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<br />. <br /> <br />. <br /> <br />r-.. <br /> <br />Production and coal mining costs to prepare such a fuel from Powder River <br />Basin coal appear to be on the order of $15 to $20 per equivalent barrel <br />of oil. Using current rail tariffs for finished products, the rail transpor- <br />tation costs to California and Texas markets would raise the delivered <br />price to $25 to $30 per barrel, barely competitive in today's world of <br />falling oil prices. Transportation by pipeiine, however, offers the possi- <br />bility of reducing transportation costs by more than half - thus the marriage <br />of the ChemCoa1 technology with that of AQUATRAIN. <br /> <br />;,"" <br />-';.j< <br />~-.~ <br /> <br />" ~ <br />'.---" <br /> <br />While long range national security considerations might recommend some <br />form of government subsidy to eliminate dependence upon foreign oil, our <br />preliminary estimates indicate that, with relatively minimal costs of <br />government cooperation, the entire project may be economically feasible <br />as an unsubsidized private enterprise. <br /> <br />We hope this explains our objectives in acquiring AQUATRAIN last year <br />and its relationship to our ChemCoal technology. Some of our principals <br />have been involved in building over 200,000 miles of pipeline including <br />the first coal pipeline'in Ohio. With that experience, we believe we <br />can be effective in securing private sector partners for AQUATRAIN. <br /> <br />f!Qject Implications <br /> <br />Pipeline delivery of the world's single largest energy reserve in the <br />Powder River Basin of Wyoming, has tremendous implications in the realm <br />of national defense, balance of trade, employment and related economics <br />of our Nation. If Califonria industrial and utility power generation <br />could be converted to coal overnight, it would require an almost 25% increase <br />in U.S. coal production. To a lesser degree, a similar situation exists <br />in the Gulf Coast, Florida, and New England, where relatively little coal <br />is used in producing electric power. None of this could happen quickly <br />as there is great inertia to change, and it would back-out considerable <br />natural gas, of which there is a temporary surplus. The "gas bubble" <br />will be over in a few years, and even a small start toward converting <br />these major areas of petroleum based power would mean a big jump in coal <br />production and the beginning of a long range path to energy self suffiCiency. <br />Ultimately, the stability of Japan will depend upon secure energy sources, <br />and the Powder River deposit may be the ultimate long range insurance <br />for Japanese as well as world stability. <br /> <br />Also not to be overlooked are the environmental and conservation of resources <br />aspects of this venture. ChemCoal appears ideal for being delivered in <br />a liquid CO? or in a saline water slurry. If CO2 is used as the slurry <br />medium, it eould be injected into oil fields near its terminus for enhanced <br />oil recovery. If saline water is used as the slurry medium, it would <br />be a beneficial use for the saline water sources that will be diverted, <br />in any event, as a companion project to control the salinity of the Colorado <br />River. We also feel that desalinization of this water might be effected <br />'by technologies currently under development while the water and ChemCoal <br />slurry is in transit. <br /> <br />ChemCoa1 holds the promise of solving the acid rain problem in the Midwest, <br />and of aiding the economy of Midwestern states with presently idle high- <br />sulfur coal producing capacity. <br /> <br />2 <br />