In the Northwest Martin Tobias CEO & Chairman, Imperium Renewables Biofuels.

in the Northwest

Martin TobiasCEO & Chairman, Imperium Renewables

Biofuels

What are biofuels?

• Alternative fuels made from agricultural products such as palm, soy, canola, corn, sugarcane, and even animal fats and fish oil

• An important step toward energy independence

• Opportunity to increase value of local crop lands and reduce the need for single source energy

• Simplest way to reduce greenhouse gas emissions right now

Biodiesel vs. Ethanol

Sources: National Biodiesel Board, Governors’ Ethanol Coalition, USDA

Compatibility Diesel engines Gasoline engines

Feedstock Oil-seed crops (soy, canola), waste oils

Sugars (beet or cane), grains (wheat, corn)

Yield per acre (gallons) Soy: 55 Corn: 420

Reduction in greenhouse gas emissions (vs. petrol.)

41% 12%

2005 US production (million gallons)

75 3,900

Net energy gain 220% 24%

Environmental benefits

• Net zero CO2 emissions

◦ Burning fossil fuels introduces new carbon into the atmosphere.

◦ Burning biofuel just re-releases the carbon absorbed by the plant (feedstock) during its lifetime.

• Significant reductions in:

◦ Particulate matter

◦ Volatile organic compounds

◦ Carbon Monoxide

Greenhouse Gas Emissions per Mile, Passenger Car

Spotlight on the Northwest

StateDiesel

consumptionGasoline

consumptionBiodiesel

productionEthanol

production

Oregon 818 217 1 108Washington 1,248 446 5 0Idaho 423 39 0 0Alaska 592 65 0 0

(All in million gallons per year.)

Growing demand for biodiesel

Five states have enacted Renewable Fuel Standards, and another six are in process. Highlights include:

By 2010, these mandates alone will require the use of over 73 million gallons of biodiesel each year.

• Washington - Starting in 2007, all diesel sold retail must contain 2% biodiesel; expected to increase to 5% by 2009.

• Portland, OR - Starting 7/1/2007, all diesel sold in the city must be 5% biodiesel; in 2010, that increases to 10%.

Potential production of ethanol in the NWThe Northwest is not a major corn or soy producer, but it does have abundant cellulose that could be used as feedstock for ethanol without planting any new crops.

Sources: Sustainable Industries Journal, CH2M Hill

• Wheat field residues, often burned after harvest, could instead be used for cellulosic ethanol production.

• Washington wheat fields alone have immediate potential to supply 300 million gallons per year from wheat residues.

• The inland Northwest is also good growing country for switchgrass, a prairie perennial grass energy crop.

• Oregon produces almost 4.5 million tons of forest residue per year as part of forest-thinning efforts. And about 62,000 tons of sawmill waste are sent to Oregon landfills each year.

Potential production of biodiesel in the NW

Currently, we have a Catch-22: the growth of local markets for canola is inhibited by a lack of local production, which doesn’t exist because there is no local market. However:

• Canola is an excellent rotation crop for wheat in Oregon, and also provides an alternative to the fluctuations of wheat prices.

• As federal and state incentives continue, more producers will be willing to build ethanol and biodiesel plants, which may not otherwise be profitable.

• Other biodiesel feedstocks are available from international growers until the Northwest can produce the necessary quantity at a viable price.

It Takes a Village…

Source: Morgan Stanley Research

About Imperium Renewables

• Northwest’s first commercial (5 million gallons a year) refinery.

• Founded by John Plaza in late 2003 as Seattle Biodiesel.

• Privately funded by the founders as well as leading venture capital firms including Nth Power, Technology Partners and Vulcan Capital.

• Building 100 million gallon biodiesel plant (the nation’s largest) in Grays Harbor, Washington.

• The company expects to begin production at the plant in 2007 and have 400 million gallons of capacity on line by fourth quarter 2008.

Any Questions?