IPAA Mid-Year Meeting Colorado Springs Colorado June 14

IPAA Mid-Year Meeting Colorado Springs, Colorado June 14, 2004

Plains All American Profile (NYSE: PAA) Operational Metrics Aggregate Size ö ö ö Annual Revenue (2003) Total Assets (3/31/04) Enterprise Value Equity Market Cap. 2003 Fortune 500 Rank # Unitholders (approx. ) $12. 6 B $2. 2 B $3. 0 B $2. 1 B 155 30, 000 ö ö ö -2 - Assets: Pipelines (miles) Tankage (MMbbls. ) Truck Fleet (units) 14, 000+ 36. 6 +/- 500 Crude handled (MMbpd) 2. 4 Approx. number of grades & varieties handled 50+ Geographic footprint: USA (states) Canada (provinces) Employees +/- 40 5 +/- 2, 000

PAA’s Role in the Crude Oil Distribution Chain Plains All American’s Operations Gathering, Marketing, Terminalling, Storage and Pipelines Producers Refiners Pipeline Truck Pipeline Gathering Injection Station Barge -3 - Terminal / Storage / Exchange Location

PAA’s Principal Business Strategy Paraphrased Excerpt Provide efficient solutions to the numerous complexities inherent in the crude oil industry and the regional crude oil supply and demand imbalances that exist in the U. S. and Canada……. . -4 -

Is the U. S. Running Out of Oil?

News Flash The United States: l Comprises < 5% of World Population l Generates ~ 10% of World Petroleum Production l Consumes ~ 25% of World Petroleum Production l Currently Imports ~62% of Its’ Daily Crude Oil Consumption -6 -

Accordingly, in practical terms, the U. S. issue is already resolved. The remaining question is: World Is the U. S. Running Out of Oil?

A Popular Topic, but No Clear Public Consensus “Enough oil to last for 500 years. ” “We’re draining our reserves dry. ” Houston Chronicle May 30, 2004 Llewellyn King H. Sterling Burnett Chairman & CEO Senior Fellow King Publishing Co. National Center for Publisher for: Policy Analysis White House Weekly & Energy Daily -8 -

GLA Working Hypothesis: NO Why Not? l Free markets work. l Changing unit economics impact both supply and demand. l There are significant, recoverable crude oil resources remaining – at the right price. -9 -

Free Markets At Work: Sample Factors Impact of Rising Prices Impact of Low Prices • Conservation & Demand destruction • Unrestrained use & Demand stimulation • Fuel switching • Reserve & production expansion • Reserve & production contraction • Increase in service costs • Pressure on service costs • Innovation & technology are rewarded ($$$) • Low cost operators are rewarded ($$$) & technology advances -1010 -

Elasticity of Oil Supply and Demand United States Oil Consumption & Commodity Prices Texas Production Full Deregulation De ma nd De Price - Price Regulated Arab Embargo & U. S. Price Regulated ? ma nd De ma ice Pr Sources: EIA, BP, WTRG, Bloomberg, various. -1111 - nd

Audience Participation l l l Conservation Demand Destruction Lottery Tickets -1212 -

The Forecasts of Today Seldom Become the Reality of Tomorrow

Accuracy of the Market’s Vision on Prices Actual Price Forward Curve -1414 -

Economic Jaws of Inventory & Price – Leading Indicator or Symptomatic Result? U. S. Crude Oil Inventory vs Oil Price (The Last 10+ years) Source: Bloomberg -1515 -

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OK Greg, if it is that simple, why is it so hard to drive a consensus on the subject? Economic theories (and realities) are simple, but the inner workings of the oil industry are very complex.

How Complicated is the U. S. Crude Oil Industry? You be the judge.

The U. S. Demand Side of The Equation Volumes Approximate 2003 Daily Average (MMBLS) Oil Exports. 001 Other Liquids 0. 9 (1) Refined Products Imports Exports 2. 6 1. 0 Other Liquids 0. 1 Aggregate Output Oil Impor ts 9. 6 Crude Oil Refinery Input mestic Do 15. 3 uction Prod 5. 7 Mogas Total Refinery Input 16. 6 44% cial & ommer l 5. 2 C ria Indust Distillate 20% Output 17. 6 LPG 10% Jet 8% Resid 4% Other Stocks & Net Loss/Gain (0. 1) al enti id Res 0. 8 Transportation 13. 3 14% El NGPL Refinery Input 0. 4 (1) Source: EIA; BP; GLA estimates Processing Gain 1. 0 NGPL Direct Use & Blends 0. 7 -1919 - e Po ctri w c 0. 5 er

Additional Complicating Factors Affecting Supply, Demand & Product Slate l l l Changes in natural gas frac spreads affect availability of blendstock and raw products Seasonality (changing feedstock demands) Weather Transportation & scheduling logistics Competing fuels (natural gas, coal, etc. ) Restrictions on product specifications Product imports/exports Multiple varieties of crude Metals content Emmission issues Scheduled/Unscheduled downtime Etc. , etc. -2020 -

