Plant Cost Projections For Nsr 12 31 2009


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Cost Projection for Waste to Energy Technology.

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Plant Cost Projections For Nsr 12 31 2009

  1. 1. Financial Benefits The advantage of NSR technology is that it can produce a profitable product from material that society pays to throw away. It is this no or low cost of feedstock that is the key advantage versus crude oil and Biodiesel as seen in the table below. Product in barrel (crude) % Crude Value $/gal Value $/bbl Total Value Fuel gas, sulfur 4% $.50 $21 $0.84 Gasoline Blends 55% $2.33 $97.86 $53.82 Diesel, jet fuels 25% $2.18 $86.10 $21.52 Six oil, asphalts 16% $0.75 $31.50 $5.04 Total $81.22 Gross profit, $81.22 - $75 = Total net value $3/bbl $6.22/barrel before refining @ $3 to $5 per bbl Product in barrel (NSR) % NSR Value, $/gal. Value, $/bbl Total Value Fuel gas, sulfur 0% $0.50 $21 $0 Gasoline blends 55% $2.33 $97.86 $53.82 Diesel, jet fuels 40% $2.18 $86.10 $34.44 Six oil, asphalts 5% $0.75 $31.50 $1.57 Total value $89.83 Gross profit, $89.83- $5.55 = Total net value $54/bbl $84.28/barrel before refining @ $30/bbl Product in barrel % Biodiesel Value, $/gal. Value, $/bbl Total Value (Biodiesel) Gasoline blends 0% $2.33 $97.86 $0 Diesel, jet fuels 100% $2.18 $86.10 $86.10 Federal excise tax credit 100% $1.00 $42.00 $42.00 Alternative Fuel tax credit 100% $0.50 $21.00 $21.00 Total value $149.10 Gross profit, $149.10- $126.00 = Total net value (- $45.90)/bbl $23.10/barrel before refining @ $69/bbl (Note: These calculations assume NSR has to pay $50/ton for plastic feedstock that normally cost about $25/ton for landfill disposal. It assumes that it will cost $180/ton to pre-process the plastic and that refining costs will be more than double commercial crude refining. This is calculated with crude oil cost at $75/bbl and Biodiesel feedstock cost at $126/bbl) THE INDUSTRY The Plastic Industry Plastics have drawn both strong positive—and strong negative—attention in their relatively short history. Examining reasons behind this attention helps explain why PLLC is “in the right place at the right time”. Plastics Use Is Proliferating, and for Good Reasons
  2. 2. Since the 1950s, plastics have grown into a major industry that positively affects all of our lives. Plastics contribute to our health, safety, and peace of mind in endless beneficial ways. The unique characteristics of plastics (light weight, durability, and formability) enable the material to be used in products ranging from coffee cups to automobiles that grace our lives on a daily basis. Today, plastics are widespread in packaging, furniture, appliances, automobiles, buildings, medical equipment, toys, and a wide variety of industrial and consumer goods. Advances in barriers, colors, and resins are further expanding the applications of plastics, and new patents are regularly granted for plastic polymers and uses. A key advantage of plastics is that minor changes in chemical structures can result in significant changes in material characteristics, making plastics one of the most versatile materials. Three members of the polyethylene family of plastics illustrate their versatility. Polyethylene terephthalate (PET) is clear, tough, provides a barrier to gas and moisture, and is heat- resistant. PET is used in drink bottles, injection-molded consumer products, and fiber applications. High density polyethylene (HDPE) is stiff and resistant to chemicals and moisture, but it is permeable to gas. HDPE is easy to process and mold, and it is used in a wide range of products including bottles, tubs, and bags. Low density polyethylene (LDPE) is used predominantly in film applications because it is tough, flexible, and relatively transparent. Because of these properties, LDPE is also used in wire and cable applications. Plastics have grown into a major industry in both the United States and California. Nationwide, the plastics industry is fourth in shipments among manufacturing industry groups, accounting for more than $330 billion in shipments for 2000. California is one of the top states, with $27.6 billion in plastic industry shipments, and 146,900 jobs.1 Nationally, production of plastics has grown at a rate of 4.9 percent per year since 1973, reaching sales of more than 50 million tons in 2000.2 Manufacturers and consumers have widely embraced plastic products, ranging from plastic water bottles to toys to computers. The largest categories of plastic resin sales are packaging (26 percent), building and construction (22 percent), consumer and institutional (14 percent), exports (10 percent), and transportation (5 percent).2 In automobiles and other transportation applications, plastic resins are both light and strong, allowing for vehicles with increased fuel efficiency. Plastics provide structural and insulating qualities in a wide range of building applications, including pipes, carpets, insulation, flooring, and window frames. In packaging, plastics offer significant source reduction benefits, reducing the amount of material needed to supply a product while maintaining the functions provided by packaging. For example, a 2- pound plastic bag of rice has a product-to-package ratio of 99 to 1, while a 28-ounce paperboard box of rice has a product-to-package ratio of 13 to 1. Delivering 1,000 pounds of rice in plastic bags generates only 3.9 pounds of waste, while delivering the same amount of rice in paperboard boxes generates 78.1 pounds of waste.3 Plastics packaging also has itself been source-reduced over the years, with 2-liter soda bottles and gallon milk jugs about 30 percent lighter today than they were in the early 1970s.
