ATC FLEET SEMINAR Presentation by: Jill Hamilton, President Sustainable Energy Strategies, Inc

Overview National Ethanol Issues: RFS National Ethanol Issues: RFS Regional E10 Situation Regional E10 Situation Regional E85 Program Regional E85 Program Contact Info Contact Info

What is RFS? Energy bill eliminated Oxygenate requirement Energy bill eliminated Oxygenate requirement Replaced it with a RFS Replaced it with a RFS Program to displace 10% of US petroleum use with renewables by 2014 Program to displace 10% of US petroleum use with renewables by 2014 Congress did not include an MTBE liability waiver, creating a demand for ethanol and biodiesel Congress did not include an MTBE liability waiver, creating a demand for ethanol and biodiesel

What do that mean for… Production Production Yield of Corn Yield of Corn Economic Impact Economic Impact Energy Security Energy Security

Production What Impact will RFS mean in terms of production needs? RFS requires 8 billion gallons of ethanol annually by RFS requires 8 billion gallons of ethanol annually by Our current capacity is 3.6 billion gal/day Our current capacity is 3.6 billion gal/day In 2004, ethanol industry produced 3.4 billion gal/day In 2004, ethanol industry produced 3.4 billion gal/day This was up 100% from 2002 This was up 100% from 2002

Corn Yield We will need 5.5 billion bu of corn by 2014 based on 2005 yields We will need 5.5 billion bu of corn by 2014 based on 2005 yields Yields are projected to increased from 2.9 gal/bu…3.36 by 2014 Yields are projected to increased from 2.9 gal/bu…3.36 by 2014 Corn for ethanol is expected to increase from 15% to 40% of market share Corn for ethanol is expected to increase from 15% to 40% of market share

Economic Impact of RFS $6 billion to build 4.3 billion gal. capacity $6 billion to build 4.3 billion gal. capacity $70 billion on goods and services to get to 8 million gallons of capacity $70 billion on goods and services to get to 8 million gallons of capacity $200 billion in indirect $200 billion in indirect $43 billion in household income $43 billion in household income Create 234,840 new jobs Create 234,840 new jobs

Energy Security Will displace 2.13 billion bbl of crude oil by 2012 Will displace 2.13 billion bbl of crude oil by 2012 Will reduce US dollars to foreign producers by $64.1 billion between Will reduce US dollars to foreign producers by $64.1 billion between Foreign oil sales to be reduced by an estimated 62%-67% Foreign oil sales to be reduced by an estimated 62%-67%

DC Baltimore Area

E10 Has Arrived MD, VA and DC blend 100% E10 MD, VA and DC blend 100% E10 Ethanol can be railed and barged into Baltimore Ethanol can be railed and barged into Baltimore All being used for the E10 market All being used for the E10 market Being shipped to Virginia and DC Being shipped to Virginia and DC

Public E85 Stations Pentagon Citgo on Joyce Street Pentagon Citgo on Joyce Street Ft. Meade Chevron in Laurel Ft. Meade Chevron in Laurel Montgomery County in Gaithersburg Montgomery County in Gaithersburg Annapolis Citgo on West Street Annapolis Citgo on West Street DC Fleet Maintenance on New Jersey Avenue DC Fleet Maintenance on New Jersey Avenue

E85 Increased Sales Tri-State Area: ~ 400,000 gallons of E85, Tri-State Area: ~ 400,000 gallons of E85, 42 percent increase in E85 fuel sales from last year 42 percent increase in E85 fuel sales from last year ’06 to be over 500,000 ’06 to be over 500,000

Promotion of E85 Dispenser Signage Dispenser Signage Highway Road Signs Highway Road Signs Targeted Coupon Program Targeted Coupon Program Radio Advertising Radio Advertising

Characteristics Octane E85: 100-plus octane (as high as 105)Octane E85: 100-plus octane (as high as 105) Lower heating value (27% less energy)Lower heating value (27% less energy) Non-toxic, pleasant smellNon-toxic, pleasant smell Handling: treat same as gasoline (blended with gasoline)Handling: treat same as gasoline (blended with gasoline) Dispensing: Aluminum replace with stainless steel, nickel plated components, 1 micron filterDispensing: Aluminum replace with stainless steel, nickel plated components, 1 micron filter

Highway Road Signs

Before and After Dispenser

Coupon We had targeted 6600 vehicle drivers We had targeted 6600 vehicle drivers Mailed a sample to 2200 Mailed a sample to 2200 Poor response to coupon Poor response to coupon But, incredible response to lower price of E85 vs. gasoline so the promotion did impact consumers! But, incredible response to lower price of E85 vs. gasoline so the promotion did impact consumers!

WRNR Two months of tag lines (250 promos)Two months of tag lines (250 promos) Ethanol Minutes (66)Ethanol Minutes (66) Gas give-aways (60)Gas give-aways (60) On-site radio spotOn-site radio spot Two hours of gas sold at $1.03Two hours of gas sold at $1.03

WRNR Advertising Picture of $103.1 day. Picture of $103.1 day.

Customers that heard the E85 AD

E85 Sign

WHAT’S AHEAD IN 2006 Baltimore Station Opening Baltimore Station Opening UMD - College Park Contract Signed UMD - College Park Contract Signed Continued Marketing and Advertising Continued Marketing and Advertising GM – Live Green Go Yellow – TrailerGM – Live Green Go Yellow – Trailer Looking for partner to do another radio adLooking for partner to do another radio ad Continue to support OEMs Continue to support OEMs Seeking potential E85 locations Seeking potential E85 locations

Resources MD Grain Producers: marylandgrain.com MD Grain Producers: marylandgrain.com National Ethanol Vehicle Coalition: National Ethanol Vehicle Coalition: / E85fuel.com / E85fuel.com National Corn Growers Association: National Corn Growers Association: Sustainable Energy Strategies, Inc: Sustainable Energy Strategies, Inc: