Value to Utilities of Agronomic Uses for Gypsum

Lamar LarrimoreSouthern Company

September 13, 2006

Large Volume Applications

• Wallboard - established• Cement - established• Agronomic - potential

– Crop yield– Soil erosion– Poultry waste runoff

Estimated Gypsum Production and DemandU.S. Gypsum Production (M tons)

2004 2010 2020Mined 18.0Synthetic 12.0 25.0 40.0Import 10.4

U.S. Gypsum Consumption (M tons) 2004 FutureTotal FGD Total

Wallboard/Plaster 31.3 8.2 similarCement 3.3 0.5 similarAgriculture

Crop 0.7 0.15 ??Erosion Control 18.0 *Poultry Waste 4.0 *

* AL, FL, GA, MS onlySources – USGS, USDA, ACAA

Conclusion – Manufacturing markets cannot absorb all FGD gypsum at peak production

Gypsum Quality Requirements

• Manufacturing applications have tighter restrictions for product performance needs

moisture, purity, chlorides, ash, particle size• Agriculture has fewer criteria

moisture, chlorides, Ca/S

Environmental Questions

• Trace element content• Potential volatilization of adsorbed emissions• Plant tissue uptake

Possible Barriers

• Regulatory– Environmental– Agriculture

• Technical acceptance• Utility interest / commitment• Market composition

– Fragmented with scattered demand (good/bad)• Marketers

– Few large regional / national players with agricultural experience

– Utilities not set up for agricultural marketing

Reasons for Utility Interest

• Low capital cost• Applicable for all power plants• Large potential market reduces storage needs• Fewer quality criteria• Broad needs

– Crops– Soil types– Industries

Actions

• Continue to develop additional technical performance and environmental information

• Develop demonstrations to lend credibility / publicity to lab results and presentations

• Clearance on environmental regulations• Achieve comfort level so that additional permits,

R&D, case studies not needed for commercial use• Encourage utilities or larger commercial participants

to serve fragmented markets• Involve U.S. and State Departments of Agriculture