  3. 3. Plastics play a significant role in reducing the amount of waste ultimately sent to landfills. The weight-reducing benefits of many plastics can offset the higher recycling rates of other materials. Plastics have greatly displaced many other materials in our economy over the last several decades. If plastics were not used, the quantity of other material to manage would have been even greater due to population and economic growth. However, the dilemma of plastic is that its strengths (versatility and utility in a wide range of applications) are also in a sense its weakness. The proliferation and heterogeneous characteristics of plastic make it challenging to manage as waste. Plastics Disposal is Growing Fast and is Voluminous As plastics are displacing heavier, less-flexible materials in packaging, building, transportation, and disposable products, the amount of disposed plastics is increasing almost as rapidly as production levels. As a result, plastics in the municipal solid waste discard continue to grow, and they are the fastest-growing portion of the municipal waste stream. An amount of plastics equal to almost one-half the resin produced each year now ends up in landfills. Nationally, plastics in the municipal solid waste (MSW) stream increased from 0.5 percent (390,000 tons) in 1960 to 13.8 percent (22.8 million tons) in 1999. This increase occurred following a rapid growth in plastics generation.4 Plastics represent a disproportionate share of landfill space. Next to paper, plastics are the second-largest category of waste by volume going into municipal landfills. In California, plastics represent 8.9 percent of the waste landfilled by weight, an estimated 3.4 million tons in 2000. Though light in weight, plastics is still the fifth-largest category of material by total weight in U.S. landfills.5 Plastics rank behind paper, construction and demolition waste, food waste, and yard waste. Because of its light unit weight, plastics represents an even larger share of U.S. landfill volume—perhaps twice as high a percentage of volume as compared to weight (or almost 18 percent by volume). Plastics in U.S. landfills fall into six main categories; film comprises by far the largest share.5 Plastics recycling started in the 1970s and is now Generation & Recovery of U. S. Plastics (USEPA) an established industry for PET and HDPE plastics. Considering that a plastics recycling infrastructure did not exist before the 1970s, plastics recycling gains have been impressive. However, when compared with recycling of other material types— and with the relatively lower recycling rates of plastics—the plastics recycling gains are disappointingly slow. Environmental groups and local governments are also frustrated because plastics recycling is difficult and expensive, and markets are inadequate. Bottle-to-bottle plastics recycling, until very recently, has been miniscule compared to other secondary material closed- loop recycling.
