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Lignite Technology Development

LEC Annual Meeting

Bismarck Event Center

Mike Holmes

April 4, 2018

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Research & Development

Priorities for the LEC

• Support continued options to enhance performance of the existing fleet

• Invest in transformational research (Next generation of Lignite conversion systems that integrate CO2capture)

• Focus on Carbon Capture Utilization & Storage (CCUS)• Leverage international R&D breakthroughs• Renewed Focus

– Additional value propositions for lignite– Polygeneration opportunities

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Historical Successes

• Thriving with high-sodium coal

Optimized operations and cleanability

Meeting regulations for primary pollutants

Addressing potential future NOx challenges

Addressing Hg and trace elements

Costs reduced by more than 20X

Support of only US coal-to-synfuels plant

DGC adding urea to product suite

Spiritwood – industrial

complex

Dryfining – coal upgrading

Lignite mining, use, and

reclamation advances

through data,

instrumentation & controls

To highlight a few

Basin Electric Antelope Valley Station and DGC Synfuels Plant www.dakotagas.com

North Dakota Carbon Solutions Needs

EOR

Partners

Existing Plant Solutions New/Replacement Solutions

Project Tundra Allam Cycle

CO2 Utilization

and Storage

Solutions

PCOR and

CarbonSAFE

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• North Dakota has an ideal situation for CO₂ management

– CO₂ emission sources are in close proximity to CO₂ storage targets

– Between 23 and 78 Gt of storage available within the state between saline formations and oil reservoirs

Much of the Recent Focus Has Been on Carbon

Management - North Dakota is Ideally Suited

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• Based on the following:

– Traditional evaluation techniques

– North Dakota Industrial Commission OOIP (original oil in place) estimates

– 4% incremental recovery

– Net utilization of 5000 and 8000 ft3/bbl

• 2 to 3.2 billion tons of CO2 needed

• Could represent 50 to 100 years of North Dakota’s current CO2 emissions from coal-fired power!

Bakken CO2 Demand in North Dakota

– A 30,000-ft View (EERC)

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AN INTEGRATED SOLUTION: HOW IT WORKS

• 25 billion tons of recoverable lignite coal

• 7 lignite-fired power plants

• Numerous potential locations for CO2 storage (EOR and deep saline)

• >250 MMbbI oil from conventional fields

• ~4000 MMbbI potential from the Bakken Petroleum System

North Dakota is rich in the key components to

build this integrated platform, and we are

developing this integrated energy and carbon

solution right now!

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Outreach

• Outreach events held at both sites (includes school tours & classroom presentations)

Test Wells

• Drilling Completed at Mercer County (analysis of cores and well logs underway)

• Drilling Completed at Oliver County (analysis of cores and well logs underway)

Modeling Underway for both sites

Economic Evaluation Based on Results Continues

Management and Reporting

• Conference calls with project team continue with a primary focus on outreach.

• Reporting underway to complete various milestones

North Dakota Integrated Carbon Storage Complex Feasibility Study

Led by EERC - Wes Peck with industry partners: ALLETE Clean Energy, BNI Energy, Basin Electric, and Minnkota Power.

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PROJECT TUNDRA – INTEGRATED SOLUTION FOR EXISTING PLANTS

• Demonstrates truly “all of the above”

energy strategy.

• Allows utilization of the most abundant fuel

in the United States – coal.

• Allows a continued platform for U.S.

Energy Security & Dominance – utilization

of coal resources and access to

unavailable oil reserves with captured

CO2.

• Maintains viability of existing fleet without

stranded investment.

• Provides a solution for carbon globally.

Carbon Solutions Are Strategic to North Dakota and Industry

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Project CarbonLed by EERC - Jason Laumb with industry partners: ALLETE Clean Energy., BNI Energy, and

Minnkota Power Cooperative.

Pilot-scale Amine Testing

Planning for amine tests with KS-1 solvent in April.

Testing at MRY scheduled for Summer 2018.

Economics of Carbon Capture

Tasks will be in full swing following amine testing.

Aerosol Management

Procured equipment to support sampling activities.

Completed Construction of amine emission reduction unit in support of

pilot-scale tests. System shakedown in progress.

Management and Reporting

Weekly conference calls with MHIA and MHI Japan.

Meeting held in Tokyo with MHI and key stakeholders to discuss Project

Carbon.

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Pathway to Low-Carbon Lignite Utilization

- Allam Cycle

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Allam Cycle Preserves the

“Coal Option”

The Allam Cycle is next generation technology.

• The turbine is driven by supercritical CO2

• Near-zero emissions - 100% of the CO2 available for utilization.

• Efficiency estimates nearing 50% - 1.4x higher than the U.S. coal fleet

average.

• Economic Power Generation

• $0.04-$0.05 /kWh with sale of CO2

• $0.06-$0.07 /kWh without the sale of CO2

• A 25 MWe natural gas-fired demonstration plant is currently being

constructed in Texas.

• Further development creates a path forward for continued utilization of

coal.

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Allam Cycle / Pathway to Low-Carbon Lignite UtilizationLed by EERC – Jason Laumb with industry partners: Minnesota Power / ALLETE Clean Energy, BNI Energy, Basin Electric Power Cooperative, and Dakota Gasification Company

Corrosion Management

Dynamic tests completed, final analysis underway. Several materials performed favorably.

Gasifier Selection

Three gasifier platforms identified for use with lignite coal. SE (ECUST), BGL, SES (U-

Gas)

Impurity Management

Impurity management tests completed. Final data analysis and reporting to be completed

in coming months.

Syngas Combustion

La Porte facility has received combustor test rig. First natural gas fire expected in April.

Pilot-scale Planning

Identified two locations of hosting coal Allam Cycle Demonstration. La Porte and DGC.

