Enertorial

Below is a statement issued by T. Boone Pickens following his meeting today with Governor Sarah Palin in Dallas, Texas:

Mr. Pickens said that he has let the campaign of U.S. Senator and Democratic Vice Presidential Candidate Joe Biden (D-DE) know that he is willing to have a similar meeting with him to discuss the Pickens Plan.

More than 600,000 people have joined the Pickens Army through the website, which has had over 8,500,000 hits. For more information on Pickens Plan, visit www.pickensplan.com.

Rentech announced that the Company believes the enactment of the Emergency Stabilization Act is a positive step toward creating financial stability in the marketplace. The inclusion of several tax provisions in the Act will greatly benefit Rentech’s efforts in domestic alternative fuels production.

Rentech has a commercial pipeline of both biomass and fossil based projects utilizing the Rentech Process, a patented and proprietary technology that converts synthesis gas from carbon-bearing resources into hydrocarbons that can be processed and upgraded into ultra clean synthetic jet and diesel fuels.

The Stabilization Act contains several provisions that will promote the domestic development of synthetic jet and diesel fuels facilities. In particular, it extends and expands the alternative fuel excise tax credit, further demonstrating growing support for ultra clean fuels facilities that use the Fischer-Tropsch process. The Act also expands the credit to include aviation fuel, which aligns well with Rentech’s planned production at its proposed facilities. While the Act includes a carbon capture requirement of 75% at a synthetic fuels production facility, Rentech’s current design plans for its proposed facilities will meet or exceed that standard.

The Stabilization Act extends and expands the renewable diesel tax credit. The credit is increased from $0.50 per gallon to $1 per gallon and expanded to include aviation fuel. Fuels production through biomass conversion using the Rentech Process will qualify.

In addition, the $500 million Investment Tax Credit for Coal Gasification for facilities that gasify coal for industrial purposes was expanded to include facilities that produce transportation fuel. Rentech’s proposed synthetic transportation fuels facilities that use coal as the primary feedstock would qualify.

The legislation also creates a carbon dioxide capture credit of $20 per ton credit for carbon dioxide injected into geological formations and $10 per ton credit for captured carbon dioxide for use in enhanced oil recovery. The captured carbon dioxide produced at Rentech’s proposed Natchez facility is designated to be sold under an existing long-term agreement with Denbury Resources for enhanced oil recovery in the region. The Company is also exploring opportunities for injection of captured carbon dioxide into geological formations. Both forms of carbon dioxide sequestration would qualify for the credit.

Finally, the Act reinstates favorable expensing provisions for new refineries. Rentech projects that produce transportation fuels, regardless of feedstock, would qualify under the Refinery Expensing provision.

Commenting on the passage of the Stabilization Act, D. Hunt Ramsbottom, President and CEO of Rentech, stated, “Rentech is pleased that Congress has passed this important legislation which will support the efforts of Rentech and other domestic alternative energy producers. It demonstrates Washington’s commitment to reducing our nation’s reliance upon foreign oil through advancing technologies and processes for converting diverse domestic resources into clean fuels.”

SourceCorp announces the extension of the Energy Efficient “Green” Building Tax Deduction and the two-year extension of the R&D Tax Credit. Today, Congress approved an unprecedented $700 billion government bailout and sent it to President Bush who quickly signed it.

Energy Efficient Commercial Building Tax Deduction

Extended through December 31, 2013. Section 179D(a) is a deduction for commercial building owners whose buildings meet certain energy standards. The deduction is as much as $1.80 per square foot for buildings that achieve a 50 percent energy savings target. Before claiming the deduction, the owner must obtain written certification from a professional engineer not related to the company using approved software that the required energy savings will be achieved.

Research and Development Tax Credit

The R&D tax credit was extended for two years through December 31, 2009. If you are involved in developing new products/processes, improving existing products, creating more reliable products, developing prototypes, design tools/jigs/molds/dies, apply for patents, testing new concepts, investment in manufacturing process activity, developing new technology or employ outside consultants and/or contractors to do any of these activities, you may qualify for the R&D Tax Credit.

In a survey between June 2007 and May 2008, an independent 3^rd party reported that 85% of the 500 manufacturers that received consulting services in Southern California, under the federal Manufacturing Extension Partnership (MEP) program, stated they had recorded increases in competitiveness. These improvements were as a result of implementing changes recommended through consulting services provided by the California Manufacturing Technology Consulting (CMTC).

The improvement results, compiled from companies receiving CMTC consulting by an independent survey conducted by Synovate, are usually from improvements in their production techniques. Benefits from these services were noted as substantial and have major implications for the California economy. Details reported separately by over 100 of the total manufacturers surveyed (who committed to more intensive changes) show that improvements made have a direct correlation to staying in business and staying in California. The significance of the gains with these 100 manufacturers can be judged from:

• 80 companies said improvements were significant to growing their business and adding jobs
• 65 companies said improvements made were significant to staying in business.
• 45 companies said improvements enabled them to stay in California.

“These Southern California companies that CMTC works with are leaders in improving their businesses and investing in change to meet the fierce challenges of global competition. They are stepping up to competition and taking advantage of new production and management strategies to improve their bottom-line and stay in business. Because these manufacturers provide ladders to high-paying manufacturing jobs they are a safeguard in California’s economy,” said David Braunstein, President and CEO of CMTC.

A new engine plant is giving Ontario’s green economy a boost. Ontario Premier Dalton McGuinty joined executives from Honda Canada Inc., to officially open the company’s new plant in Alliston on September 25.

This is the third manufacturing facility to be opened at this site. It will produce approximately 200,000 fuel-efficient four-cylinder engines per year for the Honda Civic model, and employ about 340 workers. Production at the new facility began on September 15, 2008.

In 2006, the Ontario government pledged ten per cent of the company’s $154 million investment to build the 310,300 square foot plant. Helping manufacturers be more competitive is part of the government’s five-point plan for the economy.

“I want to thank Honda for its continued confidence in Ontario’s highly skilled workforce. We will continue to partner with industry to support high-quality jobs for Ontario families, attract more investment and stay competitive in the global economy,” said Premier McGuinty.

“The auto sector is vital to Ontario’s economy. As part of our five-point plan to strengthen Ontario’s economy we are aggressively pursuing new automotive investment to keep and create jobs for Ontario,” said Minister of International Trade and Investment, Sandra Pupatello.

Quick Facts

• A total of 4,600 Ontarians work for Honda in Alliston.
• The Alliston-produced engines will be made from 100 per cent recycled aluminium.
• The Honda Civic has been the most popular car in Canada for the last ten years.

ExxonMobil Research and Engineering Company (EMRE) announced that it has entered into an agreement with Synthesis Energy Systems (SES) that provides SES the option to execute up to fifteen Methanol to Gasoline technology licenses in their global operations. SES has chosen to assign the first license to a project near Benwood, West Virginia.

This approximate 7,000 barrel per calendar day unit will be based on commercially proven MTG technology which incorporates improvements since the technology was originally commercialized by ExxonMobil 20 years ago in New Zealand.

MTG converts crude methanol directly to low sulfur, low benzene gasoline that can be sold directly or blended with conventional refinery gasoline. Although the original application of the MTG technology processed methanol from natural gas, the same technology can be used for methanol from other sources such as coal, petcoke or biomass. The SES projects will gasify the coal, convert the synthetic gas to methanol, and then convert the methanol to gasoline via the MTG process. Conversion of coal to gasoline through gasification and methanol conversion is one way to significantly reduce the potential pollutants from coal, including the reduction of SO_x emissions and the capture of CO₂.

Sunrise Solar Corp. (OTCBB:SSLR) today announced that it is in advanced negotiations for the design and installation of a $30 million solar project as part of a major foreign capital city reconstruction and renovation effort. The intention is to provide 100% of the development’s electricity requirements from solar power sources. Once completed this project will be one of the world’s most “green” city centers.

“Our design proposal has been exceptionally well received and we believe that these negotiations will result in the contract being awarded to Sunrise Solar,” said Mr. Eddie Austin, Chairman and CEO of Sunrise Solar Corp. “This project will be a model of sustainable, green redevelopment for urban planners worldwide.”

While the design plan includes several proprietary elements from Sunrise Solar certain products and technologies will be acquired from other solar companies such as; First Solar (NASDAQ:FSLR), Kyocera (NYSE:KYO), Sanyo (OTC:SANYY), or Suntech (NYSE:STP).

A new ChemSystems Special Report published by Nexant — Polygeneration from Coal: Integrated Power, Chemicals and Liquid Fuels — analyzes the technologies and economics of producing large capacity power and co-produced chemicals or liquid fuels from coal.

Advanced coal gasification technologies have raised the efficiency of coal conversion far above that of conventional coal combustion. As a result, these advanced technologies offer the promise of economically and environmentally acceptable uses of coal for chemicals and liquid fuels.

