1. Rayola Dougher Senior Economic Analyst American Petroleum Institute dougherr@api.org

2. Our Priorities  Efficiency – improve our own and encourage efficiency in other industries and among consumers.  Technology – increase investments in and use of advanced energy technologies to develop all sources of energy cleanly and responsibly.  Diversity – increase access to oil and natural gas supplies both here at home and around the world. 2

3. Diesel, gasoline & crude oil prices 3

4. What consumers are paying for at the gasoline pump TAXES 31%16%53% Source: Average of gasoline components from January through June 2007 as reported by EIA Earnings from Oil Daily. EARNINGS 9.2% CRUDE OIL RE- TAIL- ING REFINING TAXES 52%21%11%16% 4

5. Second quarter earnings by industry (net income/sales) Sources: Based on company filings with the federal government as reported by U.S. Census Bureau and Oil Daily. 5

6. Who owns “Big Oil”? (Holdings of oil stocks, 2004) 6

7. Capital Spending Source: Oil and Gas Journal, April 2, 2007 7

8. U.S. Crude Oil Resources (undiscovered technically recoverable federal resources) Atlantic offshore 3.8 Bbl Lower 48, onshore 7 Bbl Gulf offshore/deepwater 44.9 Bbl Alaska onshore 18 Bbl Alaska offshore 26.6 Bbl Pacific offshore 10.5 Bbl Lower 48, onshore 7 Bbl Atlantic offshore 3.8 Bbl 112 billion barrels is enough oil to power over 60 million cars for 60 years AND heat over 25 million homes for 60 years. 8 Source: MMS, USGS, and API Calculations

9. U.S. Natural Gas Resources (undiscovered technically recoverable federal resources) Atlantic offshore 37 Tcf Gulf offshore 232.5 Tcf Alaska onshore 69 Tcf Alaska offshore 132 Tcf Pacific offshore 18.3 Tcf Lower 48, onshore 167 Tcf 656 trillion cubic feet is enough natural gas to heat 60 million homes for 160 years. 9 Source: MMS, USGS, and API Calculations

10. Number of refineries declines but capacity expands 10 Source: DOE

11. Environmental Expenditures since 1990 Source: API Statistics

12. Return on investment

13. Future U.S. Energy Demand  The U.S. will consume 28 percent more oil and 19 percent more natural gas in 2030 than in 2005. Source: EIA, AEO 2007 Natural Gas Petroleum Nuclear Coal Nonhydro renewables Hydropower ProjectionsHistory quadrillion Btu 13

14. Future U.S. Energy Demand  The U.S. will consume more energy even with efficiency improvements Source: US DOE 14

15. Forecast of U.S. Energy Growth Nuclear Renewables Coal 26% Oil 40% 7% Gas 21% 7% Oil Nuclear Coal Renewables Gas 23% 8% 40% 6% 23% (100 quads) (131 quads) 2005 Actual 2030 Outlook 31% Growth (1.1%/yr.) Source: EIA, AEO2007 15

16. U.S. Corn Use 2006-2007 Source: USDA 16

17. 12% (Energy Content) U.S. gasoline supply The limits of ethanol If all US corn acreage was used for ethanol In a July 12, 2006 University of Minnesota biofuels energy, environment, andeconomic study the authors found that using the entire US 2005 corn supplywould have 'offset' only 12% of gasoline supply

18. Oil & Gas Companies $98 billion (73%) Other Private Federal Government Frontier Hydrocarbons End Use Non Hydrocarbons $32 billion (23%) $89 billion (66%) $31 billion (23%) $15 billion (11%) $5 billion (4%) By Technology By Investor $135 Billion Technology – Our Industry’s Investments (2000-2005) 18 Source: IER and CEE

19. Leading emerging energy investments by U.S. firms (2000-2005) 19

20. Future Global Energy Demand  Global energy demand will increase by more than 50 percent between now and 2030. Source: IEA 20

21. The Myth of “Big Oil”  The total amount of proven oil reserves held by all investor- owned oil companies (IOCs) is just 6 percent.  Almost 80 percent is exclusively controlled by foreign national oil companies (NOCs). J. Robinson West Chairman, PFC Energy: 9/21/05 21

22. 2005 Largest Oil Companies Based on Reserves Source: Oil and Gas Journal

23. U.S. Supplies of Crude and Products EIA, Petroleum Supply Monthly, May 2007 23 Other countries include: United Kingdom, Kuwait, Ecuador, Brazil, Norway, Korea-South, Aruba, Trinidad and Tobago, Columbia, Libya, Argentina, Chad, Germany, Equatorial Guinea, France,Gabon, Belgium, Sweden, Indonesia, Finland, Vietnam, Estonia, Yemen, Brunei, Italy, Lithuania, Cameroon, Malaysia, Latvia, Portugal, China, Netherlands, Oman, United Arab Emirates,Denmark, India, and Bahrain.

24. U.S. Imports of Crude and Products Other countries include: United Kingdom, Kuwait, Ecuador, Brazil, Norway, Korea-South, Aruba, Trinidad and Tobago, Columbia, Libya, Argentina, Chad, Germany, Equatorial Guinea, France,Gabon, Belgium, Sweden, Indonesia, Finland, Vietnam, Estonia, Yemen, Brunei, Italy, Lithuania, Cameroon, Malaysia, Latvia, Portugal, China, Netherlands, Oman, United Arab Emirates,Denmark, India, and Bahrain. EIA, Petroleum Supply Monthly, May 2007

25. Energy Policy Perspectives  Encourage energy efficiency  Encourage investment in long-term energy initiatives and advanced technologies.  Reduce barriers to increasing domestic supplies  Rely on market forces to allocate products.  Refrain from new taxes that make it more expensive to develop our domestic supplies.  Support our need to participate actively in global energy markets rather than isolate the U.S. 25

26. For more information visit  www.energytomorrow.org www.energytomorrow.org  www.api.org