Natural Gas The Carbon Light Energy Source Abundant

Natural Gas The Carbon Light Energy Source Abundant, Clean, Domestic Reduces air pollution, carbon emissions and our reliance on foreign oil

What to Look For What are policy aspirations? What is Natural Gas? How important is it as an energy source today? How much do we have? Can we increase production appreciably? Is it a clean energy source? Plans to achieve aspirations? Summary 2

What is the Green Energy Goal? Obama Administration Goal “ 25% of Electricity from Renewables by 2025” and A 14% reduction of GHG by 2020 Waxman-Markey Revised Goal “ 20% of Electricity from Renewables by 2025”, (also provides a 5% allowance for efficiency improvement) and A 17% reduction of GHG by 2020” What if we accomplished these Goals Today using Clean Burning Natural Gas? Note: Waxman-Markey passed the House, waiting on Senate approval 3

What is Natural Gas? Technically 96 -98% ……. CH 4 (Methane) It is NOT … Gasoline, Natural Gasoline, LPG, Propane, Butane, etc. 1 Carbon atom with 4 Hydrogen atoms around it § In Carbon based fuels it has the highest ratio of Hydrogen to Carbon § Highest energy content per carbon It is a gas at room temperature and a liquid at -258 deg. F It IS ……… Natural Gas, LNG, CNG 4

2008 US Energy Supply 107 Quads Total 5

How Much Natural Gas Do We Have? “Attainable potential is about 287 TCF of Natural Gas … … More than a hundred of our geologists and geophysicists contributed to this comprehensive study” JD Langston, VP Explor, Exxon Co, 1976 “Natural gas had it” John O’Leary, Federal Energy Administration, 1977 Cumulative Production since 1977 is 582 TCF Proven Remaining Reserves exceed 238 TCF All Sources Potential Reserves now exceed 2, 000 TCF 6

U. S. Gas Reserve Growth Gas Inventory in Years Wellhead De-Control Act First Barnett Large Water Fracs NGPA Regulation Total Potential Reserves Years of Production 7

U. S. Tight Gas and Shale Gas Plays Cody Bakken Mowry Hillard. Green Baxter. River Mancos Uinta Piceance Hermosa Lewis San Juan Pierre Antrim Utica Marcellus Niobrara Excello. Mulky Woodford New Albany Fayetteville Floyd Barnett. Woodford Haynesville 8

U. S. Gas Production Growth h M CB & Tig De cli ne s Sh ale as t. G w M Ne GO Pla ys Production Additions 9

US Natural Gas Production Growth For every 100 incremental Natural Gas Rigs Actively Drilling on a Continuous Basis: We can expect Gas Production to increase approximately 1 TCF per Year and We will also add over 100, 000 New Jobs! Source: CERI Annual Report 2007 -1 10

Is Natural Gas Clean? Cleanest-burning hydrocarbon fuel on the planet Combustion products are primarily CO 2 and Water Vapor Drilling for natural gas leaves a small footprint At Least 95% Cleaner than Alternative Fuels for Toxics

Where Does US Pollution Come From? Vehicles (On & Off Road) Utilities Oil and Gas Production 73% 58% 38% 66% 2. 3% CO (Carbon-Monoxide) ----------------- Reduces Pulmonary Function, small children, sick and elderly NOx & VOC (Nitrous. Oxide & Volatile Organics) --- Combine to form Ground Level Ozone which Reduces Pulmonary Function SO 2 (Sulfur Dioxide) ------------------- Acid Rain precursor and It smells like rotten eggs PM 10 (~ 10 Micron Dust) ---------------- Stays in Your Lungs, Reduces Pulmonary Function and causes Haze 12

Here’s a BIG Idea We can Achieve Stated US Goals for Clean and Domestically Sourced Energy for 25% of our Electricity generation NOW (Not in 2025!) simply by ………. . Shutting Down the 75 Worst Coal Fired Plants in the US Turning Up the EXISTING Natural Gas Combined Cycle Turbines Very Clean, Very Fuel Efficient, Under-Utilized And we don’t SPEND ANY $$Capital to Do It ! 13

