CTL has been gathering significant momentum over the past few years as a clean energy solution that turns a relatively inexpensive and abundant feedstock into high value liquid fuels. The current growth in CTL projects has largely been driven by significant recent increases in the coal price differential.

Coal to Liquids Information (PDF)
 
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We believe that CTL presents an opportunity offering favourable returns on projects and long-lived production in an attractive emerging industry. Alter Nrg intends to combine its expertise in designing cost effective staged facilities that are a fraction of the size of currently planned projects being announced by other parties on a regular basis. By creating large energy production facilities through the staged duplication of smaller yet economic plants, we believe we will reduce implementation and execution risk.

The Coal to Liquids Market has the following attributes:

Strong Returns:
The preliminary estimate of pre-tax returns on equity are approximately 20% with long-lived cash flow (in excess of 30 years) and capital costs per bbl of production of less than $15 per boe.

Strong Market:
We believe that the North American gasification market is in a rapid growth phase
with sustained higher commodity prices, a drive for energy self-sufficiency and the social pressure to find clean energy solutions.

Diversified Risk
We believe that CTL gasification has the ability to tailor the outputs and create a
variety of liquid fuels, syngas, and chemical compounds that can be adjusted to optimize economics. The Great Plains Synfuel Plant in Beulah, North Dakota produces a wide variety of high value energy products from a low value lignite coal utilizing gasification technology.

Environmentally Responsible
Alter Nrg believes that plasma gasification is an environmentally superior
method of producing power, syngas or liquid fuels with low emissions, and non-hazardous by-products. At the Great Plains Synfuel Plant, one of the outputs is CO2, which is efficiently captured as part of the process downstream of the gasifier, and is sold to EnCana Corporation’s Weyburn miscible EOR project.

Commercially Proven
Sasol Limited, a South African public company traded on the NYSE, produces
30 percent of that country’s liquid fuels through coal gasification. The WPC technology is commercially operational in WTE facilities with more difficult and heterogeneous feedstock to gasify, and has been successfully pilot tested with various coals.

Availability of Feedstock
Based on third party data, we believe that one tonne of coal will equate
to approximately 1.6 boe of liquid fuels, such as gasoline or diesel, through gasification. We expect to use the Fox Creek property, with its approximately 770 million tonnes of coal (as evaluated in the Norwest Corporation Coal Resource Report) as feedstock for our CTL projects.