2005 OBP Bi-Annual Peer Review

Fran FerraroMerrick & Company

Sealaska Corporation

Southeast Alaska Ethanol ProjectIntegrated Biorefinery Session

November 16, 2005

Overview

Time Line• Proj. Start: 6/03• Proj. End: 12/06• 55% Complete Stage

• Stage 3• Development• Pilot Testing

Barriers• Contaminated

Feed Mat’l• Scale-up• Integration• Yield/Costs

Budget• Total Proj. Start: $5,350,021• Project End: $5,350,021• 58% Complete

Partners• Sealaska Corporation• Merrick & Company• USDOE• USDA

Project Goals and Objectives

Project Goals and Objectives• Select and demonstrate suitable technologies to convert SE

Alaska wood residues to Ethanol for the Alaska market. Previous – established project concepts and economics. Select gasification (steam reforming) technology Select ethanol conversion technology Confirm suitable gas cleanup technologies Pilot test technologies on contaminated wood residue Design commercial scale facility Construct and operate wood residue conversion to

ethanol

Project Strategic Fit

Relevance to Platform and Pathway Objectives and Barriers• Thermochemical Platform – Feed and Thermochemical Processing,

Gas Clean-up• Products – Fuels, Chemicals, CHP• Integrated Biorefineries – Ag Residues, Energy Crops, Pulp & Paper,

and Forest Products Mill Improvement Pathways

Technology Fit and Demo Vision

Technology Fit for Sealaska/Merrick

• Regional timber and lumber processing• Residues environmental control• Alaska ethanol market• Multiple Biomass-to-Ethanol projects

Demo Phase Vision by 2008• Design Basis and Costs – early 2006• Financing and Design – 2006 to 2007• Construction – 2007 to 2008• Ready

Project Approach & Design

Technical Barriers• Feed

- Preparation- Contaminants

• Gasification (Steam Reforming)- Gas Composition – yield- Gas Cleanliness

• Conversion- Yield vs. Costs- Fermentation – limitations?- Catalytic

• Process Efficiency- Waste Energy Utilization - Tail Gas

• Process Integration

Project Design• Practical Syngas Quality and

Quantity• Practical Conversion – Integrated• Practical Energy Utilization –

Integrated• Later – Improve all 3

Technical Feasibility

• Feed PreparationContaminants

• Gasification (Steam Reforming) Syngas CompositionSyngas Cleanliness

• Conversion Alcohol Yield(s)Heat Utilization Tail Gas

Project Tasks

• Select Technologies• Basis – yield 70 gal per Dry Ton• Compatible with feed and product• Risks – readiness, suitability for feed, yield, cost

• Pilot Demos – Integrated Process• Commercial Scale Design Basis and Cost Estimate• Design, Build, Run Demo – 2006 – 2008• Adjust designs for other project feedstocks, locations, etc• Commercial Operating Plants

Competitive Advantages

• Suitable for numerous feedstocks with proper preparation• Superior yield vs. costs• Integrated heat/energy and potential export

Potential Show-Stoppers:• Scale-up

Demo 200 – 250 DTPD• Integration with reasonable costs

Initial Projected Economics Future Projected Economics

Commercial Scale Design Basis

Commercial Scale Design Basis and Cost Estimate• Basis – 6 mm gal/year AK facility on salt water contaminated

wood residue• Risks: cost, business• Milestones – cost $30 - $40 mm, business/technology useful

elsewhere• Go/No-Go – Economic Return on net Equity Investment• Accomplishments – underway• Future Plans – more feedstocks and locations, heat and power

integrated

Project Collaboration

Project Collaboration• Sealaska Corporation with Merrick & Company• USDA, USDOE, NREL• Technologies – Enerkem Technologies, Inc.;

ThermoChem, Inc.; Bioengineering Resources, Inc.; BioConversion Technology, LLC

• Industry – other similar projects – RDF, Pet Coke, Ag Residues• Alaska – AIDEA, AEA, Ketchikan Gateway Borough

Market & Customers

Market & Customers• Ethanol Product – fuel blending• Heat and Power – users

Costs• Ethanol @ $0.90/gal. depends on scale and other aspects• Current/Future Market Shifts

Competitive Advantage

Competitive Advantage• Window – next few years• Competing Technology – gasification and fermentation or other

catalytic conversions• Ready for commercial demo, yield

• Market Change – fuel and octane blending value; min. costs from other producers

• Economic/Investments – multiple interested project developers with suitable economics

Project Stage

Stage 3 – DevelopmentPilot Testing and Commercial Scale Design Basis

Progress and Accomplishments

Progress and Accomplishments• Pilot Testing – Integrated

Platform – Integrated Thermochemical Platform Conversion to Ethanol

Project – Technologies and business compatible

Future Work

Future Work• Final Integrated Pilot runs on AK feed material• Commercial Plant Design Basis and Cost Estimate• Design, Build Demo

Milestones:Pilot Runs – 12/05Design Basis – 2/06Cost Estimate – 3/06Design Underway - 2006

Contact Information

Contact Information

Francis (Fran) FerraroSenior Technical SpecialistMerrick & Company2450 S. Peoria StreetAurora, CO 80014-5472Phone: (303) 751-0741Fax: (303) 368-1299Email: fran.ferraro@merrick.com