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We are focusing our business efforts on “Green Energy” production and use of BTU output or conversion of the caloric content of hydrocarbons, through several technologies, which includes the use of our coal assets. Coal prices should remain at their current levels, or move higher based upon increasing usage in China and India, as well as other emerging countries and the more recent increase in oil and gas prices. Distribution of our refined coal occurs through agreements with our customers and traditional transportation methods utilized by the coal industry. These methods include, transporting by ship, barge, railway and over the road trucking.
On January 27, 2006, we received coal washing test results from SGS Commercial Testing & Engineering Co. of Denver, Colorado, which provided independent verification and validation that chemical modification of the Pennsylvania coal utilizing our proprietary recombinant protein/enzyme technology (acquired from Richcorp) increased the commercial value of such coal. We believe that test results from the chemically processed coal demonstrate that the processed coal qualifies as “Refined Coal” as such term is defined in Section 45 of the Internal Revenue Code of 1986, as amended. The results showed a 15.6 % increase in Btu per lb. to 13,209 Btu; a decrease in Ash of 58% to 7.33% and a 20.2% decrease in lb. S02/mm Btu.
On March 3, 2006, we executed a purchase order agreement with Island Sales Limited, a Pennsylvania corporation whereby we agreed to sell 500,000 tons of Pennsylvania processed clean coal to Island Sales between April and December, 2006, at the price of $47.10 per ton, subject to processing and delivery specifications. We have not been able to process and deliver this amount or any amount of coal and therefore may be in default of this contract.
In connection with our “Green Energy” business model, we have designed, co-manufactured and tested a small batch processing coal bio-refinery with TecEnergy Pennsylvania, Inc. (“TecEnergy”), a Consolidated Energy & Technology Group, Inc. subsidiary. The coal bio-refinery was designed to utilize our enzyme/protein technology to produce clean coal from waste coal. Our enzymes/proteins are part of an enabling technology that can economically bio-refine hydrocarbons (coal and oil) to remove contaminants such as ash, arsenic, mercury, sulfur and other heavy metals to increase the value of the coal or oil. In addition, heavy or long chain hydrocarbons, such as are contained in sludge or coal, can be bio-chemically modified to increase the value of the coal feedstock.
An independent laboratory obtained the following comparative test results:
Waste Coal (Dry Basis Pre-treatment)
Waste Coal (Dry Basis Post-treatment)
Btu/Lb
7,302
12,009
Ash
46.75%
19.24%
Sulfur
0.63%
0.82%
Independent laboratory testing results confirm that our technology bio-chemically transformed the waste coal by causing a substantial decrease in the level/volume of ash and other contaminants. We are now designing continuous flow bio-refineries, as operational volume manufacturing units intended to process 10-100 tons per hour. These continuous processing bio-refineries have multi-staged processing capabilities that are projected to facilitate further
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reduction in ash, or other coal contaminates such as sulfur, mercury, arsenic or other heavy metals.
These bio-refinery units are part of our process to remediate soil that has been mixed with the contaminating laid-up coal. We intend to utilize a specific type of enzyme/protein that is designed to sequester and eliminate hydrocarbon contamination (and the by-products thereof) and alter the soil to Environmental Protection Agency acceptable hydrocarbon levels.
Our enzyme/protein technology comprises over 140 specific proteins that perform various biochemical processes on hydrocarbons, their by-products and metal contaminants. The technology can tailor coal or other hydrocarbons, as well as transform solid fuels to liquid fuels. The processes vary depending on the starting feedstock, and the desired end product and value of that end product.
We are currently conducting business operations in the Commonwealth of Pennsylvania in cooperation with TecEnergy. We have recently entered into a Commodity Purchase Agreement with TecEnergy to acquire up to 100,000,000 tons of mined coal controlled by TecEnergy. We intend to serve as a vendor of our enzyme/protein technology and sell the enzyme/protein product to TecEnergy, Ecotec and possibly other entities for use in processing waste coal. These enzyme/protein product sales, processing of waste coal with the enzyme/protein product and the resulting chemical transformation of waste coal should enable Ecotec to perform its contractual obligations to provide us with refined coal at $18.50 per ton. Our goal is to identify end users of refined coal (such as power companies) and enter into sales agreements to generate revenues and profits for the Company. Provided that we achieve desired testing results with the enzyme/protein technology, we may be able to sell refined coal directly to NYMEX.
The Commonwealth of Pennsylvania has published that approximately 250,000 acres of the Commonwealth are contaminated with waste coal sites. It is estimated that this represents several billion tons of coal that has been laid up on these sites since the early 1900’s. In addition to our cooperative business activities with TecEnergy and Ecotec, our goal is to seek out and obtain additional waste coal resources to process into refined coal for commercial exploitation as discussed above.
Win a few. Lose a few.
Only the long term counts.
AI
