GB2464691A

GB2464691A - Manufacture of methanol from agricultural by-product cellulosic/lignitic material

Info

Publication number: GB2464691A
Application number: GB0819334A
Authority: GB
Inventors: Christopher Denham Wall
Original assignee: Individual
Current assignee: Individual
Priority date: 2008-10-22
Filing date: 2008-10-22
Publication date: 2010-04-28
Also published as: GB0819334D0

Abstract

The Cellulosic/Lignitic byproduct that remains after the cropping of agricultural produce is converted to carbon dioxide by calorific oxidation. In another section of a synthesis factory hydrogen gas is produced by electrolysis; the hydrogen gas is then reacted with the carbon dioxide to make methanol. In a related process carbon dioxide exhausted by the process of fermentation of agricultural produce to form ethanol is captured and reacted with hydrogen to form methanol. The quantity of alcohol fuel produced by an agricultural region is thereby increased without increase in the area under cultivation.

Description

BACKGROUND TO THE INVENTION

The invention relates to the manufacture of alcohol fuel.

More specifically, the invention relates to the manufacture of methanol using as a raw material the cellulosic and lignitic waste material that arises after cropping of corn (maize), wheat and other cereal products, and sugar cane.

Sugar Cane Production Typically sugar cane is crushed to release the sugar sap, and the bagasse, which is the waste material after crushing, is burned.

The burning of the bagasse is typically usefully employed to raise steam which is used in the sugar refinery process to facilitate evaporation.

The major component of the bagasse, cellulose, is converted to carbon dioxide and water, and released to the atmosphere.

During the growing cycle of the sugar cane plant, carbon obtained from carbon dioxide in the atmosphere is organically fixed into the structure of the sugar cane plant mainly in the forms of lignin, cellulose and sucrose.

Of this organically renewable fixed carbon, only the portion present in the sucrose is recovered for consumption. When the sucrose is processed to manufacture ethyl alcohol (ethanol) by fermentation, one third of the carbon content is lost to atmosphere by the fermentation process.

In the fermentation of cane sugar the following processes occur.

Sucrose, the most important and abundant sugar in cane sugar molasses, is first converted to hexose sugars.

This is accomplished through the action of the enzyme invertase C12H22011+ H20 P C6H1206 + C6H1206 Invertase Sucrose glucose fructose The mixture is converted into ethyl alcohol and carbon dioxide by Zymase C6 H12 06 P 2C2H50H + 2C02 Zymase It can thus be seen that in the fermentation process one third of the fixed carbon is lost.

Sugar cane comprises the following constituents: % by mass Sucrose 13 Other solubles 2 Fibre 14 Water 71 Total 100 Sucrose and the other solubles have the basic formula C12 H22 Oh and thus contains 42.1% carbon by mass.

The cellulosic fibre with the formula (C6H10O5)n contains approximately 44.4% carbon by mass.

Thus of the total carbon that is organically fixed, the following proportions are retained and released back to atmosphere.

Retained Carbon 0.67 x 0.42 x 0.15 = 0.0424 or 33.75% Carbon released back to atmosphere 0.33X0.42X0.15 = 0.021 + O.444X0.14 = 0.0622 0.0832 or 66.24% To a very close approximation two parts of the carbon fixed by photosynthesis are returned to the atmosphere for each part that is converted to alcohol fuel.

If the carbon contained in the waste bagasse may be converted to alcohol, together with the carbon dioxide by-product from the fermentation process for every unit of carbon presently converted to alcohol fuel, three units of carbon will be converted to alcohol fuel.

Thus, without the necessity for increased land area the quantity of alcohol fuel produced from carbon dioxide in the atmosphere is increased by 200%.

Maize Production In the case of maize production, the ratio of the carbohydrate material contained in the maize seeds attached to the maize cob; to the mass of the shelled cob, stalk, leaves and upper root is more variable.

Typically, for each tonne of dry maize produced, there remains 1.4 tonnes of dry carbohydrate (woody and pithy) waste.

As for sugar cane two thirds (2/3) of the carbon in the carbohydrate material, in this case starch, is converted to alcohol in the fermentation process, and one third is exhausted to atmosphere as a waste product of fermentation.

Thus, for every tonne of maize produced 0.67 tonne of carbohydrate is converted to alcohol fuel.

1.4 tonne of carbohydrate, or approximately double the quantity currently consumed, is available for alcohol manufacture.

If this carbohydrate may be converted to alcohol fuel, for every tonne of alcohol fuel that is currently produced from renewable resources, 3 tonnes of alcohol fuel may be produced, without any increase in land area.

The Economic Conversion of the Waste Carbohydrate Material (Typically Cellulosic and Lignitic Material) Contained in Sugar Cane Waste Material (Bagasse) and the Stems and Cobs of Maize Following Harvesting of the Starch, to Methanol Fuel Various schemes have been proposed, evaluated and tested to convert cellulosic agricultural by-product to ethanol, by hydrolysis to hexose sugars, followed by fermentation.

The major difficulty encountered in the conversion of cellulosic material to ethyl alcohol is the capital cost involved in the conversion of the cellulose, by hydrolysis. This is accomplished in the presence of dilute mineral acid, subjected to heat and in some schemes under pressure.

As for the conversion via the fermentation process of starch and sugar to ethanol, the conversion of cellulosic waste material to ethanol is accompanied by carbon dioxide emission to atmosphere, amounting to one third (1 /3") of the carbon fixed by the process of photosynthesis.

In the invention it is proposed to convert the cellulosic waste material to methanol, with the formula CH3OH, instead of ethanol with the formula C2H5OH.

The outline method of conversion of the cellulosic material to methanol is as follows: -The cellulosic material is gathered and transported to a central processing plant; -The material is oxidized (burnt) to produce heat and raise steam.

-The steam raised is passed through a turbo alternator set to produce electricity.

-In another section of the facility imported electricity together with electricity generated on site is used to produce hydrogen gas and oxygen by electrolysis of water.

-The hydrogen gas is compressed.

-The carbon dioxide gas produced by the burning of the waste cellulosic material is captured, purified and compressed.

-The carbon dioxide (C02) and hydrogen (H2) is passed over a copper catalyst at a pressure of approximately 70 -80 bar to produce methanol CO2 + 3H2 CH3OH + H20.

-The water is removed by distillation and purified for recycling or other disposal.

Whereas crude oil, and the derived products petroleum and dieseline, are proven in their use in automotive engines, and in particular in the four stroke piston engine whether of the spark ignition type or the adiabatic compression auto-ignition type (diesel), this fuel suffers from a number of disadvantages.

The primary disadvantages of the use of the distillation products of crude oil, petrol and diesel as automotive liquid fuels are as follows.

The global reserve of crude oil is finite and is being depleted at an ever increasing rate.

* At some time in the future a severe shortage of crude oil will prohibit the usage of petroleum and dieseline unless these products are synthetically manufactured.

* The shortage of crude oil will be exacerbated by the requirements of the petro-chemical industry which depends on crude oil to produce ethylene glycol, polyethylene, polypropylene, acrylonitrile, butadiene elastomers and caprolactam as major products.

* Resulting from the shortage of petroleum products a rise in the price of fuel will lead to a general increase in the price of transportation, and a concomitant price increase in most goods and services.

* Crude oil reserves are not uniformly distributed around the world, but are concentrated in certain areas. This leads to a number of difficulties including: -High transportation costs to certain areas; -Political and social problems caused by legitimate or illegitimate concerns relating to the financial or other control of crude oil production and distribution.

* Petroleum and Dieseline are often the cause of vehicular exhaust pollution, and in particular photo-chemical pollution in major conurbations.

In the light of these problems relating to the exploitation of crude oil and its refinery products, and in particular supply constraints, it is clear that at some stage in the future, a replacement for crude oil derived petroleum and dieseline must be evolved to enable the continuation of economic vehicular transportation.

The basic requirements of such a fuel are that it remains as is, or exhibits characteristics as follows: a. The fuel must be cheap to manufacture; b. The fuel should ideally be suitable for use in existing four stroke piston engines of the spark ignition type (petrol) or the compression heat ignition type (diesel). There are a number of cogent reasons why the fuel should be compatible with existing automobile engines, mainly relating to the minimization of a dislocation in the economic working of the worldwide automotive industry, and automobile servicing and repair industry; c. The fuel must be dispensed in the normal way using existing equipment and primary and secondary fuel distribution infrastructures. As a counter example the distribution of cryogenic liquid hydrogen and oxygen would require major changes in distribution infrastructure; d. The fuel must be as sale as or safer than petroleum and dieseline, both as concerns primary and secondary (retail) distribution and in traffic accidents; e. The fuel must exhibit drivabiity characteristics that are equal to or superior to the existing fuels, petroleum and dieseline. These drivability characteristics include: acceleration -top speed -torque -idling -cold start -hot start f. The fuel must be as efficient or more efficient in terms of distance traveled per unit cost; g. The fuel must exhibit pollution characteristics that are equal to or better than those evinced by petroleum and dieseline; h. The fuel must be able to be introduced gradually into the existing worldwide transportation network and infrastructure, incorporating such diverse elements as technical college training, motor vehicle design, legal statutes, vending, road safety, bulk transportation capability and many others.

A replacement fuel that fulfils all of the requirements listed in A-G above is ALCOHOL. This is in fact presently the only motor fuel that is used in significant quantities in competition with petroleum and dieseline.

The alcohol fuel that is currently distributed is the chemical compound ETHANOL, with the chemical formula C2H5OH.

ETHANOL is produced in world scale quantities in two regions in the world.

* In Brazil where ethanol is the fermentation product of sugar cane.

Approximately 5 million cars operate using ethanol blends, or pure ethanol which is marketed as E96 or Ethanol with 4% water.

* In the United States where maize (corn) is the raw material for the ethanol.

It is marketed throughout the United States as a dilute blend in petroleum, and in the Mid West States, as E85, which is 85% Ethanol with 15% petroleum.

However, the capability of the international agricultural economy will be to produce only approximately 3-5% of the total fuel requirement.

ETHANOL may be synthesized from a carbonaceous feedstock via a process route that first entails the production of METHANOL.

METHANOL with the chemical formula CH3OH has the same basic properties as ETHANOL and satisfies all of the requirements A-U listed above. The economics of synthetic METHANOL manufacture are considerably superior to synthetic ETHANOL manufacture.

It is probable therefore that METHANOL will take precedence over ETHANOL as the primary replacement for petroleum and dieseline in the market place.

It is not likely that any other chemical substance will supplant ALCOHOL in general, and METHANOL and ETHANOL specifically, as the major replacement compounds for PETROLEUM and DIESELINE.

The reasons for this are mainly their superior fuel efficiency, cost and pollution characteristics, coupled with essential compatibility with the existing engines, and distribution infrastructure.

The invention relates specifically to the use of carbon dioxide generated by burning agricultural cellulose/lignite, with the chemical formula CO2 as the carbonaceous feedstock for the production of the automotive fuel.

Thus, whilst the carbon dioxide has no value in its normal role as a chemical reductant, economically it may be used simply as the CARBON skeleton upon which other elements and in particular HYDROGEN may be added through the introduction of ENERGY, to overcome heat of formation limitations and create relatively complex chemical compounds, arid in particular METHANOL.

THE IMPORTANCE OF METHANOL

Whilst it has not yet been brought into popular focus, methanol is very likely to become extremely important as a motor fuel.

There are a number of reasons for this, as follows: 1. Methanol is the only fuel that may be synthesized from coal and/or natural gas that can economically sustain a crude oil price collapse.

A major difficulty in the substitution of naturally occurring crude oil with synthetically produced petrol and diesel, is the capital intensity of the projects.

In the case of smaller developed nations, such as (say) South African, New Zealand and Argentina, the size requirement of a synthetic fuel facility to provide sufficient economy of scale to compete with crude oil, results in capital investment on a scale that impinges noticeably on the nationally economy.

In the case of South Africa, the SASOL 2,3 initiative, which continues to produce approximately 25% of the nation's fuel needs, was underwritten by government. This was done in order to allow financing of the project, and also for strategic reasons. During the crude oil price collapse of the 1990s, it is possible that closure of the facility would have been forced, if the project was not state protected, since for a period of 5-6 years fixed and variable production costs were higher than crude oil importation and refining costs.

In the case of New Zealand a parliamentary decision was reached not to underwrite the SYNFUEL project.

Whilst technically most successful, closure of the SYNFUEL facility was forced after a few years of operation by the crude oil price collapse of the late 1980s and persisting until the late 1990s.

Due cognizance of the failure or the partial failure of these, the only two worldscale synthetic fuel initiatives, to survive a crude oil price collapse has been made in the marketplace.

Free market capital investment in synthetic fuel projects producing the traditional fuels, petrol and dieseline, is not likely to be forthcoming in the absence of a guarantee against massive downward price dislocation, such as that which caused the failure of the New Zealand SYNFUEL project.

In the future, when alcohol fuel is available generally for vehicular transportation, projects to synthetically produce methanol from coal and/or natural gas will encounter significantly less resistance from potential investors.

The reason for this is that the capital requirement to produce methanol is about 60-65% that required to produce traditional synthetic fuel (on a calorific equivalence basis).

Fixed costs of production (personnel and maintenance) are lowered in approximate proportion to the capital investment.

Variable cost of production, (the usage of coal or natural gas) is lowered by about 20%.

When these savings are compounded, the net result is that methanol may economically be produced synthetically at a price level of about half that of synthetic petrol and diesel, on a calorific value basis.

2. Alcohol fuel has already gained wide acceptance in the marketplace in the form of ethanol. This has arisen from extensive commercial production in two areas from an agricultural base. These areas are Brazil, where ethanol is produced from sugar cane, and the mid-Western States of the United States of America (corn belt) where ethanol is produced from fermentation of the sugars that arise from the hydrolisation of maize.

Methanol operates as a motor fuel in a very similar way to ethanol, and most of the groundwork required to introduce methanol into the marketplace has already been conducted.

For example, such innovations as: -Vehicle lubricants more suited to hydrophilic liquids -Higher compression ration spark ignition (petrol replacement) vehicles -Variable petrol/alcohol percentage dial-in vending at filling stations, commensurate with relevant level of vehicular modification -"Hybrid" motor vehicles which may accept alcohol fuel or petrol or alcohol/petrol mixtures -Larger fuel tanks -Cold start enhancement have already been carried out.

3. The EU has recenfly legislated to include alcohol fuel into all fuel used by spark ignition vehicles.

This has probably been undertaken for environmental reasons, although it is possible that the logic of the requirement may be flawed on this basis.

Nevertheless, the widespread introduction of ethanol fuel into Europe has commenced.

This ethanol fuel may equally well be replaced by methanol, with essentially the same physical effect.

If this methanol fuel is produced using the exhaust from fossil fuel fired thermal power stations, a lowering of carbon dioxide emissions to atmosphere exhibiting a small collateral environmental impact is demonstrable.

This is not necessarily the case for partial replacement with ethanol since vast acreages of monoculture are required.

Importation costs and the exhaust to atmosphere of carbon dioxide from farm machinery and exhaust resulting from transportation to the market from distant lands, has led a significant lobby to argue that the introduction of ethanol into Europe is counterproductive from an environmental viewpoint.

There is also a lobby which objects to the introduction of ethanol into Europe on the basis that conversion of agricultural produce to automotive fuel leads to a rise in food prices unsustainable by the world's poor, at least in the short to medium term.

These arguments do not apply to alcohol fuel produced using as a carbon skeleton waste carbon dioxide from existing power stations.

There will be collateral environmental damage in the erection of electricity generating facilities which do not themselves produce carbon dioxide.

Wind power is suitable, as is nuclear power, as power sources required to split water by electrolysis.

The introduction of ethanol fuel will have had two strongly positive effects, in the event that it is later supplanted by methanol fuel. First is the phenomenon of "methane back out". Introduction of a small quantity of alcohol, as the result of the interaction of the hydrophilic -OH radical with the hydrocarbon fuel results in the desorption of the light paraffinic gases methane, ethane, propane, butane and propane from the fuel.

Instead of incorporating these light hydrocarbons into the fuel by the standard refinery techniques of reforming and oligomerisation, it is more economic to employ physical absorption of the gases by bubbling into the liquid petrol.

Addition of alcohol in low quantities results in the desorption of these high value gases, which must be alternatively disposed of.

Light hydrocarbon gas desorption will have been encountered and solved in the event that methanol is later introduced into the fuel pooi as a replacement for ethanol.

The second effect that ethanol has on petrol when introduced as a small percentage, is to raise the Anti-knock Index (AKI) or Octane Rating of the fuel. Most fuel in Western Europe incorporates MTBE (Methyl Ter-Butyl Ether) as an Octane Number enhancer. This prevents pre-ignition (or pinking) problems.

The introduction of alcohol in small quantities into petrol lowers or relieves the necessity for further AKI enhancement.

Since MTBE is a profitable sideline for petroleum refineries, the lowering of the quantity of MTBE introduced into fuel in Europe must have had some economic consequences, which will have been encountered and solved if an when methanol is introduced in addition or as a replacement to ethanol.

4. Pollution resulting from vehicle exhaust is not particularly problematic in Western Europe as a result of prevailing wind and precipitation patterns, coupled with strict control of visible emissions, especially from diesel vehicles.

In many parts of the world, however, and particularly those areas with massive conurbations situated in arid, still areas, and which are prone to atmospheric inversion layering, vehicle pollution leads to chronic health problems.

Alcohol fuel has a very significantly lower pollution profile than the traditional fuels petrol and diesel.

When used as a replacement for petrol, alcohol fuel, because it burns at a much lower temperature than petrol, does not react with nitrogen in the air to any significant degree. Photochemical pollution is essentially eliminated, and the requirement for catalytic conversion of toxic exhaust compounds to less toxic compounds or inert compounds is reduced.

When used as a replacement for diesel, emission of microscopic particulates is reduced to an extent such as to make this form of pollution insignificant.

The practical observation of the beneficial effects of the use of alcohol fuel on an urban environment has been made in the case of São Paulo. In the past (late 1980s), when the relative prevalence of ethanol fuel was at its height, a complete turnaround in the atmosphere of that city was noted for a number of years.

During the subsequent oil price collapse when it became difficult to produce ethanol fuel economically, in spite of state subsidisation, the physical atmospheric conditions in São Paulo worsened.

People in Brazil are reported to refer to the ethanol fuelled vehicles as vacuum cleaners", since in many cities the air that enters the vehicle is less clean that the exhaust from the vehicle.

In many cities in the world the level of atmospheric pollution that results from motor vehicle exhaust is such that periodically the public is advised to wear protective equipment.

In such cities it is likely that, if alcohol fuel could be synthesized on a competitive economic basis to traditional fuels, its use would become mandatory.

Even in such cities as London and Paris where vehicle exhaust is not a primary health issue, the improvement that would be realised by wide scale use of alcohol fuel might well lead to subsidisation of the use of alcohol fuel within a prescribed geographical area and/or a disincentive to use traditional motor fuel within this demarcation.

Co-Production of Ainmoniuni Nitrate Fertilizer The method of electrolysis of water to produce hydrogen gas for use in the manufacture of anhydrous ammonia (NH3) using as a nitrogen source atmospheric air is well established. The essential stoichiometry is: N2 + 3H2 = 2N1-13.

In Norway seasonal hydroelectric power has been used to produce ammonia in this way.

The method is well suited to variable electricity supply from a renewable source such as variable electricity supply from wind turbines or hydro-electric power, since the production of ammonia represents a method of electricity storage.

The co-production of anhydrous ammonia with methanol manufactured from organic waste, using as an electricity source wind turbine generation represents a most attractive synergy from multiple viewpoints as follows: * Ammonium nitrate fertilizer in large quantities is required for the production of the agricultural produce, maize and sugar cane.

* The ammonium nitrate fertilizer will be produced in the heart of the growing area. Production of anhydrous ammonia by electrolysis of water is less economic than production via the normal route, which involves steam reforming of natural gas to produce hydrogen. However, transport costs of either the anhydrous ammonia or the bulk ammonium nitrate fertilizer make up a large proportion of the total costs in some instances, and in particular areas away from natural gas feedstock.

* The front end of the methanol manufacturing facility and of the ammonia manufacturing facility, namely the electrolytic cells producing hydrogen gas is identical.

This will lower the capital cost of the installation through economy of scale.

Fixed costs of operation, labour and maintenance will also be reduced, on a unit basis.

* The quantity of methanol manufactured and the quantity of anhydrous ammonia manufactured, may be continuously balanced in the most economic manner to utilize all of the incoming electrical energy.

As an example co-production of anhydrous ammonia and of methanol is considered in the corn belt of the United States of America, utilizing gas as a power source electrical energy from wind turbines.

During exceptionally windy periods the rate of burning of the waste cellulose material must be increased to provide sufficient carbon dioxide raw material.

This will result in: i) Firstly, more electricity generated internally in the manufacturing facility, and more carbon dioxide generation, ii) Secondly more electrolytic cells will become available for the manufacture of ammonia.

The ammonia plant will operate at a higher rate when the methanol plant also operates at a high rate, in order to utilize all of the incoming wind turbine generated electricity.

During periods in which less wind is available to drive the wind turbines, the ammonia plant production rate may be lowered and less waste cellulosic material is burned. This will produce less carbon dioxide to be absorbed as methanol production, together with a lower internally generated electrical supply.

In this way no cellulosic material is burned without conversion to methanol, and no electricity is wasted during windy periods.

* The cellulosic raw material will be deposited at the methanol/ammonia station and using the same transport the ammonium nitrate fertilizer may be on-loaded for dispatch back to the farm.

* The ash from the burning of the cellulosic waste material may be conveniently collected and added to the ammonium nitrate fertilizer. In this way, compounds of sodium, potassium and phosphorous may be returned (on average) to the fields from which they originated.

* Co-location of the methanol plant, the anhydrous ammonia plant, and the nitric acid/ammonium nitrate facilities, together with the methanol plant will lower environmental impact of the industrial facility.

* It is envisaged that the farmer will operate, at least in the medium term when the project is well under way, alcohol powered vehicles. The alcohol fuel could be collected from the station as a credit, simultaneously with off loading of the cellulosic raw material.

* Oxygen from the electrolytic cells (both electrolytic cells used for ammonia manufacture and for methanol manufacture) can be used to lower the excess air required for combustion of the cellulosic waste material.

DISCUSSION

Operation of the Combined Methanol/Ammonium Nitrate Facility The combined methanol/ammonium nitrate facility would receive power primarily from two sources, namely electrical power from wind turbines and a semi-conventional power station operated using waste cellulosic material.

The exhaust carbon dioxide from this power station represents the organic raw material from which the methanol is made.

For convenience of operation, however, and as a guaranteed of continuous operation, the station will be linked to an electrical grid system It is also envisaged that the power plant which normally operates using waste bagasse, would have the capability for operation using coal as a feedstock. The exhaust carbon dioxide from this power station would also be converted to methanol fuel.

* Cropping from Fallow Land Any plant material in the agricultural region would be suitable for the production of methanol, by conversion of the carbon dioxide following combustion.

All of the ash remaining after combustion should be incorporated into the arnmonium nitrate fertilizer.

* Zea Mays Hybrid Selection and Development The quantity of the woody cellulosic portion of the maize plant is not currently a dominant factor in the selection of seed hybrids suitable for economic maize production.

In the medium to long term, however, it is likely that photosynthesis will play a major role in the fixing of carbon from the atmosphere independently of the role of photosynthesis in capturing solar energy and transforming this into chemical energy (food).

In other words, at some time in the not too distant future the carbon cycle will be brought into equilibrium, whilst it is currently in dis-equilibrium -more carbon dioxide is currently being exhausted to atmosphere than is being fixed by plant life.

The carbon cycle will not be brought into equilibrium solely through human utilization of carbohydrates as food, so long as carbon based compounds are used as automotive fuel.

Photosynthesis must be employed as the only known method of fixing atmospheric carbon dioxide independently of the food value of the fixed carbohydrate material.

It is most probable that in the medium term, and possibly also in the short term, that the woody portion of the maize plant will achieve an economic importance such that the Zea Mays varieties selected for planting will evince a similar, albeit slightly decreased, corn production potential but a very much higher cellulose content.

This will greatly increase the overall quantity of carbon extracted from the atmosphere by photosynthesis, and converted to alcohol automotive fuel.

Independence of Aminoniuni Nitrate Fertilizer from the Carbon Cycle The ammonium nitrate fertilizer that is co-produced with the methanol fuel is independent of the carbon cycle.

The anhydrous ammonia (NH3) is produced from air and water using wind power.

The process is as follows: Water is electrolyzed to produce hydrogen and oxygen using electhcal power generated from wind stations.

Air is cooled and liquefied using standard oxygenic (air separation) technology. The nitrogen thus obtained is compressed, together with the hydrogen from the electrolytic cells.

The hydrogen and nitrogen is mixed together in a stoichiometric proportion as follows: N2 3H2 1 mole 3 moles and then compressed using a centrifugal compressor to a pressure of approximately 200-300 Bar.

The stoichiometric mixture is passed over an iron catalyst, and anhydrous ammonia is produced.

N2+ 3H2 2NH3 The anhydrous ammonia produced is then converted to ammonium nitrate fertilizer.

This is achieved first by manufacture of nitric acid by oxidizing the anhydrous ammonia with atmospheric air over a platinum catalyst to provide a mixture of nitrous oxides.

The nitrous oxides are then absorbed in water to form nitric acid.

These reactions may be represented as follows: a) NH3 + b02 cNOx + dH2O Where NO is a mixture of a number of species resulting from the variable valency of nitrogen NO, NO2, N20, N2O21, NO31, N2 03 etc, in various proportions.

b) Variable oxides of nitrogen (commonly termed NOX) are then absorbed into water to form nitric acid.

This may be represented as: eNO + f02 tgH2O hNHO3 + iH2O The nitric cid so produced is then reacted against the anhydrous ammonia in order to produce ammonium nitrate as follows -H20 + NHO3 + NH NH4 NO3 + H20 The ammonium nitrite so produced is typically de-sensitized by admixture with magnesium carbonate and prilled in a prilling tower.

The entire process is well known.

Manufacture of anhydrous ammonia by electrolysis of water was first commercially exploited in Norway. It is also carried out in Zimbabwe.

The manufacture of ammonia by means of the electrolytic decomposition of water is most attractive economically under the following circumstances.

-In regions where variable generation of electricity may not be exploited by reticulation to cities. In Norway hydro-electricity is to a considerable extent seasonal. Melting snow provides a source of hydro-electricity.

This electricity is effectively STORED by electrolysis of water, followed by conversion to ammonium nitrate.

-The process is also ideally suited to wind turbine electricity generation.

As variable production of electrical power occurs both divinally and seasonally, all of the power may be utilized by electrolysis of water.

In the invention the electrolysis of water is the starting point for BOTH METHANOL SYNTHESIS and AMMONIUM NITRATE SYNTHESIS.

Because the production of methanol through the absorption of burning cellulose waste is seasonal, and application of ammonium nitrate fertilizer is also seasonal, but occurring at a different time, storage volumes of both cellulose raw material for methanol manufacture, and of ammoniurn nitrate fertilizer, may be reduced.

