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<br />~ <br />~" <br />~~.. <br />_--4 <br />c... <br />C~ <br /> <br />. <br /> <br />. <br /> <br />project in such a fashion that it does favorably affect the <br />economics of both the public service and private enterprise <br />functions. Obviously and candidly, we do not have solutions to <br />all the problems. However, we feel that the project has <br />sufficient merit to justify the cost of proceeding through the <br />steps I've outlined for this calendar year to determine whether a <br />viable business venture can be developed from the AQOATRAIN <br />Project. <br /> <br />Among the hurdles we must clear in future months is the <br />determination of both the cost per ton of salt removal from the <br />basin, and the cost per ton mile for coal transport. Should <br />these preliminary determinations not result in costs of half, or <br />less, than other alternatives, we may not have a project. <br />Assuming favorable results of our feasibility assessment, there <br />still remain future hurdles and milestones that must be passed <br />before the full AQUATRAIN I or II Systems from the Powder River <br />Basin to Pacific and Gulf Coasts can break ground; and these are <br />completion of the liquid C02 slurry and ChemCoal technologies, <br />both of which appear to be approximately 3 years hence. <br />Furthermore, it may be 5 to 7 years before ChemCoal is available <br />in quantity as the key to having compliance coal for these <br />projects to gain access to markets outside the producing region, <br />presently denied by air quality control regulations. <br /> <br />While this may seem like a long time before the full AQUATRAIN <br />Project can be put on stream, we are examining some interim <br />projects that will ultimately be laterals to the main system, <br />but can be built ahead of the mainline by their local sources <br />of coal, closer markets, and possibility of not depending upon <br />the C02 or ChemCoal technologies. We will be advising you more <br />on these interim project components when they are more fully <br />defined. <br /> <br />We recognize and appreciate the Forum's previous support for the <br />AQOATRAIN Project. I ask your continued patience and assistance <br />in the coming months which will be most critical to finding the <br />necessary solutions. Thank you for your cooperation and support. <br />I would be pleased to answer any questions you may have. <br /> <br />ngj/43084 <br /> <br />-5- <br />