Here’s Another BIG Idea We can use Natural Gas as Clean and Domestically Sourced Energy to Replace 25% of our Crude Oil Consumption by … Switching up to 33% of Vehicles to CNG (Compressed Natural Gas) Very Clean, Very Fuel Efficient, Very Economical 14

What Do We Need to Do? How Much Nat. Gas Production? Add Domestic Natural Gas Production of: 4. 6 TCF/YR to provide electricity Add another 8 TCF/YR to Offset 25% of Crude Oil How Do We Accomplish That? Put the 1, 000 “Layed Down” Gas Rigs back to Work Build or Re-Deploy 1200 New Gas Rigs Plus Create Up to 1. 2 Million New Jobs ! Source: Industry Production Trend Analysis, CERI Annual Study 2007 -1 15

Let’s Look at the Electric Power Sector

2008 US Fuel Use for Electricity Production 40. 7 Quads Total (25. 8 Quads Waste Heat) 17

How is Electricity Generated? 18

Pollutants – Electric Sector 19

Focus on the Worst Coal Plants There are 378 Large Coal fired Power Plants in the US 75 of the Worst Coal Plants in the US Emit : 55% of the SO 2 32% of the Mercury 38% of the NOx 26% of the CO 2 But provide only 14% of Total Electricity Majority were installed before 1970 – Old Technology Located in 22 States – primarily East of Mississippi “Locally” available Combined Cycle Natural Gas Turbine capacity to offset all 75 plants 20

75 Worst Coal Power Plants Percent of Total Pollution 1% 1 plant 0. 4% 1 plant 5% 3 plants 14% 8 plants 4% 2 plants Population < 1 million 1 -5 million 5 -10 million 10 -15 million > 15 million 0. 3% 1 plant 13% 3% 1% 1% 8% 9 plants 6% 4 plants 1 plant 8 plants 5 plants 2% 1% 3% 3 plants 1 plant 3 plants 7% 6 plants 3% 3 plants 2% 4 plants 8% 5% 1% 3 plants 6 plants 1 plant 1% 1 plant 21

A Plan to Replace 30% of Coal Alternative #1 – Utilize Existing Combined Cycle Gas Turbines Alternative #2 – Purchase Large Scale 2. 4 MW Wind Turbines 22

How Do the Alternatives Compare? FUEL / CAPITAL$ EMISSIONS 23

Let’s Look at the Crude Oil Photos provided by: MC Oil

Oil Supply vs Consumption Total Sector Comprises ~ 40 QUADS per Year 25

A Plan for Nat. Gas to Displace Crude Oil Over 54% of Total US Air Pollution results from Vehicles (On-Off Highway) The US Imports 65% of it’s Crude Oil (growing) 6 Million Bbls per day comes from OPEC countries 2008 Total Balance of Trade was -$816 Billion 2008 Value of Crude & Products was $447 Billion (55%) What if we replace 25% of Crude Oil with Natural Gas? 26

How Do We Do It? Need 8 Quads (~TCF) of incremental US supply Activate 800 Nat. Gas Drilling Rigs (800, 000 jobs) Convert up to 33% of vehicles to CNG (trucks too) Provide CNG filling stations to facilitate on highways This is a BIG Goal but Small Thinking Achieves Small Results 27

CNG (Compressed Natural Gas) CNG Filling Station – safe, easy, similar to gasoline filling 28

Expected Results Transportation Sector Offset 38% of Imported Oil with Natural Gas Reduce the Trade Deficit by $130 Billion annually (-21%) Save US consumers $73 billion in fuel costs annually Create 800, 000 new jobs Reduce total air pollution by nearly 30% Electric Power Sector Reduce SO 2 emissions by 55% Reduce Mercury emissions by 32% Reduce GHG emissions by 15% This is Huge! Note: Cost savings based upon EIA 2008 average Imported Oil ($96. 98/Bbl) and Citygate Gas ($7. 47/MCF) prices 29

Questions? Promote Nat. Gas as the Realistic Green Energy And Write Your Congressmen 30