The manufacture of anhydrous ammonia by the electrolysis method is secondly suited to those regions where ammonium nitrate has, in the normal course of events, to be imported. This is because the economics of fertilizer application at any location is combinatorial -manufacturing costs of the ammonium nitrate make up (normally) the major portion of the overall cost structure, but transportation costs are significant.

In many regions transportation cost of the fertilizer makes up 30 -40% of the total cost.

* The Manufacture of Ammonium Nitrate Fertilizer Independently of the Carbon Cycle (continued) Conventional Method of Manufacture of Anhydrous Ammonia.

Almost all of the ammonium nitrate fertilizer in the world is made using natural gas as a feedstock.

The hydrogen required for the reaction with nitrogen is supplied by a process known as STEAM REFORMATION.

In the process, methane gas is passed together with steam through a tubular reactor in the presence of a nickel catalyst The reaction may be presented as follows: CH4 + 2H20 -4H2 + CO2 Additional CO2 is produced by endothermic burning of methane to power the endothermic reaction. The carbon dioxide produced is exhausted to atmosphere. The hydrogen is recovered and mixture with a stoichiornetric proportion of nitrogen, compressed and passed over an iron catalyst to form anhydrous ammonia as described above.

Of the small proportion of ammonium nitrate that is not manufactured by this method, nearly all of the remainder is manufactured using coal as a reductant, to draw hydrogen gas from the water molecule.

The processes used to achieve this are as follows: Firstly, the coal is gasified by partial oxidation with atmospheric oxygen.

C+'/202 CO This carbon monoxide is then SHIVED with steam in an exothermic reaction to produce carbon dioxide and hydrogen gas.

CO + H20 CO2 + H2 Since 3 moles of hydrogen gas are required, this reaction may be alternatively styled.

3 Co + 3H20 3C02 + 3H2 It can thus be seen that considerably more carbon dioxide gas is exhausted to atmosphere when carbon (as typically coal, lignite or anthracite) is used to produce hydrogen gas by the reduction of water, than is produced by the natural gas reformation process.

Whichever process is used, the net result is that carbon dioxide is exhausted to atmosphere.

For the case of ammonium nitrate manufactured from natural gas, the following applies:- 1 mole of methane gas produces 2 2/3rds mole of anhydrous ammonia.

However, some methane gas is used to drive the endothermic STEAM REFORMATION reaction.

As an approximation, therefore, 1 mole of methane gas produces 2 moles of anhydrous ammonia and 1 mole of carbon dioxide is produced.

When ammonium nitrate fertilizer is produced, 2 moles of anhydrous ammonia are used, together with.1 mole of carbon dioxide waste product exhausted to atmosphere.

The molecular weight of ammonium nitrate is 80, and the molecular weight of carbon dioxide is 44.

Thus, for each tonne of arnmonium nitrate is produced, about 0.55 tonnes of carbon dioxide is exhausted to atmosphere, when natural gas is used as a feedstock.

When coal is used as a feedstock the quantity of carbon dioxide gas exhausted to atmosphere increases dramatically. In this case the stoichiometric quantity of carbon dioxide produced is 1 mole for each mole of hydrogen produced.

ThusC+'/202 CO CO+H20 C02+H�= Now three moles of hydrogen gas are required to produce 2 moles of anhydrous ammonia.

N2+3H2 2NH3 The quantity of carbon dioxide produced is 3 moles, according to the stoichiometry.

However, in industrial practice the chemical plant power requirements are also supplied by oxidation of coal, and, as an approximation 4 moles of CO2 are employed to produce 2 moles of anhydrous ammonia.

Approximately 2.2 tonnes of carbon dioxide is exhausted to atmosphere, therefore, for each tonne of ammonium nitrate fertilizer produced.

TRANSPORTATION CONSIDERATIONS

Waste Cellulosic Material For the waste cellulosic material to be economically converted to alcohol fuel by the method according to the invention, a number of synergetic economies must be made.

It must be, in the first instant, economically attractive for the maize farmer to co-produce cellulosic material, with the grain including delivery costs.

For this to be a reality, the transportation costs of the cellulosic material to the methanol production facility must be lower than the price offered to the farmer for the collection and transport of the cellulosic material, per tonne produced.

A major economy will be realised if the cellulosic waste material is transported to the same storage depot as for the maize product.

For this to be achieved economically, compressed bales of cellulosic material would need to be produced by the farmer. These would be delivered simultaneously to the same depot as that utilized for grain conversion to ethanol fuel.

Ammoniuni Nitrate Fertilizer The ammonium nitrate fertilizer will be produced at the same facility as that employed for manufacture of the methanol fuel, by the method according to the invention, and the ethanol fuel by the standard fermentation process.

Typically the cost of transportation of ammonium nitrate fertilizer makes up a significant proportion of its cost to the farmer.

As an example, the case of anhydrous ammonia produced at a coastal refinery, using a low opportunity value gas feedstock is taken.

This low opportunity value gas feedstock is used to produce anhydrous ammonia employing the normal gas REFORMATION technology described above, in world scale facilities employing economy of scale.

A low unit price of manufacture of the anhydrous ammonia is achieved, and F.O.B. factory gate the cost of the raw material is (say) approximately -0% lower than that using the method of electrolysis of water and atmospheric nitrogen.

At this point the anhydrous ammonia must be converted to ammonium nitrate fertilizer and transported to the farmer.

Typically at this point a choice must be made whether to transport the raw material anhydrous ammonia to a fertilizer manufacturing plant in its unconverted state, which involves transportation of a low tonnage, or to convert the anhydrous ammonia to ammonium nitrate fertilizer at (or close to) the site of the coastal refinery.

If the anhydrous ammonia is exported in its raw form, the tonnage to be transported is much lower. This is because the finished ammonium nitrate essentially comprises anhydrous ammonia with the addition of oxygen from the air.

Thus, stoichiometrically: 2NH3 + 202 NH4 NO3 + H20

MW MW MW MW

34 64 80 18 Since the ammonium nitrate also contains some water as a result of the manufacturing process, the weight to be transported is approximately three times that of the anhydrous ammonia raw material.

For transportation of the ammonium nitrate fertilizer use may be made of unspecialized transportation, whether it be by rail or road.

Anhydrous ammonia however, must be transported in specialized tankers purpose designated for the material. This increases the cost, to a level which dependant on particular circumstances, including the unit fixed and variable costs of conversion to the fertilizer at the transport terminus, will determine which of the two transportation options is employed.

According to the invention the ammonium nitrate fertilizer is co-produced with the methanol utilizing the same production front end, namely electrolytic cells producing hydrogen gas.

The anhydrous ammonia is thus produced at the same site as the methanol fuel is produced, and which is in the heartland of the farming area.

The anhydrous ammonia will be converted to ammonium nitrate fertilizer at the terminal, and transportation costs to the terminal will be zero.

The farmer will be able to collect ammonium nitrate fertilizer from the same terminus to which the cellulosic raw material and the grain is delivered.

Transportation costs will be minimized in general, and in specific instances will make the ammonium nitrate fertilizer competitive with fertilizer imports.

It is predicted in particular; that for the "corn belt" of the United States approximate cost parity will be achieved between electrolytically produced ammonium nitrate fertilizer and that produced by steam reformation of natural gas or refinery of gas, when transportation considerations are factored into the total cost.

Co-production of Methanol (Methyl Alcohol -CH3OH), and Ethanol (Ethyl or Grain Alcohol -C2H5OHJ A number of synergies are evident if the METHANOL manufacturing facility is co-located with the ETHANOL manufacturing facility.

1. The major synergy insofar as the atmospheric carbon balance is concerned is in the conversion of the carbon dioxide exhausted by the fermentation process, to methyl alcohol.

In the conversion of starch to ethyl alcohol the following two essential processes occur.

ONE

* The starch in the corn is converted to glucose. This may be achieved directly by boiling with dilute acid.

(C6H10O5)n + nH2O n C6H1206 Starch boil with Glucose dilute acids Alternatively, the starch may be first converted to maltose. This is typically achieved by adding crushed malt and maintaining the mixture at a temperature of 50 -600 C. The starch is converted to maltose, or malt sugar by enzymic action. The enzyme involved is diastase.

diastase 2 (C6H1005)n + nH2O nClH2Oii Starch Maltose The MALTASE in yeast converts the maltose to glucose.

C12H22O11 + H20 2 C6H1206 Maltose MALTASE Glucose

TWO

* Whichever method is employed to convert the starch to glucose, the glucose is now converted to ethyl alcohol, by the process known as fermentation.

C6H1206 -* 2C2H5OH + 2C02

ZYMASE

As indicated by the stoichiometry of the reaction, the formation of ethyl alcohol is always accompanied by the release of carbon dioxide.

Stoichiometrically one third of the carbon fixed by photosynthesis is released back to the atmosphere as carbon dioxide.

It is this carbon dioxide, released by the fermentation process which may be captured and converted to METHANOL by the process of conjoining with electrolytic hydrogen.

To recap, the formation of methanol is achieved by production of hydrogen through the process of electrolysis of water.

This hydrogen is mixed with the captured carbon dioxide and compressed to a pressure of 60 -80 Bar.

3 moles of hydrogen are required for each mole of carbon dioxide.

The mixture is passed over a copper catalyst, supported on alumina, and a mixture of methanol and water is obtained. The catalyst selectivity is high, and essentially pure methanol is obtained (98%).

The major by products of the reaction are ethanol and propanol which make up most of the balance.

C02 + 3H2 CH3OH + H20 copper catalyst The water is distilled off by simple distillation, to obtain fuel grade methanol.

The carbon dioxide which is released by the fermentation process is captured by undertaking the fermentation in a closed vessel.

2. A second synergy that may be obtained is the drying and combustion of any carbon containing waste matter that results from the fermentation and associated processes, to produce carbon dioxide, by combustion. This material may then be converted to methanol fuel.

3. Blending facilities for both ethyl alcohol and methyl alcohol are located at a single site, as are primary storage tanks and road/rail tanker filling and weighbridge facilities.

PROVISION OF ELECTRICITY

The raw material with which the carbon dioxide, generated both by the fermentation process and by burning of waste cellulosic material, is combined is HYDROGEN.

The HYDROGEN is generated by electrolysis of water, which produces as a by-product, oxygen.

This is achieved in an electrolytic cell, in which purified de-ionized water, treated with a conductivity modifier, has a direct current passed through it between the ANODE and the CATHODE. The conductivity modifier is typically Potassium Hydroxide -the hydroxide is the same species as that which migrates to the ANODE. Hydrogen gas is produced at the cathode, which is then collected and compressed.

For the fixing of atmospheric carbon dioxide by the process of photosynthesis and the producing of alcohol fuel by both the fermentation process, and the process described by the invention to produce METHANOL, to represent a lowering of the total atmospheric carbon dioxide content, it is obvious that

ELECTRICITY MUST BE GENERATED WITHOUT ITSELF PRODUCING CARBON

DIOXIDE.

There are a number of methods in which this may be carried out, the chief of which are:- -Thermo-nuclear electricity -Hydro-electriC power -Wind turbine generated electricity -Solar electricity, by heat production or photo-electric cells or both -Oceanic/estuarY tidal power.

The most effective power sources, from the point of view of the invention are those sources, which provide a steady power output, and which are dedicated to the alcohol production facility. This allows forward planning and also minimizes storage volumes of raw materials.

Suitability for Wind Turbine generation of Electricity In the Mid-West (Corfl Belt) Region of the United States The corn belt of the United States is in general a suitable region for the utilization of wind turbine generated electricity.

The so-called Mid-Western portion of the contiguous United States is climatically suitable for both the production of corn (maize) and "farming" of wind.

The major difficulty encountered with the exploitation of wind generated electricity is the continuously variable diurnal production rate, coupled with seasonal variation.

The combined alcohol production facility including ammonium nitrate fertilizer production capability will only be able to accommodate the variable electricity production rate through a combination of methods.

SUMMARY TO THE BACKGROUND OF THE INVENTION

In summary the following points are relevant:

* The quantity of carbon dioxide entering the atmosphere mainly from coal based power plants is of considerable concern.

This gas may be significant contributory factor in average global surface temperature increase, commonly known as "global warming", Methanol is the cheapest of the major liquid automotive fuels to synthetically manufacture from a carbonaceous feedstock. This is mainly as a result of the simplicity of the chemical facility required, resulting from the very high catalyst selectivity. Thus very nearly all of the synthesis gas is converted to methanol (approximately 98%), and the remaining reaction products are mainly ethanol and propanol which are simply added to the fuel-grade methanol.

Water is the reaction by-product.

* When methanol is manufactured from coal a significant quantity of carbon dioxide is exhausted into the atmosphere. However, this quantity of carbon dioxide is lower than that for the manufacture from coal of traditional automotive fuels, or of ethanol.

* Methanol and ethanol are entirely compatible with the four-stroke piston engines currently in use worldwide as petrol (spark ignition) and diesel (compression ignition) engines.

* The alcohol may be added as a blend to petrol or it may be used in its neat form.

In most respects, and particularly in terms of the efficiency and pollution characteristics, ethanol and methanol are superior to the traditional automotive fuels petroleum and dieseline, within the boundaries outlined in the Background above.

SUMMARY OF THE INVENTION

According to the invention carbon dioxide gas exhausted produced by burning agricultural cellulose/lignite waste is used as the raw material, to manufacture liquid fuel for use in automobiles, or for other uses.

Thus the carbon dioxide gas is, according to the invention, one of the raw materials for the production of liquid automotive fuel.

The other raw material for the production of the liquid automotive fuel is hydrogen gas.

The hydrogen gas is obtained from a breakdown of liquid water by means of electrolysis.

A fundamental premise of the invention is that the electrical power used to electrolyse the liquid waste to produce hydrogen is generated by an energy source, which itself does not produce a carbon dioxide by-product. For most applications this energy source will arise from nuclear power stations, wind turbines, or hydroelectric power stations..

METHANOL MANUFACTURE: OUTLINE OF CHEMISTRY -

BASIC STOICHIOMETRY

METHANOL MANUFACTURE -CARBON SOURCE COAL

Manufacture Using Coal as a Feedstock The basic reactions in a simplified form are as follows: C + 02 P CO (COAL)

GASIFICATION

CO + H20 P CO2 + H2

SHIFF REACTION

CO + 5H2 + CO2 p 2CH3OH + H2

SYNTHESIS REACTION

METHANOL MANUFACTURE -CARBON SOURCE NATURAL GAS

Manufacture Using Natural Gas (Methane) as a Feedstock CH4 + H20 P CO + 3H2

STEAM REFORMING REACTION

CH4 + 202 P CO2 + 2H20

COMBUSTION OF METHANE

CO + 5H2 + CO2 p 2CHOH + H20

SYNTHESIS REACTION

METHANOL MANUFACTURE -CARBON SOURCE AGRICULTURAL

WASTE CARBON DIOXIDE

Manufacture Using Fossil Fuel Burning Power Station Exhaust CO2 Gas as a Feedstock 2H20 2H + 02

ELECTROLYSIS OF WATER

H2 + CO2 � H20 + CO REVERSE SHIFI' REACTION CO + 5H2 + CO2 2CH3OH + OH + H2O

SYNTHESIS REACTION

DISCUSSION OF BASIC CHEMISTRY

Coal Process When coal is used as a feedstock, carbon monoxide CO is formed by partial oxidation, in the gasifier.

The hydrogen, H2, is formed by reacting the carbon monoxide with water. This has the effect of reducing the water.

Part of the by-product of this reaction produces the carbon dioxide (C02) required for the synthesis reaction.

According to the basic stoichiometry of the process: 3 KG.MOLE of C is used for each KG.MOLE OF CH3OH (METHANOL). Of this: * 2KG.MOLE of C is used to make 2KG.MOLE of H2 * 1KG.MOLE of C is used to make 1KG.MOLE of CO * 1 KG.MOLE of CH3OH is produced * + 2 KG.MOLE of CO2 is exhausted to atmosphere Natural Gas Process When natural gas is used as the feedstock to produce methanol the methane (CH4) is reacted with steam (H20). This produces both the CO and the H2 required for the reaction.

* 1 KG.MOLE of CH4 and 1 KG.MOLE of H20 produces 1 KG.MOLE of CO and 3 KG.MOLE of H2 * 1 KG.MOLE of CH3OH is produced from 1 KG.MOLE of CH4 * 1 KG.MOLE of excess H2 is produced * (zero) 0 KG.MOLE OF CO2 is exhausted to atmosphere A portion of the natural gas is combusted to power the steam reforming reaction.

This provides the carbon dioxide (CU2) required.

gcultural Waste Carbon Diodde Process When carbon dioxide is used as the carbon source for the process, hydrogen (H2) is first produced by electrolysis of water (H2O).

A portion of the hydrogen (H2) is reacted against a portion of the carbon dioxide (CO2) to form the carbon monoxide (CO) required for the reaction.

According to the basic stoichiometry of the process: 3 KG.MOLE of H20 is electrolytically decomposed to form 3 KG.MOLE of H2 and 1.5 KG.MOLE of 02.

Of this: * 1 KG.MOLE of H2 is reacted with 1 KG.MOLE of CO2 to produce, 1 KG.MOLE of CO * 2 KG.MOLE of H2 reacts with the CO so formed * 1 KG.MOLE of CH3OI-I is produced from 3 KG.MOLE of H2 * + 1.5 KG.MOLE of oxygen is exhausted to atmosphere -1KG.MOLE of CO2 is exhausted to atmosphere In the waste carbon dioxide process, carbon dioxide that would be exhausted to atmosphere is consumed. Minus one KG.MOLE of CO2 is produced per KG.MOLE of methanol produced.

At present the only known visible method of fixing atmospheric carbon dioxide economically on a large scale remains the natural process of photosynthesis.

Alcohol fuel in the form of ethanol is manufactured from the products of photosynthesis, namely sugars and starches (carbohydrates).

A number of proposals have been mooted for conversion of the bagasse in sugar cane to fermentable sugars by the process of hydrolysis.

The hydrolysis of the cellulosic and lignitic material contained in the waste bagasse would be conducted in a weakly acidic environment at an elevated temperature (approximately 50-60°C).

Such proposals have until recently foundered on the issue of capital cost, since the best acid to use for the hydrolysis appears to be hydrochloric acid.

The cost of the reaction vessels required to undertake the hydrolysis is then prohibitive.

No doubt the re-evaluation of this technology will be undertaken as the financial pressure to locally produce automotive fuel in certain regions of the world, and the combination of environmental concern and economic affordability in other areas will promote deeper exploration into renewable resource fuel initiatives.

Be that as it may, a number of restrictions will still pertain to the production of ethanol by the hydrolysis/fermentation process: -In the first place, fermentation, which is an organic process is always accompanied by the release of carbon dioxide as a by-product of the fermentation. Stoichiometrically the quantity of carbon dioxide released back to the atmosphere is fixed at one third C6H1206 _______ 2C2H50H + 2C02

ZYMASE

Thus, independent of process inefficiencies, one third of the carbon fixed by photosynthesis is released back into the atmosphere.

-In the second place, weak acid hydrolysis may be relatively easily constrained to break down soft cellulosic material, but less easily to break down harder lignitic (woody) material. There will thus always be a significant portion of the organic material that is not amenable to conversion to alcohol in this way.

-Thirdly, the process is relatively complex and is variable dependent on the nature of the raw material, be it (say) sugar cane bagasse, maize plant stems and cobs, or hay.

The technology that is under review, that is the conversion of carbon dioxide to methanol by reaction with electrolytically produced hydrogen, may be applied to the waste material after cropping of various agricultural produce.

For example, the waste material bagasse from sugar cane production, or the water material from maize production, namely the stalk, roots and cob, may be converted to methanol fuel economically in certain regions of the world by this method.

In combination with the carbon dioxide produced by burning the waste material, the waste carbon dioxide from the manufacture of ethanol could be captured and converted by the process into methanol.

As a result of the combination of the existing fermentation technology to produce ethanol, with the "carbon skeleton" carbon dioxide reaction with electrolytically produced hydrogen to produce methanol, the quantity of alcohol fuel produced renewably by the photosynthetic fixing of atmospheric carbon dioxide will be increased manifold.

As an example of the increase in the quantity of organically produced alcohol that would result, were this technology to prove economically viable, ethyl alcohol production from the mid-Western States of the United States of America is semi-quantitatively explored. I0

INCREASE IN ORGANICALLY PRODUCED ALCOHOL FROM THE MID

WESTERN STATES OF THE UNITED STATES OF AMERICA

Use of Technology to Combine Carbon Dioxide Gas with Electrolytically Produced Hydrogen to Manufacture Methanol Basis -Ethanol is produced by conversion of the starch in maize to fermentable sugars, followed by fermentation.

-42% of the maize plant by dry mass comprises the grain, 58% by dry mass cellulosic and lignitic material with the general formula (C6H1oO5).

Assumptions -30% of the current crop is converted to ethanol.

-40% of the waste cellulosic/lignitic material is converted to silage for cattle at present, and is not available for conversion to alcohol fuel.

-Methanol synthesis stations will be co-located with ethanol synthesis stations in order to capture carbon dioxide exhausted by the fermentation process.

-A cash credit is given to the farmer for disposal of waste cellulosic material, to cover transportation costs and provide economic incentive to supply the alcohol fuel stations with the carbonaceous material.

Current Conversion of the Atmospheric Carbon Dioxide Fixed by Photosynthesis to Alcohol Fuel (Ethanol Only) = 0.3 (proportion of crop currently converted to ethanol) x 0.42 (proportion of maize plant that comprises the grain) x 0.66 (proportion of carbon retained -one third is lost in the fermentation process) = 0.084 (8.4%) Projected Conversion of the Atmospheric Carbon Dioxide Fixed by io Photosynthesis to Alcohol Fuel (both Methanol and Ethanol) Part A: Waste carbon dioxide from the fermentation process to produce ethanol. This carbon dioxide is converted to methanol 0.3 x 0.42 x 0.33 = 0.042 Part B: Cellulosic material converted to methanol 0.6 x 0.58 = 0.348 Part C: Ethanol produced by fermentation of sugars produced from breakdown of starch 0.3 x 0.42 x 0.66 = 0.084 Total A + B + C = 0.474 These figures indicate that the increase in carbon dioxide capture from a renewable resource is increased by a factor of 5.65 (approximately a sixfold increase), with no increase in the area of land under monoculture, and without specifically impinging on the current balance between agricultural produce earmarked for food and that for fuel.

The increase in fuel produced is, however, greater than this on a volumetric basis, since the specific gravity of the ethanol and methanol is the same (0.79 at 25°C), but only 1 mole of CO2 is required for each mole of methanol and 2 moles for each mole of ethanol.

Thus in terms of litres of alcohol fuel produced, the increase is approximately by a factor of 7.5.

On a calorific value basis, which is probably the best way to approach the multiplication factor, the increase in fuel production is by a factor of about 6.2 or 620%.

METHANOL MANUFACTURE -EXISTING PROCESS -COAL

FEEDSTOCK

TECHNICAL DESCRIPTION

In the normal production of methanol using a coal feedstock, the coal is first GASIFIED to produce mainly carbon monoxide (CO). Unwanted by-products are, typically, hydrogen suiphide (H2S) or sulphur dioxide (SO2), (dependent on gasification temperature), and carbon dioxide (C02).

Step One __________ Co COAL CO2 trace C ______ _______ H2S,S02 H2 4 Others C"4, V2 02 OXYGEN etc BLOCK DIAGRAM 1 çp Two In a second step, this gas stream is typically washed clean of dust and the unwanted carbon dioxide and hydrogen sulphide are then removed. The removal of the carbon dioxide and hydrogen sulphide is typically achieved by a process known as temperature swing adsorption (TSA). H2S Co2

Co, Co2 SCRUBBING H2S Co ____________ SECTION so2 plus Dust CO2 some

REMOVAL TT

LI2L), I12 _____________ SO2 TSA BLOCK DIAGRAM 2 Step Three In a third step the CO gas is compressed to a pressure level suitable for the SHIFT REACTION and the METHANOL SYNTHESIS REACTION. some

LOW I-HGH

PRESSURE PRESSURE

COMPRESSION

BLOCK DIAGRAM 3 Step Four In the fourth step the hydrogen for the reaction is generated by the reduction of water in a process known as the SHIFT REACTION.

Approximately two thirds of the carbon monoxide (CO) gas stream is diverted to the SHIFT REACTOR, and one third is used to provide the carbon source for the SYNTHESIS REACTION.

In this reaction water is reduced by the action of the reducing agent, which is carbon monoxide.

The waste product of this reaction is carbon dioxide which is exhausted to the atmosphere.

The product of this reaction is hydrogen. . 2CO

TO WASTE

3C0 2C0 ______ 2C0+2H20 Lf12 2C02+2H2 H20 Co BLOCK DIAGRAM 4 Step Five In the fifth step the synthesis gas is proportioned and then directed into the SYNTHESIS REACTOR. The reaction typically takes place at 50 -90 BAR.

Some carbon dioxide is added to the synthesis gas stream to cool down the reaction by the reverse shift reaction. This prevents catalyst sintering and extends catalyst life The gas is typically added to the METHANOL SYNTHESIS REACTOR at the top of the reactor, and at two or more further intermediate stages to allow the reaction to progress, which would otherwise be stopped by equilibrium considerations. The reaction is exothermic and the intermediate gas injection, called quench injection, lowers the temperature and moves the gas mixture away from equilibrium, allowing methanol formation.

A number of reactions occur in the synthesis reactor, which may typically be represented as: 1. CO + 5H2 + CO2 2CH3OH + H20 2. 2C0 + 7H2 + CO2 3CH3OH + H20 3. CO + 8H2 + CO2 --* 3CH3OH + 2H20 4. 2C0 + 10H2 + 2C02 4CH3OH + 2H20 Etc These reactions are all essentially equivalent to the same reaction, namely, CO + 2H2 CH3OH once the reverse shift reaction is accounted for. Thus, for example, in 4 above 2C0 + 10H2 + 2C02 4CH3OH + 2H20 could equally be written 2C0 + (2C0 +2H20) + 8H2 --4C1-130H + 2H20 When water is removed from both sides of the equation the following results: 4(CO + 2H2) 4(CH3OH) or CO + 2H2 CH3OH Thus the effect of adding carbon dioxide is to increase the quantity of water by-product of the reaction.

The actual quantity of methanol produced remains unchanged.

The methanol synthesis reactor is equipped with a recycle compressor.

BLOCK D1AGRAM

PRODUCTS OF

+ CO, C02, 112

PLUS UNREACTED

SYNTHESIS GAS StepS

In the next step the product stream is cooled down to condense out the methanol and the water.

This is typically conducted in a heat exchange known as an interchanger, against the incoming fresh synthesis gas, which requires heating up.

The liquid methanol product and by-product water are condensed and io recovered.

The unreacted synthesis gas is mixed with the fresh hot synthesis gas and passed to the recycle compressor. This compressor ensures that the reactants are maintained at the correct pressure.

FRESH SYNTHESIS GAS U14REACTED SYNTHESIS (COLD) GAS PRODUCT CH3OH(s) CH3OH

PHASE PRODUCT

C SEPARATOR

By-product H2O(g) 2 by-product Plus unreacted Synthesis gas

FRESH REACTION SYNTHESIS GAS (HOT)

BLOCK D1AGRA1 cp Sevefl The products of the reaction which are essentially pure methanol (the reaction is approximately 98% selective to CH3OH as product) and water are distilled to S provide fuel grade methanol by coarse distillation.

