1. Potential Development of United States Oil Shale Resources March 28, 2007 Khosrow Biglarbigi INTEK, INC. INTEK Presented at the 2007 EIA Energy Outlook Conference, Washington, D.C.

2. 2 Key Discussion Items Importance of shale oil Size and quality of resource State of the technology Economics Environmental challenges –Land use –Air quality –Water quality Path forward

3. 3 World Oil Supply and Demand Growing World Demand Diminishing OPEC Excess Capacity Source: Energy Information Administration (AEO 2006) Million Bbl/D Demand Growth of 15MMBbl/D (by 2025) OPEC Excess Capacity of 1 MMBbl/D (in 2005) Where Would the Balance Come From?

4. 4 Reason for Concern at Home: Ever Rising Oil & Refined Products Imports U.S. Production* U.S. ConsumptionImports * Includes crude, NGLs, and refinery gains

5. 5 The Opportunity: Most Concentrated Hydrocarbon Deposits on Earth Over 6 trillion barrels of resource nationwide Nearly 2 trillion barrels in rich deposits in Western states Colorado, Utah, and Wyoming

6. 6 Western Oil Shale Ownership (80% on Federal Lands) 990 220 170 210 60 90 0 200 400 600 800 1000 1200 1400 COUTWY Federal Non - Federal Resource (Billion Barrels)

7. 7 Oil Shale Conversion Technology Ore Mining Retorting Oil Upgrading Resource Premium Refinery Feed In-Situ Conversion Oil Upgrading Resource Premium Refinery Feed Surface Process In-Situ Process

8. 8 Key Present Activities Department of the Interior (DOI) –RD&D leasing program –Commercial leasing program Industry activities Unconventional Fuels Task Force –EPACT 2005 –Section 369

9. 9 Leasing Program DOI awarded five (5) RD&D leases in 2006 –Shell Frontier –Chevron U.S.A. –EGL Resources A sixth lease is being finalized for award (OSEC LLC) Lease size and duration: –Initially, 160 acres (per) –Option to expand to 5,120 acres (if technology is successful) –The RD&D phase is for ten (10) years Development of commercial leasing program underway –PEIS to be released by late summer

10. 10 Location of Oil Shale R&D Leases

11. 11 Example In-Situ Conversion Technology Developed by Shell Petroleum Currently in “pilot” phase in north-western Colorado Shell to apply technology at three other sites in Colorado Shell’s ICP Process

12. 12 Other Examples of In-Situ Conversion Technology Chevron Process EGL Resources Process Pilot tests under development in Colorado

13. 13 Example Surface Retort Technology Initially designed for extracting bitumen from tar sands Selected for oil shale conversion in Australia (SPP) OSEC to apply ATP for its RD&D efforts in Utah Alberta Taciuk Processor (ATP)

14. 14 Other Surface Retort Technology Gas Combustion Retort Originally developed by –Cameron Engineering –Bureau of Mines Most successful –High thermal efficiency –High retort efficiency Variations of GCR –Petro-six operating in Brazil –Paraho Process being tested for a major project abroad

15. 15 Companies Planning Activities American Oil Production LLC Anadarko Petroleum Corp. Argyll Energy LLC Carbon Recovery Corp. Chattanooga Corp. Electro-Petroleum Inc. Exxon Mobil Corp. Great Western Energy LLC Imperial Petroleum Recovery Corp. Independent Energy Partners Inc. Kennecott Exploration Company Mountain West Energy Inc. Nevtah Capital Management Inc. Natural Soda Inc. Oil Tech Inc. Petro Probe Inc. Phoenix Wyoming Inc. Syntec Energy LLC Temple Mountain Energy Inc. Western Energy Partners LLC Red Leaf Purple Mountain Ventures Raytheon Board Energy LLC Earth Search Sciences Reynolds Raw Materials Wright & Talisman

16. 16 The Unconventional Fuels Task Force Federal agencies –Department of Energy –Department of Defense –Department of the Interior Participating states –Colorado –Kentucky –Mississippi –Utah –Wyoming

17. 17 The Energy Policy Act Directed The Strategic Unconventional Fuels Task Force to: Develop a program to coordinate and accelerate the commercial development of strategic unconventional fuels Make recommendations for promoting unconventional fuels development Recommend whether and how America should: –Partner with Alberta on development of U.S. tar sands, and –Partner with nations with significant oil shale resources Task force findings and reports coming soon

18. 18 Oil Shale Economics Cost as a function of technology and resource quality Expected to decrease with experience and lessons learned Canadian oil sands a good example: First Generation Projects *Inclusive of mining, retort, & upgrading * *

19. 19 Projected Production Potential (BOE) (Shale Oil in the U.S.) Base Tax Incentives RD&D

20. 20 Example Benefits of Oil Shale Development Cumulative (Over 25 Years) 1 – Federal Revenues are the sum of Federal Business Taxes plus Royalty payments 2 – State Revenues are the sum of State Business Taxes, production taxes, plus the state portion of Federal Royalty payments 3 – Public Sector Revenues are the sum of Direct Federal and Direct State Revenues

21. 21 Projected Potential Employment

22. 22 A New Model Developed by NPOSR

23. 23 Oil Shale Environmental Challenges Land Use –Disturbance depends on process –31 square miles per 1 MM Bbl/d capacity (surface) –21 square miles per 1.5 MM Bbl/d capacity (in-situ) –Less than 0.5% for a 2.5 MM Bbl/d industry –For 40 years Air Quality –Heating shale can generate gases including SO 2, NOx, CO 2, particulates, and water vapor –Technology exists to control / reduce emissions –And to sequester Green River Formation 17,000 Sq. mi.

24. 24 Environmental Challenges Water Impacts: –Estimates range from 1-3 barrels of water per barrel of shale oil –Colorado river systems flow: 10-22 million acre feet/yr 2.5 MM Bbl/d oil shale industry: –Requires 0.2-0.4 million acre feet/yr Challenge –Water runoffs (surface) –Ground water protection (in-situ)

25. 25 Summary Over 2 trillion barrels of in place resource The most concentrated hydrocarbon deposits on Earth Conversion technologies are advancing rapidly A unique opportunity to provide long term sustained production of up to 2.5 MMBbl/Day Substantial economic benefits to the Nation Requires concerted effort by the private sector, Federal & State governments, and local communities

26. 26 U.S. Department of Energy Office of Naval Petroleum & Oil Shale Reserves Office of Petroleum Reserves Task Force for Unconventional Fuels Department of Energy Department of Defense Department of the Interior State of Colorado State of Kentucky State of Mississippi State of Utah State of Wyoming Acknowledgements