Caterpillar, Secure Energy, L.L.C. Sign Letter Of Intent That Could Lead to the Development of Coal-to-Syngas Plant in Decatur
Proposed facility would produce synthetic natural gas from Illinois coal.

DECATUR, IL-Caterpillar Inc. (NYSE: CAT) and Secure Energy, L.L.C. signed a nonbinding letter of intent (LOI) today, which could lead to the development of a coal gasification plant that would turn Illinois coal into synthetic natural gas (syngas).

Under terms of the LOI, Secure Energy has the right to purchase property and equipment located at Caterpillar's manufacturing facility in Decatur, Illinois. The equipment includes a coal-powered boiler constructed on the Caterpillar grounds in 1980 that was never put into operation. Secure Energy plans to utilize the boiler building and several pieces of existing equipment at the Caterpillar site as part of a new coal-to-syngas plant. The plant would produce synthetic natural gas for the Decatur area. This plan would not impact Caterpillar's manufacturing facility at Decatur.

"Today marks an important step in a long process, and Caterpillar is pleased to find what we hope will be a positive and sustainable use for the coal boiler facility, which has sat idle for more than 20 years," said Doug McCallen, senior business resource manager for Caterpillar's Decatur facility.

Secure Energy plans to develop a coal-to-syngas facility at the site that could eventually consume up to 600,000 tons of coal annually.

"This technology can provide a stable domestic supply of natural gas using the abundant supply of high-sulfur Illinois coal in an extremely low-emissions process," said Lars Scott, comanaging member of Secure Energy.

In past decades, coal was primarily used as an energy source for the Decatur region, but because of emissions concerns and the cost of natural gas, many facilities switched to natural gas as a power source. This includes Caterpillar's Decatur facility, which switched to natural gas in the early 1980s. Now with supply concerns for natural gas, coal gasification technology is seen as a potential new, and sustainable use for Illinois coal.

"This announcement marks another great story for the city of Decatur and Macon County.  New and existing businesses continue to locate, grow and prosper, creating new jobs in our community," said Decatur Mayor Paul Osborne. "It is an exciting day for Decatur."

Craig Coil, president of the Economic Development Corporation of Decatur and Macon County, said, "The Decatur economy is growing, and with it comes new business opportunities such as Secure Energy. The use of new technologies to provide energy for our area supports continual growth for our region. We welcome Secure Energy to our business community."

The letter of intent will allow Secure Energy to begin the permitting process for the proposed facility. Once permitted, Secure Energy would then plan to begin construction with the goal of being in operation by the end of 2008.