The water by-product is purified for recycling within the process.

BLOCK DIAGRAM 7 PRODUCT METHANOL (DI STILLATE) z CH3OH (Methanol) H20 (Water)

WATER

(RAFFINATE) The combined process flow scheme is illustrated overleaf as a block diagram.

FLOWSHEET TRADITIONAL PROCESS

FUEL METHANOL Nitrogen Exhaust N2

PRODUCT COAL FROM MINE I AiR

METHANOL ___________ ___________

I CHOH AIR I HANDLING] r COAL

I PRODUCT SEPARATOR

I ______

-I

WATER O2 1H2O

COAL

BY-PRODUCT GASIFICATION CO2.

WATER

CO + (CO, + Trace H, H25, I SO2 +H,S) C -, so2

STISIS _____

SULPHUR REMOVAL

REACTOR _j r DUST REMOVAL] Exhaust

ARBON DIOXIDE REMOVAL

PHASE J CO

PRODUCT ____

INTERCOOLER EPARATORJ

/RECYCLE \coMPREsS/ / CONRESSOR CO2 ___________ H20 {HIFT REACT1OJ H2 + CO2 I SECOND STAGE CO2 H2 REMOVAL C2 Exhaust CO2 In the manufacture of methanol using a coal feedstock, the following points should be noted.

* After the gasification section three kilogramme.moleS of carbon monoxide are produced for each kilogramme.mOle of methanol that is produced for sale.

The other two kilogramme.mOleS (kg.nioles) of carbon monoxide are used to reduce water and thereby produce hydrogen gas (H2 gas) by the shift reaction CO + HO ----* CO2 + H�= In this reaction, the C02 gas is exhausted to the atmosphere, contributing to the global increase in Carbon Dioxide levels.

Only one third of the carbon that is processed into Carbon Monoxide in the gasification section is incorporated into the product methanol, and only about a quarter of the carbon (or coal) feedstock is incorporated into the final product as a result of unavoidable process inefficiencies, including the gasifier efficiency.

* The majority of the coal (Carbon) is therefore used as a method of splitting the water molecule (H20) using CHEMICAL ENERGY.

* In the process for the manufacture of methanol from a coal feedstock, the following major reactions occur. The heats of formation are shown below each: A. GASIFICATION REACTIQI'I C + /O2 * CO (solid) (gas) (gas) i\Hf Hf iHf 0 0 -110598 kj /kg.mole TOTAL -110598 This reaction is strongly exothermic.

13 SHIF1 REACTION CO + H20 -* H2 + CO2 (gas) (gas) (gas) (gas) Hf iHf Hf Hf -110 598 -241 984 0 -393 780 kj/kg.mole kj/kg.mole kj/kg.mole TOTAL -41 198 The reaction is weakly exothermic.

C. SYNTHESIS REACTION This may be typically represented by the following: CO + 5H2 + CO2 * 2CH3OH + H20 (gas) (gas) AHf Hf Hf iHf iHf -110 598 0 -393 780 (x 2 kg.moles) -241 984 kj/kg.m kj/kg.mole -201 301 kj/kg.mole kj /kg.mole TOTAL -402 602 This reaction is strongly exothermic.

METHANOL PRODUCTION PROCESS EMPLOYED BY THE INVENTION

io According to the invention, carbon dioxide exhaust, typically from cellulosic/lignitic agricultural waste, is used as the carbonaceous raw material for the manufacture of methanol.

The carbon dioxide will typically be diluted with a large amount of excess air used for combustion, and will contain a significant quantity of particulate matter, as well as sulphur containing compounds, mainly Sulphur Dioxide.

The gas collection point should be situated after the normal dust collection units, that is after the bag filters or electrostatic precipitators The carbon source is useless as a reducing medium, since it is fully oxidised. It is entirely ineffective in its normal role as a reactant, and cannot be used to undertake the formation of hydrogen gas by capturing oxygen from the water molecule.

çp One In the first step of the process, the carbon dioxide gas, which is mixed with a large quantity of excess air and nitrogen, together with some sulphur containing compounds and residual dust is raised in pressure by a few inches water gauge (inches wg) in order to pass it through the WASHING UNIT. This is achieved by using a BLOWER.

N2, C02, Excess Air N2, C02, Excess Air 8LOWER Residual Dust Residual Dust BLOCK DIAGRAM 1 Step Two The Carbon Dioxide gas stream is now passed through a WASHING UNIT to remove the residual dust. This unit will typically comprise a set of water spray nozzles situated along the diameter of a venturi pressure recovery constriction.

A number of venturis may be placed in series.

Following from this wash, the gas, which is saturated with water is passed through a DROPLET SEPARATOR to remove dirty water droplets, using a physical separation method.

BLOCK DIAGRAM 2 N2, C02, Excess Air N2, C02, Excess Air Residual Dust ___________________ Trace so2 WASHING

CLEAN DROPLET

WATER

Step Three The carbon dioxide stream, which is now substantially free of dust, but which contains N2, Air and some Sulphur containing compounds, typically SO2, is now processed in order to provide a source of pure Carbon Dioxide (C04. This is achieved in the GAS PURIFICATION SECTION.

This typically comprises a temperature and/or pressure swing adsorption unit.

A number of proprietary technologies are available to achieve this.

The residual SO2 and other impurities are removed from the CO2 stream at this stage.

Refrigeration of the adsorbent liquid may be required at this stage.

If pressure swing adsorption is used, the exhaust comprising mainly excess air and nitrogen may be passed through a turbine in order to economize on compression costs.

BLOCK DIAGRAM 3 ________________ AIR, NITROGEN, Some CU,, Some SO, CU2, AIR, NITROGEN GAS __________________

____________________ PURIFICATION

Some so, SECTION PURE CO, Step Four The pure carbon dioxide (CO2) is now compressed prior to the REVERSE SHIFT REACTION.

Typçlly this will take place at about 50-90 BAR.

Co2 Co2

LOW PRESSURE INTERMEDIATE PRESSURE

BLOCK DIAGRAM 4 Step Five In another section of the methanol facility HYDROGEN GAS is prepared by electrolysis of water.

Raw material WATER is purified by filtration followed by removal of electrolytic impurities, typically salts of various trace elements, as well as dissolved carbonates, etc. The removal of ionic species is typically conducted in an ION EXCHANGE TOWER.

BLOCK DIAGRAM 5

PROCESS WATER

WASTE STREAM

Step Six The process water is now treated with a CONDUCTIVITY MODIFIER, which optimises the electricital efficiency of the electrolyte cells. This is typically potassium hydroxide.

BLOCK DIAGRAM 6

CONDUCTIVITY

MODIFIER

PROCESS WATER PROCESS WATER TO

Step Seven The process water is now electrolysed to produce HYDROGEN GAS. This is essentially the core of the entire process.

A very large amount of electrical energy is required at this stage, since water is a stable molecule and has a highly negative heat of formation as follows: H2 + 02 ____ H20 (gas) (gas) (liquid) Hf iHf Hf 0 0 -286 000 kj /kg.mole As well as employing a very large power input, the cell house will be physically very large in extent, and will require a considerable input of construction material.

Nevertheless, the technology is well known and proprietary electrolytic cells are available from a number of vendors.

The function of the electrolytic cell is to break down the water molecule by the action of ELECTROLYSIS.

The basic process of ELECTROLYSIS OF WATER is described in outline below: H2t K OH-tO2 I (conductivity (H+H = H2) modifier)

H IONS K OH-

SELECTIVELY BOTH OH- OH

DISCHARGED IONS TO -CATHODE ANODE 40H -* 0 + 2H20 CATHODE;:T-*-----...

(PROCESS WATER) H20 The product HYDROGEN is generated at the CATHODE and is captured as the raw material for the process.

The by-product OXYGEN is generated at the ANODE, and, because it will be produced in quantities too large for commercial exploitation, will mainly be exhausted into the atmosphere. For electrolysis units conjoined to coal based power plants, the oxygen may be used to reduce excess combustion air and lower residual waste carbon in the ash.

Some oxygen may be removed for commercial sale.

The amount of electrical energy is extremely large, and is typically generated using a THERMO-NUCLEAR POWER STATION for large projects involved with traditional liquid fuel displacement.

For the generation of 1 KG.MOLE PER SECOND of hydrogen gas at the cathode of the (combined) electrolytic cell, assuming a 5% efficiency loss in conversion of electrical energy to chemical energy requires an electrical input of about 300 MEGAWATI'S.

Thus 2 kg mass of hydrogen generation per second requires 306 MW of electrical power.

02 gas (to exhaust) H20 H2 gas ocss ELECTROLYSIS (to process) BLOCK DIAGRAM 7 Step Elgjt The hydrogen gas produced by the ELECTROLYTIC cell is collected and compressed, in a first stage compression, to enable reaction against the purified and compressed CARBON DIOXIDE.

H2 GAS H2 GAS

LOW INTERMEDIATE

pREssui PRESSURE BLOCK DIAGRAM 8 Step Nine The purified and compressed CARBON DIOXIDE is now reacted against the HYDROGEN gas to produce the CARBON MONOXIDE gas required for the synthesis reaction.

Approximately one sixth of the HYDROGEN GAS stream is directed, along with approximately half of the CARBON DIOXIDE gas stream, into the REVERSE SHIFT REACTOR.

These proportions will vary somewhat dependent on the catalyst type, the operating pressure of the SYNTHESIS REACTION, and the quench gas injection arrangement around the reactor.

The heats of formation of the REACTANTS are PRODUCTS involved in the REVERSE SHIFT ACTION are as follows: CO2 + H2 --CO + H20 (gas) (gas) 4____! (gas) (gas) iHf Hf iHf i\Hf -393780 0 -110598 -241984 kj/kg.mole kj/kg.mole kj/kg.mole i\Hf= +41 198 kj/kg.mole There is thus a net positive heat of formation according to HESS'S LAW OF CONSTANT HEAT SUMMATION.

The process will absorb approximately 41.2 MW of power per KG.MOLE of Hydrogen consumed to form CARBON MONOXIDE.

However, since only a relatively small portion of the HYDROGEN generated by the electrolytic cells is involved in the REVERSE SHIFT REACTION, this does not amount to a significant heat input.

Thermodynamic integration of the entire methanol manufacturing process will allow the REVERSE SHIFT REACTION endothermic power input to be transferred from the SYNTHESIS REACTOR by heat exchange, in typical energy integration schemes.

BLOCK DIAGRAM 9 50% CO2 GAS BYPASS (TYPICAL) Co2 Co2

REVERSE CO

SHIFT

112 REACTOR

GAS

H2 GAS BYPASS REVERSE SFI1FT

REACTOR

80-85% (TYPICAL) H2 GAS BYPASS çp Ten (: The following steps are as for the coal based flowsheet.) In the tenth step the synthesis gas is proportioned and then directed into the SYNTHESIS REACTOR. The reaction typically takes place at 50 -90 BAR.

Some carbon dioxide is added to the synthesis gas stream to cool down the reaction by the reverse shift reaction. This prevents catalyst sintering and extends catalyst life I0 The gas is typically added to the METHANOL SYNTHESIS REACTOR at the top of the reactor, and at two or more further intermediate stages to allow the reaction to progress, which would otherwise be stopped by equilibrium considerations. The reaction is exothermic and the intermediate gas injection, IS called quench injection, lowers the temperature and moves the gas mixture away from the equilibrium, allowing methanol formation.

A number of reactions occur in the synthesis reactor, which may typically be represented as: 1. CO + 5H2 + CO2 -) 2CH3OH + H20 2. 2C0 + 7H2 + CO2 -----p 3CH3OH +H20 3. CO + 8H2 + 2C02 3CH3OH 2H2O 4. 2C0 + 10H2 + 2C02 4:: 4CH3OH + 2H20 Etc....

These reactions are all essentially equivalent to the same reaction, namely, CO+2H2 -CI-130H once the reverse shift reaction is accounted for. Thus, for example, in 4 above 2CO + 10H2 + 2C02 T2� 4CH3OH + 2H2O could equally be written 2C0 + (2C0 + H20) + 81-12 4CH3OH + 2H20 When water is removed from both sides of the equation the following results: 4(CO + 2H2) 4(CH3OH) or CO + 2H2 -* CH3OH Thus the effect of adding carbon dioxide is to increase the quantity of water by-product of the reaction.

The actual quantity of methanol produced remains unchanged.

The methanol synthesis reactor is equipped with a recycle compressor.

BLOCK DIAGRAM 10 CO+H2+C02 4 4 4 co+H2+C02 PRODUCTS OF CO+H2+C02: H20 + CO, CO2. H2

PLUS UNREACTED

SYNTHESIS GAS

Step Eleven In the next step the product stream is cooled down to condense out the methanol and the water.

The liquid methanol product and by-product water are condensed and recovered.

FRESH SYNTHESIS GAS UNREACTED SYNTHESIS

(COLD) GAS PRODUCT CH3OH(s)

_______________ PRODUCT

By-product H2O(g) SEPARATOR H20 by-product Plus unreacted Synthesis gas

FRESH REACTION SYNTHESIS GAS (HOT)

BLOCK DIAGRAM 11 Step Twelve The products of the reaction which are essentially pure methanol (the reaction is approximately 98% selective to CH3OH as product) and water are distilled to provide fuel grade methanol by coarse distillation.

The water by-product is purified for recycling within the process.

PRODUCT METHANOL

(DISTiLLATE) ] CH3OH (Iviethanol) 2 Water C/D

WATER

(RAFFINATE) BLOCK DIAGRAM 12 The combined process flow scheme is illustrated below as a block diagram.

In the manufacture of methanol using wind, hydroelectric or nuclear generated electricity to electrolyse water and produce hydrogen gas, the following points are relevant: * The raw material carbon takes the form of Carbon Dioxide (C02).

* The only other raw material for the manufacture of methanol is water. After purification and conductivity modification, the raw material water is electrolysed to produce hydrogen.

* The major effluent from the plant is oxygen which is released to the atmosphere.

* From an economic viewpoint the following salient features emerge: -The raw materials for the process, Carbon Dioxide and Water require a relatively basic cleanup prior to processing.

From an economic point of view the two major traditional ways of producing methanol are compared with the nuclear electrolysis method as an overview.

FLOWSHEET

METHANOL PRODUCED BY ELECTROLYSIS OF WATER

c02, ____ _____ AIR, AIR, Li i C02, N2, _____ ________ WASFIENG DROPLET N2, Trace SO2 WASH UNIT SEPARATOR WATER 1 ____________ r AIR

DIRTY WATER GAS

__________________ NiTROGEN I PURIFICATION i

FLOCCULATION I I SECTION SO

AND/OR FILTRATION I] _________ PROCESS' C02 1NTERDIATE ION H20 _____ \ OMPRESSO

EXCHANGE _____ _____

REVERSE

SHJFT

REACTOR CO2 CO2

PROCESS

WATER ____ Co

CONDUCTIVITY H2

MODIFICATION jib r

H20 H2 __ 1

RECYCLE

\\COMPRESSOR

ELECTROLYSIS _____________ __________________

CELLS T PHASE PRODUCT _____

SEPARATOR j I INTERCOOLER] 1 LIQUID _____________

Z METHANOL

02 _IAND I

EXHAUST WATER REACTOR

-

-I

-I (/D

RAFFINATE WASTE METHANOL

I UNREACTED GAS

METHANOL

PRODUCT

METHANOL FROM COAL

(Raw Material -Coal) Raw material is low opportunity cost, high ash coal. (Limited export potential).

The cost of coal mining, coal beneficiation and handling, coal gasification and ash disposal is high. This represents approximately 50% of the capital cost input.

Other variable costs are low.

Fixed costs (Maintenance and Personnel) are relatively high as a result of the high proportion of solids handling equipment and gasifiers which are in general high maintenance items.

The process of converting low value coal to high value methanol is typically referred to as a HIGH VALE ADDED operation.

METHANOL FROM NATURAL GAS

(Raw Material -Typically Natural Gas) Raw material is usually high cost and has a number of alternative uses.

Fixed costs for a gas based plant, maintenance and personnel, are much lower than for a coal based plant.

All of the equipment downstream of the production of the required synthesis gas is identical (or nearly identical) to that for the coal based methanol plant.

The process of converting expensive Natural Gas into high value methanol is typically referred to as a LOW VALUE ADDED operation.

METHANOL FROM WASTE CO2 CONVERTED BY ELECTROLYSIS (Raw Material -Carbon Dioxide Produced by Burning Agricultural Waste; -River Water) Raw Material is essentially at zero cost.

The Electrolysis method of methanol manufacture is essentially a DIRECT ENERGY CONVERSION PROCESS.

All of the chemical energy in the methanol comes form the electrical energy generated by the power plant.

The value of the chemical energy in the methanol is greater than the value of the raw electrical energy generated.

This pays for the chemical synthesis equipment, capital requirement and all of the fixed costs.

Fixed costs are low, and essentially similar to those for a gas based plant.

The major item of capital equipment is the electrolysis cell house.

The electricity cost for the conversion represents practically all of the total variable cost of production.

The process of converting essentially valueless carbon dioxide exhaust and raw water to high value methanol using high value electricity may be referred to as a DIRECT ENERGY CONVERSION process.

MASS AND ENERGY BALANCE

Methanol Produced by Electrolysis of Water, in Combination with Waste Carbon Dioxide BASIS 4400 TONNES/DAY OF METHANOL PRODUCT 4 400 Tonnes/Day = 183.333 Tonnes/hr = 50.925 Kg/second KG.MOLES/SECOND OF PRODUCT METHANOL Molecular Weight of Methanol CH3OH = 32.043 KG.MOLE/SEC 50.925 = 1.589 32.043 KG.MOLES/SECOND OF HYDROGEN GENERATED The reaction formulae may be variously represented as: CO + 2H CH3OH CO + 5H2 + C02 2CH3OH + H20 2CO + 7H2 + CO2 3CH3OH + H20 CO + 8H2 + 2C02 3CH3OH + 2H20 3CO + 9H2 + CO2 4CH3OH + H20 2C0 � 10H2 + 2CO2 4CH3OH + 2H20 These reactions are, in fact, all equivalent one to the other, as can be seen when it is taken into account that in the REVERSE SHIFT ACTION H2+C02 -CO One kg of CO is, in fact, equivalent to one kg.mole of H2.

Thus the formula CO + 2H2 CH3OH indicates 3 EQUIVALENT moles of H2 to produce 1 mole of CH3OH, as does the formula 3C0 + 9H2 + CO2. 4CH3OH + H20 where 12 EQUIVALENT moles of H2 are required to produce 4 moles of CH3OH.

KG.MOLES H2 REQURIED TO BE GENERATED PER SECOND = 3x1.589 = 4.767 kg.moles This is equivalent to 9.534 kg/second.

PURIFIED DE-IONISED WATER REQUIREMENT FOR THE ELECTROLYTIC

CELL HOUSE

KG.MOLES DE-IONISED WATER REQUIRED/SECOND 4.767 kg.moles 85.85 kg/second 309.07 tonnes/hr 7417.75 tonnes/day

CARBON DIOXIDE REQUIREMENT

All of the carbon in the carbon dioxide entering the synthesis plant, appears in the methanol product.

KG.MOLES OF CO2 REQUIRED = 1.589 kg.moles/secofld = 69.91 kg/second 251.69 tonnes/hr = 6040.7 tonnes/day Note: SIZE OF CONJOINED CONVENTIONAL FOSSIL FUEL BURNING POWER

PLANT

The approximate minimum size of the power plant linked to the methanol facility is as follows: KG.MOLES/SECOND OF CARBON = 1.589 Heat of combustion of Carbon C + 02 _____ C02 iHf i\Hf iHf 0 0 -393 780 kj/kg.mole Energy released per second by the burning of 1.589 kg.moles of Carbon to Carbon Dioxide: = 1.589x3937SO = 625.72 MW The approximate efficiency of a coal fired power station in conversion of chemical energy to electrical energy is 40%.

The minimum size of the conjoined fossil fuel burning power station is thus: 625 xO.4 250 MW is Since not all of the CO2 will be recovered from the existing facility, an existing plant size of 300-400 MW would probably be required.

Electrical Power Required for the Methanol Synthesis Plant The electrical power required for the electrolysis cells which generate hydrogen gas and oxygen gas from water is calculated as follows: KG.MOLES/SECOND REOUIRE H2 (gas) = 4.767 H2 + 02 _____ H20 (gas) (gas) (liquid) Hf iHf -iHf 0 0 -286 030 kj /kg.mole Assuming a 5% conversion loss, the electrical power required is: 4.767 x 286030x 1.05 = 1432 MW kg.moles kj sec kg.mole Thus a nuclear power plant of approximate capacity 1500 MW will be associated with a conventional power plant of approximately one third of the size.

CHEMICAL ENERGY STORED IN THE METHANOL MOLECULE

It is instructive to compare electrical power input into the chemical synthesis plant with the chemical energy that is stored in the methanol molecule.

Methanol manufactured per second = 1.589 kg.moles On combustion CH3OH + 11/202 ____ C02 + 2H20 (gas) (gas) iHf \Hf iHf 238815 0 393780 2x(241988) kj/kg.mole kj/kg.mole =483 976 kj /kg.mole Net heat = 638 941 kj/kg.mole FOR 1.589 KG.MOLE/SECOND

CHEMICAL POWER POTENTIAL

= 1.589x63894l = 1015 MW Thus an ELECTRICAL POWER of approximately 1432 MW is converted into a CHEMICAL POWER of 1015 MW.

The majority of the balance is the loss incurred as heat of vaporisation of water and of methanol.

ECONOMICS OF THE MANUFACTURE OF METHANOL FUEL FROM

WASTE AGRICULTURAL PRODUCE, UNITED STATES OF AMERICA The economics of the above conversion is of overriding importance.

Essentially, the economics of conversion of carbon dioxide obtained from the burning of waste agriculturally produced cellulosic/lignitic material is similar to that for the conversion of the carbon dioxide exhaust from fossil fuel power stations.

These economics revolve mainly around: a) The cost and availability of electric power to conduct the electrolysis of water, which provides the hydrogen for the methanol synthesis.

b) Economy of scale -the physical size of the synthetic fuel manufacturing facility.

c) Transportation costs and infrastructure required to transport the (essentially bulky) cellulosic material to the synthetic fuel facility.

d) Any extraneous financial incentives/disincentives which are prevalent in many national economies and particularly in the agricultural sector.

The physical basis for the synthetic production of methanol is described for the corn belt of the United States of America as follows: Provision of Electricity Statistically, the mid-West of the United States, comprising the States of North and South Dakota, Nebraska, Kansas, Iowa and the western portions of Montana and Wyoming are well suited to the generation of electricity by wind turbine.

Indeed, it has been pointed out recently that it is unfortunate geographically that the areas in the United States most suitable to the generation of electricity by wind turbine are those areas which are sparsely populated and in which the population is static or shrinking. (Precisely the areas above.) The provision of electricity by wind turbine is not particularly suitable for reticulation for normal domestic use, since the quantity of electricity generated at any particular time is at the vagary of the instantaneous wind speed. Cities undergo a cyclical demand pattern with peaks coinciding with domestic human activity. Provision of electricity by wind turbine for this use is awkward, and must be supplemented by a controllable power source.

The generation of electricity by wind turbine is, however, well suited to a continuous production process in which the instantaneous production rate is not critical and may be readily increased or decreased at short notice.

The methanol synthesis satisfies this requirement by virtue of its simplicity. The product of the synthesis reaction is almost entirely methanol (with water as a by-product) and the major co-products are ethanol and propanol, which are simply retained in the product.

Under these conditions, namely continuous absorption of electricity generation independent of cyclical demand, and of electricity turbines situated in an intrinsically suitable windy area, the cost of the electricity per kw.hr will be in the order of US' 5.5-6.O/kw.hr, which is closely similar to that for thermal power stations.

Harvesting, Transportation and Combustion of the Waste Cellulosic Material The waste cellulosic/lignitic material in the case of maize accounts for approximately 58% by dry mass of the crop.

After removing the cobs from the plants and shelling the maize, the residue comprising stalks, stems and husks must be collected and compressed into a form suitable for transportation.

Ideally, transportation distance to the methanol/ethanol synthesis station should be minimised.

What is envisaged in this respect is some form of standardised "modular" S alcohol synthesis station, occurring at regular intervals in the relevant agricultural area on some form of grid basis.

The combustible material would be offloaded at the station and used as the fuel for electricity generation from a standard thermal power station equipped with turbo-alternator sets.

From the point of view of economics, and to allow a realistic overview of the "true" economics of the process, the cellulosic material should be accorded a value according to its equivalent calorific content in the area in which it is used. iS

In other words, a typical heat of combustion of cellulosic/lignitic material is of the order of 15 800 kj/kg and that of a medium grade coal suitable for power generation 24 600 kj/kg (for a coal containing 24% ash).

In, for example, Nebraska, such a coal would cost (say) US$30/tonne delivered to the power station.

A credit of US$19.26 would then be accorded to each tonne of cellulosic material delivered.

Electricity generated from this thermal power station would then be purchased by the methanol synthesis facility along with wind turbine generated electricity, as well as intermittent importation from other (unspecified sources) via the electrical grid system as required for optimum economic operation of the facility.

Depending on the transportation distance, it would appear that the calorific value "credit" accorded to the material of approximately US$20/tonne would more than cover the cost of harvesting, baling and transportation to the power station.

The quantities involved are explored quantitatively in a mass and energy balance in order to provide a more substantial appreciation of the economics of and the economic factors involved in the process.

s MASS AND ENERGY BALANCE BASIS 1 000 KG OF METHANOL produced from waste cellulosic material Quantity of Waste Cellulosic Material Required (All weights refer to dry weight) For simplicity all material is accorded the stoichiometric formula CoH1005. (MW 162) One tonne of cellulosic material contains 6.173 kg/moles x 6 = 37.037 kg/moles of carbon.

Mass of carbon 444.4 kg (= 72/162 x 1000) One tonne of methanol (CH3OH) (MW 32) contains 12/32 x 1000 = 375 kg of carbon.

One tonne of waste cellulosic material therefore produces 444.4/375 = 1.185 tonne of methanol.

Electricity Reguireme The electricity consumption to provide hydrogen gas by electrolysis for reaction with the carbon dioxide is calculated.

Kg moles of H2 required per tonne of methanol Kg moles of methanol = 31.25 Reaction Stoichiometry C02 + 3H2 -CH3OH + H20 Kg moles of hydrogen required 31.25x3 93.75 kg moles. l0

From the heat of formation of water H2 + 02 _____ H20 (gas) (gas) (liquid) Hf=0 i\Hf=O zHf =-286030 kj/kg mole Energy requirement per tonne of methanol = 3x31.25x286O3O = 2.6815x107k1 Assuming a 5% efficiency loss this amounts to 2.822 x 1Qjj The quantity of electrical energy required to perform the electrolysis, per tonne of methanol is then 2.822 x 1O kw.hr 3 600 =7.83x103kw.hr Electrical Energy Cost The cost of electrical energy is assumed at US 6.O/kw.hr independent of the electrical energy source.

