Ecosphere Energy Plan

EcoSphere Energy, LLC

Executive Summary

EcoSphere Energy, LLC. believes that major breakthroughs in technology in the 21st century will incorporate both chemistry and biology. This belief is shared by many in the scientific community. Companies like EcoSphere that blend the right technologies, will be the keys to a clean, secure energy future.

ECOSPHERE TECHNOLOGY OVERVIEW

1. CHEMISTRY: EcoSphere has exclusively licensed a patented chemical reaction technology that utilizes plasma induction technology to gasify low value carbon materials producing a carbon syngas, rich in carbon monoxide (CO) and hydrogen (H). The best available feedstock for this technology have been identified as carbon dioxide (CO2), methane (CH4), and waste carbon products, which are found in readily available quantities at natural gas processing plants, corn ethanol plants, and oil refineries.

1. BIOLOGY: EcoSphere has licensed a second technology that can convert carbon based syngas, rich in carbon monoxide (CO) and hydrogen (H) via a biological (bio-catalytic) process, into ethanol.

1. CHEMISTRY/BIOLOGY: EcoSphere, over the past several years, has worked to combine these technologies in order to produce ethanol at a competitive price and to eliminate large amounts of CO2 from entering the Earth’s atmosphere.

See attachment: “EcoSphere Ethanol - Simplified Plant Overview”

ENVIRONMENTAL STATEMENT

EcoSphere contends that it is better to use carbon (CO2) to produce an economically viable liquid fuel, than to bury it in the ground. At a typical plant location, EcoSphere’s chemical gasification process will capture over 190 thousand tons of CO2 per year, which is presently being released into the atmosphere. With the captured CO2 converted to CO and H, EcoSphere’s biological process will then produce approximately 60 million gallons of ethanol. Ethanol, economically produced, can bridge the gap to hydrogen or electric powered cars of the future while making us greener in the process.

EcoSphere Ethanol emits as much as 39% less “Well to Wheels” CO2 than gasoline, and about 40% less than corn-based ethanol. This is due in part to the fact that the EcoSphere Ethanol process actually consumes CO2 in the production process. Moreover, in order to meet the U.S. 15 Billion gallon ethanol production goal for 2015, EcoSphere Ethanol would require 12,000 times less acreage to meet the production increase than meeting this goal with corn-based ethanol - eliminating a host of negative land use impacts.

See attachment: “EcoSphere Ethanol - Total Carbon Dioxide Footprint vs. Gasoline”

No other commercialized liquid fuels production process in the world actually consumes CO2 and has a negative CO2 footprint.

See attachment: “EcoSphere Ethanol – Plant Emissions and Energy Use Profile”

MARKET FOCUS

In Phase One, the focus for EcoSphere Ethanol Plants will be directed at co-locating next to existing natural gas processing plants, corn ethanol plants, and oil refineries. In the United States there are over 400 natural gas processing plants, approximately 100 corn ethanol plants, and 150 major oil refineries. All are large emitters of relatively pure CO2 streams and great prospects for utilizing this technology.

The focus of Phase Two will be to reduce the CO2 levels from existing coal fired power plants. There are around 1,000 of these plants in existence today which account for nearly half of the electric power produced in the United States. Selected plants would be retrofitted with CO2 capture systems and EcoSphere Ethanol Plants, offsetting the cost of CO2 capture with ethanol revenue. Utility companies could confidently phase out their oldest, dirtiest plants and replace them with new IGCC (clean coal) plants with integrated EcoSphere Ethanol Plants, offsetting the higher capital costs of IGCC technology with ethanol revenue.

WHAT IS THE TIMING?

The patented plasma induction technology for syngas production from CO2 is commercially proven. A pilot plant exists that has a commercial torch in operation. The syngas to ethanol technology was purchased by INEOS and they are working on scale up projects that include gasification but should consider the offer to build a turnkey commercial plant where the syngas is already provided for processing postively. Production results and emissions have been validated by a major U.S. engineering firm. The time for integrated system implementation is now.

GOVERNMENT SUPPORT

The United States government has supported making ethanol from corn and from cellulosic material. When it is proven that readily available, non-food feedstock can produce ethanol much more economically and be an environmental plus, it is believed that the government will embrace these efforts. The government is seriously looking for a solution to America’s dependence on foreign oil.

