1. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 1 National Petroleum Council Future Transportation Fuels Study v.19

2. 03/15/2010 v.19 DRAFT – DO NOT CITE OR QUOTE FOR NPC STUDY DISCUSSION ONLY – NOT APPROVED 2 Background

3. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 3 Secretary Chu’s Request Study Future Transportation Fuels prospects through 2030 for auto, truck, air, rail and waterborne transport Address fuel demand, supply, infrastructure, and technology Advise on policy options and pathways for integrating new fuels and vehicles into the marketplace, including infrastructure development –Address the transition to an expanded suite of reliable, secure and clean, low-carbon transportation fuels –Evaluating options, risks, and consequences Factors to consider include –Technological advances –Manufacturing, distribution and infrastructure –Market dynamics and economic competitiveness –Cost/benefit tradeoffs –Customer expectations and acceptance –Environmental, e.g., impact on carbon, land and water use

4. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 4 Study Context Protect US from economic & strategic risks associated with –Reliance on foreign oil –Effects of changing climate US transportation system must evolve over the next 20 years in ways that advance national interest All energy uses and supply sources need to be re-examined to enable transition towards –Lower carbon fuel mix –More economically and environmentally sustainable energy mix Next generation transportation systems, fuels and infrastructure will be introduced to –Diversify fuel choice –Increase energy efficiency in the development of fuels –Increase energy efficiency in the use of fuels –Lower green house gas and other emissions Each fuel has technical, economic, infrastructure and social attributes that must be considered in evaluating its role in a modern, prosperous U.S. economy Recognize concurrent study –Prudent Development of North America Natural Gas and Oil Resources Study –Reassess the North America resources production supply chain and infrastructure potential and the contribution that natural gas can make in a transition to a lower carbon fuel mix

5. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 55 Guiding Questions 1.Define criteria for 2030 transportation fuels and recommend criteria weighting –Environmentally sustainable (e.g., low-GHG, acceptable land & water use) –Secure (e.g., available resources, reliable infrastructure) –Economically viable (e.g., capital investment & operating costs, consumer acceptance, subsidy requirements) –Achievable at scale (e.g., technology state of the art, RD&E pathways, scale-up capability) 2.Describe business as usual baseline for 2030 transportation fuels based upon EIA and other studies 3.Identify critical technological advances and changes in supply, infrastructure and demand that could accelerate the transition to a fuel mix that meets the study objectives relative to the baseline. 4.Describe areas of investment by government and industry which could increase the probability of technological advances 5.Provide insight on the environment impacts such as GHG, water and land use 6.Provide insight on acceptance of these accelerated transportation fuels by 2030 7.Consider 2050 – Describe the 2030 potential interim states or scenarios which could accelerate progress to a more advanced fuels mix by 2050

6. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 6 Structure

7. 03/15/2010 v.19 3/12/2010 NPC DRAFT – Do Not Cite or Quote 7 COMMITTEE ChairClarence Cazalot (Marathon) Gov’t Co-ChairDan Poneman (DOE) Supply Vice ChairJohn Watson (Chevron) Demand Vice ChairJim Owens (Caterpillar) Technology Vice ChairJohn Deutch (MIT) SecretaryMarshall Nichols (NPC) Proposed Organization Structure Coordinating Subcommittee ChairLinda Capuano (Marathon) Gov’t Co-ChairTBD Asst ChairMike Leister (Marathon) Demand Task Group ChairDeanne Short (Caterpillar) Supply Task Group ChairShariq Yosufzai (Chevron) Technology Task Group ChairTBD SecretaryAndy Oliver (NPC) National Petroleum Council Steve Hart (Exxon) Peggy Montana (Shell) Chris Sultemeier (Walmart) TBD Task Groups

8. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 8 Proposed Coordinating Subcommittee Membership ChairLinda CapuanoVP Emerging TechnologyMarathon Gov’t Co-ChairTBDDOE Ass’t ChairMike LeisterPrincipal EngineerMarathon Ass’t ChairTBDMarathon Demand Task Group ChairDeanne ShortBusiness EconomicsCaterpillar Supply & InfraTask Group ChairShariq YosufzaiGlobal VP MarketingChevron Technology Task Group ChairTBD SecretaryAndy Oliver NPC Members Steve HartVP Planning & Project Execution, Refining & SupplyExxon Peggy MontanaEVP Supply & Distribution, DownstreamShell Chris SultemeierSenior VP TransportationWalmart TBD

9. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 9 Proposed Demand Task Group Membership ChairDeanne ShortCaterpillar Gov’t Co-ChairTBD Asst ChairTBD Steering CommitteeChris SultemeierWalmart Steering Committee TBDFedEx Steering Committee TBDADM Members TBD

10. 03/15/2010 v.19 3/12/2010 NPC DRAFT – Do Not Cite or Quote 10 Supply & Infrastructure ChairShariq Yosufzai Gov’t Co-Chair TBD Asst ChairJoseph Caggiano SecretaryTBD Demand Chair Deanne Short (Caterpillar) Gov’t Co-Chair TBD Asst Chair TBD Secretary TBD Technology Chair TBD Gov’t Co-Chair TBD Asst Chair TBD Secretary TBD Proposed Organization Structure (Cont.) Potential Task Group Responsibilities\ Task Groups Fossil Liquids Electric Post 2050 Fuels BiofuelsNatural Gas Fuel Clusters Available resources: Don Paul former CTO Chevron Larry Burns former GM Caterpillar, Walmart, FedEx, Archer Daniels Transportation Clusters AutoRailAirBusTruckWater

11. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 11 Fossil Liquids ElectricPost 2050 FuelsBiofuelsNatural Gas Fuel Clusters Carbohydrate Cellulosic Algae Co- lead ADM Ceres Participants Mascoma Cargill Monsanto Oil Companies Etc Proposed Organization Structure (Cont.) Potential Task Group Responsibilities

12. 03/15/2010 v.19 3/10/10 v.18 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 12 Integrate Task Group Results Fossil Liquids Electric Post 2050 Fuels BiofuelsNatural Gas AutoRailAirBusTruckWater Overall Timeline Scope, Frame, Staff Analyze and draft sections Integrate, model and draft sections Draft report and review Deliver Report Jan 2010 Jun 2010 Jan 2011 Jun 2011 Integrate & Model A B C D Oct 2011

13. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 13 Biofuels Recruiting Wish List ADM –Co-lead Biofuels (CTO) Michael Pacheco (CTO) – Tom Binder – Tom Werpy –Also need Demand Team Steering Committee – Agricultural Business Services Ceres –Co-lead Biofuels - Richard Hamilton – Pres & CEO – Ceres (cellulosic pathways) Mascoma – Biofuel participation – cellulosic ethanol –First Choice - Charles Wyman – Prof UC Riverside and co-founder of Mascoma –Alternate – Lee Lynd – Chief Scientific Officer, Mascoma, Professor Dartmouth College School of Engineering Monsanto – Cargill etc Oil Company Participation –Carbohydrates – sugar/corn –Cellulosic – Ceres/Mascoma + others –Algae – should it be here or in 2050 fuels

14. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 14 Phase 1 – Start by Defining the Baseline

15. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 15 Standard Methodology – Phase 1 ElectricNatural Gas Post -2050 Fuels Secure Available Reliable Economic Clean Low Carbon 1. Describe & Define Evaluation Criteria Sustainable Environmental Fossil Liquids Cluster Fuels in a Practical Way Biofuels 3. Develop a range of pathways (roadmaps) based on currently available information 4. Identify barriers to acceleration for consideration 2. Describe a baseline

16. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 16 Phase 2 - Integrating

17. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 17 Eventually Integrate Across Fuel Options Consequences and Impact Across Fuel Options Evaluate how advances in each fuel impacts 2030 fuel mix Describe the technology associated with such advances Comment on environmental impact (including carbon) Describe associated investment requirements Provide insights on 2030 consumer acceptance Natural Gas Electric 2050 Fuels Describe 2050 Fuels Describe 2050 best available baseline Identify accelerating technical advances Describe the interim state of such technologies at 2030 Comment on environmental impact (including carbon) Describe associated investment requirements Provide insight on 2050 acceptance BiofuelsFossil Liquids

18. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 18 Mentioned by National Academies (Elizabeth Eide, Jason Ortego and John Holmes) Nigel Clark, Director of Center for Alternative Fuels, Engines, and Emissions, WVU Ron Graves, Director of Fuels, Engines, and Emissions Research Center, ORNL Drew Kodjak, Executive Director, International Council on Clean Transportation, Washington, DC Sam Snyder, FedEx Mike Ramage, former head of R&E ExxonMobil, Chair of liquid Transportation James Katzer, ExxonMobil Daniel Sperling, UC Davis Institute of Transportation Studies –Author “Two Billion Cars: Driving Toward Sustainability” –Co-Chair committee to draft/implement CA governor’s executive order to cut the carbon intensity of transportation fuel John Heywood, MIT (emissions and efficiencies of engines) Phil Sharp, Resources for the Future (involved in CAFÉ and other vehicle issues) Bob Fri (on NPC, I think? So you probably know of him) Menahem Anderman, Total Battery Consulting, Inc Bart Riley, VP of R&D at A123 (battery company Neil Peterson, MD DOT Dave Tilman – University of Minnesota – supply side of Biofuel Jim Katzer – conversion on technical side Jim Sweeney – Stanford trained economist, systems engineer – integrate across fuel types Franklyn Orr, Stanford Energy Initiative – oil and gas resource base

19. 03/15/2010 v.19 DRAFT - NOT APPROVED - FOR NPC STUDY DISCUSSION ONLY 19 Ray Johnson – Energy Programs – CTO Lockheed Martin D’Arcy Carroll, Brenco (merged with Odebrecht’s ETH Bioenergia in Brazil – creates one of the largest fuel ethanol and dedicated biomass power producers Roberto Bucca – Senior Director & Head of Energy Industries of World Economic Forum Former Group Leader of BP – Downstream and Alternative Energy Former Director of Emerging Consumer Markets for BP Alternative energy Turin University of Business & Economics Tom Eizember Planning Division Mgr of Corp Strategic Planning Exxon Mobile – Hard Truths Study Thomas Granville – Pres CEO Axion Power Industries & Axion Power Battery Manufacturing formerly NYS Electric Co Tom Baloga VP Engineering US BMW of North America (electric vehicles) Britta Gross – Director, Global Energy Systems & Infrastructure Commercialization, GM R&D, Strategic planning Gerhard Achlik – manager highway program of the Air Resources Board in CA Roy Kim – California Fuel Cell Partnership Catherine Rips – California Hydrogen Business Council Joan Ogden Director Sustainable Transportation Energy Pathways program, UC Davis Charles Territo spokesman for Alliance of Automobile Manufacturers Dimitri Stanich, Air Research Board CA spokesperson

20. 03/15/2010 v.19 Appendix Chu letter Committee and Task Group Roles and Responsibilities

21. 03/15/2010 v.19 Secretary Chu’s Request Letter

22. 03/15/2010 v.19 Study Committee Approves the general approach, scope, organization, milestones, and timetable of the study. Recruits participants and provides resources. Provides guidance to the Coordinating Subcommittee to ensure that the study will meet the objectives defined by the Secretary of Energy. Resolves policy or directional issues as required by the Coordinating Subcommittee. Endorses the draft final report before submittal to the Council for approval. Meets quarterly or teleconferences as needed 22March 15th, 2010

23. 03/15/2010 v.19 Coordinating Subcommittee (CSC) Develops the general approach, scope, organization, milestones, and timetable of the study. Recruits participants and provides resources. Supervises the work of task groups or individuals. Ensures coordination between task groups. Monitors progress and milestones Develops and implements outreach and communication plans. Addresses policy or directional issues that may arise during task group work. Integrate with North American Resources Study Reports periodically to the study committee regarding status, for guidance, or about issues that need attention. Integrates working drafts and sections into a draft final study report for submission to the study committee and the Council. Strives for consensus of opinion among the diverse interests represented. Weekly teleconferences initially 23March 15th, 2010

24. 03/15/2010 v.19 Task Group Chairs Recruit diverse, expert membership for their task group. Oversee task group work plans, methodology, and timetables. Ensure integration between task group work and the overall study framework. Implement Coordinating Subcommittee decisions and guidance in the task group. Ensure outreach to stakeholders outside the task group. Guide development of task group findings and recommendations. 24March 15th, 2010