In actual operation three sources of electrical energy will be used as follows: -Electrical energy generated on site by the burning of the waste cellulosic material -Electrical energy provided by wind turbines -Imported electricity from the grid system, with a generally non-specific form of generation.

In addition to these three sources of electrical energy it is also envisaged that the electricity generating station on site will operate with a partial feedstock of coal, on either a normal or intermittent basis. This will ensure that the synthesis facility operates at an economic utilisation capacity when there is a transportation interruption or poor harvest or other circumstances leading to feedstock starvation.

The electrical energy cost per tonne of methanol produced, including the on site requirements of carbon dioxide and hydrogen compression, and other electrical requirements is of the order of 8.2 x 1O kw.hr.

The electricity cost at US 6/kw.hr is then US$492/tonne.

Since carbon dioxide raw material has already been accounted, this essentially represents the variable cost of production.

Proportion of Electricity Provided by the Burning of Cellulosic Material It has already been assumed that the cellulosic/lignitic maize plant waste will be used in the generation of electricity to be sold to the methanol synthesis plant at US 6/kw.hr.

Nevertheless, it is of importance to calculate the proportion of the electrical energy that must be imported to the site, relative to the proportion generated on site.

One tonne of methanol is accompanied by the importation of 844 kg of cellulosic material (dry basis).

The calorific value of this material is approximately 1 580 kj /kg.

One tonne of methanol is thus accompanied by the release of: 844 x 15800 = 3704 kw.hr of heat 3 600 Typically in a thermal power station approximately 35-40% of the heat energy is translated to electrical energy.

The quantity of electrical energy generated on site will thus be of the order of: 0.375 x 3 704 = 1.389 x 10 kw.hr The proportion of the electricity generated on site to the proportion of imported electricity is thus: 1.39 x 10 0.169 or 17% 8.2 x 10 Thus 17% of the electricity requirement is generated on site, and 83% is imported.

Economics of Manufacture (Continued -Capital Cost and Fixed Costs of Production Specific fixed costs, that is primarily the cost of labour and maintenance per tonne of fuel produced, are, by and large, proportional to the specific capital cost of the manufacturing facility.

In this regard, economics of scale are important.

Typically, a power law with exponent 0.6 is applicable to the relative capital cost as a function of relative capacity.

Thus a facility producing, say, 2 000 tonnes/day of methanol does not cost then times as much as a facility producing 200 tonnes/day, but: I 2 000 106 100.6 = 3.98 L200J or 4 times as much.

The cost per litre of methanol produced of capital repayment, labour, and maintenance is thus, to a significant extent, dependent on the scale of the operation.

For a facility producing 2 200 tonnes/day of methanol, which is the approximate size of the facility envisaged, the following figures are assumed: Capital Cost -US$1 617.9 m Annual Fixed Cost of Production -US$38.9 in Adopting these figures, and including the cost of electricity at US 6.0/kw.hr, a financial model of the production economics may be built up.

This model includes a taxation regime, incorporating an initial allowance of 50% of the capital cost of the facility granted during the first year of production, and two "wear and tear" taxation allowances, each of 25% of the initial capital cost in the next two succeeding years.

Farming Crop Price for Waste Material It is envisaged that the methanol production economics must include a payment made to the fanner, over and above the transportation costs of the maize cellulosic/lignitic waste to the processing facility.

This will provide an incentive for the farmer to deliver the cellulose to the manufacturing facility, and also to explore the economics of different maize varieties, which have a greater proportion of incorporated non-grain hydrocarbon material.

As a provisional return, a credit of US7.0 on each litre of methanol fuel produced is envisaged, payable to the fanner for the production of the raw material cellulose, over and above the credit of US$19.26 per tonne accepted as a credit by the power station for its calorific value.

This latter credit, as detailed above, does not appear as an additional cost burden to the methanol produced since electricity is produced and properly accounted for as a variable cost input to the manufacturing facility.

Since the specific gravity of methanol is 0.79, and 1 tonne of waste cellulosic material produces 1.185 tonnes of methanol, the credit per kg dry mass of cellulosic/lignitiC material is: 7/0.79 X 1.185 = US4 10.5/kg For material containing 12% moisture (average for "dry" cellulose), the credit US9.2 /kg.

Farming Credit per Hecta Since the waste material accounts for approximately 58% of the mass of the crop, and an average crop of shelled maize is 4.5 tonnes/hectare, the quantity of cellulosic material per hectare, on a dry mass basis is approximately 6.2 tonnes.

A credit of approximately US$650/ha would accrue to the farmer over and above transportation costs to the methanol synthesis facility, and the normal maize crop. I0

Combined Production Economics For a methanol synthesis plant operating at a production rate of 2 200 tonnes/day, and employing imported electricity generated (mainly) by wind turbines at a cost of US6.0(1/kw.hr, the following sample economic breakdown pertains [Variable Cost /litre ___________ [Electricity 38.9 Cost of Cellulose 7.0 ____________ Fixed Cost -Personnel Costs 1.7 Le?ce Costs ___________________ Other 0.9 ________ Capital 5.0 payrnents/DistribUtiOfl I ________ Taxation 5.0 LTAL 71.7 C/litre Cost per Gallon of Fuel The cost per gallon of fuel is then approximately: 3.785 x 71.7 US$2.71/gallon Calorific Value Cost of the Fuel Since the calorific value of the fuel is only 51% of that of petroleum, the actual cost per unit calorific value is approximately: 2.71 US$5.31/gallon 0.51 Cost to the Consumer -Petroleum Usag As a substitute for petroleum, methanol is more efficient if employed in purpose modified engines incorporating a higher compressions ratio.

In this case the proportion of chemical energy translated to mechanical energy (or the increase in miles per gallon) is about 40%. If this is factored into the cost equation (FOR PETROL VEHICLES ONLY), the actual cost of the fuel to the consumer is of the order of US$3.20/gallon

PRODUCTION ECONOMICS -FINANCIAL MODEL

The economics of the production of fuel using agricultural waste carbon dioxide as a carbon source is of crucial importance to the practical implementation of the invention.

In this respect a financial analysis is presented as a part of the background to the invention, for the production of methanol.

The production economics of the carbon dioxide energy conversion process are primarily dependent on the cost of electrical energy at the synthesis plant, and secondarily on the capital cost of the synthesis plant.

For a natural gas based methanol synthesis plant, the economics of production are primarily depend ant on the cost of the natural gas, and secondarily on the capital cost of the synthesis plant.

For a coal based methanol synthesis plant, using as a raw material high ash coal with essentially zero opportunity cost (no export potential) the major financial consideration is the overall capital cost of the facility. Fixed costs of production (mechanical maintenance and personnel) are a secondary financial consideration.

The financial parameters that are used in the evaluation are: * Net present value at zero cost of capital * Net present value at a weighted average cost of capital above the inflation rate * Internal Rate of Return (non-inflationary), and * Internal Rate of Return (inflationary).

For the comparative financial analysis the following input parameters are of especial relevance:

CAPITAL CO

Each technology has been assigned a base case capital cost, at fixed production rate. This production rate is set at 4400 tonnes/day. Note that this is the size of the New Zealand Synfuel facility, erected in the mid-1980s.

The capital cost in each case reflects not only the direct cost of chemical plant construction, including off sites and utilities, but also includes: * Indirect costs

-field distributables

-contractor and sub-contractor home offices.

* Capitalized engineering * Capitalized spares * Venture costs * Insurances and levies * Start-up and commissioning costs * Inflation and interest during construction * Contingency.

The indirect and other costs typically make up greater proportion of the capital input than the direct construction costs.

For the three types of Methanol Synthesis plant the following inclusive capital costs of implementation are representative.

Base Case Production Rate -4400 Tonnes/Day r Technology Capital Cost US$m NATURAL GAS REFORMING 2037.2 Notes: In a sense this represents a base-case as most methanol plants worldwide use natural gas as a raw material.

Technology Capital Cost US$m COAL GASIFICATION 3395.4 Notes: A coal based methanol plant is approximately 67% more expensive in terms of capital compared to gas based synthesis plant.

Technology Capital Cost US$m WASTE CO2 ELECTROLYTIC H2 2452.2 Notes: For the exhaust CO2 synthesis the main additional capital cost elements are the electrolytic cells and the CO2 recovery and SO2 stripping sections at the front end of the synthesis facility.

The major cost saving compared of the natural gas synthesis is the steam reformer section which is not a part of the flow sheet. However, this is essentially replaced by the reverse shift rector.

CAPITAL COST -PRODUCTION RATIO FACTORING

For alternative rates of production the capital cost is calculated at the production ratio, factored to a power of 0.6.

Thus for the same three cases producing 2,200 tonnes per day, or exactly half of the base case of 4400 tonnes per day, the capital cost is not 50% of the base case but r2200l 0.6 = 0.659 L4400J Thus the cost is not half, but two thirds, which is typical of industrial experience with loss of economy of scale.

CAPITAL COST -EXPENDITURE PROFILE

For all of the scenarios, it is assumed that the capital is expended over a three and one half year period, and the following proportions are expended.

YEAR 1 23.3% YEAR 2 40.0% YEAR 3 YEAR 4 6.7% (half year) It is assumed that commissioning starts after the first quarter year 4, and that nameplate production is achieved in quarters 3 and 4.

For smaller synthesis plants (circa 500 tonnes/day and lower) this time scale is longer than would be typically anticipated, but is in any event conservative and will not inflate economic expectation.

FIXED COSTS OF PRODUCTION

Each technology has been assigned a fixed cost base of production which is typical of the technology used.

Fixed costs of production typically comprise for the main part (Ca 80%) personnel and maintenance costs.

The following base case fixed costs of production are assumed for the investments.

Annual Fixed Costs of Production by Technology Base Case Production Rate 4400 Tonnes Technology Annual Fixed Cost of Produc US$/Annum NATURAL GAS REFORMING 51.9 COAL GASIFICATION 89.6 WASTE CO2, ELECTROLYTIC H2 58.9 For alternative rates of production in the fixed costs of production are calculated at the production ratio factored to a power of 0.6.

In essence the ratio of fixed costs of production will follow the ratio of installed capital cost.

In the calculation of the fixed costs of production for the waste C02, electrolytic H2 method of production, it has been assumed that the electrolytic cells, which re relatively capital intensive are not maintenance or personnel intensive.

VARIABLE COSTS OF PRODUCTION

General Introduction

Whilst the capital cost of the methanol plant installations will vary regionally and globally, the range of variation is limited of the order of 30%.

In areas remote from the primary manufacture of the major equipment items and where extensive infrastructure is required the cost will be higher. In areas where the methanol plant may be situated adjacent to existing service facilities (brownfield site) a lower capital cost may be anticipated.

The same basic range of variability may be anticipated for the fixed costs of production.

The primary financial parameter, for both natural gas based and electrolytic hydrogen based synthesis facilities, namely that of variable cost is considerably more difficult to anticipate, and may be expected to cover a much wider range.

It is difficult to anticipate the variable cost structures that will pertain through the life of the investment.

It is also difficult to allocate a variable cost that will pertain to an "average" investment, for the purposes of this financial comparison.

Natural Gas For large (world scale) projects the equity and loan partners, because of the large capital investment, will require some assurance that the variable cost of production will fall in a range at least in the early payback period, that will to some extent, guarantee their investment.

Thus a pricing arrangement will in most cases be a requisite for project approval.

This may take the form of an interest in the development of a previously undeveloped gas field which is dedicated or primarily dedicated to the production facility. Typically the developers of the gas field would enter into some form of financial arrangement with the methanol synthesis company, such as a take or pay arrangement.

Such an arrangement might or might not be applicable through the entire discount period of the methanol synthesis plant.

However, under such an arrangement the gas price would be to a greater or lesser extent decoupled from spot price fluctuations in energy prices.

Essentially, for facilities exhibiting massive economy of scale, it must be anticipated that the average price of natural gas raw material is considerably lower than the market price for the high opportunity cost commodity.

Such methanol plants would be dedicated primarily to the production of methanol as an automotive fuel as the production would be impossible to accommodate in any alternative way.

Whilst the methanol produced from such plants is relatively inexpensive the number of locations worldwide where access to a supply of natural gas with a low opportunity cost is severely limited.

Most regions in the world with a large natural gas resource have over a period of time developed market outlets for the raw material, or have a regional operational development plant in place which renders the resource of medium to high opportunity cost.

Thus in the financial analysis which follows, whilst a low cost of natural gas is assumed for world scale production units, this is provisional upon a limited number of such opportunities being available.

For smaller production facilities the assumed cost of the natural gas is higher For the smallest natural gas based facilities, it is assumed that the cost of the gas is that which pertains to general consumption (spot prices) In the financial analysis which follows larger facilities will have access to a cheaper supply of natural gas. Whilst this is a generalization, and in fact many small plants may have access to low cost niche sources of gas, it is a practicable simplifying assumption.

COAL COST

The same general remarks pertaining to the supply of natural gas to a synthetic fuels facility pertain to the supply of a coal feedstock.

There is, however, a fundamental difference in that coal is more abundant than natural gas, and sourcing of dedicated low opportunity cost coalfields, specifically to service liquid fuels facilities exhibiting economy of scale is easier than that for natural gas.

Whilst natural gas and crude oil pricing is generally closely linked, pricing of coal is, to some extent decoupled, since many coal reserves hve a low or zero opportunity value.

For the purposes of this economic evaluation, large synthesis facilities will have access to lower priced coal than smaller facilities.

Variable Costs -Electricl*y For the purposes of this economic appraisal, electricity costs pertaining in the United States of America are taken as a benchmark.

Unlike coal costs and natural gas costs, which typically vary over a wide range, electricity costs in the USA for plants coming on line in 2013 cover an essentially small price band.

The electricity costs projected for 2013 in the United States area as follows: Coal 5.04 kw/hr Natural Gas 5.35 kw/hr Wind 5.85c kw/hr Nuclear 6.45t' kw/hr The following should be noted with regard to electricity cost: * For large synthetic fuel facilities exhibiting economy of scale, the fuel synthesis facility will be constructed in tandem with electricity generating plant (or power station).

* The projected cost of 6.0 kw/hr for general electricity supply to the electricity grid system, should be lowered by a factor representative of continuous power supply at nameplate capacity.

* Since a power station operating in this capacity will evince superior economics, and will not be subject to off-peak load reduction, some form of electricity price structure at a lower rate than that pertaining for general use should be established.

* For the purpose of this economic appraisal a 12% discount below costs applicable to variable demand users is assumed.

* For small facilities a price level of 5c1 kw/hr is assumed. This reflects a balance between cheap power at off-peak periods, and the requirement to oversize the liquid fuels synthesis facility to accommodate variable production rate.

Assumed Fiscal Regimen A once-off Initial Allowance of 50% of the capital cost of the manufacturing facility is assumed in the first year of production.

This is followed by two equal tranches of 50% of the remainder, termed the Wear and Tear allowance, in the two years following: * Corporation taxation of 42.5% is payable on taxable income * Inflation is assumed at 4.5% per annum * Cost of capital is assumed at 3% above the inflation rate.

Comparative Economic Appraisal Comparative economic appraisal is carried out for the manufacture of METHANOL by three different process routes: * Coal Raw Material * Natural Gas Raw Material * Waste C02/Electrolytic H2 Raw Material.

The economic appraisal is carried out at four different scales of production: A. 4400 tonnes/day B. 1000 tonnes/day C. 250 tonnes/day.

Case A is representative of a liquid automotive fuels displacement initiative, whilst Case C would be more representative of an electricity storage initiative, with Case B of an intermediate nature.

METHANOL FINANCIAL ANALYSIS

Case: 4400 Tonnes/Day

Description: VARIABILITY AROUND VARIABLE COST

Selling Price at Factory Gate: 60 per Litre Equivalent Petrol Price: 1.20 per litre

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Infi Real Real InfI Payable Payable 4.5% 0% 3% 7.5% Non-4.5% US!$ Tonne WACC WACC WACC InfI Infi H _______ _____ 45 14 19 8649 4708 4289 7020 14727 COAL BASED M 3395.4 89.6 35 15 20 9096 4989 4589 7377 15347 ______________ L _______ _____ 25 15 20 9543 5270 4891 7733 15968 -US$!MMBTU _______ _____ ______ _____ _______ _______ H _______ _____ 15 13 18 4200 2256 2052 3411 6856 GAS BASED M 2037.2 51.9 11 18 22 635.4 3610 3395 4961 9663 _____________ L _______ _____ 9 20 24 7490 4335 4002 5676 11171 ____________ ______ _____ US$IKWHR _______ _____ ______ _____ _______ _______ WASTE C02 H ______ _____ 6.3 8 11 2684 1143 968 2226 4928 ELECTROLYTIC M 2452.2 58.9 5.67 9 14 3575 1712 1510 2937 6228 H2 L _______ _____ 5.2 11 15 4239 2315 1909 3467 7203 Case: 4400 Tonnes/ Day

Description: VARIABILITY AROUND CAPITAL COST

____________ -INPUT PARAMETERS OUTPUT PARAMETERS

______ _____ ________ IRR _____ _____ _____ ______ _______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Infi Real Real Infi Payable Payable 4.5% 0% 3% 7.5% Non-4.5% US/s WACC WACC WACC InfI InfI ______________ ______ ______ Tonne _______ ______ ______ ______ _______ ________ Fl 4244.3 ______ _________ 12 17 8608 4499 4043 7016 15054 COAL BASED M 3395.4 89.6 35 15 20 9096 4989 4589 7377 15347 ______________ L 2546.6 ______ _________ 20 24 9808 5653 5202 7513 15509 I-I 2546.6 ______ _________ 14 18 5965 3242 2973 4840 9653 GAS BASED M 2037.2 51.9 11 18 22 635.4 3610 3395 4961 9663 ______________ L 1527.9 ______ _________ 23 27 6713 3951 3668 5111 9909 WASTE CO2 H 3065.3 _____ ________ 7 11 3223 1343 1129 2676 5963 ELECTROLYTIC M 2452.2 58.9 5.67 9 14 3575 1712 1510 2937 6228 H2 L 1839 ______ _________ 13 17 3927 2073 1880 3198 6492 Case: 4400 Tonnes/Day

Description: VARIABILITY AROUND CAPITAL COST

Selling Price at Factory Gate: 554 per Litre Equivalent Petrol Price: 1.10 per litre

____________ -INPUT PARAMETERS OUTPUT PARAMETERS

______ _____ __________ IRR _____ _____ _____ _______ _______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Intl Real Real Intl Payable Payable 4.5% 0% 3% 7.5% Non-4.5% USI$Tonne WACC WACC WACC InfI lnfl H 4244.3 _____ ___________ 11 15 7463 3775 3356 6101 13317 COAL BASED M 3395.4 89.6 35 13 18 7951 4269 3864 6462 13678 _______________ L 2546.6 ______ ____________ 17 23 8527 4826 4528 6735 13757 -US$IMMBTU _______ _____ _____ _____ _______ _______ GAS BASED H 2546.6 ______ ____________ 12 16 4819 2521 2280 3926 7996 M 2037.2 51.9 11 15 20 5112 2815 2626 4143 8139 ______________ L 1527.9 ______ ___________ 20 25 5567 3236 2979 4197 8260 -______ _____ US*IKWHR _______ _____ _____ _____ _______ _______ WASTE C02 H 3065.3 _____ _________ 5 9 2077 598 j 414 1762 4295 ELECTROLYTIC M 2452.2 58.9 5.67 7 11 2429 978 j 808 2023 4561 H2 L 1839 ______ ___________ 10 14 2782 1348 I 1192 2283 4820 Case: 4400 Tonnes/Day

Description: VARIABILITY AROUND VARIABLE COST

____________ -INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR _____ _____ _____ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation InfI Real Real Intl Payable Payable 4.5% 0% 3% 7.5% Non-4.5% US!$ Tonne WACC WACC WACC Intl InfI H _______ _____ 45 13 17 7504 3988 3599 6106 12992 COAL BASED M 3395.4 89.6 35 13 18 7951 4269 3864 6462 13678 ______________ L _______ _____ 25 14 19 8397 4550 4127 6819 14363 -US$/MMBTU _______ _____ _____ _____ _______ _______ GAS BASED H _______ _____ 15 11 15 3055 1533 1370 2497 5179 M 2037.2 51.9 11 15 20 5112 2815 2626 4143 8139 ______________ L _______ _____ 9 17 22 6209 3508 3305 4899 9532 WASTE C02 H ______ _____ 6.3 5 8 1539 397 254 1312 3256 ELECTROLYTIC M 2452.2 58.9 5.67 7 11 2429 978 808 2023 4561 H2 L ______ _____ 5.2 8 12 3093 1405 1216 2553 5530 Case: 1000 Tonnes/Day

Description: VARIABILITY AROUND CAPITAL COST

Selling Price at Factory Gate: 65 per Litre Equivalent Petrol Price: 1.30 per litre

____________ -INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR ______ _____ ______ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Inn Real Real lnfl Payable Payable 4.5% 0% 3% 7.5% Non-4.5% ______ ____ _________ _______ WACC WACC WACC InfI InfI H 1744.7 _____ ___________ 6 10 1458 521 403 1224 3013 COAL BASED M 1396 36.8 45 8 12 1659 735 624 1372 3164 ______________ L 1046.8 _____ ___________ 11 15 1860 943 839 1520 3313 ______ _____ US$/MMBTU _______ ______ ______ ______ _______ _______ GAS BASED H 1046.8 _____ ___________ 7 11 934 363 296 779 1771 M 837.4 21.3 13.5 9 13 1054 491 429 868 1859 ______________ L 628.1 -12 16 1175 614 555 957 1950 WASTE CO2 H 1260 ____ _________ 4 7 619 89 21 537 1422 ELECTROLYTIC 1008 24.2 5.4 6 9 763 249 187 644 1530 112 L 756 ______ ____________ 8 12 908 404 347 751 1639 Case: 1000 Tonnes/Day

Description: VARIABILITY AROUND VARIABLE COST

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR _____ _____ ______ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Infi Real Real InfI Payable Payable I 4.5% 0% 3% 7.5% Non-4.5% ______ ____ _________ _______ WACC WACC WACC lnfl Intl ft _______ _____ 55 8 12 1557 669 562 1291 3007 COAL BASED M 1396 36.8 45 8 12 1659 735 624 1372 3164 ______________ L ______ _____ 35 8 13 1761 800 686 1453 3320 ______ _____ US$/MMBTU _______ ______ ______ ______ _______ _______ GAS BASED H _______ _____ 17 6 10 645 230 180.5 541 1256 M 837.4 21.3 13.5 9 13 1054 491 429 868 1859 _____________ L ______ _____ 10.5 11 15 1405 711 637 1149 2379 WASTE CO2 H ______ ____ 6.0 4 8 571 122 65 490 1250 ELECTROLYTIC M 1008 24.2 5.4 6 9 763 249 187 644 1530 112 L _______ ______ 5.0 6 10 892 333 267 746 1718 Case: 1000 Tonnes/Day

Description: VARIABILITY AROUND CAPITAL COST

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR _____ _____ _____ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Tve Cost Cost Cost Inflation Intl Real Real InfI Payable Payable 4.5% 0% 3% 7.5% Non-4.5% US$!Tonne WACC WACC WACC Infi Intl H 1744.7 _____ ___________ 5 9 1198 350 240 1016 2617 COAL BASED M 1396 36.8 45 7 11 1399 567 467 1164 2763 _____________ L 1046.8 _____ __________ 10 14 1599 777 682 1312 2915 GAS BASED it 1046.8 _____ ___________ 5 9 674 194 134 571 1391 M 837.4 21.3 13.5 7 11 794 323 269 660 1479 ______________ L 628.1 _____ ___________ 10 14 915 449 399 749 1570 WASTE C02 H 1260 _____ __________ 2 6 358.2 -87 -149 329 149 ELECTROLYTIC M 1008 24.2 5.4 4 7 503 77 22 463 1150 H2 L 756 _____ ___________ 6 10 648 236 167 543 1258 Case: 1000 Tonnes/ Day

Description: VARIABILITY AROUND VARIABLE COST

Selling Price at Factory Gate: 6O4 per Litre Equivalent Petrol Price: 1.20 per litre

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR ______ _____ _____ ______ ______

Manufacturinq Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation InfI Real Real InfI Payable Payable 4.5% 0% 3% 7.5% Non-4.5% COAL WACC WACC WACC Intl Inf _____________ ______ _____ US$ltonne _______ ______ ______ ______ _______ _______ H ______ _____ 55 7 11 1297 501 402 1083 2611 COAL BASED M 1396 36.8 45 7 11 1399 567 467 1164 2763 _____________ L ______ _____ 35 7 12 1500 633 528 1245 2920 ______ _____ US$IMMBTU _______ _____ _____ _____ ______ _______ GAS BASED H ______ _____ 17 4 7 384 58.7 16.2 333 876 M 837.4 21.3 13.5 7 11 794 323 269 660 1479 _____________ L ______ _____ 10.5 9 13 1145 546 480 941 1997 WASTE C02 H ______ _____ 6 2 6 310 -54 -104 282 869 ELECTROLYTIC M 1008 24.2 5.4 4 7 503 77 22 463 1150 H2 L _______ _____ 5.0 5 8 632 162 104 539 1337 Case: 250 Tonnes/Day

Description: VARIABILITY AROUND VARIABLE COST

Selling Price at Factory Gate: 70 per Litre Equivalent Petrol Price: 1.40 per litre

INPUT PARAMETERS OUTPUT PARAMETERS

_____ ____ _________ IRR _____ _____ _____ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Infi Real Real Intl Payable Payable 4.5% 0% 3% 7.5% Non. 4.5% ___________ _____ ____ _________ ______ WACC WACC WACC Intl Intl H _______ _____ 55 3 7 219.5 -10.4 -42.7 195 609 COAL BASED M 607.5 16.0 50 3 7 232 -1.7 -34.5 206 629 _____________ L ______ _____ 45 3 7 245 6.9 -26.3 216 646 GAS BASED H _______ _____ 18.0 1 5 58 -52 -68 58 228 M 364.5 9.3 14 4 7 17.5 27 7.3 151.5 399 ______________ L _______ _____ 8.5 7 11 336 131 107 280 637 WASTE CO2 H ______ _____ 5.5 2 5 84 -59 -79 81.9 303 ELECTROLYTIC M 439 10.5 5.0 2 6 124 -31 -53 114 362 H2 L _______ _____ 4.0 4 7 204 23 0 128 479 Case: 250 Tonnes/ Day

Description: VARIABILITY AROUND CAPITAL COST

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR ______ _____ _____ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation InfI Real Real Infi Payable Payable 4.5% 0% 3% 7.5% Non. 4.5% ________ ______ ____ _________ ______ WACC WACC WACC Intl InfI H 759.44 _____ ___________ 2 5 149 -103 -139 142 564 COAL BASED M 607.5 16 50 3 7 232 -1.7 -34.5 206 629 � 455.7 _____ ___________ 5 9 320 96 67 271 694 GAS BASED K 455.6 _____ __________ 2 6 122.5 -33 -54 113 360 M 364.5 9.3 14 4 7 175 27 7.3 151.5 399 ______________ L 273.4 _____ ___________ 6 10 227 84 67 190 439 WASTE CO2 H 548 ____ _________ 1 4 61 -106 -129 67 315 ELECTROLYTIC M 439 10.5 5.0 2 6 124 -31 -53 114 362 H2 L 329.1 _____ ___________ 4 8 187 40 21 160 409 Case: 250 Tonnes/Day

