Rentech's Future Turns a Lovely Shade of Green

"There is a common misconception that all coal is dirty," says Rentech CFO Merrick Kerr. "We want to show people that coal can be used in a clean and efficient way."

All of Rentech's operations are intended to reduce greenhouse gas emissions. "Rentech would not take part in a program unless there is a carbon-reduction program in place," says Julie Dawoodjee, director of investor relations at Rentech.

Rentech has patented an iron-based catalyst that is three times less expensive than the traditional cobalt catalyst used by other CTL players, according to Michael Tian, an analyst at Morningstar. While the company's strategy once relied on the licensing of its technology for profitability, it now wants to take the next step.

Its first move is to convert a fertilizer plant in East Dubuque, Ill., into the nation's first operational CTL plant. That will be a $900 million investment for Rentech, Kerr says. The company next plans to build a larger facility near Natchez, Miss., that would cost between $3 billion and $4 billion.

Rentech is also stepping out of the shadows by entering into savvy strategic partnerships. The first is with Denbury Resources (DNR Quote), a domestic mid-cap oil and gas exploration and production company that's on the forefront of carbon-sequestration technology.

Denbury has agreed to purchase and transport all captured carbon dioxide from the Natchez facility and reinject it into completed oil fields. The procedure pushes deep oil closer to the surface, allowing drillers to capture crude that has long been considered unrecoverable.