THE FUTURE

EcoSphere Energy technologies, combined with the sources of readily available CO2 noted above, can produce more than 30 Billion gallons of EcoSphere Ethanol annually. A Department of Energy study shows that ethanol blended at a level of 30% produces gas mileage very close to that of straight gasoline, even in standard (non-flex fuel) engines. Combined with the 8 billion gallons currently made annually from corn ethanol, the U.S. can realize a reduction in gasoline consumption of more than 35 billion gallons, or about 25% of our current gasoline consumption while simultaneously reducing the overall CO2 emitted.

The economic and environmental impact of EcoSphere Ethanol on our nation would be greater than anything else we could do in the foreseeable future.

Simplified Plant Overview

SYNGAS PRODUCTION

- The system consists of a 600kW inductively coupled plasma (ICP) torch, thermal reaction vessel, material feed system, induction fan and syngas cooling system.

- Plasma induction technology is used to break down carbon dioxide into carbon monoxide and oxygen.

- Carbon, oxygen and other hydrocarbons are added to enhance the thermal reaction for additional CO2 destruction and to provide material to generate the desired CO:H2 molar ratio in the syngas.

- The syngas is cooled via standard heat exchangers and cooling towers. Thermal energy is recovered for various downstream process steps.

ETHANOL PRODUCTION

- The system consists of syngas compression pumps, aqueous stirred tank bio-fermenter, and distillation system.

- The cooled syngas pressure is increased to enhance delivery into the aqueous environment of the microorganisms.

- The microorganisms ingest the syngas and excrete ethanol and water.

- The aqueous solution is continually drawn off, filtered and the ethanol distilled via existing, industry standard distillation systems.

Figure 1: Simplified EcoSphere Ethanol Module Process Schematic

EcoSphere Ethanol - Plant Emissions and Energy Use Profile

Systems Emissions

An Inductively Coupled Plasma (ICP) torch system can be designed for sealed system operations. The selected torch design has no exhaust vents or open intakes. All material inputs are controlled and metered to create a thermal environment that ensures complete CO2 destruction and reduction of all complex molecules to their basic elements. The syngas production environment is also controlled to be carbon rich and oxygen starved so the production of NOx and SOx is eliminated. If any nitrogen or sulfur compounds are introduced into the system, they are broken down and passed through as elemental nitrogen and sulfur.

The waste heat recovery system is also a sealed system, using closed shell and tube waste heat boilers or plate and frame heat exchangers.

The microorganisms in the bio-catalytic stirred tank fermenter are product specific to ethanol. They create no other byproducts or gaseous emission.

Based on actual operation of the existing 600kW torch and thermal models, it is calculated that 1 torch module will convert 2,289 kg/hr of CO2 (with other hydrocarbons) to syngas available for the production of 719.8 gallons of ethanol/hr.

Thus 3.18 kg of CO2 is consumed per gallon of EcoSphere Ethanol produced and no other emissions or CO2 is generated by the production process.

System Power Use

While each syngas production module incorporates a 600kW rated ICP torch, it is expected that actual operations will be modulated between 450 and 550kW. The combined torch and thermal reaction vessel unit is also designed to operate at a pressure slightly above atmospheric and negative to the rest of the system. This leads to an energy favorable design of material feed systems and of the induction fan used for syngas transfer to the ethanol production modules.

During syngas production, electric power consumed by the ICP torch, induction fan, material feed systems, oxygen generation and syngas cooling equipment will be less than 1.3 MW per module. This calculation assumes no power offset from the significant heat recovery that will be available – as much as 20% of power usage.

During ethanol production, electric power will be consumed by the syngas pressurization pumps, stir tank motors and distillation system. It is calculated that a module will consume 1.5 MW in the production of 719.8 gallons of ethanol/hr.

Plant Summary

Based on the information above, an EcoSphere Ethanol plant producing 100 million gallons per year would consist of 16 ICP modules and would consume 318,000 metric tons of CO2 - producing no other emissions (CO2, NOx, SOx, VOCs, etc).

The electrical demand of this plant would be approximately 48 MWs. Assuming power was generated using natural gas turbines and using EPA’s published natural gas power plant CO2 emission average of 515 kg per MWh, we arrive at 216,547 metric tons of CO2 emitted during power production for the plant – 101,453 tons less than was consumed in the production of the EcoSphere Ethanol. So, in the worst case energy use scenario, an EcoSphere Ethanol plant would consume 46% more CO2 than it would “overall” produce.

Power use reduction from thermal heat recovery, which must be incorporated, will only reduce the plant’s carbon footprint further. Also, the EPA’s published CO2 emission average for natural gas power plants is the average of plants in operation today and includes older, less than state of the art turbine designs.