Description: VARIABILITY AROUND VARIABLE COST

INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR _____ _____ _____ ______ ______

Manufacturinq Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Intl Real Real Intl Payable Payable 4.5% 0% 3% 7.5% Non-4.5% US$!Tonne WACC WACC WACC Intl Intl H _______ _____ 55 2 6 154 -55 -85 144 509 COAL BASED M 607.5 16.0 50 2 6 167 -46 -77 154 530 ______________ L _______ ______ 45 2 6 179 -37 -68 164 549 -US$IMMBTU _______ _____ _____ _____ _______ _______ GAS BASED H _______ ______ 18.0 0 3 -21 -107 -114 19.5 132 M 364.5 9.3 14.0 2 6 109 -17.6 -34.8 100 304 _____________ L ______ ______ 8.5 6 9 271 89 67 228 541 WASTE CO2 H _______ ______ 5.5 0 3 19 -106 -124 30 208 ELECTROLYTIC M 439 10.5 5.0 1 4 59 -77 -96 62 267 H2 L _______ ______ 4.0 2 6 139 -21 -42 126 384 Case: 250 Tonnes/Day

Description: VARIABILITY AROUND CAPITAL COST

____________ -INPUT PARAMETERS OUTPUT PARAMETERS

______ ____ _________ IRR _____ _____ ______ ______ ______

Manufacturing Capital Fixed Variable Non-IRR NPV NPV NPV Tax Tax Facility Type Cost Cost Cost Inflation Intl Real Real Intl Payable Payable 4.5% 0% 3% 7.5% Non-4.5% ___________ ______ ____ _________ _______ WACC WACC WACC InfI InfI H 759.44 _____ ___________ 1 4 79.8 -149 -183 89.6 464 COAL BASED M 607.5 16.0 50 2 6 167 -46 -77 154 530 ______________ L 455.7 _____ ___________ 4 8 254 52.5 25.8 219 594 GAS BASED H 455.6 _____ ___________ 1 4 57.4 -79 -98 61 266 M 364.5 9.3 14.0 2 6 109 -17.6 -34.8 100 304 _____________ L 273.4 _____ ___________ 5 8 162 41.3 26.2 138 343 WASTE CO2 H 548 _____ ___________ 0 3 -21 -161 -175 32 220 ELECTROLYTIC M 439 10.5 5.0 1 4 59 -77 -96 62 267 ft L 329.1 _____ ___________ 3 6 122 -4 -21 109 319

SYNTHETIC METHANOL PRODUCTION -FINANCIAL ANALYSIS

* MEDIUM PRESSURE PROCESS * COPPER CATALYST SUPPORTED ON ALUMINA

NOTES -FINANCIAL

1 BOTH INFLATIONARY AND NON-INFLATIONARY FINANCIAL ANALYSES ARE

PERFORMED

2 INFLATION RATE OVER THE DISCOUNT PERIOD IS ASSUMED AT 4.5 PERCENT 3 NON-INFLATIONARY FINANCIAL FIGURES ARE REFERRED TO IN THE SPREADSHEET AS "REAL'

TAX REGIME

4 COMPANY TAXATION IS INCLUDED AT A RATE OF 42.5% AN INITIAL CAPITAL ALLOWANCE OF 50% IS ALLOWABLE IN THE FIRST PRODUCTION

YEAR

6 WEAR AND TEAR ALLOWANCE OF 50% OF THE BALANCE FOLLOWS FOR THE

FOLLOWING TWO SUCCESSIVE YEARS

FINANCIAL ANALYSES PERFORMED

7 INTERNAL RATE OF RETURN ON INFLATIONARY NET CASH FLOW 8 INTERNAL RATE OF RETURN ON NON-INFLATIONARY (REAL) NET CASH FLOWS 9 NET PRESENT VALUE AT ZERO COST OF CAPITAL PERFORMED OVER THE NON-INFLATIONARY (REAL) CASH FLOWS

NET PRESENT VALUE AT A STATED COST OF CAPITAL IN PERCENTAGE TERMS

ABOVE THE INFLATION RATE PERFORMED OVER THE NON-INFLATIONARY NET

CASH FLOWS

11 NET PRESENT VALUE AT A STATED COST OF CAPITAL PERFORMED OVER THE

INFLATIONARY NET CASH FLOWS

TIME SCALE

12 CONSTRUCTION COMMENCES BEGINNING FIRST QUARTER 2011 13 FIRST PRODUCTION BEGINNING 3RD QUARTER 2014 14 DISCOUNT PERIOD FROM 2011 TO 2036

NOTES-CAPFTAL COST

A BASE CASE CAPITAL COST OF US$7200 MILLION IS ASSUMED 16 CAPITAL COST IS FACTORED AT PROPORTIONAL PRODUCTION TO POWER 0.6 17 CAPEX IS APPROXIMATELY 23 PERCENT IN YEAR ONE

PERCENT IN YEAR TWO

PERCENT IN YEAR THREE

7 PERCENT UP TO BEGINNING THIRD QUARTER YEAR FOUR 18 CAPITAL EXPENDITURE PROPORTIONS ARE AS DETAILED BELOW

NOTES -COST OF COAL

19 LOW OPPORTUNITY VALUE HIGH ASH COAL/LIGNITE IS ASSUMED AS RAW

MATERIAL

COAL MINE IS INTEGRAL WITH THE SYNTHETIC FUELS FACILITY

21 A TRANSFER PRICE IS ASSUMED WHICH WILL ALLOW THE COAL MINE TO OPERATE

UNDER

ESSENTIALLY THE SAME FINANCIAL PARAMETERS OFIRR AND NPV AS THE FUEL

FACILITY

22 COAL COST IS FACTORED ACCORDING TO PRODUCTION RATE

NOTES-PRODUCTION RATE

23 BASE CASE IS 15400 METRIC TONNES PER DAY OF METHANOL 24 PRODUCTION OF METHANOL IS MODULAR-EACH SYNTHESIS REACTOR CAPACITY 2200 TONNES/DAY OCCUPANCY AT NAMEPLATE CAPACITY IS ASSUMED AT 90 PERCENT 26 ROLLING SHUTDOWN FOR PLANT MAINTENANCE IS ASSUMED

NOTES-FIXED COSTS OF PRODUCTION

27 BASE CASE FIXED COSTS ARE ASSUMED AT US$190 MILLION/ANNUM 28 FIXED COSTS ARE FACTORED ACCORDING TO PRODUCTION RATE NOTES. TECHNOLOGY 29 HIGH PRESSURE (APPROX 30 BAR) NON-SLAGGING GASIFIERS

RECTISOL GAS CLEANING

31 SYNTHESIS CONDUCTED AT 80 BAR 32 COARSE DISTILLATION (FUEL GRADE) 33 CARBON CAPTURE AND STORAGE ASSUMED Number of -____________ ____________ Synthesis Modules ________ ________ 2 ________ _______ __________ __________ ________ ________ Size of each synthesis module ____________ ___________ 2200 tonnes/day.... _________ ______________ ______________ ____________ ____________ Nominal Daily Production ___________ __________ 4400 __________ ________ _____________ _____________ ___________ ___________ Percentage Capital Capex Capex Basecase Capex Additions ___________ __________ ___________ __________ Percent Proportions Capex lstallation ___________ Coal Preparation and _________ Gasification __________ 950.7135882 US$ Millions 0.28 28 US$7200M YEAR 1 0.233333333 Gas cleanup, stagel C02 _________ removal __________ 305.5865105 US$ Millions 0.09 9 Exponent YEAR 2 0.4 Shift reaction, compression, stage2CO2 _________ removal __________ 407.4486807 US$ Millions 0.12 12 0.6 YEAR 3 0.3 Synthesis Basecase _________ Reaction __________ 475.3567941 US$ Millions 0.14 14 prodution YEAR 4 0.066666667 Distillation Wastewater _________ Section treatment 271.6324538 LJS$ Millions 0.08 8 15400 l/D __________ ___________ Utilities and _________ Offsites ___________ 746.9892479 US$ Millions 0.22 22 Scaling Factor (PLANT) ___________ Carbon _________ Capture ___________ 237.678397 US$ Millions 0.07 7 0.471584121 __________ ___________ Total Capital (COAL Additions ___________ ___________ 3395.405672 US$ Millions _________ 100 Scaling Factor COST) ___________ _________ ___________ ___________ ___________ ___________ _________ _____________ 0. 323846 166 __________ ___________ Online -_____________ __________ ___________ Time __________ __________ 90 % ________ ____________ ____________ _________ __________ Equivalent online time at nameplate production rate ___________ ___________ 328.725 __________ _________ _____________ _____________ __________ ___________ Density of methanol ___________ ___________ 790 Kg/m3 _________ _____________ _____________ __________ ___________ Realised Price of methanol

FOB

perimeter __________ __________ __________ __________ ________ 70 US centsitre _____________ __________ __________ Tonnes of Methanol Tonnes I produced ___________ ___________ ___________ 1446390 annum _____________ _____________ ___________ __________ Kilo -litresof metanol produced __________ __________ ___________ 1830873.418 _________ _____________ _____________ __________ ___________ Gross sales of Methanol US$ per perannum __________ __________ __________ 1281611392 annum ____________ ____________ __________ __________ Million us$/ __________ __________ __________ ___________ 1281.611392 annum _____________ _____________ __________ ___________ Percentage of ash in coal _________ _________ _________ 27 % ___________ Basecase -coal _________ _________ Tonnes of coal Million required Tonnes I per annum __________ __________ __________ 3.571428571 annum _____________ 9.125 pure __________ ___________ US$ per __________ __________ __________ __________ 35 tonne _____________ _____________ __________ ___________ ________ ________ ________ ________ ________ _______ __________ Base Case Percent Fixed Costs Fixed Costs __________ __________ ___________ ___________ _________ _____________ Fixed Costs Salaries 40 __________ Payroll 35.84039321 US$M ___________ _________ _____________ 190 Maintenance 40 __________ Maintenance -35.84039321 US$M ___________ _________ _____________ _____________ Other 20 __________ Other 17.9201966 US$M ___________ _________ _____________ _____________ __________ ___________ Fixed Costs Total ____________ 89.60098301 US$M All Figures In Millions Of United Slates Dollars ______________ ___________ ____________ Year 2011 2012 2013 2014 2015 2016 Inflation Rate 4.5 4.5 4.5 4.5 4.5 4.5 Inflation Index 1 1.045 1.092025 1.1411661 1.1925186 1.2461819 Gross Sales (real) 0 0 0 640.8057 1281.6114 1281.6114 Gross Sales (inflated) 0 0 0 731.26575 1528.3454 1597.121 Fixed Costs real 0 0 0 64.512708 89.600983 89.600983 Fixed Costs (inflated) 0 0 0 73.619717 106.85084 111.65913 Fixed Costs (inflated) __________ __________ __________ __________ __________ __________ Cost of coal (real) 0 0 0 62.5 125 125 Costofcoalinflated) 0 0 0 71.322883 149.06483 155.77274 Fixed and Variable Costs-(real) 0 0 0 127.01 271 214.60098 214.60098 Fixed and Variable Costs (inflated) 0 0 0 1449426 255.91 566 267.431 87 Cash Flow (real) 0 0 0 513.79299 1067.0104 1067.0104 Cash Flow (inflated) 0 0 0 586. 32315 1272.4298 1329.6891 Taxable Value of Plant (real) 0 792.26132 2150.4236 3169.0453 1697.7028 848.85142 Capital Additions During Year (real) 792.26132 1358.1623 1018.6217' 226.38038 0 0 Cumulative Capital Additions (real) 792.261 32 2150.4236 3169.0453 3395.4057 3395.4057 3395.4057 Initial Allowance (real) 0 0 0 1697.7028 0 0 Wear And Tear Allowance (real) 0 0 0 0 848.85142 848.85142 Year 2011 2012 2013 2014 2015 2016 Tax Allowance (real) 0 0 0 1697.7028 848.85142 648.85142 Taxable Value of Plant (inflated) 0 792.26132 2211.5409 3323.9013 1791.108 89555401 Capital Additions During Year (inflated) 792.26132 1419.2796 1112.3604 258.3148 0 ________ Cumulative Capital Additions (inflated) 792.26132 2211.5409 3323.9013 3582.2161 3582.2161 3582.2161 Initial Allowance (inflated) 0 _________ _________ 1791.108 _________ _________ Wear And Tear Allowance (inflated) 0 __________ __________ __________ 895.55401 895.55401 Tax Allowance (inflated) _________ __________ __________ 1791.108 895.55401 895.55401 Annual Taxable Income (real) 0 0 0 -1183.91 218.15899 218.15899 Annual Taxable Income (inflated) 0 0 0 -1204.785 376.87575 434.13509 Tax Loss Carried Forward (real) ________ ________ _________ -1183.91 -965.7509 -747.5919 Tax Loss Carried Forward(inflated) _________ _________ _________ -1204.785 -827.9091 -393.774 Taxable Income (real) 0 0 0 0 0 0 Taxable lncome(inflated) 0 0 0 0 0 40.361 046 Tax Payable (real) 0 0 0 0 0 0 Tax Payable (inflated) 0 0 0 0 0 17.1534.44 Trading Cash Flow After Tax (real) 0 0 0 513.79299 1067.0104 1067.0104 Trading cash flow aftertax(inf) 0 0 0 586.32315 1272.4298 1312.5357 Net Cash FIow(real) -792.2613 -1358.162 -1018.622 287.43261 1067.0104 1067.0104 Net Cash FIow(inflated) -792.2613 -1419.28 -1112.36 328.00836 1272.4298 1312.5357 Cumulative cash flow (real) -792.2613 -2150.424 -3169.045 -2881.613 -1814.602 -747.5919 Cumulative cash flow(inflated) -792.2613 -2211.541 -3323.901 -2995.893 -1723.463 -410.9275 Year 2017 2018 2019 2020 2021 2022 Inflation Rate 4.5 4.5 4.5 4.5 4.5 4.5 Inflation Index 1.3022601 1.3608618 1.4221006 1.4860951 1.5529694 1.622853 Gross Sales (real) 1281.6114 1281.6114 1281.6114 1281.6114 1281.6114 1281.6114 Gross Sales (inflated) 1668.9914 1744.096 1822.5803 1904.5965 1990.3033 2079.867 Fixed Costs real 89.600983 89.600983 89.600983 89.600983 89.600983 89.600983 Fixed Costs (inflated) 116.68379 121.93456 127.42161 133.15559 139.14759 145.40923 Fixed Costs (inflated) __________ __________ __________ __________ __________ __________ Cost of coal (real) 125 125 125 125 125 125 Costof coal (inflated) 162.78252 170.10773 177.76258 185.76189 194.12118 202.85663 Fixed and Variable Costs-(real) 214.60098 214,60098 214.60098 214.60098 214.60098 214.60098 Fixed and Variable Costs (inflated) 279.4663 292,04229 305.18419 318.91748 333.26876 348.26586 Cash Flow (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Cash Flow (inflated) 1389.5251 1452.0537 1517.3962 1585.679 1657.0345 1731.6011 Taxable Value of Plant (real) 0 0 0 0 0 0 Capital Additions During Year (real) 0 _________ 0 0 0 0 Cumulative Capital Additions (real) 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 Initial Allowance (real) 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 Taxable Value of Plant (inflated) 0 0 __________ __________ __________ __________ Capital Additions During Year (inflated) __________ __________ __________ __________ __________ __________ Cumulative Capital Additions (inflated) __________ __________ __________ __________ __________ __________ Initial Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Wear And Tear Allowance (inflated) __________ __________ __________ __________ __________ __________ Tax Allowance (inflated) __________ __________ __________ __________ __________ __________ Annual Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Annual Taxable Income (inflated) 1389.5251 1452.0537 1517.3962 1585.679 1657.0345 1731.6011 Tax Loss Carried Forward (real) 0 0 0 0 0 0 Tax Loss Carried Forward(inflated) 0 0 0 0 0 0 Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Taxable lncome(inflated) 1389.5251 1452.0537 1517.3962 1585.679 1657.0345 1731.6011 Year 2017 2018 2019 2020 2021 2022 Tax Payable (real) 453.47942 453.47942 453.47942 453.47942 453.47942 453.47942 Tax Payable (inflated) 590.54817 617.12284 644.89337 673.91357 704.23968 735.93046 Trading Cash Flow After Tax (real) 61 3.53099 613.53099 613.53099 613.53099 613.53099 613.53099 Trading cash flow after tax(inf) 798.97694 83.4.9309 872.50279 911.76542 952.79486 995.67063 Net Cash Flow(real) 613.53099 613.53099 613.53099 613.53099 613.53099 613.53099 Net Cash Flow(inflated) 798.97694 834.9309 872.50279 911.76542 952.79486 995.67063 Cumulative cash flow (real) -134.0609 479.47011 1093.0011 1706.5321 2320.0631 2933.594 Cumulative cash flow(inflated) 388.04945 1222.9804 2095.4831 3007.2486 3960.0434 4955.714 Year 2023 2024 2025 2026 2027 2028 Inflation Rate 4.5 4.5 4.5 4.5 4.5 4.5 Inflation Index 1.6958814 1.7721961 1.8519449 1.9352824 2.0223702 2.1133768 Gross Sales (real) 1281.6114 1281.6114 1281.6114 1281.6114 1281,6114 1281.6114 Gross Sales (inflated) 21 73.461 2271.2667 2373.4737 2480.28 2591.8926 2708.5278 Fixed Costs real 89.600983 89.600983 89.600983 89.600983 89.600983 89.600983 Fixed Costs (inflated) 151.95264 158.79051 165.93609 173.40321 181.20635 189.36064 Fixed Costs (inflated) __________ __________ __________ __________ __________ __________ Costof coal (real) 125 125 125 125 125 125 Costof coal (inflated) 211.98518 221.52451 231.49312 241.91031 252.79627 264.1721 Fixed and Variable Costs-(real) 214.60098 214.60098 214.60098 214.60098 214.60098 214.60098 Fixed and Variable Costs (inflated) 363.93782 380. 31 502 397.4292 41 5.31 351 434.00262 453.53274 Cash Flow (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Cash Flow (inflated) 1809.5231 1890.9517 1976.0445 2064.9665 2157.89 2254.9951 Taxable Value of Plant (real) 0 0 0 0 0 0 Capital Additions During Year (real) 0 0 0 0 0 0 Cumulative Capital Additions (real) 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 Initial Allowance (real) 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 Taxable Value of Plant (inflated) __________ __________ __________ __________ __________ __________ Capital Additions During Year (inflated) __________ __________ __________ _________ __________ __________ Cumulative Capital Additions (inflated) __________ __________ _________ _________ __________ __________ Initial Allowance (inflated) ___________ ___________ __________ __________ ___________ ___________ Wear And Tear Allowance (inflated) __________ __________ _________ _________ __________ __________ Tax Allowance (inflated) __________ __________ _________ _________ __________ __________ Annual Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Annual Taxable Income (inflated) 1809.5231 1890.9517 1976.0445 2064.9665 2157.89 2254.9951 Tax Loss Carried Forward (real) 0 0 0 0 0 0 Tax Loss Carried Forward(inflated) 0 0 0 0 0 0 Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067,0104 Taxable lncome(inflated) 1809.5231 1890.9517 1976.0445 2064.9665 2157.89 2254.9951 Tax Payable (real) 453.47942 453.47942 453.47942 453.47942 453.47942 453.47942 Tax Payable (inflated) 769,04734 803.65447 839.81 892 877.61 077 91 7.10325 958.3729 Trading Cash Flow After Tax (real) 613.53099 61 3.53099 613. 53099 61 3.53099 613.53099 613.53099 Trading cash flow after tax(inf) 1040.4758 1087.2972 1136.2256 1187.3557 1240.7868 1296.6222 Net Cash FIow(real) 61 3.53099 61 3.53099 613.53099 613.53099 613.53099 613.53099 Net Cash Flow(inflated) 1040.4758 1087.2972 1136.2256 1187.3557 1240.7868 1296.6222 Cumulative cash flow (real) 3547.125 4160.656 4774.187 5387.718 6001.249 6614.78 Cumulative cash flow(inflated) 5996.1899 7083.4871 821 9.7127 9407.0684 10647.855 11944.477 Year 2029 2030 2031 2032 2033 2034 Inflation Rate 4.5 4.5 4.5 4.5 4.5 4.5 Inflation Index 2.2084788 2.3078603 2.411714 2.5202412 2.633652 2.7521663 Gross Sales (real) 1281.6114 1281.6114 1281.6114 1281.6114 1281.6114 1281.6114 Gross Sales (inflated) 2830.4115 2957.7801 3090.8802 3229.9698 3375.3184 3527,2077 Fixed Costs real 89.600983 89.600983 89.600983 89.600983 89.600983 89.600983 Fixed Costs (inflated) 197.881 87 206.78655 216.091 95 225.81609 235.97781 246.59681 Fixed Costs (inflated) _________ _________ _________ _________ _________ _________ Cost of coal (real) 125 125 125 125 125 125 Cost of coal (inflated) 276.05985 288.48254 301.46425 31 5.03014 329.2065 344.02079 Fixed and Variable Costs-(real) 214.60098 214.60098 214.60098 214,60098 214.60098 214.60098 Fixed and Variable Costs (inflated) 473.94171 495.26909 517.5562 540.84623 565.18431 590.6176 Cash Flow (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Cash Flow (inflated) 2356.4698 2462.511 2573.324 2689.1235 2810.1341 2936.5901 Taxable Value of Plant (real) 0 0 0 0 0 0 Capital Additions During Year (real) 0 0 0 0 0 0 Cumulative Capital Additions (reall 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 3395.4057 Initial Allowance (real) 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 Taxable Value of PlantnfIated) __________ __________ __________ __________ __________ __________ Capital Additions During Year (inflated) __________ __________ __________ __________ __________ __________ Cumulative Capital Additions (inflated) __________ __________ __________ __________ __________ __________ Initial Allowance (inflated) __________ __________ __________ __________ __________ __________ Wear And Tear Allowance (inflated) __________ __________ __________ __________ __________ __________ Tax Allowance (inflated) __________ __________ __________ __________ __________ __________ Annual Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Annual Taxable Income (inflated) 2356.4698 2462.511 2573.324 2689.1235 2810.1341 2936.5901 Tax Loss Carried Forward (real) 0 0 0 0 0 __________ Tax Loss Carried Forward(inflated) __________ __________ __________ __________ __________ __________ Taxable Income (real) 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 1067.0104 Taxable Income(inflated) 2356.4698 2462.511 2573.324 2689.1235 2810.1341 2936.5901 Tax Payable (real) 453.47942 453.47942 453.47942 453.47942 453.47942 453.47942 Tax Payable (inflated) 1001.4997 1046.5672 1093.6627 1142.8775 1194.307 1248.0508 Trading Cash Flow After Tax (real) 613.53099 613.53099 613.53099 613.53099 613.53099 613.53099 trading cash flow after tax(inf) 1354.9702 1415.9438 1479,6613 1546.246 1615.8271 1688.5393 Net Cash FIow(real) 613.53099 613.53099 613.53099 613.53099 613.53099 613.53099 Net Cash FIow(inflated) 1354.9702 1415.9438 1479.6613 1546.246 1615.8271 1688.5393 Cumulative cash flow (real) 7228.3109 7841.8419 8455.3729 9068.9039 9682.4349 10295.966 Cumulative cash flow(inflated) 13299.447 14715.391 16195.053 17741.299 19357.126 21045.665 Year 2035 2036 Inflation Rate 4.5 4.5 Inflation Index 2.8760138 3.0054345 Gross Sales (real) 1281.6114 1281.6114 Gross Sales (inflated) 3685.9321 3851.799 Fixed Costs real 89.600983 89.600983 Fixed Costs (inflated) 257,69367 269. 28988 Fixed Costs (inflated) __________ __________ Cost of coal (real) 125 125 Cost of coal (inflated) 359.50173 375.67931 Fixed and Variable Costs-(real) 214.60098 214.60098 Fixed and Variable Costs (inflated) 617.1954 644.96919 Cash Flow (real) 1067.0104 1067.0104 Year 2035 2036 Cash Flow (inflated) 3068.7367 3206.8298 Taxable Value of Plant (real) 0 0 Capital Additions During Year (real) 0 0 Cumulative Capital Additions (real) 3395.4057 3395.4057 Initial Allowance (real) 0 0 Wear And Tear Allowance (real) 0 0 Tax Allowance (real) 0 0 Taxable Value of Plant (inflated) __________ __________ Capital Additions During Year (inflated) __________ __________ Cumulative Capital Additions (inflated) __________ __________ Initial Allowance (inflated) __________ __________ Wear And Tear Allowance (inflated) __________ __________ Tax Allowance (inflated) __________ __________ Annual Taxable Income (real) 1067.0104 1067.01 04 Annual Taxable Income (inflated) 3068.7367 3206.8298 Tax Loss Carried Forward (real) __________ __________ Tax Loss Carried Forward(inflated) __________ __________ Taxable Income (real) 1067.0104 1067.0104 Taxable lncome(inflated) 3068.7367 3206.8298 Tax Payable (real) 453.47942 453.47942 Tax Payable (inflated) 1304.2131 1362.9027 Trading Cash Flow After Tax (real) 61 3. 53099 613.53099 Trading cash flow after tax(inf) 1764.5236 1843.9272 Net Cash Flow(real) 61 3.53099 61 3.53099 Net Cash FIow(inflated) 1764.5236 18.43.9272 Cumulative cash flow (real) 10909.497 11523.028 Cumulative cash flow(inflated) 22810.189 24654.116 SELLING PRICE OF METHANOL 70 US CENTS PER LITRE FOB FACTORY GATE INFLATION RATE OVER DISCOUNT PERIOD 4.5% WEIGHTED AVERAGE COST OF CAPITAL-NON INFLATIONARY 3% WEIGHTED AVERAGE COST OF CAPITAL -INFLATIONARY 7.5% INTERNAL RATE OF RETURN-(IRR) NON-INFLATIONARY 0.1769219 INTERNAL RATE OF RETURN-INFLATIONARY 0.2294787 NET PRESENT VALUE AT ZERO COST OF CAPITAL 11523.028 NET PRESENT VALUE AT WACC-NON-INFLATIONARY 6536.1281 NET PRESENT VALUE AT WACC-INFLATIONARY 61 22.013 TAX PAYABLE TO REVENUE AUTHORITY (REAL) US$M 9069.5885 TAX PAYABLE TO REVENUE AUTHORITY(INFLATED) US$M 18543.49

NUCLEAR ELECTROLYSIS METHANOL SYNTHESIS -FINANCIAL

ANALYSIS

* SYNTHETIC METHANOL PRODUCTION -MEDIUM PRESSURE PROCESS * COPPER CATALYST SUPPORTED ON ALUMINA * WASTE CARBON DIOXIDE IS USED FROM COAL-BASED POWER PLANTS * THERMO-NUCLEAR ELECTRICITY IS USED IN THE ELECTROLYSIS OF WATER TO MANUFACTURE HYDROGEN * THE THERMO-NUCLEAR POWER PLANT IS SITUATED ADJACENT TO THE CONVENTIONAL POWER PLANT NOTES. FINANCIAL 1 BOTH INFLATIONARY AND NON-INFLATIONARY FINANCIAL ANALYSES ARE PERFORMED 2 INFLATION RATE OVER THE DISCOUNT PERIOD IS ASSUMED AT 4.2 PERCENT 3 NON-INFLATIONARY FINANCIAL FIGURES ARE REFERRED TO IN THE SPREADSHEET AS "REAL"