  4. 4. 1. U.S. Plastics Industry Data, The Society of Plastic Industries, <> (2002). 2. The Resin Review 2000 Edition, American Plastics Council, Washington, D.C.: 2001. 3. "Plastics Industry Statistics: Year in Review," American Plastics Council, <> (April 2002). 4. U.S. Environmental Protection Agency, Municipal Solid Waste in the United States 1999, prepared by Franklin Associates, Ltd., Washington, D.C., 2000. 5. California Integrated Waste Management Board, Statewide Waste Characterization Study, Results and Final Report, prepared by Cascadia Consulting Group, Sacramento, Calif., 1999. 6. U.S. Environmental Protection Agency The Fuel Industry Despite high demand in the country and despite rising fuel costs, gasoline prices are low in the United States when compared with most other Western countries. As of December 21, 2008, the United States average price of self-serve regular unleaded gasoline was $1.65/gal. Gasoline amounts to 44% of the total US consumption of petroleum products. According to national figures from the US Department of Energy, in March 2007 52% of the cost of gasoline went to pay for crude oil, 24% for refining, 15% to taxes, and 9% for distribution and marketing. By April 2008, these had changed to 72.7% for crude oil, 10% for refining, 11% to taxes, and 6% for distribution and marketing. Gasoline usage and pricing in the United States US gasoline prices, 1919-2007 (nominal and inflation adjusted)
  5. 5. In 2008, a report by Cambridge Energy Research Associates stated that 2007 had been the year of peak gasoline usage in the United States, and that record energy prices would cause an "enduring shift" in energy consumption practices. According to the report, in April gas consumption had been lower than a year before for the sixth straight month, suggesting 2008 would be the first year US gasoline usage declined in 17 years. The total miles driven in the US began declining in 2006 NSR Media Coverage Public and industry awareness will grow with continuous exposure in related public and industry media. Currently, PLLC benefits from NSR news coverage in various news publications in association with its recent clean technology expo presentation, including, PR Newswire, Reuters, Small Times, US Politics Today, BioSpace, BioWorld Online, CSR Wire, Arizona Republic, The Seattle Times, BioAlabama, Channel Web, Conferences & Tradeshows, Today, Waste Management Today, Waste to charity.Org, Trade Show Marketing, Tech Trends, Healthcare Industry Today, Downloads Portal, Dr. Koop, The E-Environmental Magazine, Greenopolis, KansasBio,, Colin County Business, HealthScout, HealthSquare, RBC, and MMM News
  6. 6. Current Plastic Recycling System achieve about 6% recycle rates
  7. 7. With NSR Conversion Facilities plastic recycling rates in excess of 50% are achievable Plant Cost Projections The projections in this plan are based upon a 3 ton/hr plant. A 3 ton/hr operation equates to a 25,000 ton plastic/yr plant that produces 175,000 barrels (7,350,000 gals) of fuel per year. This may not be the ideal size plant. There is no apparent reason why a plant could not be 10, 20 or 100 tons/hr. Table 3 depicts the projected financial breakdown of the fuel production. Table 3 gives the estimated capital expense for the 3 ton/hr plant. Table 4 gives the estimated operating expense. Table 3 Capital Expense – 3 ton/hr # Description 3 ton/hr plastic plant units cost/unit Total 1 Receiving Area containers 8 $12,500 $100,000 2 Conveyor 2 $15,000 $30,000 3 Shredder 1 $500,000 $500,000 4 Washer 1 $250,000 $250,000 5 Classifier/Dryer 1 $225,000 $225,000 6 Dryer 1 $500,000 $500,000 7 Additives Bin and Conveyor 1 $25,000 $25,000 8 Intermediate Hoppers 3 $25,000 $75,000 9 Extruder 6 $50,000 $600,000 10 Reactor 6 $150,000 $900,000