Using heat recovery and state of the art power generation equipment, a 100MM Gallon EcoSphere Ethanol Plant will have an estimated negative CO2 footprint of 140,000 metric tons of CO2 per year, consuming 65% more CO2 than it would “overall” produce.

CO2 Separation

There is no “cost” of CO2 separation, in terms of energy or emissions, included in the calculations above. Large quantities of relatively pure sources of CO2 can be readily obtained from existing industrial facilities.

One such example is corn based ethanol plants. A 100 MM gallon corn based ethanol plant off gasses 34 metric tons / hr of pure CO2. This CO2 can be used to produce an additional 94 MM gallons of EcoSphere Ethanol with no disruption to the existing process or cost of CO2 separation. There is currently over 7.5 Billion gallons of ethanol created from corn – an additional 7 Billion gallons of EcoSphere Ethanol could be created from this currently emitted CO2.

Also, natural gas processing facilities currently separate CO2 from raw natural gas before introduction into the pipeline system. This pure CO2 stream is vented to atmosphere and the cost of CO2 separation is already borne in the natural gas product. An average, 100,000,000 cubic foot per day natural gas processing plant off gases 13 metric tons of CO2 per hour. This CO2 can produce 36 MM gallons of EcoSphere Ethanol with no disruption to the existing process or additional cost of CO2 separation. There is currently over 50 Billion cubic feet of natural gas processed daily – an additional 18 Billion gallons of EcoSphere Ethanol could be created from this currently emitted CO2.

Dilute Sources of CO2

Industry averages currently range from a 15 to 20% energy increase required to separate and sequester dilute CO2 from exhaust flue gasses. The sequestration compression and transportation process consumes a significant majority of this energy. CO2 separated for a co-located EcoSphere Ethanol Plant would require no “transportation” and can be provided at atmospheric pressures, significantly reducing energy expended.

CO2 separation technology is constantly advancing and evolving. A particular CO2 separation process must be individually evaluated for its CO2 footprint and the CO2 cost added to the overall EcoSphere Ethanol Plant CO2 footprint. These calculations are relatively simple once the desired separation technology is chosen for evaluation.

EcoSphere Ethanol - Total Carbon Dioxide Footprint vs. Gasoline

While the fuel in your tank has various additives, for the purposes of relative comparison, pure gasoline (represented by iso-octane) and pure ethanol is used in the calculations below.

CO2 from Production (CO2p)

Gasoline: A Well to Tank and Tank to Wheels analysis of CO2 emissions for various fuels was published by Argonne National Labs in May of 2005(1). This study was comprehensive of all CO2 generating factors and is widely accepted and cited by industry and government agencies. Well to Tank CO2 emissions for gasoline is stated to be 5.6 lbs or 2.45 kg/gal.

Ethanol: The energy required to produce 100,000,000 gallons of ethanol/yr via the EcoSphere Ethanol process is approximately 48 MWs. An average natural gas power plant would produce 216,547,000 kg of CO2/yr to provide an EcoSphere Ethanol plant with 48 MWs of continuous power.

Thus a worst case scenario for an EcoSphere Ethanol plant, using no recovered heat and “purchasing” all required power from the public grid, would be 2.16 kg of CO2 per gallon of ethanol produced. This number is doubled, to 4.32 kg, to account for feedstock transportation to the EcoSphere Ethanol Plant and finished product transportation to the distribution system.

CO2 Consumed in the process (CO2s)

Gasoline: No CO2 is consumed in the production of gasoline.

Ethanol: In the EcoSphere Ethanol process, 318 million kg of CO2 is consumed in the production of 100 million gallons of ethanol or 3.18 kg of CO2 consumed per gallon of ethanol produced.

CO2 from Combustion (CO2c)

Gasoline: Composition is C8H18, molecular weight of 114 g/mol and a weight of 2.835 kg/gal.

The combustion reaction of gasoline is: C8H18 + 12.5O2 => 8CO2 + 9H2O + heat .

Thus for every 114 grams of gasoline combusted, 352 grams of CO2 (44*8) is created.

Using the ratio of 352 / 114, for every gallon of gasoline combusted, 8.754 kg of CO2 is created.

CO2c = {2.835kg of Gasoline/gal * (352g CO2/114g Gasoline)} = 8.754 kg CO2 / gal

Ethanol: Composition is C2H5OH, molecular weight of 46 g/mol and a weight of 2.989 kg/gal.

The combustion reaction of ethanol is: C2H5OH + 3O2 => 2CO2 + 3H20 + heat .