TAX REGIME

4 COMPANY TAXATION S lNCLUDED AT A RATE OF 42.5% AN INITIAL CAPITAL ALLOWANCE OF 50% IS ALLOWABLE IN THE FIRST PRODUCTION YEAR 6 WEAR AND TEAR ALLOWANCE OF 50% OF THE BALANCE FOLLOWS FOR THE FOLLOWING TWO

SUCCESSIVE YEARS

FINANCIAL ANALYSES PERFORMED

NET PRESENT VALUE AT A STATED COST OF CAPITAL IN PERCENTAGE TERMS ABOVE THE

INFLATION RATE PERFORMED OVER THE NON-INFLATIONARY NET CASH FLOWS

11 NET PRESENT VALUE AT A STATED COST OF CAPITAL PERFORMED OVER THE INFLATIONARY NET

CASH FLOWS

TIME SCALE

12 CONSTRUCTION COMMENCES BEGINNING FIRST QUARTER 2011 13 FIRST PRODUCTION BEGINNING 3RD QUARTER 2014 14 DISCOUNT PERIOD FROM 2011 102036 NOTES. CAPITAL COST A BASE CASE CAPITAL COST OF US$5200 MILLION IS ASSUMED FOR A PRODUCTION RATE OF 15400 TONNES/ANNUM 16 CAPITAL COST IS FACTORED AT PROPORTIONAL PRODUCTION TO POWER 0.6 17 CAPEX IS APPROXIMATELY 23 PERCENT IN YEAR ONE

PERCENT IN YEAR TWO

PERCENT IN YEAR THREE

NOTES -COST OF ELECTRICITY

19 ELECTRICITY IS PURCHASED FROM A THERMO-NUCLEAR POWER PLANT DEDICATED TO THE

METHANOL SYNTHESIS PLANT

FOR HIGH PRODUCTION RATES >2000 TONNE/DAY

THE NUCLEAR POWER STATION OPERATES ON AN INDEPENDENT FINANCIAL BASIS

21 FOR LOWER PRODUCTION RATES A NON-CO2 EXHAUST MIX MAY BE ASSUMED OR

OFF-PEAK POWER STORAGE BY ALCOHOL MANUFACTURE

NOTES -PRODUCTION RATE

23 BASE CASE IS 15400 METRIC TONNES PER DAY OF METHANOL 24 PRODUCTION OF METHANOL IS MODULAR-EACH SYNTHESIS REACTOR CAPACITY 2200

TONNESIDAY

OCCUPANCY AT NAMEPLATE CAPACITY IS ASSUMED AT 90 PERCENT 26 ROLLING SHUTDOWN FOR PLANT MAINTENANCE IS ASSUMED NOTES. FIXED COSTS OF PRODUCTION 27 BASE CASE FIXED COSTS ARE ASSUMED AT 28 FIXED COSTS ARE FACTORED ACCORDING TO PRODUCTION RATE NOTES. TECHNOLOGY 29 CARBON DIOXIDE EXHAUST FROM CONVENTIONAL POWER PLANT IS EMPLOYED AS THE

CARBONACEOUS FEEDSIOCK

THE CO2 GAS IS RAISED IN PRESSURE BY A BLOWER AT A POINT AFTER THE DUST COLLECTION

PLANT

31 THE GAS IS WASHED CLEAN OF DUST 32 PURE CO2 GAS IS SEPARATED FROM THE GAS STREAM CONTAINING EXCESS AIR NITROGEN, AND S02 THIS IS ACHIEVED BY TEMPERATURE AND/OR PRESSURE SWING GAS ADSORPTION 33 THE PURIFIED C02 GAS STREAM IS COMPRESSED 34 RAW WATER IS PURIFIED BY FLOCCULATIONIFILTRATION FOLLOWED BY ION EXCHANGE

A CONDUCTIVITY MODIFIER IS ADDED

36 THE WATER IS ELECTROLYSED AND HYDROGEN IS DISCHARGED AT THE CATHODE 37 THE H2 GAS IS COLLECTED AND COMPRESSED 38 A PORTION OF THE H2 GAS IS REACTED AGAINST A PORTION OF THE C02 GAS IN THE REVERSE

SHIFT REACTOR TO FORM CO

39 THE GASES ARE PROPORTIONED INTO THE SYNTHESIS REACTOR IN THE NORMAL WAY

COARSE DISTILLATION IS UNDERTAKEN-FUEL GRADE METHANOL IS PRODUCED

Number of yis Modules 2 ________ _________ __________ _________ ______ ____________ ________ Size of each synthesis module 2200 tonnes/day _____________ ______________ _____________ ________ _________________ ____________ Nominal Daily Production 4400 __________ ___________ ____________ ___________ _______ _______________ __________ Capex Basecase Percentage Capex Capital Additions ___________ ___________ Capex Percent Proportions Capex ________ Istallation __________ Electrolytic Cell House 686.6264804 US$ Millions 0.28 28 5200 US$M YEAR 1 0.233333333 Gas Cleanup C02 Capture 220.7013687 US$ Millions 0.09 9 Exponent ________ YEAR 2 0.4 Compression,Revetse Shift Reaction 294.2684916 US$ Millions 0.12 12 0.6 ________ YEAR 3 0.3 Basecase Synthesis Reaction 343.3132402 US$ Millions 0.14 14 prodution ________ YEAR 4 0.066666667 Distillation Section Wastewater Treatment 196.1789944 US$ Millions 0.08 8 15400 l/D ________________ ___________ Utilities and Offsites 539.4922346 US$ Millions 0.22 22 Scaling Factor (PLANT) ________________ ___________ Electilcal Integration With Existing Power Plant 171.6566201 US$ Millions 0.07 7 0.471584121 ________ ________________ ___________ Total Capital Additions 2452.23743 US$ Millions ____________ 100 __________ ________ ________________ __________ Online Time 90 % ____________ _____________ __________ ________ ________________ ___________ Equivalent online time at nameplate production rate 328.725 __________ ____________ _____________ ____________ ________ ________________ ___________ Density of methanol 790 KgTh3 Days _____________ ____________ ________ ________________ ___________ Realised Selling Price of methanol fob Factory perimeter __________ __________ ___________ 65 US cents/litre ___________ ________ _______________ __________ Tonnes of Methanol produced ___________ 1446390 Tonnes/annum _____________ ____________ ________ ________________ __________ Kilo litresot metanol produced ___________ 1830873.418 ____________ _____________ ____________ ________ ________________ __________ Gross sales of US$ per Methanol perannum __________ 1190067722 annum ____________ Base Case Power Million US$ Plant ________________ __________ 1190.067722 perannum ____________ ___________ Size _______________ __________ Per 2200 tonne/day _________ _________ ________ 750 Megawatts module Base Capacity Of Nuclear Case Power Plant __________ 1500 Megawatt _____________ ___________ Electricity ________________ Nameplate Power Consumption __________ 1431.999899 Megawatt _____________ ___________ ________ ________________ Gigawatt.hrs GIGA required perannum ________ 11297.62 GigawattHrs ___________ _________ 39541.67 WATT.HRS/ANNUM _________ Cost Of Electricity From lhermo U. Scents per Nuclear Power Plant ___________ 4 Kilowatt. Hr _____________ ____________ ________ ________________ Million tJ.S.Dollars per _____________ _________ 0.04 GigawattHr ________ ________ ________ ____________ ________ Percentage Fixed _______________ ___________ 4000000 __________ _________ _________ Base Case Costs _________ Fixed Costs __________ ________ __________ _________ _________ Fixed Costs Salaes 40 Payroll 23.57920606 _________ __________ _________ _________ 125 Maintenance 40 Maintenance 23.57920606 _________ __________ _________ _________ __________ Other 20 Other 11.78960303 ________ _________ ________ ________ _________ _____________ ________ Fixed Costs ________________ 58.94801514 __________ All Figures In Millions Of United States Dollars _______________ __________ Year 2011 2012 2013 2014 2015 2016 Inflation Rate -4.2 4.2 4.2 4.2 4.2 4.2 Inflation Index 1 1.042 1.085764 1.1313661 1.1788835 1.2283966 GrossSales(real) 0 0 0 595.03386 1190.0677 1190.0677 GrossSales(inflated) 0 0 0 673.20113 1402.9512 1461.8751 Fixed Costs real 0 0 0 42442571 58.948015 58.948015 FixedCosts(inflated) 0 0 0 48.018085 69.49284 72.41154 Fixed Costs (inflated) __________ __________ ________ -__________ __________ __________ Cost Of Electricity (real) 0 0 ________ 0 225.9524 451.9048 451.9048 Cost of Electricity (inflated) 0 0 ________ 0 255.63488 532.7431 555.11831 Fixed and Variable Costs-(real) 0 0 ________ 0 268.39497 510.85282 510.85282 Fixed and Variable Costs (inflated) 0 0 ________ 0 303.65297 602.23594 627.52985 Cash Flow (real) 0 0 ________ 0 326.63889 679.21491 679.21491 Cash Flow (inflated) 0 0 ________ 0 369.54816 800.71522 834.34526 Taxable Valueof Plant(real) 0 572.18873 1553.0837 2288.7549 1226.1187 613.05936 Capital Additions During Year (real) 572.18873 980.89497 735.671 23 163.4825 0 0 Cumulative Capital Additions (real) 572.18873 1553.0837 2288.7549 2452.2374 2452.2374 2452.2374 lnitialAllowance(real) 0 0 0 1226.1187 0 0 Wear And Tear Allowance (real) 0 0 0 0 613.05936 613.05936 Tax Allowance (real) 0 0 0 1226.1187 613.05936 613.05936 Taxable Value of Plant (inflated) 0 572.18873 1594.2813 2393.0466 1289.0026 644.5013 Capital Additions During Year (inflated) 57218873 10220926 798.76534 184.95855 0 __________ Cumulative Capital Additions (inflated) 572.18873 1594.2813 2393.0466 2578.0052 2578.0052 2578.0052 Initial Allowance (inflated) 0 __________ __________ 1289.0026 __________ __________ Wear And Tear Allowance (inflated) 0 __________ __________ __________ 644.5013 644.5013 Tax Allowance (inflated) __________ __________ _________ 1289.0026 644.5013 644.5013 Annual Taxable Income (real) 0 0 0 -899.4798 -66.155549 66.155549 Annual Taxable Income (inflated) 0 0 0 -919.4544 156.21393 189.84397 Tax Loss Carried Forward (real) __________ __________ __________ -899.4798 -833.3243 -767.1687 Tax Loss Carried Forward(inflated) __________ __________ __________ -919.4544 -763.2405 -573.3965 Taxable Income (real) 0 0 0 0 0 ________ 0 Taxable lncome(inflated) 0 0 0 0 ________0 ________ 0 Tax Payable (real) 0 0 0 0 ________0 ________ Tax Payable (inflated) 0 0 0 ________0 ________0 ________ Trading Cash Flow After Tax (real) 0 0 0 326.63889 679.21491 679.21491 Tradingcashflowaftertax(inf) 0 0 0 369.54816 800.71522 834.34526 Year 2011 2012 2013 2014 2015 2016 Net Cash FIow(real) -572.1887 -980.895 -735.6712 163.15639 679.21491 679.21491 Net Cash Flow(inflated) -572.1887 -1022.093 -798.7653 184.58961 800.71522 834.34526 Cumulativecashfiow(real) -572.1887 -1553.084 -2288.755 -2125.599 -1446.384 -767.1687 Cumulative cash flow(inflated) -572.1887 -1594.281 -2393.047 -2208.457 -1407.742 -573.3965 Year 2017 2018 2019 2020 2021 2022 Inflation Rate 4.2 4.2 4.2 4.2 4.2 4.2 Inflation Index 1.2799892 1.3337488 1.3897662 1.4481364 1.5089581 1.5723344 GrossSales(real) 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 Gross Sales (inflated) 1523.2739 1587.2514 1653.9159 1723.3804 1795.7624 1871.1844 Fixed Costs real 58.948015 58.948015 58.948015 58.948015 58.948015 58.948015 Fixed Costs (inflated) 75.452824 78.621843 81.92396 85.364767 88.950087 92.68599 Fixed Costs (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cost Of Electricity (real) 451.9048 451.9048 451.9048 451.9048 451.9048 451.9048 Cost of Electricity (inflatedj 578.43327 602.72747 628.04203 654.41979 681.90542 710.54545 Fixed and Variable Costs-(real) 510.85282 510.85282 510.85282 510.85282 510.85282 510.85282 Fixed and Variable Costs (inflated) 653.8861 681.34932 709.96599 739.78456 770.85551 803,23144 Cash Flow (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Cash Flow (inflated) 869.38776 905.90205 943.94993 983.59583 1024.9069 1067.9529 Taxable Value of Plant (real) 0 0 0 0 0 0 Capital Addions During Year (real) 0 ___________ 0 0 0 0 Cumulative Capital Additions (real) 2452.2374 2452.2374 2452,2374 2452.2374 2452.2374 2452.2374 Initial Allowance (real) 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 Taxable Value of Plant (inflated) 0 0 ___________ ___________ ___________ ___________ Capital Addiions During Year (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cumulative Capital Additions (inflated) ___________ ___________ ___________ ___________ ___________ ____________ Initial Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Wear And Tear Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Tax Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Annual Taxable Income (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Annual Taxable Income (inflated) 869.38776 905.90205 943.94993 983.59583 1024.9069 1067.9529 Thx Loss Canied Forward (real) -87.95382 0 0 0 0 0 Tax Loss Carried Forward(inflated) 0 0 0 0 0 0 Taxable Income (real) 591.26109 679.21491 679.21491 679.21491 679.21491 679.21491 Taxable lncome(inflated) 869.38776 905.90205 943.94993 983.59583 1024.9069 1067.9529 Tax Payable (real) 251.28596 288.66634 288.66634 288.66634 288.66634 288.66634 Tax Payable (inflated) 369.4898 385.00837 401.17872 418.02823 435.58541 453.88 Trading Cash Flow After Tax (real) 427.92895 390.54857 390.54857 390.54857 390.54857 390.54857 Trading cash flow after tax(inf) 499.89796 520.89368 542.77121 565.5676 589.32144 614.07294 Net Cash Flow(real) 427.92895 390.54857 390.54857 390.54857 390.54857 390.54857 Net Cash FIow(inflated) 499.89796 520.89368 542.771 21 565.5676 589.32144 614.07294 Cumulativecashflow(real) -339.2398 51.308789 441.85736 832.40593 1222.9545 1613.5031 Cumulative cash flow(inflated) -73.49857 447.3951 990.16632 1555.7339 2145.0554 2759.1283 Year 2023 2024 2025 2026 2027 2028 Inflation Rate 4.2 4,2 4.2 4.2 4.2 4.2 Inflation Index 1.6383724 1.7071841 1.7788858 1.853599 1.9314501 2.0125711 Gross Sales (real) 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 Gross Sales (inflated) 1949.7741 2031.6646 2116.9946 2205,9083 2298.5565 2395.0959 Fixed Costs real 58.948015 58.948015 58.948015 58.948015 58.948015 58.948015 F'eed Costs (inflated) 96.578802 100.63511 104.86179 109.26598 113.85515 118.63707 Fixed Costs (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cost Of Electricity (real) 451.9048 451.9048 451.9048 451.9048 451.9048 451.9048 Cost of Electricity (inflated) 740.38836 771.48467 803.88703 837.65028 872.83159 909.49052 Fixed and Variable Costs-(real) 510.85282 510.85282 510.85282 510,85282 510.85282 510.85282 Fixed and Variable Costs (inflated) 836.96716 872.11978 908.74881 946.91626 986.68675 1028.1276 Cash Flow (real) 679.21491 679.21491 67921491 679.21491 679.21491 679.21491 Cash Flow (inflated) 1112.807 1159.5449 1208.2457 1258.9921 1311.8697 1366.9683 Taxable Value of Plant (real) 0 0 0 0 _________ 0 Capital Additions During Year (real) 0 0 0 0 _________ 0 Cumulative Capital Additions (real) 2452.2374 2452.2374 2452.2374 24522374 2452.2374 2452.2374 Initial Allowance (real) 0 0 0 _________ 0 0 Wear And Tear Allowance (real) 0 0 0 ________ 0 0 Tax Allowance (real) 0 0 0 ________ 0 0 Taxable Value of Plant (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Capital Additions During Year (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cumulative Capital Additions (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Initial Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Wear And Tear Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Tax Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Annual Taxable Income (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Annual Taxable Income (inflated) 1112.807 1159.5449 1208.2457 1258.9921 1311.8697 1366,9683 Tax Loss Carried Forward (real) 0 0 0 0 0 0 Tax Loss Carried Forward(inflated) 0 0 0 0 0 0 Taxable Income (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Taxable lncome(inflated) 1112.807 1159.5449 1208.2457 1258.9921 1311.8697 1366.9683 Tax Payable (real) 288.66634 288.66634 288.66634 288.66634 288.66634 288.66634 Tax Payable (inflated) 472.94296 492.80657 513.50444 535.07163 557.54464 580.96151 Trading Cash Flow After Tax (real) 390.54857 390.54857 390.54857 390.54857 390.54857 390.54857 Trading cash flow after tax(inf) 639.86401 666.73829 694.7413 723.92044 754.3251 786.00675 Net Cash FIow(real) 390.54857 390.54857 390.54857 390.54857 390.54857 390.54857 Net Cash Flow(inflated) 639.86401 666.73829 6947413 723.92044 754.3251 786.00675 Cumulative cash flow (real) 2004.0516 2394.6002 2785.1488 3175.6974 3566.2459 3956.7945 Cumulative cash flow(inflated) 3398.9923 4065.7306 4760.4719 5484.3923 6238.71 74 7024.7242 Year 2029 2030 2031 2032 2033 2034 Inflation Rate 4.2 4.2 4.2 4.2 4.2 4.2 Inflation Index 2.097099 2.1851772 2.2769546 2.3725867 2.4722354 2.5760693 Gross Sales (real) 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 1190.0677 Gross Sales (inflated) 2495.6899 2600.5089 2709.7302 2823.5389 2942.1275 3065.6969 Fixed Costs real 58.948015 58.948015 58.948015 58.948015 58.948015 58.948015 Fixed Costs (inflated) 123.61983 128.81186 134.22196 139.85928 145.73337 151.85417 Fixed Costs (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cost Of Electricity (real) 451.9048 451.9048 451.9048 451.9048 451.9048 451.9048 Cost of Electricity (inflated) 947.68912 987.49207 1028.9667 1072.1833 1117.215 1164.1381 Fixed and Variable Costs-(real) 510.85282 510.85282 510.85282 510.85282 510.85282 -510.85282 Year 2029 2030 2031 2032 2033 2034 Fixed and Variable Costs (inflated) 1071.3089 1116.3039 1163.1887 1212.0426 1262.9484 1315.9922 Cash Flow (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Cash Flow (inflated) 1424.3809 1484.2049 1546.5415 1611.4963 1679.1791 1749.7046 Taxable Value of Plant (real) 0 0 0 0 0 0 Capital Additions During Year (real) 0 0 0 0 0 0 Cumulative Capital Additions (real) 2452.2374 2452.2374 2452.2374 2452.2374 -2452.2374 2452.2374 Initial Allowance (real) 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 _________ Taxable Value of Plant (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Capital Additions During Year (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Cumulative Capital Additions (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Initial Allowance (inflated) ___________ ___________ ____________ ____________ ____________ ____________ Wear And Tear Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Tax Allowance (inflated) ___________ ___________ ___________ ___________ ___________ ___________ Annual Taxable Income (real) 679.21491 679.21491 679.21491 679.21491 679.21491 679.21491 Annual Taxable Income (inflated) 1424.3809 1484.2049 1546.5415 1611.4963 1679.1791 1749.7046 Tax Loss Carried Forward (real) 0 0 0 0 0 ___________ Tax Loss Carried Forward(inflated) ___________ __________ ___________ ___________ __________ ___________ Taxable Income (real) 67921491 679.21491 679.21491 679.21491 679.21491 679.21491 Taxable Income(inflated) 1424.3809 1484.2049 1546.5415 1611.4963 1679.1791 1749.7046 Tax Payable (real) 288.66634 288.66634 288.66634 288.66634 288.66634 288.66634 Tax Payable (inflated) 605.36189 630.78709 657.28015 684.88592 713.65113 743.62447 Trading Cash Flow After Tax (real) 390.54857 390.54857 390.54857 390.54857 390.54857 390.54857 Tradingcashflowaftertax(inf) 819.01903 853.41783 889.26138 926.61036 965.528 1006.0802 Net Cash FIow(real) 390,54857 390.54857 390.54857 390.54857 390.54857 390.54857 Net Cash FIow(inflated) 819,01903 853.41783 889.26138 926.61036 965.528 1006.0802 Cumulative cash flow (real) 4347.3431 4737.8916 5128.4402 551 8.9888 5909.5374 6300.0859 Cumulative cash flow(inflated) 7843.7432 8697.1611 9586.4224 10513.033 11478.561 12484.641 Year 2035 2036 Inflation Rate 4.2 4,2 Inflation Index 2.6842642 2.7970033 Gross Sales (real) 1190.0677 1190.0677 Gross Sales (inflated) 31 94.4562 3328.6233 Fixed Costs real 58.948015 58.948015 Fixed Costs (inflated) 158.23205 164.87779 Fixed Costs (inflated) ___________ ___________ Cost Of Electricity (rea!) 451.9048 451.9048 Cost of Electricity (inflated) 1213.0319 1263.9792 Fixed and Variable Cocts-(real) 510.85282 510.85282 Fixed and Variable Costs (inflated) 1371.2639 1428.857 Cash Flow (real) 679.21491 679.21491 Cash Flow (inflated) 1823.1922 1899.7663 Taxable Value of Plant (real) 0 0 Capital Additions During Year (real) 0 0 Cumulative Capital Additions (real) 2452.2374 2452.2374 Initial Allowance (real) 0 0 Wear And Tear Allowance (real) 0 0 Tax Allowance (real) 0 0 Year 2035 2036 Taxable Value of Plant (inflated) ___________ ___________ Capital Addions During Year (inflated) ___________ ___________ Cumulative Capital Additions (inflated) ___________ ___________ Initial Allowance (inflated) ____________ ____________ Wear And Tear Allowance (inflated) ___________ ___________ Tax Allowance (inflated) ___________ ___________ Annual Taxable Income (real) 679.21491 679.21491 Annual Taxable Income (inflated) 1823.1922 1899.7663 Tax Loss Carried Forward (real) ___________ ___________ Tax Loss Carried Forward(inflated) ___________ ___________ Taxable Income (real) 679.21491 679.21491 Taxable Income(inflated) 1823.1922 1899.7663 Tax Payable (real) 288.66634 288.66634 Tax Payable (inflated) 774.8567 807.40068 Trading Cash Flow After Tax (real) 390.54857 390.54857 Trading cash flow after tax(inf) 1048.3355 1092.3656 Net Cash FIow(real) 390.54857 390.54857 Net Cash FIow(inflated) 1048.3355 1092.3656 Cumulative cash flow (real) 6690.6345 7081.1831 Cumulative cash flow(inflated) 13532.977 14625.342 SELLING PRICE OF METHANOL 65 US CENTS PER LITRE FOB. FACTORY GATE COST OF ELECTRICITY U.S.CENTSIKWHR 4 SIZE OF NUCLEAR POWER PLANT 1500 MEGAWATTS TONNES OF METHANOL PRODUCED PER ANNUM 1446390 TONNES INFLATION RATE OVER DISCOUNT PERIOD 4.2 PERCENT

WEIGHTED AVERAGE COST OF CAPITAL -NON-

INFLATIONARY 3 PERCENT WEIGHTED AVERAGE COST OF CAPITAL -INFLATIONARY 7.2 PERCENT INTERNAL RATE OF RETURN-(IRR) NON-INFLATIONARY 0.15642809 INTERNAL RATE OF RETURN -INFLATIONARY 0.20369557 NET PRESENT VALUE AT ZERO COST OF CAPITAL 7081.18307 NET PRESENT VALUE AT WACC -NON-INFLATIONARY 3925.0771 NET PRESENT VALUE AT WACC-INFLATIONARY 3674.98373 CUMULATIVE TAX PAID TO REVENUE AUTHORITY (REAL) 5735.94633 US$M CUMULATIVE TAX PAID TO REVENUE AUTHORITY (INF) 11233.8503 US$M

SYNTHETIC METHANOL-NATURAL GAS BASED PRODUCTION

FINANCIAL ANALYSIS

* MEDIUM PRESSURE PROCESS * COPPER CATALYST SUPPORTED ON ALUMINA

NOTES -FINANCIAL

I BOTH INFLATIONARY AND NON-INFLATIONARY FINANCIAL ANALYSES ARE PERFORMED

2 INFLATION RATE OVER THE DISCOUNT PERIOD IS ASSUMED AT 4.2 PERCENT 3 NON-INFLATIONARY FINANCIAL FIGURES ARE REFERRED TO IN THE SPREADSHEET AS "REAL'

TAX REGIME

4 COMPANY TAXATION IS INCLUDED AT A RATE OF 42.5% AN INITIAL CAPITAL ALLOWANCE OF 50% IS ALLOWABLE IN THE FIRST PRODUCTION YEAR 6 WEAR AND TEAR ALLOWANCE OF 50% OF THE BALANCE FOLLOWS FOR THE FOLLOWING

TWO SUCCESSIVE YEARS

FINANCIAL ANALYSES PERFORMED

NET PRESENT VALUE AT A STATED COST OF CAPITAL IN PERCENTAGE TERMS ABOVE THE

INFLATION RATE PERFORMED OVER THE NON-INFLATIONARY NET CASH FLOWS

11 NET PRESENT VALUE AT A STATED COST OF CAPITAL PERFORMED OVER THE INFLATIONARY

NET CASH FLOWS

TIME SCALE

NOTES -CAPITAL COST

A BASE CASE CAPITAL COST OF US$4320 IS ASSUMED FOR A PRODUCTION RATE OF 15400 TONNES/ANNUM 16 CAPITAL COST IS FACTORED AT PROPORTIONAL PRODUCTION TO POWER 0.6 17 CAPEX IS APPROXIMATELY 23 PERCENT IN YEAR ONE

PERCENT IN YEAR TWO

PERCENT IN YEAR THREE

NOTES -COST OF NATURAL GAS

19 NATURAL GAS IS IMPORTED TO THE METHANOL SYNTHESIS FACILITY COST 8.5 US$/MMBTU

THE GAS PRODUCTION FACILITY OPERATES ON A SEPARATE FINANCIAL BASIS

NOTES -PRODUCTION RATE

21 BASE CASE IS 15400 METRIC TONNES PER DAY OF METHANOL 22 PRODUCTION OF METHANOL IS MODULAR-EACH SYNTHESIS REACTOR CAPACITY 2200 TONNES/DAY 23 OCCUPANCY AT NAMEPLATE CAPACITY IS ASSUMED AT 90 PERCENT 24 ROLLING SHUTDOWN FOR PLANT MAINTENANCE IS ASSUMED