  8. 8. 11 Heating system 6 $100,000 $600,000 12 Condenser 3 $50,000 $150,000 13 Filtration 3 $15,000 $45,000 14 Transfer Pumps 6 $5,000 $30,000 15 Fuel Storage & Containment (50K gals.) 1 $250,000 $250,000 16 Motor Control Center & Electrical 1 $100,000 $100,000 17 Programmable Logic Control 1 $100,000 $100,000 18 Plumbing 1 $50,000 $50,000 19 Building (15,000 ft²) 1 $28/ft² $420,000 Total Cost $4,950,000 Table 4 Operating Expense – 3 ton/hr. (24 hr/day) Category cost/unit units total/yr cost/bbl Labor (35% for taxes & benefits) Manager $48/hr 1 $135,000 $0.77 Mechanic $25/hr 1 $70,200 $0.40 Operator $18/hr 8 $404,352 $2.31 Laborer $13/hr 8 $292,032 $1.67 Feedstock (waste plastic) $45/ton 25K $1,125,000 $6.43 Capex ($5M for 10 years at 12%) $872,350 $4.98 Repair & Replacement (5% of capex) $495,000 $2.83 Electrical Energy $0.15/kwh 300 $394,000 $2.25 Natural Gas $5.00/mbtu $910,000 $5.21 Insurance, permits, overhead $87,500 $0.50 10% contingency $464,566 $2.65 Total $5,250,000 $30.00 Fuel Production – Financial Components Table 5 depicts the projected financial breakdown of the fuel production. This model uses $5.55/bbl refining costs after we have spent $30/bbl to produce. Our fuel is compared to crude oil at $75/bbl. Table 5 Fuel production financial breakdown (using $75/bbl crude oil as benchmark) Product in barrel (PLLC) % PLLC Value, $/gal. Value, $/bbl Total Value Fuel gas, sulfur 0% $0.50 $21 $0 Gasoline blends 55% $2.33 $97.86 $53.82 Diesel, jet fuels 40% $2.18 $86.10 $34.44 Six oil, asphalts 5% $0.75 $31.50 $1.57 Total value $89.83 Gross profit, $89.83- $5.55 = Total net value $54/bbl $84.28/barrel before refining @ $30/bbl Product in barrel (crude) % Crude Value $/gal Value $/bbl Total Value Fuel gas, sulfur 4% $0.50 $21 $0.84 Gasoline Blends 55% $2.33 $97.86 $53.82 Diesel, jet fuels 25% $2.18 $86.10 $21.52 Six oil, asphalts 16% $0.75 $31.50 $5.04
  9. 9. Total value $81.22 Gross profit, $81.22 - $75 = Total net value $3/bbl $6.22/barrel before refining @ $3 to $5 per bbl Commodity Prices The following is a rough estimate of plant profitability based on the price of crude oil and natural gas. The projections throughout this document are based on crude oil at $75/bbl and Natural gas at $5.00/Mbtu Crude oil Natural Gas 175,000 bbl Comments $/bbl $/Mbtu EBIT $115 $13.00 $15.5M $105 $11.00 $13.8M $95 $9.00 $12.0M $85 $7.00 $10.3M $75 $5.00 $9.4M Base Case $65 $5.00 $6.8M $55 $5.00 $5.0M $45 $5.00 $3.3M $35 $5.00 $1.5M $30 $5.00 0 Break Even The graph below shows the historical relationship between crude oil and natural gas. Our largest variable cost item is natural gas at about 20% of the plant costs, but if this component was to increase dramatically the plant operator should actually see profits increase because of the corresponding
  10. 10. Gasoline and Diesel Prices (As of November 4, 2009) The U.S. average retail price for regular gasoline gained 2 cents this week to reach $2.694 per gallon, the highest level this year. This surpassed the previous 2009 weekly high of $2.691 per gallon seen on June 22. The national average is now $0.29 per gallon higher than it was a year ago. Prices increased in all regions of the country. In the Rocky Mountains, the average increased three cents to $2.61 per gallon. The price rose roughly two cents in each of the other major regions, from one and a half cents in the Midwest and Gulf Coast to a bit over two cents in the East Coast and the West Coast. Prices ranged from a low of $2.56 in the Gulf Coast to a high of $2.91 in the West Coast. The average in California was essentially unchanged at $2.99 per gallon. The national average price of diesel fuel inched up about a penny to $2.81 per gallon. Despite a cumulative increase over the past four weeks of $0.23 per gallon, the average remains $0.28 per gallon below a year ago. Prices increased in most regions of the country. The average on the East Coast went up about two cents to $2.83 per gallon. The Gulf Coast and West Coast prices edged up about a penny to $2.75 and $2.91 per gallon, respectively. In California, the average rose about a penny to $2.97 per gallon.
  11. 11. U.S. Gasoline and Diesel Fuel Prices, 11/02/09 Gasoline (Dollars per Gallon) Diesel Fuel (Dollars per Gallon)