One of the more promising advanced development concepts is polygeneration from coal. Polygeneration involves the gasification (or conversion) of coal to produce synthesis gas (syngas) that can be simultaneously used for the generation of electricity and in the manufacture of chemicals and liquid fuels. This approach offers an integrated strategy for optimizing the value of coal.

In polygeneration from coal, electricity is produced in conventional integrated gasification/steam turbine combined cycle (IGCC) systems, while commodity chemicals (methanol, ammonia, and their derivatives such as olefins and acetic acid from methanol and fertilizers from ammonia) or liquid fuels (methanol, diesel, dimethyl ether (DME), and gasoline) are produced via state-of-the-art chemical processes.

Since 2006, the unprecedented rise in prices of crude oil and other forms/sources of energy, along with a range of technology advances, has resulted in a significant favorable change in coal’s potential investment economics. In the interim, despite price volatility, mid-2008 prices are still well above those in the first quarter of 2008. Thus, we observe that many petrochemicals can now be made very competitively on a full cost basis by using syngas made via polygeneration. Polygeneration-based syngas as a feedstock is demonstrating increasing competitiveness.

Background

The use of coal as a fuel and a feedstock in a technologically advanced facility represents a modern approach to maximizing coal’s potential, exceeding the capability of cogeneration (the previous best practice) which increased the value of low-grade fuel in refinery and chemical facilities in the 1980s and 1990s. Coal polygeneration provides highly flexible and efficient cross-sector design and implementation features with numerous benefits:

Nexant’s Findings

The concept of a world-scale polygeneration facility involves a large number of unit operations dealing with the gasification of coal, the IGCC production of power, and the conversion of syngas to chemicals or liquid fuels. The heart of the complex is a gasifier island, consisting of multiple coal gasifiers and auxiliary systems. For the world-scale capacity used in the Nexant study, the gasifier island consists of numerous trains producing a total of 1,015 MW of power plus 4,600 million NM³ per year of syngas for chemicals or liquid fuels production, based on commercially proven technologies.

In the study, Nexant developed regional economics for the U.S., China, and a typical Eastern European/Eurasian location — for historical 2007 as well as forecast 2010 and 2015 coal and feedstock prices — and for crude oil scenarios intended to account for the future uncertainty of oil availability and price. Based on the chosen facility configuration and a regional co-product credit for the net power produced, the economics for chemicals and liquid fuels show interesting and promising results. Several of the more interesting chemical and fuel analyses included in the study are highlighted below.

Technology for the production of olefins from coal has been highly researched in recent years. The production of methanol from syngas (from coal gasification), followed by the production of ethylene and propylene via methanol to olefins (MTO) technology has shown great promise in coal-rich countries, particularly China. Nexant analyzed these costs when produced along with export power and compared them to the production of ethylene from steam cracking of typical regional feedstocks. The investment and non-feedstock operating costs of polygeneration facilities are high when compared to conventional routes (pulverized coal combustion for power generation and conventional refining and chemical routes based on crude oil). Therefore, the economic advantage of polygeneration will generally increase substantially when one or more of the following conditions have occurred:

• Crude oil and natural gas prices are high relative to coal prices
• Conventional feedstocks (crude oil and natural gas) for chemicals and liquid fuels are inadequate to satisfy market demand
• A market exists such that there would be substantial carbon credits that would benefit the large concentrated stream of carbon dioxide from a polygeneration facility (to be used for sequestration or other use of carbon). Note: Nexant’s analysis in this study did not assume or make allowance for any carbon credits

Further, since many of the process steps in polygeneration represent fairly new or novel technologies, we believe that project sponsors and lenders will be seeking to limit their investments in these projects to opportunities in which the key operation bases of the project and expected future cash flows are fairly conservative. In that way, sponsors will limit their risk exposure. Given the key issue of prices for the commercial prospects for polygeneration, we believe that, to be developed, projects may need to exhibit strong expected future financial performance based on prices that are conservative relative to mid-2008 market prices in which petroleum prices rose to unprecedented highs.

To provide analyses of the downside risks that would be faced by polygeneration projects, the cost comparisons in this study are based on a combination of 2007 prices and relatively pessimistic forecasts of lower future prices, taking into consideration recent price volatility, but also acknowledging the long-term history of lower oil and gas prices. The analysis quantifies the risks to the competitiveness of polygeneration should energy prices trend downward toward figures consistent with long-term historical trends and historical cyclicality for oil and gas prices.