Thus for every 46 grams of ethanol combusted, 88 grams of CO2 (44*2) is created.

Using the ratio of 88 / 46, for every gallon of ethanol combusted, 5.718 kg of CO2 is created.

CO2c = {2.989kg of Ethanol/gal * (88 g CO2/48g Ethanol)} = 5.718 kg CO2 / gal

Lifecycle Calculation (CO2L)

CO2L = CO2 from production – CO2 consumption + CO2 from combustion

CO2L of Gasoline = 2.54kg CO2p – 0kg CO2s + 8.754kg CO2c = 11.29 kg of CO2 / gal

CO2L of EcoSphere Ethanol = 4.32kg CO2p – 3.18kg CO2s + 5.718kg CO2c = 6.858 kg of CO2 / gal

Best Case: If ethanol-gas blends of greater than 10% ethanol (E10) result in no derate for power performance (as suggested in a recent DOE/Univ. of N Dakota study of E20 and E30 blends), then the CO2L reduction from the use of EcoSphere Ethanol would be 39.25%.

Worst Case: If ethanol-gas blends of greater than 10% ethanol (E10) result in a derate for power equivalent to the lower BTU content of ethanol, then 33% more EcoSphere Ethanol would be combusted to equal the power from a gallon of gas. The equivalent CO2c would then be increased 33% to 7.605 kg CO2c. The resulting CO2L reduction from the use of EcoSphere Ethanol in this scenario would be 22.5%.

Impact

CO2 Reduction: The US emits 1.6 billion tons of CO2 annually from motor gasoline use. If the US moved to E30, using EcoSphere Ethanol, CO2 emissions would be cut 118,800,000 tons per year - worst case and 207,240,000 tons per year - best case.

Corn Ethanol: Most importantly, EcoSphere Ethanol’s consumption of CO2 actually mirrors the natural process of CO2 absorption by corn or switch grass plants. This places the EcoSphere Ethanol process on par with the “CO2 sink” qualities of a natural biological process. In a Well to Wheels comparison, this helps make EcoSphere Ethanol significantly better than Corn Ethanol, a 41.2% reduction in CO2L per gallon.

Land Use: Last year the US dedicated approximately 20 million acres of corn production to make 8.4 million gallons of ethanol. The US Energy Independence and Security Act of 2007 mandates (and caps) corn ethanol production at 15 billion gallons starting in 2015. To accomplish this, another 15.714 Million acres would have to be put under corn production. This action would bring with it a host of negative land use impacts - land price increases, erosion, air particulate increases, stream contamination, habitat destruction, etc. However, a 100 MM gal/yr EcoSphere Ethanol Plant would occupy approximately 20 acres, requiring only 1,320 acres to achieve the 2015 production goal of an additional 6.6 Billion gallons.

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Argonne National Laboratory. Effects on Fuel Ethanol Use on Fuel-Cycle Energy and Greenhouse Gas Emissions. Jan. 1999 (M. Wang, C. Saricks and D. Santini) ANL/ESD-38. http://www.transportation.anl.gov/pdfs/TA/13.pdf

EcoSphere Ethanol – Alternate Use Value Analysis

In the course of the production of energy, it is important to understand the relative value of the use of materials in terms of energy output and the environmental impact associated with their use in various energy production techniques. The energy value of the input materials can be quantified and the efficiency of their use compared. Also, the environmental impact of the different uses of the material can be assessed.

The EcoSphere Ethanol process takes various hydrocarbons to produce a liquid form of energy – ethanol. Would we be better off, in terms of efficient use and environmental impact, using these hydrocarbons to produce another form of energy - electricity? This paper attempts to answer this value question in terms of energy balance and CO2 footprint in a simplified, macro overview.

The simplest way to compare the energy value of various forms of energy is to first convert all forms to the same basic reference – Btu’s. For this paper, the following Lower Heating Values are used:

Natural Gas: 930 Btu/scf

Power River Basin Coal: 7,994 Btu/lb

Ethanol: 76,000 Btu/gal

Is the EcoSphere Ethanol Production Process an “efficient” use of hydrocarbons?

In the EcoSphere Ethanol production process, the only energy based feedstock material consumed is methane and carbon (introduced by Powder River Basin coal). These materials are combined with CO2 to produce a syngas (CO & H2) to feed a patented microorganism which, in turn, ingests the syngas and excretes ethanol(1). A 100MM gallon/yr EcoSphere Ethanol plant would consume these materials and electric power at the following rates:

Material: