Natural Gas: A Conventional Fuel as an Unconventional Answer

January 14, 2010

A Conventional Fuel as an Unconventional AnswerJim Hackett – Chairman, President and CEO

2January 14, 2010

ENERGY FOR AMERICA

AbundantDomesticCleanAffordableJobs

Abundant

3January 14, 2010

2,074.1TCF OF FUTURENAT GAS SUPPLY

58%INCREASE IN THE PAST 4 YEARS

POTENTIAL GAS COMMITTEE REPORT, JUNE 2009

COALBED GAS RESOURCESTRADITIONAL GAS RESOURCES

SHALE GAS (615.9 TCF)

TOTAL POTENTIAL RESOURCES (VALUES, TCF)

1,836.4 TcfINCREASE INTHE PAST 4 YEARS

237.7 TcfPROVED RESERVES

NATURAL GAS: AN ABUNDANT RESOURCE

4January 14, 2010

TCF

/ YEA

R

UNCONVENTIONALINCLUDES NATURAL GAS FROM SHALE FORMATIONS, COAL SEAMS AND TIGHT SAND

UNCONVENTIONAL GAS: A GAME CHANGER

5January 14, 2010

ENERGY FOR AMERICA

AbundantDomesticCleanAffordableJobs

Domestic

6January 14, 2010

U.S. ENERGY INFORMATION ADMINISTRATION

32 OF 50STATES HAVE PRODUCTION

85%SUPPLY FROM U.S.

97%SUPPLY FROM NO. AMERICA

NATURAL GAS PRODUCING STATES

7January 14, 2010

Cody

PierreFayettevilleFayetteville

HaynesvilleHaynesville

Eagleford/Pearsall

Horn River

Montney

Deep Basin Colorado Group

Mowry

Gammon

Bakken

Baxter/MancosBaxter/Mancos

MancosMancos

Barnett/Woodford

Barnett

MulkyNew Albany

Antrim

Marcellus/Ohio/HuronMarcellus/Ohio/Huron

Utica

Woodford

Floyd-Neal

NiobraraNiobrara

Lewis

SHALE PLAYS IN NORTH AMERICA

8January 14, 2010

ENERGY FOR AMERICA

AbundantDomesticCleanAffordableJobs

Clean

9January 14, 2010

NATURAL GASWIND / SOLARVIABLERENEWABLEENERGY MIX

NATURAL GAS IS CLEANER

10January 14, 2010

TYPICAL EMISSIONS FOR COAL-FIRED, OIL-FIRED, AND NATURAL GAS GENERATING PLANTS (POUNDS PER MEGAWATT-HOUR)

U.S. ENERGY INFORMATION ADMINISTRATION, “NATURAL GAS ISSUES AND TRENDS,” 1998. �COMPUTED USING EIA DATE BASED ON THE FOLLOWING CONDITIONS: �A. COMBINED CYCLE (GAS/STEAM TURBINE PLANT) HEAT RATE OF 6,500 BTU/KW-HOUR (THERMAL EFFICIENCY=52.2%)B. SIMPLE CYCLE (GAS TURBINE PLANT) HEAT RATE OF 9,750 BTU/KW-HOUR (THERMAL EFFICIENCY=35.0%)

NATURAL GAS IS CLEANER

11January 14, 2010

WE NEED MORE NATURAL GAS VEHICLES (NGVs)

12January 14, 2010

THE NGV OPPORTUNITY

The transportation sector accounts for 30% of U.S. CO2 emissions.

Converting one heavy-duty truck from diesel to natural gas is the pollution-reduction equivalent of removing 325 cars from the road.

There are more than 10 million NGVs worldwide, with only about 120,000 in the U.S. – ranking us 12th

in the world.

13January 14, 2010

ENERGY FOR AMERICA

AbundantDomesticCleanAffordableJobsAffordable

14January 14, 2010

REDUCING VOLATILITY THROUGH GREATER SUPPLY

NO SPIKE FROM IKE

PRICE SPIKEPRICE SPIKE FROMKATRINA & RITA

15January 14, 2010

ENERGY FOR AMERICA

AbundantDomesticCleanAffordableJobsJobs

16January 14, 2010

2.8 MILLION2008 TOTALEMPLOYMENT

2.6 MILLION2007 TOTALEMPLOYMENT

2.4 MILLION2006 TOTALEMPLOYMENT

NATURAL GAS STRENGTHENS THE U.S. ECONOMY

17January 14, 2010

WE NEED YOU INVOLVED

18January 14, 2010

PRIMARY ENERGY CONSUMPTION BY SOURCE & SECTOR, 2008 (Quadrillion Btu)

37.1PETROLEUM

23.8NATURAL GAS

22.5COAL

7.3RENEWABLE ENERGY(Including hydro ~5%)

27.8TRANSPORTATION

20.6INDUSTRIAL

10.8RESIDENTIAL

& COMMERCIAL

40.1ELECTRIC

POWER

8.5NUCLEAR

SUPPLYSOURCES

% OF SOURCE

% OF SECTOR

DEMANDSECTORS

ENERGY INFORMATION ADMINISTRATION, ANNUAL ENERGY REVIEW, 2008

WE NEED A DIVERSIFIED ENERGY PORTFOLIO

19January 14, 2010

Total 4,157 Billion kWhElectric Utility Plants 60.2%Independent Power Producers and Combined Heat & Power Plants 39.8%

WE NEED CLEANER ELECTRICITY GENERATION

1.6

20January 14, 2010

22.8% 68.5%

WE NEED TO SWITCH TODAY

21January 14, 2010

U.S. ENERGY INFORMATION ADMINISTRATION

32GOVERNORS

64SENATORS

324MEMBERS OF CONGRESS

WE NEED CONSTRUCTIVE LEGISLATION

January 14, 2010

A Conventional Fuel as an Unconventional Answer for Climate

Change and National Security