CONSOL Energy and SES Agree to Investigate Gasification of Waste Coal
Thu Sep 6, 8:10 AM
ca.news.finance.yahoo.com
PITTSBURGH, Sept. 6 /PRNewswire-FirstCall/ -- CONSOL Energy Inc. (NYSE: CNX), the nation's largest bituminous coal production company, and Synthesis Energy Systems, Inc. (SES) (OTC: SYMX.PK) have entered into an agreement to investigate the development of coal-based gasification facilities to produce feedstock for various industrial chemical manufacturers. CONSOL Energy and SES will also investigate the feasibility of producing substitute natural gas (SNG) to meet the demand for clean, affordable energy.
"If this agreement develops as we hope," said J. Brett Harvey, president and chief executive officer, "it will expand significantly our total energy production profile and will meet our continuing objective of capturing the full value of all our assets. In this case, the achievement of the goal is amplified because the process creates an asset of a waste stream that would otherwise be on the balance sheet as a liability."
Under the agreement, CONSOL Energy and SES will perform engineering, environmental, and marketing assessments to analyze the feasibility of projects that would use coal gasification technology to convert coal from preparation plants tailings provided by CONSOL Energy's coal mining complexes located in the eastern United States into higher-value products including: methanol, ethanol, mixed alcohols, ammonia and SNG. The project initially will focus on the CONSOL Energy's Northern Appalachian mine sites in Pennsylvania, West Virginia and Ohio.
CONSOL Energy mining complexes produce an estimated 20 million tons per year of coal preparation plants tailings that include un-recovered coal that could be used to make valuable liquid and gas products rather than be land filled as waste. The waste stream from CONSOL Energy's five largest Northern Appalachian mining complexes would produce approximately 40,000 to 50,000 barrels of liquids per day or 40- 50 billion cubic feet of gas per year.
"Projects of this nature have multiple benefits to the economy and to the environment," said Harvey. "They produce clean fuels or affordable feedstock for our domestic chemical industry, and they reduce the solid waste stream from our prep plants. This agreement requires completion of a successful project feasibility study and further negotiation of a definitive agreement by both parties before any projects will be undertaken.
SES owns an exclusive global license for U-Gas(R) gasification technology that has been developed over the past 30 years by the Gas Technology Institute, and was designed especially to convert low-rank waste coal, which would otherwise be disposed in landfills, into synthetic gas (syngas). The syngas produced is a valuable feedstock that can then be used to produce liquid transportation fuels, bulk chemical commodities, and other energy products.
About CONSOL Energy:
CONSOL Energy Inc., a high-Btu bituminous coal and coal bed methane company, is a member of the Standard & Poor's 500 Equity Index and has annual revenues of $3.7 billion. It has 20 bituminous coal mining complexes in six states and reports proven and probable coal reserves of 4.5 billion tons. In addition, the company is a majority shareholder in one of the largest U.S. producers of coalbed methane gas, CNX Gas Corporation. CONSOL Energy was named one of America's most admired companies in 2005 by Fortune magazine. It received the U.S. Department of the Interior's Office of Surface Mining National Award for Excellence in Surface Mining for the company's innovative reclamation practices in 2002, 2003 and 2004.
Also in 2003, the company was listed in Information Week magazine's "Information Week 500" list for its information technology operations. In 2002, the company received a U.S. Environmental Protection Agency Climate Protection Award. Additional information about the company can be found at its web site: www.consolenergy.com.
About Synthesis Energy Systems
Synthesis Energy Systems, Inc., is an energy and technology company that deploys proprietary systems and technology to gasify low value fuels to replace high-cost energy and chemical products sold to major global markets. The U-GAS(R) technology, which the company licenses from the Gas Technology Institute, is designed to turn waste coal products into high value synthesis gas for use in power and chemical applications. The technology performs this gasification without many of the harmful emissions normally associated with coal-fired energy production. SES currently has offices in Houston, Texas, Shanghai and Beijing, China.
