Oil and Gas Industry Presentation Activities, GHG Emission Sources, and Potential Reductions January 14, 2009

Upstream Drilling, Workovers, and Completions Production Operations Construction Final Well Abandonment Maintenance Midstream Gathering Systems Processing Plants Treatment Plants Downstream Refineries Transportation Terminals

Pad Construction and Interim Reclamation Construct pad to fit rig activity and fulfill permit conditions Construct pad to fit rig activity and fulfill permit conditions Perform Interim reclamation upon conclusion of rig and completion activity Perform Interim reclamation upon conclusion of rig and completion activity

Pad Construction and Interim Reclamation Construct pad to fit rig activity and fulfill permit conditions Construct pad to fit rig activity and fulfill permit conditions Perform Interim reclamation upon conclusion of rig and completion activity Perform Interim reclamation upon conclusion of rig and completion activity POTENTIAL GHG EMISSIONS Combustion of Diesel Fuel from earthmoving equipment Transportation of Equipment to Wellsite

Drilling, Workovers, and Recompletions New well drilling New well drilling Tubing repairs Tubing repairs Restimulation Restimulation Downhole pump failure Downhole pump failure Complete well to a new formation Complete well to a new formation Scale in tubing Scale in tubing

Drilling, Workovers, Completions, and Recompletions New Well Drilling New Well Drilling Tubing Repairs Tubing Repairs Restimulation Restimulation Downhole pump failure Downhole pump failure Complete well to a new formation Complete well to a new formation Scale in tubing Scale in tubing POTENTIAL GHG EMISSIONS Combustion of Diesel Fuel on Rigs Transportation of Equipment to Wellsite Well Completions Fracture Stimulation Well Completions Venting

Production Facility Wellsite Setups Setting tanks, separator, compressor, inlet scrubbers, line heaters, etc. Setting tanks, separator, compressor, inlet scrubbers, line heaters, etc. Installing piping to connect various equipment Installing piping to connect various equipment Connecting meter station Connecting meter station

Production Facility Wellsite Setups Setting tanks, separator, compressor, inlet scrubbers, line heaters, etc. Setting tanks, separator, compressor, inlet scrubbers, line heaters, etc. Installing piping to connect various equipment Installing piping to connect various equipment Connecting meter station Connecting meter station Cathodic Well installation Cathodic Well installation POTENTIAL GHG EMISSIONS Equipment Purging – CO2, Methane Vehicle exhaust

Production Operations Gas, oil, and/or condensate production Gas, oil, and/or condensate production Unloading wellbore fluids Unloading wellbore fluids Crude Oil and Produced Water Transport Crude Oil and Produced Water Transport Artificial Lift Artificial Lift

Production Operations Gas, oil, and/or condensate production Gas, oil, and/or condensate production Unloading wellbore fluids Unloading wellbore fluids Crude Oil and Produced Water Transport Crude Oil and Produced Water Transport Artificial Lift Artificial Lift POTENTIAL GHG EMISSIONS Tank Emissions – Flash of Methane and CO 2 Tank Truck Emissions – CO 2 Well Emissions – Fugitive losses Engine Exhaust – CO 2 Heater Exhaust – CO 2 Well Venting – Manual and Automatic Pneumatic Controllers – Methane and CO 2

Production Facility Satellite Facility Operations Centralized Tank Batteries. Centralized Tank Batteries. Compressor Stations or Central Delivery Points Compressor Stations or Central Delivery Points Saltwater Disposal Facilities Saltwater Disposal Facilities

Production Facility Satellite Facility Setups Centralized Tank Batteries. Centralized Tank Batteries. Compressor Stations or Central Delivery Points Compressor Stations or Central Delivery Points Saltwater Disposal Facilities Saltwater Disposal Facilities Pig Launchers & Catchers Pig Launchers & Catchers POTENTIAL GHG EMISSIONS Tank emissions – should be minimal Engine Exhaust – CO 2 Heater Exhaust – CO 2 Pigging Activities – Methane and CO 2

Plugging and Abandonment Plug Wellbore Plug Wellbore Pull Facilities Pull Facilities Recontour well pad Recontour well pad Remove unneeded roads Remove unneeded roads Revegetation Revegetation

Plugging and Abandonment Plug Wellbore Plug Wellbore Pull Facilities Pull Facilities Recontour well pad Recontour well pad Remove unneeded roads Remove unneeded roads Revegetation Revegetation POTENTIAL GHG EMISSIONS Engine Exhaust – CO 2 Well Venting – should be minimal

Gathering Systems Compressor Stations Compressor Stations Engines Engines Dehydration units Dehydration units Tanks Tanks Heaters Heaters Pig launcher/receivers Pig launcher/receivers Pipelines Pipelines Pig launcher/receivers Pig launcher/receivers POTENTIAL GHG EMISSIONS Tank emissions – should be minimal Engine Exhaust – CO2 Heater Exhaust – CO2 Pigging Activities – Methane and CO2 Pipeline Leaks – Methane and CO2

Processing Plants Recovery of condensable natural gas liquids from conventional gas (i.e, butane, propane, etc.) Recovery of condensable natural gas liquids from conventional gas (i.e, butane, propane, etc.) Pumps, turbines, compressors, dehydrators, flare etc. Pumps, turbines, compressors, dehydrators, flare etc. POTENTIAL GHG EMISSIONS Tank emissions – should be minimal Engine Exhaust – CO2 Heater Exhaust – CO2 Dehydration – None if dessicant system; Methane & CO 2 if glycol. Pipeline Leaks – Methane and CO2 Flare – CO 2 Compression Liquids Recovery Dehydration Field Gas & Compressor Stations To Distribution Line Turbines

Treating Plants Removal of entrained CO2 from natural gas Removal of entrained CO2 from natural gas Compressors, dehydrators, heaters, etc. Compressors, dehydrators, heaters, etc. POTENTIAL GHG EMISSIONS Direct CO2 venting – CO2 Tank emissions – should be minimal Engine Exhaust – CO2 Heater Exhaust – CO2 Pigging Activities – Methane and CO2 Compression CO2 Removal Dehydration Field Gas & Compressor Stations To Distribution Line Natural Gas Treating Plant

GHG Reduction Strategies Upstream Engine Strategies Engine Strategies Heater Strategies Heater Strategies Completion Strategies Completion Strategies Venting Strategies Venting Strategies Other Strategies Other Strategies

Engine GHG Emission Reductions Optimization of horsepower Optimization of horsepower

Heater GHG Emission Reductions Insulation of vessels Insulation of vessels Pilotless firing units Pilotless firing units

Completion GHG Emission Reductions Flaring vs Venting Flaring vs Venting Green Completions Green Completions

Venting GHG Emission Reductions Low-bleed pneumatics Low-bleed pneumatics Dehydrator optimization Dehydrator optimization Plunger lift optimization Plunger lift optimization Solar chemical pumps Solar chemical pumps No-bleed Pilots. The pneumatic controller can be equipped with one of three types of no-bleed pilots: a snap pilot, throttling pilot, or patented Envirosavefpilot.

Other GHG Emission Reductions Produced Water Management Produced Water Management Electrical motors where power has low carbon footprint Electrical motors where power has low carbon footprint Well Automation Well Automation