Additional Complicating Factors Affecting Supply, Demand & Product Slate l l l Changes in natural gas frac spreads affect availability of blendstock and raw products Seasonality (changing feedstock demands) Weather Transportation & scheduling logistics Competing fuels (natural gas, coal, etc. ) Restrictions on product specifications Product imports/exports Multiple varieties of crude Two areas of Metals content Emmission issues Focus. Scheduled/Unscheduled downtime Etc. , etc. -2121 -

Getting 9. 6 mmb/d of Oil to The U. S. Source: BP -2222 -

All Regions are Supply Deficient, but the Landlocked PADD II Region is the Focus Area for Transportation Petroleum Administration Defense Districts IV V (0. 2 mmb/d) (0. 8 mmb/d) II (1. 5 mmb/d) (2. 8 mmb/d) I III mmb/d (3. 9 mmb/d) Total Refinery Inputs 15. 3 Domestic Production 5. 7 Reliance on Imports 9. 6 -2323 -

U. S. Pipeline Infrastructure Designed to Displace Crude to Meet PADD II Demand IV Inter-PADD Movements Driven Primarily by Economics of: II V I • Transportation differentials III • Quality issues (intergrade surplus/shortage & refinery constraints) -2424 -

PADD II Demand to Be Satisfied by Imports from Canada, Cushing & Gulf Coast PADD II Supply Shortfall (Millions of Barrels per Day) Refinery Inputs: 3. 3 MMbbls Supply Shortfall 2. 8 MMbbls Production: . 46 MMbbls Source: Energy Information Administration IV II V I III BP Pipeline PAA Basin Pipeline STG Pipeline Link Pipeline PAA Red River Pipeline Seaway Pipeline Mid-Continent (Sun) Pipeline BP Pipeline Shell (W. Tulsa) Pipeline Cush-Po Phillips Borger Pipeline Mid-Continent Pipeline Osage Pipeline Ozark Pipeline Gulf of Mexico Foreign Imports -2525 - Capline Pipeline System

Multiple Crude Grades Add to Complexity Foreign Sweet Sour Domestic Sour Sweet Bonny Light Spraberry W. Tx. Sour Scurry Poseidon Brent W. Tx. Int. Mars Blend Brass River Okla. Sweet Okla. Sour Oseburg Kansas Sweet West Coast OCS Gullfaks N. TX Sweet Sunniland Cano Limon East TX Sweet W. Central TX Light LA Sweet Quitman Sour Cuisana Heavy LA Sweet San Joaquin Light. Forties San Joaquin Heavy Eugene Island Bonita -2626 - Mesa 30 Oriente Maya Arab Medium Furiel Leona 24 Arab Heavy Mesa 28 Lago Cinco Olmeca Basrah BCF 17

Not All Crude Oil Is Equal Gross Product Value in $/bbl $43. 31 10% $39. 59 32% 45% 38% 45% 30% Note: Values shown are approximate based on estimated yields and Platts’ indicated values on June 8, 2004. -2727 -

Variations in Selected Domestic Differentials to WTI -2828 -

Variations in Selected Canadian Differentials to WTI -2929 -

Example of an Impending Complication: Storm Clouds Forming or Light Shower? Situation: A. U. S. market is currently balanced with foreign waterborne imports. B. Canada is projected to ramp up oil sands production ~500, 000 b/d+ C. U. S. GOM is projected to ramp up deepwater production ~500, 000 b/d+ D. U. S. demand is not projected to simultaneously grow by 1 million b/d. E. Mideast Politcs are highly unstable. -3030 -

Example of an Impending Complication: Storm Clouds Forming or Light Shower? Continued. Possible Outcomes: 1. The U. S. begins exporting over 500, 000 b/d. 2. U. S. producers shut-in over 500, 000 b/d or reduce drilling activities (at ~ $40. 00/bo) to make room for incremental volumes. 3. Foreign sources of waterborne imports happily withdraw 500, 000 b/d from the market (thus losing market share in the world’s most critical market? ). 4. Inventories begin to build; price pressure hits the U. S. market and competition among grades and qualities intensifies. 5. Something unexpected happens to balance the market (strike, Mideast disturbance, explosion in demand, etc. ) 6. Some combination of all of the foregoing -3131 -

Chinese Proverb (Curse): “May you live in interesting times. ” Oil Industry Prediction (Challenge): “We are going to be living in interesting times. ”

GLA View is that both statements are correct, with slight editing…. , if the price is high enough. Cheap GLA Edit “We’re draining our ^ reserves dry. ” “Enough oil to last for 500 years. ” Houston Chronicle May 30, 2004 Llewellyn King H. Sterling Burnett Chairman & CEO Senior Fellow King Publishing Co. National Center for Publisher for: Policy Analysis ^ White House Weekly & Energy Daily -3333 -

World Is the U. S. Running Out of Oil? Not any time soon… …, but it could get REAL expensive.

NYSE: PAA Except for the historical information contained herein, the matters discussed in this presentation are forward-looking statements that include risks and uncertainties. These risks and uncertainties include, among other things, market conditions, governmental regulations and other factors discussed in Plains All American Pipeline, L. P. ’s filings with the Securities and Exchange Commission.