Pulverized Petcoke as Fuel 12 2007

Pulverized Petroleum CokeAs a Fuel: 

Pulverized Petroleum Coke As a Fuel DTE PetCoke, LLC December 2007

DTE Energy Overview: 

DTE Energy Overview

Petroleum Coke (Petcoke): 

Petroleum Coke (Petcoke) In North America, Fuel Grade (S>4%) Petcoke is used by: Power Plants Supplemental Fuel in Pulverized Coal Plants Primary Fuel in Circulating Fluidized Bed (CFB) Boilers Cement Kilns Brick Kilns, Other Industrial Paper Mill Lime Kilns (currently 16 locations) 3 mills for 20+ years 13 additional mills since 2004, 6+ expected startups in 2008 Additional 3 active + 1 planned test burn in Q1 2008

Petcoke use Pulp & Paper Lime Kilns - Southeast US Pre-2004: 

Petcoke use Pulp & Paper Lime Kilns - Southeast US Pre-2004 PeTroCoke, Campti LA IP, Prattville AL Weyerhaeuser, Campti LA Domtar, Hawesville KY PeTroCoke, Owensboro KY X X X Only 3 mills burning petcoke for 20+ years, either self-pulverizing or served by small, dedicated pulverizers

Petcoke use Pulp & Paper Lime Kilns - Southeast US December 2007: 

Petcoke use Pulp & Paper Lime Kilns - Southeast US December 2007 PeTroCoke, Campti LA IP, Prattville AL Weyerhaeuser, Campti LA Domtar, Hawesville KY PeTroCoke, Owensboro KY X X GP, Port Hudson LA Tembec, St.Francisville, LA Potlatch, McGehee AR Boise, DeRidder LA Pine Hill GP, New Augusta MS Alabama River, Perdue Hill AL Boise, Jackson AL GP, Monticello MS Temple, Bogalusa LA Oxbow, Tuscaloosa AL DTEPC, Vicksburg MS Smurfit-Stone, Hodge LA Domtar, Bennettsville SC Weyerhaeuser, Valliant OK NewPage, Wickliffe KY X X X X Startup of larger merchant petcoke pulverizers, advances in burner technology, and high gas/oil prices lead to rapid increase in petcoke use in pulp mill lime kilns Weyerhaeuser, Pine Hill AL

Historical Fuel Prices: 

Historical Fuel Prices

Projected Savings vs. Natural Gas: 

Projected Savings vs. Natural Gas Incremental Mill Costs Caustic/Lime Makeup Electricity Dead Load Kiln Maint. Add’l Evap Load Transportation Pulverized Petcoke FOB Typical Lime Kiln will save $1MM - $2MM per year Capital Payback = 1 – 2 years

Petcoke Composition(Typical Properties - Dry Basis): 

Petcoke Composition (Typical Properties - Dry Basis)

DTE PetCokeVicksburg, MS Facility: 

DTE PetCoke Vicksburg, MS Facility Commercial Ops in May, 2005 Currently serving 8 full time customers and 3 test firing customers (references available) Truck and rail car loading capability 250,000 TPY design capacity ~120,000 TPY contracted Future: East Coast facility Q3 2008, 250K TPY Essential equipment purchased/in storage Expand to 1MM TPY as needed Other Markets? (NE, NW, Midwest, W.Canada?) 1,400 Ton pulverized petcoke storage silo Barge unloading to 10,000 ton covered storage

Why is DTE in the pulverizedpetcoke business?: 

DTE Energy Services familiar with the pulp & paper industry Operator and 50% owner of MESC, an onsite facility that supplies steam and electricity to a Kimberly-Clark tissue mill in Mobile, Alabama Developing other onsite energy projects to serve the pulp & paper industry DTE coal pulverizing experience Detroit Edison pulverizing coal at its power plants for decades DTE Energy Services owns and operates facilities that supply pulverized coal to steel industry blast furnaces River Rouge, Michigan – US Steel River Rouge, Michigan – Severstal Steel Sparrows Point, MD – Mittal Steel DTE Energy Services is developing: Additional coal and petcoke pulverizing projects New fuel switching applications for pulverized solid fuels DTE Coal Services solid fuel procurement and transportation experience One of the top three coal marketers and transporters in North America 60+ million tons / year moved across the country including Detroit Edison’s 21 million tons 8000+ railcars Why is DTE in the pulverized petcoke business?

What value does DTE bring?: 

DTE solid fuel procurement, transportation and pulverizing expertise Advantages of central pulverizing facilities Provide pulverized petcoke at lower cost than customer-pulverize Economies of scale on capital expenditures and O&M; most users require relatively small volumes Petcoke sourcing Water delivery Buying power Customer site impact and permitting minimized Eliminates need for customer-site facilities for unloading, raw storage, pulverizing, and conveying Petcoke supply logistics handled by DTE Reduces customer capital requirement DTEPC’s goal - make firing pulverized petcoke as easy as firing gas… almost DTEPC provides customers: Technical assistance Permitting assistance What value does DTE bring?

New Application – Black Liquor Recovery Boilers: 

New Application – Black Liquor Recovery Boilers Black Liquor Recovery Boiler supplemental firing with pulverized petcoke New use of pulverized petcoke by paper mills – demand roughly equal to kiln at mills where applicable Indirect substitution for gas/oil - Add petcoke to black liquor to produce more steam in BLRB allowing turndown of power boiler DTEPC commissioned laboratory tests in 2005 by IPST/Georgia Tech Southeastern test March – June 2006 Second test under development IPST/Ga. Tech conducting additional lab studies

North American / Caribbean Cokers: 

North American / Caribbean Cokers

Western N.A. Pulp & PaperPetcoke in lime kiln potential: 

Western N.A. Pulp & Paper Petcoke in lime kiln potential

Edmonton, AB Pulverizing SitePotential lime kiln demand: 

Edmonton, AB Pulverizing Site Potential lime kiln demand DTE PetCoke typically builds pulverizing operations in 250K tpy increments, with both truck and rail distribution. DTE PetCoke, Vicksburg MS built with a >500K tpy market potential.

Western N.A. SummaryDTE PetCoke perspective: 

Western N.A. Summary DTE PetCoke perspective Pulverized petcoke market potential for pulp mill lime kilns is smaller than DTEPC’s previous merchant ventures Majority of mills would need to commit to pulverized petcoke use to make business sense for DTEPC to purchase, install and operate a merchant pulverizer Rail would be primary mode of transportation DTEPC can conduct trials using product from Vicksburg pulverizer via rail delivery, but this is expensive Black Liquor Recovery Boiler application could double the market potential for pulverized petcoke