1. Biodiesel: A Healthy And Flexible Alternative to Petroleum Diesel

2. Biodiesel: A General Definition  Biodiesel is not raw vegetable oil. It is produced by a chemical process that removes glycerin from the oil.  Biodiesel is a domestic, renewable fuel for diesel engines derived from natural oils such as soybean oil or recycled cooking oil that meets the specifications of ASTM D 6751.  Biodiesel is registered with the U.S. EPA as a legal fuel and has completed rigorous Tier I and Tier II Health Effects Testing.  Biodiesel can be used in any concentration with petroleum- based diesel fuel in existing diesel engines with little or no modification.

3. Biodiesel Production 100 lbs. of soybean oil + 10 lbs. methanol = 100 lbs. soy biodiesel (B100) + 10 lbs. of glycerin

4. Describing Biodiesel Blends B100 = 100% Biodiesel B20B20 = 80% Petroleum Diesel / 20% Biodiesel –1500 gallons B100 + 6000 gallons petroleum = B20 Transport Load B5 – 95% Petroleum Diesel / 5% Biodiesel

5. Biodiesel is a simple and effective alternative to Petroleum Diesel Reduces harmful emissions Runs in diesel engines with no modifications. Uses existing fueling infrastructure. Meets Federal Standards Reduces petroleum dependence.

6. How Does Biodiesel Perform Compared to Petroleum Diesel Fuel? High Cetane (>50 vs. 42) Comparable BTU content (120,000 BTU/gal vs. 126,000) High lubricity (> 6000g vs 3100g SLBOCLE) Readily mixes with diesel Flashpoint exceeds 300 F

7. OEM Warranty

8. OEM Warranty (cont.)

9. What Is Driving the Switch to Biodiesel?

10. Why Biofuels Matter - The Distillate Gap

11. Diesel Exhaust and Health Diesel Exhaust contains fine matter called Particulate Matter (PM) and other air toxics that negatively impact health Children in and around school buses can be exposed to particulate concentrations that are 5 to 15 times higher than background levels Exposure to PM is associated with aggravated conditions of asthma and bronchitis in developing lungs. EPA has identified diesel exhaust as a probable human carcinogen.

12. Public Reaction

13. What to do with what we have? Diesel Power is THE prime mover for school buses.

14. Public Health Risk Reduction Lovelace Research Institute 211(b) test results NO pronounced toxicity at any level (B100) NO mortality or clinical abnormality NO neurotoxic or internal pathologic response NO adverse effect on fertility and reproductive systems Corroboration of Tier I findings concerning decreased mutagenicity activity in living organisms

15. 0246810 Tier I Health Effects Data supplied by SWRI, 1997-8

16. Emissions Reductions B20 emissions reductions compared to petroleum diesel: –Carbon monoxide -20% –Unburned hydrocarbons-30% –Particulate matter -22% –Sulfates-20% –NPAH-50% –Mutagenicity-20%

17. US EPA 2006 ULSD Rule  How sulfur is removed from diesel fuel impacts its lubricity (hydrotreating)  Hydrotreating required to achieve the EPA mandated 15 ppm level for sulfur in on-road diesel fuel will cause a further reduction in the lubricity of the fuel (sulfur is known to “poison” the after-treatment devices required in 2007)  B100 is a sulfur-free fuel  Results of extensive testing (Stanadyne Automotive Corp.) have shown that low-levels of biodiesel (1-2%) provide the needed lubricity for use with ULSD  Fuel Injection Equipment manufacturers have an adopted limit of 460 micron wear scar diameter (WSD) – lower WSD better

18. Enhanced Lubricity  B2 has approx. 60% more lubricity than #2 Diesel

19. Federal Biodiesel Tax Credit  The new law took effect Jan. 1, 2005.  Creates a tax credit for biodiesel $1 per gallon tax credit for each gallon of pure biodiesel made from virgin oils derived from agricultural products and animal fats $.50 per gallon tax credit for each gallon of pure biodiesel made from other oils  All taxable gallons allow the credit to be claimed in both taxable and tax-exempt markets Tax-exempt fleet fuel programs Off-road diesel markets (dyed diesel) Heating oil, Boiler Fuel, Power Generation  Streamlines the use of biodiesel at the terminal rack The tax structure and credit will encourage petroleum blenders to blend biodiesel as far upstream as possible, which under the RFS or Minnesota’s 2% volume requirement will allow more biodiesel to be used in the marketplace

20. Who is using biodiesel?

21. WWW.WORLDENERGY.NET Southern U.S. 410 Pierce Street Houston, TX 77002 Tel 832-615-7390 martinb@worldenergy.net