Management & Reporting

Draft final report submitted on 12/29/2017.

Weekly conference calls with technical team.Additional DOE award ($700K) to expand engineering for demonstration plant; Phase 1 of 3 possible.

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Leveraging International R&D

• Carbon Management - Incorporating learnings from commercial systems and technology development• Boundary Dam CCUS in Saskatchewan

• Memorandum of Understanding for collaboration on CCUS signed by Governors of North Dakota, Montana, and Wyoming, and the Premier of Saskatchewan

• Initial meeting held in March to review opportunities to grow collaboration

• Parish 8 CCUS system in Texas (Petra Nova)• Project Tundra and Project Carbon Activities include close collaboration with

Mitsubishi (MHI Americas and MHI Japan)

• Additional Value Opportunities for Lignite – Collaboration with Brown Coal Innovation Australia (BCIA)

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Additional Value Opportunities for Lignite

• Current Commercial Uses

• Technology Developments

Brown Coal Innovation Australia (BCIA) joined LEC in 2018• BCIA current focus enhanced uses for brown coal• LEC presentation at BCIA meeting in February, 2018 • Discussing potential joint study where we each fund our

counterparts and foster collaboration

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Coal Gasification for Fuels, Chemicals and

Hydrogen

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Liquid Fuels and AdditivesGasoline Jet FuelDiesel

Syngas

CO2

Heat

Nitrogen Fertilizers

Chemicals

Electricity

EOR

Lignite

Direct or Indirect

Liquefaction

Fertilizer

• Approximately 1 ton of ammonia (NH3) can be produced from 1.5 tons of coal

• Hydrogen from coal gasification, combined with nitrogen produces ammonia

• Further processing of ammonia with coal derived CO2 produces urea fertilizer for easier handling and storage

• Developmental electrochemical processes may provide low-pressure, smaller scale alternative to traditional thermo-catalytic approaches

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Carbon Based Products

• Activated Carbon• Facility in final design stages in

Valley City, North Dakota

• Carbon Black• Semi-continuous pilot unit at the

EERC, proof-of-concept complete

• Carbon Fiber• Coal-derived pitch has unique

properties• High value product with growing

market

• Carbon Nanotubes and graphite• High value product with growing

markets

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Hydrocarbon Production from Direct Coal Liquefaction• Produces aromatic and cyclic

hydrocarbons• complimentary paraffin hydrocarbons

produced through gasification and gas-to-liquid processes

• One ton coal can produce 100-120 gallons of hydrocarbon liquid

• High carbon conversion efficiency to fuel

• Technology development needed to optimize continuous operation and reduce capital expense

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High Value Material Extraction

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• Pioneering work by the North Dakota Geologic Survey has led to a number of funded projects investigating recovery of high value materials from coal and byproducts:– Characterization study of coal and byproducts across

North America

– Rare earth element extraction from ND lignite

– Rare earth element extraction from coal combustion byproducts

• Technology development is needed to optimize and improve economics of processes that extract and concentrate rare earth elements and other high value minerals.

Why are REEs Important?

• Unique properties makes them very useful in numerous applications

• Often termed “Chemical Vitamins” → low usage, high impact

• Essential materials for many high-value and critical applications

Magnets, batteries, electronics, computers, auto vehicles, renewable energy, military defense…and many many others

REEs make possible $7 Trillion in value-added products globally

Unique properties prevent replacement by other materials

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Why Research REEs from Coal?• Several REEs identified as ‘critical’ – mostly the less

common HREE

• China dominates global market - 83% of production in 2016

• U.S. 100% import reliant

• Chinese production rich in the HREE; U.S. deposits deficient

• Chinese reserves dwindling (HREE-rich ion adsorbed clays)

– Current deposit for ~100% supply of HREE gone by 2025

– Growth market sectors are dependent on HREEs – wind turbines, HEVs and many others

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Leonardite

Leonardite is an oxidized form of lignite, rich in humic acid.• Existing agricultural uses

• soil conditioner to improve moisture retention and reduce toxins

• Animal feed additive, source of trace minerals

• Growing market in oil field fluids• Leonardite, used as an additive in

water based drilling fluids

• Global humic acid market was $325.6MM in 2014 (LeonarditeProduction, LLC)

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Waste Heat and Combined Heat and Power• Enormous potential for waste heat use

• Eight ND power plants = 7500 MWth

• Space heating for 3.2-million homes

• Low cost natural gas challenges economics of low-grade waste heat utilization

• The US Department of Energy is working on new technology and approaches to improve efficiency of waste heat use

• Combination of CO2 and waste heat could enhance greenhouse agriculture

• Combined heat and power (CHP) achieves higher energy efficiency than electricity production alone.

• Spiritwood and Coal Creek Stations in ND provide electricity to the electrical grid and steam to co-located agricultural industries

• Some commercial plants use steam for oil refining, natural gas processing, water desalination, or pharmaceutical production.

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Resource Recovery from a Coal Fired Power Plant to Enhance

Agricultural Production in Open Field and Greenhouse Facilities

Plant Integration: Waste heat used for greenhouse heating demands CO2 & Flue gas used to enhance plant growth Plant water / condensate can supplement irrigation

Updates: First planting cycle complete (data analysis ongoing) Low and intermediate concentrations of CO2

improved plant growth and highest level was antagonistic

Second planting cycle to include varied levels of CO2

Coal Beneficiation with Waste Heat

• Benefits:• Reduced coal consumption

• System efficiency improvement

• Reduced emissions• SO2

• NOx

• Hg

• CO2

• Opportunity to utilize plant waste heat

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28 4/10/20181/17/2017

Advanced Reclamation Strategiesfor North Dakota coal mine lands

Questions??