NOTES FIXED COSTS OF PRODUCTION

BASE CASE FIXED COSTS ARE ASSUMED AT US$110 MILLION/ANNUM 26 FIXED COSTS ARE FACTORED ACCORDING TO PRODUCTION RATE

NOTES -TECHNOLOGY

27 NATURAL GAS (CH4) IS EMPLOYED AS THE CARBONACEOUS FEEDSTOCK 28 STEAM REFORMATION OF THE CH4 IS CARRIED OUT OVER A NICKEL CATALYST 29 THE REFORMATION TECHNOLOGY IS AS FOLLOWS:CH4+H203H2+CO

THE CARBON DIOXIDE REQUIRED TO MODIFY THE SYNTHESIS REACTION IS

OBTAINED BY COMBUSTION OF NATURAL GAS TO POWER THE STEAM REFORMATION

REACTION

31 THE PURIFIED C02 GAS STREAM IS COMPRESSED 32 THE GASES ARE PROPORTIONED INTO THE SYNTHESIS REACTOR IN THE NORMAL WAY 33 THE SYNTHESIS REACTOR IS EQUIPPED WITH RECYCLE COMPRESSION 34 COARSE DISTILLATION IS UNDERTAKEN-FUEL GRADE METHANOL IS PRODUCED Numberof I I Synthesis Modules _________ 0.113636364 __________ _______ _______ ___________ ________ _________ __________ Size of each synthesis module __________ 2200 tonnes/day _______ _________ ___________ _________ _________ ___________ Nominal Daily Production _________ 250 __________ _______ _________ ___________ _________ _________ __________ Percentage Capex Capex Basecase Capex Capital Additions __________ ___________ __________ Percent Proportions Gapex _________ Istallation __________ Steam reformation __________ 102.0688804 US$ Millions 0.28 28 4320 US$M YEAR 1 0.233333333 Gas Cleanup C02 Capture __________ 32.8078544 US$ Millions 0.09 9 Exponent _________ YEAR 2 0.4 Compression,Reverse Shift Reaction _________ 43.74380587 US$ Millions 0.12 12 0.6 ________ YEAR 3 0.3 Basecase Synthesis Reaction __________ 51.03444018 US$ Millions 0.14 14 produflon _________ YEAR 4 0.066666667 Wastewater Distillation Section treatment 29.16253725 US$ Millions 0.08 8 15400 TID __________ __________ Utilities and OfIsites __________ 80.19697743 US$ Millions 0.22 22 Scaling Factor (PLANT) __________ __________ Carbon Capture __________ 25.51722009 US$ Millions 0.07 7 0.084382342 _________ __________ __________ (NATURAL Total Capital GAS Additions _________ 364.5317156 US$ Millions _______ 100 Scaling Factor COST) __________ __________ __________ _______ _________ 0.02451 1922 _________ _________ __________ Online Time _________ 90 % _______ _________ ___________ _________ __________ ___________ Equivalent online time at nameplate production rate _________ 328.725 Days _______ __________ ___________ _________ __________ p of methanol __________ 790 Kg/m3 ___________ _____________ _________ __________ ________ Realised Selling Price of methanol fob Factory perimeter __________ -__________ ___________ io US cents/litre -_________ __________ ________ Tonnes of Methanol produced ___________ -82181.25 Tonnes/annum _____________ -Kilo -litresof metanol produced ___________ -1040268987 ____________ _____________ _________ __________ ________ Gross sales United States of Methanol Dollars per perannum __________ -72818829.11 annum _____________ __________ __________ ________ Million United Base Case States Power ___________ __________ -72.81882911 Dollars/annum _____________ Plant Size __________ ________ Per 2200 tonne/day ____________ _____________ ______________ 750 MW ___________ module Quantity of natural gas required per tonne in MMBTU ________ 29.1 MMBTU ___________ ________ _________ _____ ___________ _________ 30.7005 GIGA JOULES ____________ _________ _________ _______ Nameplate Power Consuption __________ -0.088832465 GIGAWATT _____________ _________ __________ ________ Natural Gas Price per MMBTU _________ -8,5 U.S.$IMMBTU ___________ ________ _________ _______ Percentage _________ _________ __________ ___________ Base Case Feed Costs _______ Fixed Costs JM -__________ ___________ _____________ -Fixed Costs Salanes 40 Payroll 3.712823029 -___________ ____________ _____________ 110 Maintenance 40 Maintenance 3.712823029 -___________ ____________ _____________ _________ Other 20 Other 1.856411515 __________ ___________ _____________ _________ __________ ________ Fixed Costs ____________ 9.282057573 All Figures In Millions Of United States Dollars _________ ___________ ________ Year 2011 2012 2013 2014 2015 2016 2017 Inflation Rate 4.2 4.2 4.2 4.2 4,2 4.2 4.2 Inflation Index 1 1.042 1.085764 1.1313661 1.1788835 1.2283966 1.2799892 Gross Sales (real) 0 0 0 36.409415 72.818829 72.818829 72.818829 Gross Sales (inflated) 0 0 0 41.192377 85844913 894504 93.207317 Fixed Costs real 0 0 0 6.6830815 9.2820576 9.2820576 9.2820576 FixedCosts (inflated) 0 0 0 7.5610117 10.942464 11.402048 11.880934 Fixed Costs (inflated) _______ _________ _________ _________ _________ _________ _________ Cost Of Electricity (real) 0 0 0 0 20.327532 20.327532 20.327532 Cost of Electncity (inflated) 0 0 0 0 23.963792 24.970271 26.0 19022 Fixed and Variable Costs-(real) 0 0 0 6.6830815 29.60959 29.60959 29.60959 Fixed and Variable Costs (inflated) 0 0 0 7.5610117 34906256 36.372318 37.899956 Cash Flow (real) 0 0 0 29.726333 43.209239 43.209239 43.209239 Cash Flow (inflated) 0 0 0 33.631365 50.938658 53.078081 55.307361 Taxable Value of Plant (real) 0 85.0574 230.87009 340.2296 182.26586 91.132929 0 Year 2011 2012 2013 2014 2015 2016 2017 Capital Additions During Year (real) 85.0574 145.81269 109.35951 24.302114 0 0 0 Cumulative Capital Additions (real) 85.0574 230.87009 340.2296 364.53172 364.53172 364.53172 364.53172 Initial Allowance (real) 0 0 0 182.26586 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 91.132929 91.132929 0 Tax Allowance (real) 0 0 0 182.26586 91.132929 91.132929 0 Taxable Value of Plant (inflated) 0 85.0574 236.99422 355.73284 191.61 372 95.806858 0 Capital Additions During Year (inflated) 85.0574 151.93682 118.73862 27.494588 0 _________ _________ Cumulative Capital Additions (inflated) 85.0574 236.99422 355.73284 383.22743 383.22743 383.22743 _________ Initial Allowance (inflated) 0 _________ _________ 191.61372 _________ _________ _________ Wear And Tear Allowance (inflated) 0 _________ _________ _________ 95.806858 95.806858 _________ Tax Allowance (inflated) ________ _________ _________ 191.61372 95.806858 95.806858 _________ Annual Taxable Income (real) 0 0 0 -152.5395 -47.92369 -47.92369 43.209239 Annual Taxable Income (inflated) 0 0 0 -157.9824 -44.8682 -42.72878 55.307361 Tax Loss Carried Forward (real) ________ _________ _________ -152.5395 -200.4632 -248.3869 -205.1777 Tax Loss Carried Forward(inflated) ________ _________ _________ -157.9824 -202.8506 -245.5793 -190.272 Taxable Income (real) 0 0 0 0 0 0 0 Taxable lncome(inflated) 0 0 0 0 0 0 0 Tax Payable (real) 0 0 0 0 0 0 0 Tax Payable (inflated) 0 0 0 0 0 0 0 Trading Cash Flow After Tax (real) 0 0 0 29.726333 43.209239 43.209239 43.209239 Trading cash flow after tax(inf) 0 0 0 33.631365 50.938658 53.078081 55.307361 Net Cash Flow(real) -85.0574 -145.8127 -1 09.3595 5.4242187 43.209239 43.209239 43.209239 Net Cash Flow(inflated) -85.0574 -151.9368 -118.7386 6.1367771 50.938658 53.078081 55.307361 Cumulative cash flow (real) -85.0574 -2308701 -340.2296 -334.8054 -291.5961 -248.3869 -205.1777 Cumulative cash flow(inflated) -85.0574 -236.9942 -355.7328 -349.5961 -298.6574 -245.5793 -190.272 Year 2018 2019 2020 2021 2022 2023 2024 Inflation Rate 4.2 4.2 4.2 4.2 4.2 4.2 4.2 Inflation Index 1.3337488 1.3897662 1.4481364 1.5089581 1.5723344 1.6383724 1.7071841 Gross Sales (real) 72.818829 72,818829 72.818829 72.818829 72.818829 72.818829 72.818829 Gross Sales (inflated) 97.122024 101.20115 105.4516 109.88056 114.49555 119,30436 124.31514 Fixed Costs real 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 Fixed Costs (inflated) 12.379933 12.89989 13.4.41685 14.006236 14.594498 15.207467 15.846181 Fixed Costs (inflated) _________ _________ _________ _________ _________ _________ _________ Cost Of Electilcity (real) 20.327532 20.327532 20.327532 20.327532 20.327532 20.327532 20.327532 Cost of Electncity (inflated) 27.111821 28.250518 29.437039 30.673395 31.961678 33.304068 34.702839 Fixed and Variable Costs-(real[ 29.60959 29.60959 29.60959 29.60959 29.60959 29.60959 29.60959 Feed and Variable Costs (inflated) 39.491754 41.150408 42.878725 44.679631 46.556176 48.511535 50.54902 Cash Flow (real) 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 Cash Flow (inflated) 57.63027 60.050741 62.572872 65.200933 67.939372 70.792826 73.766125 Taxable Value of Plant (real) 0 0 0 0 0 0 0 Capital Additions During Year (realL _________ 0 0 0 0 0 0 Cumulative Capital Additions (real) 364.531 72 364.53172 364.53172 364.53172 364.53172 364.531 72 364.53172 Initial Allowance (real) 0 0 0 0 0 0 0 Wear And Tear Allowance (reall 0 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 0 Taxable Value of Plant (inflated) 0 ________________________________ _________ _________ _________ Year 2018 2019 2020 2021 2022 2023 2024 Capital Additions During Year (inflated) _________ _________ _________ _________ _________ _________ _________ Cumulative Capital Additions (inflated) _________ _________ _________ _________ _________ _________ _________ Initial Allowance (inflated) __________ _________ __________ __________ __________ __________ __________ Wear And Tear Allowance (inflated) _________ _________ _________ _________ _________ _________ _________ Tax Allowance (inflated) _________ _________ _________ _________ _________ _________ _________ Annual Taxable Income (real) 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 Annual Taxable Income (inflated) 57.63027 60.050741 62.572872 65.200933 67.939372 70.792826 73.7661 25 Tax Loss Carried Forward (real) -161.9684 -118.7592 -75.54995 -32.34071 0 0 0 Tax Loss Carried Forward(inflated) -132.6417 -72.59096 -10.01808 0 0 0 0 Taxable Income (real) 0 0 0 10.868532 43.209239 43.209239 43.209239 Taxable lncome(inflated) 0 0 52.55479 65.200933 67.939372 70.792826 73.766125 TaxPayable(real) 0 0 0 4.6191262 18.363927 18.363927 18.363927 Tax Payable (inflated) 0 0 22.335786 27.710397 28.874233 30.086951 31.350603 Trading Cash Flow After Tax (real) 43.209239 43.209239 43.209239 38.590113 24.845313 24.845313 24.845313 Trading cash flow after tax(inf) 57.63027 60.050741 40.237087 37.490537 39.0651 39 40.705875 42.415522 Net Cash Flow(real) 43.209239 43.209239 43.209239 38.590113 24.845313 24.845313 24.845313 Net Cash Flow(inflated) 57.63027 60.050741 40.237087 37.490537 39.065139 40.705875 42.415522 Cumulativecash flow (real) -161.9684 -118.7592 -75.54995 -36,95983 -12.11452 12.730792 37.576105 Cumulative cash flow(inflated) -132.6417 -72.59096 -32.35387 5.1366681 44.201807 84.907682 127.3232 Year 2025 2026 2027 2028 2029 2030 2031 Inflation Rate 4.2 4.2 4.2 4.2 4.2 4.2 4.2 Inflation Index 1.7788858 1.853599 1.9314501 20125711 2.097099 2.1851772 2.2769546 Gross Sales (real) 72.818829 72.818829 72.818829 72.818829 72.818829 72.818829 72.818829 Gross Sales (inflated) 129.53638 134.97691 140.64594 146.55307 152.7083 159.12205 165.80517 Fixed Costs real 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 Fixed Costs (inflated) 16.51172 17.205213 17,927831 186808 19.465394 20.282941 21.134824 Fixed Costs (inflated) _________ _________ _________ _________ _________ _________ _________ Cost Of Electricity (real) 20.327532 20.327532 20.327532 20.327532 20.327532 20.327532 20.327532 Cost of Electricity (inflated) 36.160358 37.679093 39.261615 40.910603 42.628848 44.41926 46.284869 Fixed and Variable Costs-(real) 29.60959 29.60959 29.60959 29.60959 29.60959 29.60959 29.60959 Fixed and Variable Costs (inflated) 52.672078 54.884306 57.189447 59.591403 62.094242 64.7022 67.419693 Cash Flow (real) 43.209239 43.209239 43,209239 43.209239 43.209239 43.209239 43.209239 Cash Flow (inflated) 76.864302 80.092602 83.456492 86.961 664 90.614054 94.41 9845 98.385478 Taxable Value of Plant (real) 0 0 0 0 0 0 0 Capital Additions During Year (real) 0 0 0 0 0 0 0 Cumulative Capital Additions (real) 364.53172 364.53172 364.53172 364.53172 364.53172 36453172 364.53172 Initial Allowance (real) 0 0 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 0 0 Taxable Value of Plant (inflated) _________ _________ _________ _________ _________ _________ _________ Capital Additions During Year (inflated) _________ _________ _________ _________ _________ _________ _________ Cumulative Capital Additions (inflated) _________ _________ _________ _________ _________ _________ _________ Initial Allowance (inflated) __________ _________ __________ __________ __________ __________ __________ Wear And Tear Allowance (inflated) _________ _________ _________ _________ _________ _________ _________ Tax Allowance (inflated) _________ _________ _________ _________ _________ _________ _________ Year 2025 2026 2027 2028 2029 2030 2031 Annual Taxable Income (real) 43.209239 43.209239 43.209239 43209239 43.209239 43.209239 43.209239 Annual Taxable Income (inflated) 76.864302 80.092602 83.456492 86.961664 90.614054 94.419845 98.385478 Tax Loss Carried Forward (rea 0 0 0 0 0 0 0 Tax Loss Carried Forward(inflatedL 0 0 0 0 _________ _________ _________ Taxable Income (real) 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 43.209239 Taxable lncome(inflated) 76.864302 80.092602 83.456492 86.961664 90.614054 94.419845 98.385478 Tax Payable (real) 18.363927 18.363927 18.363927 18.363927 18.363927 18.363927 18.363927 Tax Payable (inflated) 32.667328 34.039356 35.469009 36.958707 38.510973 40.128434 41.813828 Trading Cash Flow After Tax (real) 24.845313 24.845313 24.845313 24.845313 24.845313 24.845313 24.845313 Trading cash flow after tax(inf) 44.196974 46.053246 47.987483 50.002957 52.103081 54.291411 56.57165 Net Cash Flow(real) 24.845313 24.845313 24.845313 24.845313 24.845313 24.845313 24.845313 Net Cash Flow(inflated) 44.196974 46.053246 47.987483 50.002957 52.103081 54.291411 56.57165 Cumulavecashflow(real) 62.421417 87.26673 112.11204 136.95736 161.80267 186.64798 211.49329 Cumulative cash flow(inflated) 171.52018 217.57342 26556091 315.56386 367.66694 421.95836 47853001 Year 2032 2033 2034 2035 2036 Inflation Rate 4.2 4.2 4.2 4.2 4.2 Inflation Index 2.3725867 2.4722354 2.5760693 2.6842642 2.7970033 Gross Sales (real) 72.818829 72.818829 72.818829 72.818829 72.818829 Gross Sales (inflated) 172.76899 180.02529 187.58635 195.46497 203.6745 Fixed Costs real 9.2820576 9.2820576 9.2820576 9.2820576 9.2820576 Fixed Costs (inflated) 22.022487 22.947431 23.911223 24.915495 25.961945 Fixed Costs (inflated) _____________ ___________ ___________ ___________ ___________ Cost Of Electricdy (real) 20.327532 20.327532 20.327532 20.327532 20.327532 Cost of Electricity (inflated) 48.228833 50.254444 52.365131 54.564466 56.856174 Fixed and Variable Costs-(real) 29.60959 29.60959 29.60959 29.60959 29.60959 Fixed and Variable Costs (inflated) 70.25132 73.201875 76.276354 79.479961 82.818119 Cash Flow (real) 43.209239 43.209239 43.209239 43.209239 43.209239 Cash Flow (inflated) 102.51767 10682341 111.30999 115.98501 120.85638 Taxable Value of Plant (real) 0 0 0 0 0 Capital Additions During Year (real) 0 0 0 0 0 Cumulative Capital Additions (real) 364.531 72 364.53172 364.53172 364.531 72 364.531 72 Initial Allowance (real) 0 0 0 0 0 Wear And Tear Allowance (real) 0 0 0 0 0 Tax Allowance (real) 0 0 0 0 0 Taxable Value of Plant (inflated) _____________ ___________ ____________ ___________ ___________ Capital Additions During Year (inflated) ____________ ___________ ___________ ___________ ___________ Cumulative Capital Additions (inflate) ____________ ___________ ___________ ___________ ___________ Initial Allowance (inflated) Wear And Tear Allowance (inflated) ____________ ___________ ___________ ___________ ___________ Tax Allowance (inflated) ____________ ___________ ___________ ___________ ___________ Annual Taxable Income (real) 43.209239 43.209239 43.209239 43.209239 43.209239 Annual Taxable Income (inflated) 102.51767 106.82341 111.30999 115.98501 120.85638 Tax Loss Carried Forward (real) 0 0 ___________ ___________ ___________ Tax Loss Carried Forward(inflated) _____________ ___________ ___________ ___________ ___________ Taxable Income (real) 43.209239 43.209239 43.209239 43.209239 43.209239 Year 2032 2033 2034 2035 2036 TabIe lncome(inflated) 102.51767 106.82341 111.30999 115.98501 120.85638 Tax Payable (real) 18.363927 18.363927 18.363927 18.363927 18.363927 Tax Payable (inflated) 43.570009 45.399949 47.306747 49.293631 51.363963 Trading Cash Flow After Tax (real) 24.845313 24.845313 24.845313 24.845313 24.845313 Trading cash flow after tax(inf) 58.947659 61.423461 64003246 66.691383 69.492421 Net Cash FIow(real) 24.845313 24.845313 24.845313 24.845313 24.845313 Net Cash FIow(inflated) 58.947659 61.423461 64.003246 66.691383 69.492421 Cumulativecashflow(real) 236.33861 261.18392 286.02923 310.87454 335.71986 Cumulave cash flow(inated) 537.47766 598.90113 662.90437 729.59575 799.08817 SELLING PRICE OF METHANOL 70 US CENTS PER LITRE FOB. FACTORY GATE COST OF NATURAL GAS U.S.$/MMBTU 8.5 U.S.$IMMBTU QUANTITY OF NATURAL GAS REQUIRED PER TONNE 29.1 MMBTU TONNES OF METHANOL PRODUCED PER ANNUM 82181.25 TONNES INFLATION RATE OVER DISCOUNT PERIOD 4.2 PERCENT WEIGHTED AVERAGE COST OF CAPITAL -NON-INFLATIONARY 3 PERCENT WEIGHTED AVERAGE COST OF CAPITAL -INFLATIONARY 7.2 PERCENT INTERNAL RATE OF RETURN -(IRR) NON-INFLATIONARY 0.06649636 INTERNAL RATE OF RETURN -INFLATIONARY 0.10540022 NET PRESENT VALUE AT ZERO COST OF CAPITAL 335.719856 NET PRESENT VALUE AT WACC -NON-INFLATIONARY 130.910445 NET PRESENT VALUE AT WACC -INFLATIONARY 106.79737 TAX PAYABLE TO REVENUE AUTHORITY (REAL) 280.078027 TAX PAYABLE TO REVENUE AUTHORITY (INFLATED) 636.879905

PRODUCTION COST COMPARED TO ETHANOL

The production cost of methanol manufactured by combination of carbon dioxide with electrolytically produced hydrogen, is compared against the cost of ethanol manufactured from maize.

The production cost of ethanol from maize is reported to be US$1.09 per gallon or 1JS28.8 /litre.

J5 This fuel is retailed at $2.62/gallon as E85.

The production cost of methanol on the same basis as that used for ethanol production should not include the cost of the cellulose, apart from the transportation costs, since this material is produced at present.

In the table above, the portion of the cost devoted to dividends, retained earnings and taxation should also be omitted.

On this basis, the cost of the fuel per litre is calculated to be US54.7' /litre.

However, on an equivalent calorific basis, the cost is increased by the relative calorific values.

Equivalent Cost Per Litre of Methanol The heat of combustion of methanol is 64.5 M BTU/Gal, and that of ethanol is 76.5 M BTU/Gal.

The equivalent production cost of methanol per litre is then calculated as US54.7 x 76.5 US64.9 64.5 Discussion Comparison of Economics of Methanol and Ethanol Production It is notoriously difficult to compare economics of production cost, because of arguments for and against inclusion of certain cost factors.

For example, if the payback on the investment in the farmland is not included in the ethanol production cost, is this not equivalent to considering that the payback of the methanol manufacturing facility should not be included in the direct production cost? The logic for this argument is that the land itself represents a synthesis facility, albeit using photosynthesis, which is a natural process, as the synthesis route.

In this respect, it is identical to the methanol synthesis plant.

The major difference is that once the land has been paid for, it is assumed not to require replacement, unlike the methanol synthesis plant which requires replacement at regular intervals of approximately 20 years.

Many interesting points of discussion relevant to the economics of the production of ethanol and methanol, as well as to wider issues must be raised to gain a more complete understanding of what is essentially involved in these enterprises. These cannot be examined in detail in this précis of the exposition of a new technology to provide liquid automotive fuel from a renewable resource.

The following briefly summarised points represent most of the important features which should be considered: I0 (A) The technology employs waste cellulosic/lignitic material from an existing crop to increase the production of organically renewable alcohol by a factor of approximately 6.5-7 (a 650-700% increase) (B) The six to sevenfold increase in the production of alcohol fuel is achieved without an increase in the area of monoculture (maize) under cultivation.

(C) The technology maximises the useful recovery of carbon dioxide that has been fixed by photosynthesis. This is achieved in two ways: a. Carbon dioxide released by the fermentation process is recovered and converted in its turn to alcohol fuel b. Waste cellulosic/lignitic material that is not normally converted to sugar by hydrolysis is converted to alcohol fuel.

(D) The technology interferes with the complex interaction between corn utilisation as a fuel and corn utilisation as a foodstuff in a less direct way than the production of ethanol.

Whilst some of the waste material from the production of maize is earmarked for silage, the above semi-quantitative illustration assumes that only 60% of the waste cellulosic material is available for conversion to methanol.

(E) In the case of the corn belt of the Unites States, the production of methanol is achieved through the use of a natural resource that would not otherwise be utilised, namely that of wind power.

An ideal electricity source from many viewpoints is electricity from wind turbines. The quantities required and the practicability of utilising wind power is explored below.

The corn belt is characterised by a low (and slowly shrinking) human io population with generally fairly strong and consistent windy conditions.

This windy condition cannot in general be exploited to provide electricity to more populous areas, because of the distances involved in reticulation.

However, the use of wind turbines to provide electricity for alcohol production stations, located on a grid system throughout the corn belt would minimise reticulation problems.

Wind turbines are most suited to continuous production processes in which the instantaneous utiuisation capacity is not of any overriding significance, and in which production capacity may be readily varied.

The methanol production process, because of its simplicity, fulfils these requirements.

Furthermore, storage of both feedstock gases, namely carbon dioxide and hydrogen may be economically undertaken to assist in smoothing out the production rate.

(F) The use of wind power as the primary energy source for the production of hydrogen gas by electrolysis, renders the entire process of methanol fuel production sustainable without recourse to the exploitation of fossil fuel or nuclear energy.

In the production of ethanol, energy balances indicate that significant quantities of energy must be absorbed in transportation, fertilizers and stream heating of the vats in which the breakdown of starch and fermentation processes occur.

(G) It is envisaged that, with the increase in the quantity of alcohol fuel produced, by a factor of 6-7, most vehicular transportation in the corn belt will be by means of alcohol fuelled vehicles.

(11) In addition to the manufacture of methanol fuel by the process of combination of carbon dioxide and electrolytic hydrogen, an obvious synergy is the production of ammonium nitrate fertilizer using the same process.

The methanol formation reaction: CO2 + 3H2 -* CH3OH + H20 is substantially the same as the ammonia formation reaction N2 + 31-12 -* 2NH3 The anhydrous ammonia plant in fact has the identical "frontend" to the methanol manufacturing plant.

The process of combination of electrolytic hydrogen with atmospheric nitrogen was pioneered in Norway in order to take advantage of a seasonal surge in Hydro-Electric power in Norway.

The process is well known and provided the original impetus for the Norwegian fertilizer industry.

It is, however, not widely used, since until recently the economics of production of anhydrous ammonia, by the steam reformation of natural gas, have been considerably superior.

However, since amajor portion of the cost of fertilizer is transportation, the co-production of ammonium nitrate fertilizer with the methanol is likely to be the most economic source.

In this case, three of the major inputs to the farming region, namely transportation, fuel and ammonium nitrate fertilizer will be provided by renewable resources.

(I) For strategic reasons, there is a lobby in the United States which favours local production of at least a sizeable percentage of the liquid automotive fuel consumed in the United States.

These strategic reasons revolve mainly around price dislocations outside of the control of the United States' economy, as well as continuous or semi-continuous political and/or military embroilment as the United States negotiates a position for itself in the worldwide market place.

Renewable resource fuel produced in much larger quantities than at present will provide a permanent source of supply, albeit initially at a small percentage level of the US requirement.

An increase in production of alcohol fuel by a factor of 650-700% will partially fulfil this requirement for strategic local manufacture, on a sustainable basis.

(J) There is, additionally, a lobby in the United States which favours renewable resource carbon based fuel production, in order that carbon dioxide emissions to atmosphere are reduced to prevent, primarily, "global warming".

Conjoined with this lobby is a further interest group which is concerned that exploitation of coal and oil reserves, whilst not particularly damaging to the environment, is proceeding at too rapid a pace.

In other words, this lobby is concerned with a too rapid and thoughtless depletion of coal and oil reserves, which can never be replaced, but regards the increase in the atmospheric carbon dioxide level to be either a minor or irrelevant issue, which has not been responsibly quantified.

