The technology behind CTL

The technologies required to produce large-scale supplies of clean liquid fuels from coal are not
on the drawing boards or in laboratories. They are in use around the world today, from countries
such as South Africa which has long relied on coal liquefaction to provide a substantial
percentage of its transportation fuels to China, India, Indonesia and the Philippines. All of
these countries are making multi-billion dollar investments in coal liquefaction plants.

The production of CTL fuels begins with coal as a raw material or feedstock. Both indirect and
direct liquefaction processes have been proven.

In indirect coal liquefaction, coal is subjected to intense heat and pressure to create a synthesis
gas comprised of hydrogen and carbon monoxide. The synthetic gas is treated to remove
impurities and unwanted compounds such as mercury and sulfur. This clean gas enters a second
stage Fischer-Tropsch process which converts the synthesis gas into clean liquid fuels and
other chemical products.

Diesel fuel produced by Fischer-Tropsch synthesis virtually sulfur-free with low aromatics and
a high cetane value is cleaner than conventional diesel. It burns more completely and
emissions are significantly lower than low-sulfur diesel, as tested by the Department of Defense
in 6.5 liter diesel engines. Most of the CO2 is already concentrated and ready for capture and
possible sequestration or for use in enhanced oil or gas recovery.

In direct coal liquefaction, coal is pulverized and mixed with oil and hydrogen in a pressurized
environment. This process converts the coal into a synthetic crude oil that can then be refined
into a variety of fuel products. The direct coal liquefaction technology has been demonstrated in
the United States and is now being commercially deployed in China and other countries.