Processing Technologies Enhance Appeal of Clean Coal as Long-term Energy Solution
AuraSource Positioned to Meet Growing Global Demand for Sustainable Energy Sources
Ask even the most insightful analysts and investors about the challenges of predicting where markets are going, and they'll tell you just how rare it is to be genuinely confident about the future of an industry. Ask those same investors about the outlook for energy, though, and you're likely to hear that we're experiencing one of those rare moments of foresight right now. The world's relationship with energy is in upheaval, and the overwhelming consensus is that energy sources, suppliers, processing, consumption and more are undergoing a transition that will last for decades to come. While the specifics of that transition are still unfolding, there is no doubt that the energy map of tomorrow will be vastly different than it is today.
It is a sentiment that comes from sources as well-respected as the International Energy Agency. Their 2012 World Energy Outlook emphasized that we are living through a sea change in terms of our relationship with energy, and that by 2035, global shifts in climate, population and technology will be driving demand that can best be met by governments and businesses that are actively positioning themselves today to address these emerging realities. That message was reinforced at this year's Fortune Global Forum, where a special session was held on "Building a Sustainable Future," with companies such as General Electric (NYSE: GE) and Dupont (NYSE: DD) emphasizing their commitment to generating viable energy solutions. While blue-chip providers have an essential role to play in the development and dissemination of new technologies, less-well known but equally innovative companies like U.S.-based AuraSource (OTCQB: ARAO) may be similarly effective at driving positive change. AuraSource in particular stands out because their pioneering hydrocarbon cleaning technology promises to help address the growing worldwide demand for clean coal.
AuraSource itself is quick to point out that "clean coal" really means "cleaner coal" – the company recognizes that pollution control, not elimination, is the realistic goal not only for coal but for all carbon-based energy sources. Considering the growing demand for fossil fuels in general and coal in particular, though, solutions that can reduce pollutants associated with coal processing will be essential to the emerging energy landscape. Cleaner coal, for example, is highly desirable for energy-heavy users, including industrial and utility boilers and industrial kilns. Coal-fueled facilities produce several types of emissions – notably, carbon dioxide, sulfur dioxide, nitrogen oxides and mercury – all of which are becoming highly regulated because of their potential to impact quality of life on a local scale and climate on a global scale.
To address these concerns, ARAO currently licenses a proprietary cleaner fuel technology – AuraCoal– to coal processors who fully finance the equipment and facilities before contracting with ARAO to operate the machinery on-site. ARAO and its investors benefit by generating revenue through all stages of the client relationship, from equipment purchase to financing, licensing to ongoing operations – while clients benefit from more efficient production and cleaner processes, both of which are often essential to maintain compliance with regulators.
AuraCoal technology utilizes ultrafine grinding and removes impurities from coal, which in turn reduces energy costs and all but eliminates harmful emissions. Containing only trace amounts of sulfur and ash, this low-cost alternative to oil or natural gas can be delivered via pipeline, truck, railway or ship in a non-volatile state. Potential customers and investors alike are intrigued by AuraCoal's ability to replace heavy oil using a 2:1 ratio – two tons of AuraCoal can replace one ton of heavy oil. Also appealing is its use by large power stations to reduce coal usage and electricity required since a milling system is not necessary with AuraCoal in place.
ARAO also offers a low cost, high yield mineral processing technology branded under the name AuraMetal. This process efficiently and economically utilizes the company's proprietary grinding and separation technology to separate commercially valuable minerals from their ores and improve grade of ore. Potential applications include low grade iron ore beneficiation, iron ore tailings utilization and hematite ore separation.
The opportunity for ARAO is significant both domestically and internationally. Currently, the United States has the world's largest coal reserves with more than 250 billion tons of recoverable coal. That's enough to last more than 200 years, according to the U.S. Energy Information Administration, but it will need to be processed in a way that is consistent with present and future legislative requirements, energy treaties and commercial realities. As a U.S.-based company, AuraSource is well positioned to leverage its proprietary technologies and unique business model to earn a leadership position – and significant recurring revenue – as demand grows.
Magnifying the opportunity for growth is AuraSource's established presence and developed relationships in the People's Republic of China. Earlier this month, ARAO announced it received a patent for AuraCoal from the State Intellectual Property Office of the PRC and is constructing a large scale demonstration plant in the city of Wuxi. China presently depends on coal for nearly 80% of its electricity generation, making it the world's largest importer of coal in 2011. As the race to fuel this burgeoning nation picks up pace, more focus is being placed on pollution management, environmental degradation and health concerns in the ever-growing urban settings. These concerns are not only troublesome in their own right, but also command attention due to their cost – an estimated 11% of the country's national GDP, according to a report by the Lawrence, Livermore National Labs.
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