The requirements of both interest groups in this conjoined lobby will be satisfied by the production of methanol fuel from renewable resources, provided the economics of production are sufficiently low to sustain this method of production.

(K) Generation of electricity wind turbines is essentially a youthful technology, and has only been implemented on a large scale over the last 10-15 years.

One aspect of the investment in this form of electricity generation that requires exploration in the future, is the write-off period of the investment.

In other words, how long does a wind turbine last? After what period of time will the routine maintenance to the wind turbine reach such an intensity that it is more economic to dismantle the wind turbine and replace it with a new one? May wind turbines be built to accept modular replacement units on a regular maintenance schedule, and on this basis never actually require to be replaced as a unit? (This represents the "grandfather's axe" theory of processing equipment renovation.) These questions are of importance as they affect the longer term basis of the major variable cost input, namely the electricity required for the electrolysis of water.

If, for example, the erection of wind turbines to supply the methanol synthesis units is conducted on the economic basis of a 20 year write-off period, at a delivered cost of US6.0(/kw.hr to the synthesis plant, it will be of interest to calculate the cost after this period of time has elapsed.

It is possible that on a long term basis electricity costs may be lowered significantly below the US6.O4/kw.hr mark.

(L) Modularisation of methanol synthesis facilities, and the employment of "LCM" (low cost methanol production technology) may be used to increase process efficiency and lower fixed costs of production, if the technology is widespread over the corn belt region.

The process will also gain impetus from engineering design and innovation in related technology to produce methanol from power station exhaust.

(M) Similarly, the widespread production of methanol as a liquid automotive fuel, will lead to advances in purpose-designed engine technology, maximising compression ratios, and increasing mechanical efficiency.

(N) All of the above points lead to a fuller understanding of the wider issues involved in methanol production on a large scale.

The fact remains that in the short term and ignoring the monetary implications of the broader issues, such as the size of the national standing army, navy and air force, which pertain to fuel security, the fuel is on a strict fiscal basis more expensive than ethanol and imported petroleum.

The extent to which the fuel should be subsidized or, alternatively, exempted from taxation, must be closely examined with particular reference to: -Strategic fuel security issues -Environmental issues -Food/fuel competition issues -Regional economic growth -Long term fuel security goals -Short term cost -Long term cost.

SYNERGIES THAT SHOULD BE UNDERTAKEN IN TH

DEVELOPMENT OF RENEWABLE RESOURCE METHANOL

There are a number of synergies that should be undertaken to maximise the efficiency of production, to maximise the capture of the carbon fixed by photosynthesis, and to minimise fossil fuel use.

These synergies are: Si The process of fermentation is accompanied by the unavoidable release of carbon dioxide back to the atmosphere as a consequence of the metabolic process.

This carbon dioxide is stoichiometrically equivalent to one third of the carbon contained in the maize starch.

In order to maximise the useful conversion of carbon captured by photosynthesis, the methanol synthesis station should ideally be co-located with the ethanol production station.

S2 Co-location of methanol synthesis plant with ethanol synthesis plant will allow a number of additional synergies as follows: -Transportation of both grain and cellulosic/lignitic waste will be to the same terminus -Personnel requirement for a conjoined facility will be lower than for separate facilities -Blending of the methanol/ethanol to a standard composition may be carried out -Provision of steam to the starch hydrolysis and sugar fermentation vats may be provided by the burning of the cellulosic waste, in conjunction with or replacing electricity generation -Environmental impact will be lessened.

S3 The entire ammonium nitrate fertilizer requirement may be produced on site as an obvious synergy.

The process of anhydrous ammonia manufacture using atmospheric nitrogen and electrolytically produced hydrogen is well known, and has been developed on a large scale in Norway.

Whilst this production route has not normally been competitive against anhydrous ammonia production using a natural gas feedstock, it is likely that in this specific circumstance, it will prove to compete economically.

The reasons for this relate to the following circumstances which pertain generally, and also specifically, to the corn belt of the United States: -Natural gas prices have risen very rapidly in the last few years, in tandem with the crude oil price. In the absence of any other factors, this has, in any event, closed the gap in the production price between the standard methane gas reformation process and the electrolytic hydrogen process.

-In the production of ammonium nitrate fertilizer, the cost of transport is a major factor. Essentially one of three choices must be made in a typical transportation/usage scenario: i) Transport low weight anhydrous ammonia in specialised pressure tankers to a nitric acid/axnmonium nitrate conversion facility located at or near a point of sale terminus.

This involves relatively low transportation tonnages, but a sophisticated onloading/offloading regime, and specialised transportation tankers. There is also a fairly stringent safety requirement since anhydrous ammonia is both highly toxic and flammable, and has a high vapour pressure under ambient conditions.

ii) Convert the anhydrous ammonia to nitric acid and ammonium nitrate fertilizer at a manufacturing plant in the same industrial complex as the anhydrous ammonia plant.

The stoichiometric reactions involved are as follows (for illustrative process -the oxidisation of nitrogen is in fact complex): 4NH3 + 702 4N02 + 6H20 4N02 + 4H20, 4HN03 4HN03 + 4NH3 4NHN0 Thus instead of transporting 34 tonnes of anhydrous ammonia, 80 tonnes of ammonium nitrate must be transported from this stoichiometric analysis.

Actually, the quantity is slightly greater, since the ammonium nitrate prills contain a deactivating agent, usually magnesium/calcium carbonate, and also contain approximately 12% water, as the product is somewhat hygroscopic.

The transportation may be readily undertaken by any non-specialised transport contractor, but the physical weight is considerably higher.

iii) The third option is to transport the base raw material to a factory situated at the consumption or point of sale terminus, in this case, the corn belt.

This raw material is typically a methane gas feedstock, sourced typically from coastal refineries, oil fields or coal bed methane deposits, or, alternatively, a coal feedstock.

In the process under review, the feedstock for the production of the arnmonium nitrate fertilizer is river water. This water is available at essentially zero cost at the manufacturing site.

The motive force to conduct the breakdown of the water by electrolysis is electricity which is reticulated to the manufacturing plant.

Thus the ammonium nitrate is manufactured at point of sale, which releases the cost burden of transportation. I0

The cost of transportation of ammonium nitrate fertilizer is obviously highly variable, and depends fundamentally on how far removed the point of sale terminus is from the manufacturing plant, as well as the development of the transportation infrastructure, and the number of offloading/onloading operations that must be undertaken.

In the case of the corn belt, transportation costs make up a significant portion of the delivered cost of the fertilizer in many areas. This further erodes the margin between the delivered cost of the fertilizer manufactured using the standard natural gas reformation process for hydrogen generation, and the electrolytic hydrogen process.

-The conversion to alcohol fuel of the carbon dioxide generated by burning of waste cellulosic/lignitic material is carried out by reaction with electrolytically produced hydrogen.

This reaction is represented as: C02 + 3H2 = CH3OH + H20 The manufacture of the anhydrous ammonia is carried out by a fundamentally similar process, namely the reaction of a gas with no calorific value with electrolytically produced hydrogen gas.

The anhydrous ammonia formation reaction is essentially similar N2 + 3H2 -p 2NH3 The significance of this is that if the anhydrous ammonia plant is located together with the methanol manufacturing plant, there is complete commonality of the hydrogen production section of the combined facility.

Thus the water purification, ion exchange plant, cell house, hydrogen capture and first stage hydrogen compression is common.

This synergy may be used to lower costs by economy of scale, mainly in the region of the electrolysis cell house.

There is also synergy possible in both production scheduling and in instantaneous electricity generation from the wind turbines.

For example, in the event of a shortage for whatever reason of waste cellulosic/lignitiC material, and a high electrical production (windy conditions), anhydrous ammonia production could be increased, and the arnmonium nitrate stored for later sale. This production scheduling should also be linked with carbon dioxide liquefaction and storage, and also (the more complex and expensive) hydrogen liquefaction arid storage.

S4 A fourth synergy that should be undertaken is the capture of the ash from the burning of the cellulosic/lignitic material, for incorporation into either the ammoniuln nitrate fertilizer, or other fertilizers imported to the site.

The production of the carbon dioxide arising from the burning of the agricultural "waste" will be accompanied by the oxidation of the trace elements incorporated into the material ("ash"). This ash must be completely removed from the carbon dioxide raw material by (provisionally) bag filtration, followed by wet scrubbing.

Since trace elements are removed from the soil, with incorporation into the agricultural produce, these trace elements must be returned to the soil.

Further work must be conducted in order to quantify the best compound suitable for incorporation of the ash into the fertilizer for return to the

to agricultural fields.

It may be that the oxides are suitable. Incorporation as nitrates could be simply achieved, since nitric acid will be available at each (proposed) ammonium nitrate fertilizer manufacturing station.

In this case the ash as oxides would typically be converted to highly soluble assimilable trace elements by the standard oxide/acid reaction, namely: -For monovalent trace metals M20 + 2HN03 = 2MN03 + H20 where M is the metal or -For bivalent trace metals MO + 2HN03 = M(N03)2 + H20 It is possible that waste material from the existing starch hydrolysis and sugar fermentation processes may be considered for treatment in a similar way.

S5 As a further synergy it is envisaged that on site electricity generation by steam generation using the calorific value of the waste agricultural material, may be supplemented by electricity generation using coal. This could be by the installation of a boiler designed to accept either waste agricultural produce or coal or a combination of the two.

The logic of this would be to optimise continuous production under all predicted electricity supply conditions, and agricultural production conditions.

This is best illustrated by example: Scenario Situation * Extremely Windy Conditions * Excess Electrical Generation Production -Excess hydrogen gas liquified and placed in Scenario storage, using excess electrical capacity -Liquid carbon dioxide from storage vapourised and used as feed for the methanol plant, which operates at high capacity -Anhydrous ammonia plant at high capacity to absorb excess electrical generation and minimise hydrogen storage -On site electricity generation increased to a maximum Generation of a maximum carbon dioxide for methanol production taken from storage Scenario Situation * Still Conditions * Insufficient Wind to Service Cell House Production -Hydrogen gas vapourised from liquid hydrogen Scenario storage to supply methanol plant -Carbon dioxide is used directly from the boiler off-gas. Excess carbon dioxide is produced and liquefied for use later (under windy production scenario) -Methanol plant operates at low capacity -Anhydrous ammonia plant at low capacity or offline -On site electricity generation is at a minimum but will service the electricity requirements of the methanol plant (apart form the major source of electricity consumption, the cell house) -Carbon dioxide capture and liquefaction is at a maximum Scenario Situation * Still Conditions * Insufficient Wind to Service Cell House and * Supply of Cellulosic/Lignitic Material Exhausted Production -As above Scenario -On site generation of electricity is at a minimum, but coal is used as the calorific source -Waste carbon dioxide is still captured as before Note that the use of coal instead of cellulose/lignite may occur annually on a regular basis, related to the crop cycle, as well as on an irregular basis related to the annual tonnage produced, which typically varies over a wide range.

Production scheduling, together with the quantification and optimisation of storage must take into account the annual crop cycle, as well as the known variability in wind strength on a month by month basis from historical weather records.

Thus, for example, it may be beneficial to maximise the co-production of ethanol by fermentation during months which are typically windy, so that the carbon dioxide by-product may be utilised without recourse to burning the cellulose by-product.

Storage volumes of: -Liquid hydrogen -Liquid carbon dioxide -Grain -Cellulose / lignite -Ammonium nitrate fertilizer may be optimised, together with the size of the methanol and anhydrous ammonia synthesiS plants, the on site boiler station, and the cell house generating hydrogen.

Mathematical modelling to optimise production scheduling, as well as synthesiS plant nameplate capacity, cell house nameplate capacity and storage volumes must take into account seasonal weather patterns, together with the annual agricultural cycle.

Considerable variability in both the crop production and the actual wind experienced (electricity generation) around the statistical mean will be encountered. In this respect, the mathematical modelling should incorporate a stochastic (random number) element, superimposed upon the historical average values.

This will give a further insight into actual production scheduling and the frequency and extent of production rate changes and production regime.

METHANOL GENERATING STATION QUANTIFICATION OF BASIC

INPUTS

The basic inputs are presented for a methanol generating station situated in the corn belt and producing 2 200 tonnes/day of methanol.

Quantity of Raw Material Cellulose/Lignite One tonne of waste cellulosic/lignitic material, accorded the stoichiometric formula C6H1005 (MW 162) contains: 37.037 kg moles of carbon 444.4 kg of carbon One tonne of methanol (CH3OH, MW 32) contains 31.25 kg moles of carbon = 375 kg of carbon One tonne of waste cellulosic material therefore produces 1.185 tonnes of methanol.

Quantity of Cellulosic Material Required per Day = 2 200 = 1 856.54 tonnes 1.185 Quantity of Cellulose Material Required per Annum Assume a 90% availability of the production facility at nameplate capacity.

The quantity of cellulosic/lignitic maize plant "waste" is then 365 x 0.9 x 1 856.54 609 873 tonnes or Approximately 610 000 tonnes (dry mass) Mass, with a moisture content of 12% = 983 058 tonnes Acreage of Land Under Cultivation Required to Produce This Quantity of Material It is assumed that 40% of the crop in the region is not available for conversion to methanol, but is converted to silage for cattle feed.

One hectare of arable land typically produces 4.5 tonnes of maize.

The grain accounts for 42% by dry mass of the maize plant including the grain.

Thus the crop of cellulosic/lignitic matter per hectare is approximately 4.5x58 -6.2tonnes Hectares under cultivation required = 609873 =98 366 ha 6.2 To a close approximation 100 000 ha under cultivation is required to service the plant.

However, it is assumed that 40% of the crop is not available.

Thus the area under cultivation is: 98366 = 163 944 ha 0.6 Approximately 165 000 ha under cultivation will service the methanol plant.

Approximate Spacing of Methanol Stations throughout the Corn BeLt Assume that half of the land on average lies fallow at any time. Further assume that half of the land under cultivation with maize as a monoculture.

Land area required 4 x 165 000 ha 660 000 ha This is equivalent to 6 600 km2, or a square block of side 81.2 km.

The methanol stations, as a rough approximation, will be situated 60-100 km apart.

It is envisaged that some form of planning to implement the scheme on a grid basis will be undertaken, in the event that the scheme is adopted.

Electricity Input Basis 2 200 torines/day -CH3OH On Site Electricity Generation The calorific value of the cellulosic/lignitic material is approximately 15 800 kj 7kg.

The quantity of material required is: 1 856.5 tonnes/day 77.35 tonnes/hour 21.5 kg/sec Heat generated by the burning of the cellulose is: 21.5x15800 jxg kg sec = 339 700 kg/sec 340 MW The quantity of electrical energy generated on site will be approximately 35-40% of this, since the conversion of heat energy to electrical energy is typically of this order.

Electrical energy generated on site 0.375 x 339 700 kjfsec = 127.4 MW This quantity of electrical power will be sufficient to run all the ancillary equipment for both the methanol plant and the anhydrous ammonia plant at the synthesis station, including: -All pumps and drives -The main hydrogen and carbon dioxide compressors Cooling water pumps -Carbon dioxide and hydrogen cryogenic storage compressors.

The quantity of carbon dioxide produced is in the ratio of the molecular weight of carbon dioxide and of carbohydrate matter i.e. CO2 MW 44 C6H1003 MW 162 * 139 The Quantity of Carbon Dioxide Produced = 6x44x1856.5 = 1.629x1856.5 = 3 0254 tonnes/day 126.06 tonnes/hr 35.0 kg/sec According to the methanol formation reaction CO2 + 3H2 CH3OH + H20 3 moles of hydrogen gas are required to produce 1 mole of methanol.

This hydrogen gas is produced by the electrolysis of water.

According to the heat of formation the following applies: H2 + V202 H20 (gas) (gas) (liquid) AHf tHf HF =0 =0 -286030 kj/kg mole kj/kg mole kj/kg mole The quantity of hydrogen required in kg moles per second is H2 requirement = 2.3835 kg moles/second This will provide the hydrogen requirement for 2.3835 = 0.7945 kg moles/second methanol 3 which is equivalent to 0.7945x32 = 25424kg/sec = 91 700 kg/hour = 2200tonnes/day The electrical power required is thus, according to the stoichiometry 2.39 x286 030 kj/sec 683.6 MW With a 5% conversion loss this amounts to 720 MW.

Since approximately 127 MW is generated on site, the balance of 593 MW, or 600 MW must be imported.

GENERATION OP IMPORTED ELECTRICITY BY WIND TURBINE

-Number and Location of Wind Turbine Generating Sets It is assumed, as above, that the land area required to provide stubble to feed the on site boiler, is of the order of 660 000 ha, then the methanol stations, on a square grid system will be approximately 81 km apart.

The size of an individual electricity generating turbine is variable.

There is a tendency towards larger and larger wind turbines as they provide economy of scale.

For the purposes of this exploratory quantification, it is assumed that the wind turbines will be of uniform construction and supply 500 kw or 0.5 MW under an average wind condition.

On this basis 1 200 wind turbines would be required to service the methanol synthesis facility. The most economic physical arrangement would be for the turbines to be clustered relatively closely to the terminus. This would maximise the proximity of the turbines to each other, reducing routine maintenance cost, and to the manufacturing terminus, reducing reticulation cost.

Purchase of Electricity Generating Wind Turbines by Farmers in the Corn Belt The preponderance of electricity generation by wind turbines in this scenario will promote the generation of electricity by this means for domestic general agricultural usage.

Private ownership of wind turbines by farmers may be promoted, as a partial buffer against variable production rate at the methanol synthesis facility.

Whilst, to a considerable extent, windy conditions are seasonal and a dearth of electrical power or an overabundance of electrical power would affect, in many instances, an entire region, short term fluctuations would be eased to some extent by private ownership.

This would operate essentially in the following way: -During windy conditions (above average electricity generation) the farmer would be encouraged to undertake operations which are energy intensive, such as pumping water for irrigation During still conditions (below average electricity generation) the farmer would be encouraged to export electricity.

Purchase of wind turbines by farmers and smaliholders in Denmark has accelerated greatly in recent years, and approximately 30% of the national power requirement is now satisfied by wind turbine.

Provision of a Stable Production Environment at the Methanol Synthesis Station without Wastage of Electricity Since by far the greatest cost in the manufacture of the methanol is the variable cost of the electricity which is used to produce hydrogen gas by electrolysis of water, the process economics revolve mostly around this issue.

It has been assumed that electricity will be produced at an average cost of US6.0/kw.hr (six United States cents per kilowatt hour), using on site electricity generation to provide approximately 17% of the power demand, and wind turbines to supply the rest.

Obviously, if the methanol plant was constructed to accommodate a capacity � much greater than the average of 2 200 tonnes/day, say three times the average capacity and amounting to 6 600 tonnes/day, most of the electricity supply could be accommodated.

This, however, would prove uneconomic on the grounds of capital cost.

The most cost effective method of maximising the usage of electricity generated by the wind turbines must be determined, incorporating a number of strategies.

These strategies will include the following Stabilisation Techniques (STs): STi Provision of Storage for Liquefied Hydrogen This provision is over arid above the provision of a hydrogen gasholder, which is a normal part of the production process.

Provision of storage for liquid hydrogen will allow the electrolysis ce3s to operate at full capacity during gusty periods, to take advantage of the additpal electricity. This hydrogen storage will not amount, however, to nçp lp (approximately) the requirement for 12 hours production at normal rates.

This is equivalent to 137.5 tonnes of hydrogen.

Because the liquid density of hydrogen is very low at 0.071 tonnes/rn3 (71 kg/tonne), the storage volume would be 1 936.5 or 2 000m3.

A storage volume much greater than this should not be contemplated from capital cost and safety considerations.

The hydrogen storage will allow steady operation of the methanol synthesis plant, during normal diurnal electricity variation fluctuations.

ST2 lmj,ortation of Electricity at Off-peak Periods It is also envisaged that during the seasonal period when (statistically) generation of electricity by wind turbine is at a minimum, electricity will be imported.

In order for this to be most economic, the bulk of the electricity will be imported at a specifically negotiated tariff during off-peak periods.

During this period the electrolytic cells will operate a high occupancy, and the methanol plant will operate using hydrogen produced directly by electrolysis of water.

It is envisaged that, in addition to this, the hydrogen gas storage will be filled.

During the peak period, when the cost of imported electricity will be higher, less electricity is imported to the methanol synthesis plant, and hydrogen is utilised from storage.

ST3 Oversizing of the Electrolysis Cell Segment of the Synthesis Plant In order for the importation of electricity at off-peak periods to be accompanied by normal plant operation and the relegation of hydrogen to storage, the electrolytic cell house must be oversized relative to the nameplate capacity of the synthesis plant.

ST4 Co-production of Anhydrous Ammonia, Nitric Acid and Ainmonium Nitrate Co-production of anhydrous ammonia using the same essential process route, that of provision of hydrogen by electrolysis, may be undertaken.

The arnmonium nitrate requirement per hectare of maize is approximately 350kg.

The area under cultivation, assuming 60% of the stubble is harvested and earmarked for methanol production, is (approximately) 16 000 ha.

Annual production of ammonium nitrate fertilizer is therefore 165 000 x 0.35 tonnes = 57 750 tonnes/annum = 175 tonnesJday The quantity of anhydrous ammonia required for this is calculated from the stoichiometry as follows: NH3 MW 17 -2 moles N114N03 MW 80 -1 mole Tonnes/day NH3 = 175x34 744 tonnesJday The size of the fertilizer plant is in fact much less than the size of the methanol plant in terms of both physical production and electricity consumption.

The anhydrous ammonia plant will consume only approximately 4% of the electricity consumed by the methanol plant.

Nevertheless if the ammonia synthesis is operated on a campaign basis, for say 4-5 months of the year, then this percentage may be constrained to rise to (say) 10-12%.

If the ammonium nitrate fertilizer production campaign could be made to S coincide with the windiest months of the year, the co-production of ammonium nitrate fertilizer with methanol could provide a further stabilisation factor in production rate.

ST5 Methanol Synthesis Rate Variation Methanol synthesis is sufficiently simple in practice to be amenable to relatively rapid production rate variation by a combination of techniques including reactor pressure, gas composition, inlet temperature and quench gas control.

The synthesis section of the methanol plant could be sized to accommodate diurnal electricity supply variation.

ST6 Sale of Electricity by Farmers As mentioned above a portion of the electricity supply could be provided by regional farmers. Sale of electricity into the grid would be discouraged during peak generation (windy) periods and encouraged during still periods.

ST7 Export of Electricity Electricity exports could be planned in advance to neighbouring regions during the season when, statistically, a surplus of electricity generation would occur.

Thus, neighbouring regions could import electricity at a negotiated preferential tariff, when the corn belt electricity production by wind turbine is statistically in excess of the alcohol fuel station demand.

This electricity should preferably be imported by regions supplied by coal burning power stations, rather than nuclear power stations, in order to effect an appreciable cost saving. Coal based thermal power stations could operate at a lower rate during these periods with a variable cost saving in the coal consumption. For nuclear power plants variable costs are lower in proportion than for coal based plants.

ST8 Carbon Dioxide Storage In the same way that hydrogen storage provides production rate stabilisation, carbon dioxide storage will allow operation under low electricity generation periods.

Under these conditions the on site boiler will produce an excess of carbon dioxide which may be compressed and liquefied.

The quantity of carbon dioxide stored is envisaged to be similar to that of hydrogen storage in terms of production hours.

ST9 On Site Boiler Rate Change The on site boiler provides most of the carbon dioxide requirement for the methanol plant, but only a small portion of the electricity requirement.

During windy periods (above average electricity generation), more carbon dioxide must be produced, and so the on site boiler will (to some extent) exacerbate the electricity surplus by being operated at a high production rate.

During still periods the on site boiler must be operated at a low rate, so that carbon dioxide is not exhausted to atmosphere.

The on site boiler may therefore not be used as a stabilisation method, but will exacerbate the variation in electricity generation rate, if all of the carbon dioxide generated is to be captured as alcohol fuel.

Under extreme conditions, it is envisaged that the boiler must be run to supply the on site power requirement, with the cell house offline.

Under these conditions all methanol production would be from hydrogen in storage, and carbon dioxide would be placed into storage and any excess above the storage limit vented to atmosphere.

A requirement for the successful implementation of these production stabilisation techniques is linkage of the alcohol production centres to an electrical grid system.

Mathematical modelling must be employed, using climatic data as a basic input together with the seasonal cropping and fertilisation cycle. Superimposed on this, semi-random number (stochastic) mathematical modelling will indicate the occurrence and severity of unscheduled electricity imports and exports, and storage capacity overrun.

The objective of this modelling will be to attempt to secure a delivered electricity cost at a minimum level, and also to minimise the capital cost associated with the synthesis facilities themselves, together with raw material and finished product storage volumes.

CONCLUSION

The production of methanol in the corn belt of the United States has been explored in some detail.

The production of methanol form waste product of sugar manufacture, namely bagasse, is similar in all fundamental respects.

Economics of production revolve mainly around the major variable cost of production, which is the electricity cost, which, in this case, could be nuclear, hydroelectric, wind turbine or a combination.

Claims

CLAIMS1. A method of economically converting agricultural by-product cellulose/lignite to methanol fuel.
2. A method of converting the exhaust carbon dioxide from the process of fermentation to methanol fuel.
3. Through a conjunction of Claims 1 and 2, a method of co-producing methanol fuel with ethanol fuel, to produce a manifold increase in the alcohol fuel produced from an agricultural region. In the case of the corn belt of the USA a sixfold to sevenfold increase in alcohol fuel is attainable.
4. A method of utilising electricity generated by wind turbines to produce methanol fuel by combination of electrolytic hydrogen with carbon dioxide generated by burning of agricultural waste in a power station.
5. A method of economically producing ammonium nitrate fertilizer in conjunction with the methanol, using electrolytically produced hydrogen gas, using substantially wind turbines as the power source.
6. A method of combining synergenetically a number of related power production and fuel production requirements to lower overall cost of synthetic methanol production in an agricultural region.
7. In combination with Claims 5 and 6, a method of substantially eliminating the burning of fossil fuels entirely from the production of a carbon based liquid automotive fuel supply.Amendments to the claims have been filed as follows: REVISED CLAIMS: Patent No. GB0819334.4 1. A method of economically converting agricultural by-product cellulose/lignite to methanol by gasification of the by-product agricultural material to carbon dioxide, and reaction of the said carbon dioxide with hydrogen gas obtained by the electrolysis of water, to form substantially methanol with water as by-product.2. A method of economically converting the carbon dioxide that is universally exhausted by the process of fermentation, and in particular the fermentation process to produce ethanol fuel, to methanol by the process of reacting the exhausted carbon dioxide against hydrogen gas, which hydrogen gas is produced by the electrolysis of water.*: :: : * Through a conjunction of CLAIMS 1 and 2, a method of co- * : :: producing methanol with ethanol fuel to produce a manifold increase in the alcohol fuel produced from an agricultural region *** ) without increase in the area or tonnage of the crop under ****** * cultivation, typically to provide a six-fold to seven-fold increase in the quantity of alcohol fuel. *,*S4. A method of producing hydrogen gas using electricity generated by external sources, and in particular wind turbines, in conjunction with electricity produced from power stations employing waste agricultural produce as the calorific fuel.