The Phoenix "Replacement Energy" Initiatives – 2012-13 Outlook

Phoenix maintains exclusive ownership of its proprietary "Synfuel" technology, having filed for U.S. and international provisional patents covering the novel compounding of Hydrogen with diverse captured carbon emissions.

18 July 2012 The energy world remains in a state of flux -- which includes the pivotal Phoenix role in advancing our proprietary Hydrogen and "Synfuel" technologies -- technically, financially and legally. All relevant statistics point towards the foreseeable commerciality of these breakthrough replacement (not "renewable" nor "alternative") energy systems.

Phoenix maintains exclusive ownership of its proprietary "Synfuel" technology, having filed for U.S. and international provisional patents covering the novel compounding of Hydrogen with diverse captured carbon emissions. The Hydrogen and carbon components of Phoenix "Synfuel" both derive from widely diverse sources. The "Synfuel" equivalents of conventional liquid transportation fuels, ranging from light-end jet fuel and kerosene, to mid-range gasoline, and heavy-end diesel oil products, can all employ the long-established (and long paid for) liquid fuel distribution infrastructure with the massive investments already in place for uninterrupted commercial operation.

Our "Synfuel" technology will also play the critical central role in advancing economic Carbon Capture and Storage/Sequestration (CCS) systems -- which will be further upgraded by the environmentally benign Phoenix Carbon Capture and Recycling (CCR) strategy. The Phoenix plans for a leading role in the increasingly inevitable future "Hydrogen Economy" deriving from our proprietary technologies, including "Synfuel," covering the light-powered generation of low cost Hydrogen gas will largely be sourced by "splitting" ordinary water feedstocks (including seawater and impure waters).

The world Hydrogen gas market, now at $300-billion annually, is growing at more than 10% per year. Major ancillary Hydrogen gas generation will also be required for our future proprietary "Synfuel" production. The full range of conventional liquid hydrocarbon transportation fuels, deriving from the compounding of Hydrogen gas with captured carbon emissions from any source, is in the Phoenix replacement energy future.

The recent widely publicized development of large scale shale gas and oil reserves is suggested as highly over-rated. By definition, shale is a long known tight source rock -- with minimal porosity and permeability, inherently limiting economically produceable hydrocarbon reserves. Hydraulic fracturing (or "fracking") of the tight shale rock logically does not increase the aggregate of its oil and gas reserves. Drastic, precipitous, production decline curves are a virtual certainty in the not too distant future. Shale wells, requiring lengthy horizontal drilling legs, are very high cost (with long term payouts, increased by substantial front-end lease and post-end disposal costs).

With world oil demand now over 88-million barrels per day, a real hard number, each increasingly rare billion-barrel oil discovery covers less than 12 days of current world oil consumption! We must logically conclude that the proven Hydrogen energy alternative is the only obvious and preferred replacement for conventional liquid transportation fuels.

Phoenix has been awarded a Canadian Government Collaborative Grant to advance our "Synfuel" research project -- "Efficient Catalytic Systems for Reverse Water Gas Shift (RWGS) Reactions Based on Nano Structured Nickel Catalysts," by the Natural Sciences and Engineering Research Council of Canada (NSERC). The program will focus on the electrochemical design and promotion of novel catalytic reactions to be employed in the application of diverse metals, alloys and composites for special catalysts and fuel cells.

The Collaborative Research Grant will help fund the development of our Low Carbon Hydrocarbon Fuel (LCHF), or "Synfuel," a proprietary synthetic hydrocarbon fuel that is compounded from diverse economic sources of Hydrogen and carbon. "Synfuel" is chemically identical to conventional petroleum-based liquid fuels. The funding will advance research on the basic Phoenix technology for converting carbon dioxide to carbon monoxide and water. The proprietary flowsheets, designed for commercial "Synfuel" production, employs the generated carbon monoxide for compounding with Hydrogen.

SABIC IP, the North American petrochemical unit of Saudi Basic Industries Corp. of Riyadh, Saudi Arabia, is evaluating the Company-developed, proprietary, scalable, reactor unit designed for the photo-chemical generation of Hydrogen gas from a water feedstock -- including salt and impure waters. The SABIC accord includes the limited disclosure of the Phoenix "Synfuel" production system -- our proprietary generation of the full range of conventional liquid transportation fuels by compounding Hydrogen with captured carbon emissions.

A brief overview of primary, current energy, fuel and power alternatives is appropriate:

 Wind and Solar Power:
The wind and solar power alternatives are complicated by unpredictable, intermittent and directionally-variable atmospheric conditions, including inherent environmental downsides that severely limit optimum locations. Capital cost intensive standby power and storage capabilities are essential. Wind and solar power systems currently require upwards of 400% increases in tariffs above those for conventional energy -- suggesting major consumer/taxpayer subsidies forever.

 Biofuels (including Ethanol):
Edible crop sources (largely corn) of biofuels consume essential food commodities that can lead to disastrous food price inflation. Not to be ignored are the ever increasing input costs of fertilizers, planting, harvesting, storage, processing, transport, and infrastructure. Alternative biomass waste inputs require costly collection and delivery before processing.

 Algae:
Algae's sensitivity to temperatures, and nutritional needs for their cultivation, suggests that its batch (not continuous) production system inherently results in a very costly energy alternative. Indicated current capital and production costs are high and rising. Algae's energy future is highly debatable.

 Coal and Nuclear:
Coal and nuclear are widely recognized as environmentally degrading and/or dangerous in their commercial production and use. Their substantial costs and dangers in routine nuclear power generation also must consider the investments for the essential provision of spent nuclear fuel disposal sites that must be secured for upwards of 1,000 years!

Phoenix will maintain and expand its Hydrogen energy power initiative -- to employ this virtually inexhaustible, pollution-free, energy resource to generate low cost, sustainable, clean energy -- while emitting, upon combustion, only pure water vapor. Slated for mitigation, or complete elimination, are the escalating costs and dangers of the wide range of noxious emissions of carbon dioxide, sulphur dioxide, nitrous oxide, and other greenhouse gases, as well as the costly and problematic nuclear energy requirement for the long term disposal and/or storage of the spent fuel.

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