The prospects in the U.S. for the polygeneration route to ethylene are not encouraging under very pessimistic long-term petroleum price scenarios. So, while in 2007 the ethylene from syngas route is relatively competitive with ethylene from steam cracking of ethane, the syngas route is likely to become less competitive when considering the downturn in petrochemical feedstock and commodity chemical prices during the trough years of the petrochemical cycle (arguably in the 2010 and 2015 timeframes) under a very pessimistic oil price forecast.

On the other hand, the polygeneration route appears to be very competitive in Eastern Europe/Eurasia throughout the analysis period, primarily due to lower coal prices.

There is great potential for the production of liquid fuels from coal. In addition to methanol (as a potential fuel), coal can also be the raw material for diesel fuel (Fischer-Tropsch liquids), DME, and gasoline.

Nexant analyzed the production of diesel fuel via Fischer-Tropsch synthesis using syngas from polygeneration. Diesel production via polygeneration is comparable to diesel produced via Fischer-Tropsch synthesis of natural gas in the U.S., at least until the end of 2015, although neither route is considered competitive in the U.S. under the long-term pessimistic crude oil price scenario. In China, the cost of production from coal is — and will be — reasonably competitive with that from natural gas.

A very real potential for chemicals and liquid fuels is as export commodities from coal-rich regions. With a polygeneration complex also supplying a large amount of power locally, the co-produced chemicals or fuels can be exported to other global regions at realistic and profitable margins. As an example, gasoline produced from syngas (using the economics for the Haldor Topsoe TIGAS process) in either China or Eastern Europe/Eurasia will be very competitive in the U.S. market in the estimated 2010 scenario, even after accounting for shipping costs. Estimated margins are high and appear to offer excellent investment potential.

Conclusion

Polygeneration from coal offers excellent prospective investment potential in coal-rich regions. Nevertheless, although there are important issues to be addressed regarding downside scenario risks, there are potentially large returns to be made. Nexant’s study on Polygeneration from Coal addresses key techno-strategic issues such as the expected different competitive cost positions of such projects on a broad regional basis and for different products given two pessimistic downside oil price scenarios.

As consumer demand for environmentally-friendly products and services grows, insights into how consumers think about “green” products have become vital to making informed marketing decisions. Which product categories do consumers believe have the greatest impact on the environment? What type of environmental impact are they most concerned about? Is it more important to them that a product’s packaging is green or its manufacturing process? This half-day conference will draw from new survey findings as well as a panel discussion featuring industry experts to provide insights into these and other key challenges facing marketers.

The findings of the inaugural “Green Consumer Values Survey” will be presented. The research was conducted by the YCCI and CBEY in collaboration with McKinsey & Company’s Consumer & Shopper Insights Center. This nation-wide survey with 1,000 respondents was conducted to uncover what consumers truly value in “green” business across the value chain and in a wide range of industries including automobiles, appliances, and consumer packaged goods. The findings will help companies that are investing in environmental initiatives better communicate the benefits of being green to consumers.

Among the survey findings to be discussed in depth along with their implications for industry are:

• While 60% of consumers say environmentally-friendly products are more desirable, only 24% named a green product by brand name when asked what “green” consumer product first comes to mind.
• Consumers are not always consistent when thinking about which environmental improvements to products will have the most impact vs. which ones will make them want to buy. For example, they believe wood harvesting in creating paper products has the most significant environmental impact but improving biodegradability is more likely to motivate purchase.

NSTAR is rolling out a new traveling display that will make it easy for customers to learn more about current trends in energy efficiency and renewable energy technologies. The NSTAR Energy Showroom of Innovation, or NESI, is visiting local communities to provide customers with an opportunity to view several cutting-edge products, including the latest in LED lighting, solar panels, compact wind turbines and miniature heat pumps.

“Our customers are very interested in information about the many energy efficiency and renewable energy options available to them,” said Penni Conner, NSTAR Vice President of Customer Care. “By driving our NESI trailer right to their neighborhoods, we’re making it convenient to experience the latest technologies in a hands-on, educational setting.”

The NESI trailer is a 16-foot-long showroom on wheels that will be making stops at local schools, energy fairs, home shows and other community events throughout NSTAR’s service area. Using a whole-house approach to saving energy, NSTAR energy specialists display and describe several popular products that customers can consider for their own homes.

Along with the innovative technologies on display, the trailer will also demonstrate traditional energy efficiency standards like compact fluorescent lights and cellulose insulation. Compact fluorescent lights, available at most retailers, are competitively priced, use 75 percent less energy than ordinary incandescent bulbs and last up to 10 times longer. Cellulose insulation, made of recycled newspaper and denim, is an excellent alternative to traditional fiberglass insulation.