For purposes of this press release, references to "CONSOL Energy," the "company," "we," "our," or "us" or similar words (other than the legal names of companies) shall include CONSOL Energy Inc. and its respective subsidiaries.
Forward-Looking Statements
Various statements in this document, including those that express a belief, expectation, or intention, as well as those that are not statements of historical fact, are forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995). The forward-looking statements may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. When we use the words "believe," "intend," "expect," "may," "should," "anticipate," "could," "would," "will," "estimate," "plan," "predict," "project," or their negatives, or other similar expressions, the statements which include those words are usually forward-looking statements. When we describe strategy that involves risks or uncertainties, we are making forward-looking statements. The forward- looking statements in this document speak only as of the date of this document; we disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, uncertainties and contingencies include, but are not limited to: an extended decline in prices we receive for our coal and gas affecting our operating results and cash flows; reliance on customers extending existing contracts or entering into new long-term contracts for coal; reliance on major customers; our inability to collect payments from customers if their creditworthiness declines; the disruption of rail, barge and other systems that deliver our coal, or pipeline systems which deliver our gas; a loss of our competitive position because of the competitive nature of the coal industry and the gas industry, or a loss of our competitive position because of overcapacity in these industries impairing our profitability; our inability to hire qualified people to meet replacement or expansion needs; coal users switching to other fuels in order to comply with various environmental standards related to coal combustion; the inability to produce a sufficient amount of coal to fulfill our customers' requirements which could result in our customers initiating claims against us; the risks inherent in coal mining being subject to unexpected disruptions, including geological conditions, equipment failure, timing of completion of significant construction or repair of equipment, fires, accidents and weather conditions which could cause our results to deteriorate; increases in the price of commodities used in our mining operations and could impact our cost of production; obtaining governmental permits and approvals for our operations; the effects of government regulation; the effects of stringent federal and state safety regulations; the effects of mine closing, reclamation and certain other liabilities; uncertainties in estimating our economically recoverable coal and gas reserves; we do not insure against all potential operating risks; the outcomes of various legal proceedings, which proceedings are more fully described in our reports filed under the Securities Exchange Act of 1934; increased exposure to employee related long-term liabilities; our participation in multi-employer pension plans may expose us to obligations beyond the obligation to our employees; lump sum payments made to retiring salaried employees pursuant to our defined benefit pension plan; our ability to comply with laws or regulations requiring that we obtain surety bonds for workers' compensation and other statutory requirements; acquisitions that we recently have made or may make in the future including the accuracy of our assessment of the acquired businesses and their risks, achieving any anticipated synergies, integrating the acquisitions and unanticipated changes that could affect assumptions we may have made; the anti-takeover effects of our rights plan could prevent a change of control; risks in exploring for and producing gas; new gas development projects and exploration for gas in areas where we have little or no proven gas reserves; the availability of field services, equipment and personnel for drilling and producing gas; replacing our natural gas reserves which if not replaced will cause our gas reserves and gas production to decline; costs associated with perfecting title for gas rights in some of our properties; we need to use unproven technologies to extract coalbed methane on some of our properties; location of a vast majority of our gas producing properties in three counties in southwestern Virginia, making us vulnerable to risks associated with having our gas production concentrated in one area; other persons could have ownership rights in our advanced gas extraction techniques which could force us to cease using those techniques or pay royalties; the coalbeds from which we produce methane gas frequently contain water that may hamper production; and other factors discussed in our 2006 Form 10-K under "Risk Factors," as updated by any subsequent Form 10-Qs, which are on file at the Securities and Exchange Commission.
SOURCE CONSOL Energy Inc.
Contacts
Thomas F. Hoffman
Senior Vice President - External Affairs
+1-412-831-4060 or Joseph A. Cerenzia
Director - Public Relations
+1-412-831-4062
both of CONSOL Energy Inc. |
