1. www.eia.gov U.S. Energy Information Administration Independent Statistics & Analysis Natural Gas Markets: Recent Changes and Key Drivers for LDC Gas Forum September 11, 2012| Chicago, Il by Howard Gruenspecht, Deputy Administrator

2. U.S. Natural Gas Injection Season 1999-2012 Billion Cubic Feet Source: U.S. Energy Information Administration Short Term Energy Outlook 2 Howard Gruenspecht, LDC Forum September 11, 2012

3. Natural Gas use for electric power Billion cubic feet per day Source: U.S. Energy Information Administration based on Bentek Energy, LLC 3 Howard Gruenspecht, LDC Forum September 11, 2012

4. U.S. Electricity Output from Natural Gas and Coal Gigawatthours Source: U.S. Energy Information Administration Electric Power Monthly 4 Howard Gruenspecht, LDC Forum September 11, 2012

5. Electric Power Sector Natural Gas Consumption: Sept thru March Billion cubic feet Source: U.S. Energy Information Administration Short Term Energy Outlook 5 Howard Gruenspecht, LDC Forum September 11, 2012

6. Henry Hub Natural Gas Price Dollars per million btu Source: U.S. Energy Information Administration Short Term Energy Outlook 6 Howard Gruenspecht, LDC Forum September 11, 2012

7. Probability of the December 2012 Henry Hub contract expiring above price levels 7 Source: U.S. Energy Information Administration, based on the CME Group Howard Gruenspecht, LDC Forum September 11, 2012

8. September Probability Distributions of December Future Contracts With Actual Contract Prices Traded in September Source: U.S. Energy Information Administration based on Bloomberg, LLC 8 Howard Gruenspecht, LDC Forum September 11, 2012

9. Primary energy use by fuel, 1980-2035 9 U.S. energy consumption quadrillion Btu Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory 2010 Other Renewables Liquid biofuels Petroleum and other liquids Coal Nuclear Natural gas 21% 37% 9% 25% 2% 1% 20% 32% 9% 26% 6% 4% Share of total U.S. energy use Howard Gruenspecht, LDC Forum September 11, 2012 Wind, solar, geothermal and biomass 5%

10. Technically recoverable dry gas resources Howard Gruenspecht, LDC Forum September 11, 2012 10 U.S. dry gas resources trillion cubic feet *Alaska resource estimates prior to AEO2009 reflect resources from the North Slope that were not included in previously published documentation. Source: EIA, Annual Energy Outlook 2012

11. Domestic natural gas production grows faster than consumption U.S. dry gas trillion cubic feet per year Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory 2010 Consumption Domestic supply Net imports 11 Howard Gruenspecht, LDC Forum September 11, 2012

12. 273 482 1,460 Global spot natural gas and crude oil prices vary widely Source: EIA based on Bloomberg as of 6/25/2012 Global spot natural gas and crude oil prices U.S. dollars per million British thermal unit 12 Howard Gruenspecht, LDC Forum September 11, 2012

13. 2% Shale gas offsets declines in other U.S. natural gas production sources U.S. dry gas production trillion cubic feet per year Source: EIA, Annual Energy Outlook 2012 Non-associated offshore ProjectionsHistory Associated with oil Coalbed methane Non-associated onshore Shale gas 2010 10% 6% 9% 7% 21% 23% 9% 6% 49% Alaska 1% Tight gas 26% 22% 13 Howard Gruenspecht, LDC Forum September 11, 2012

14. Electric power and industrial use drives much of the future domestic natural gas demand growth in the Reference case U.S. dry gas consumption trillion cubic feet per year *Includes combined heat-and-power and lease and plant fuel. **Includes pipeline fuel. Source: EIA, Annual Energy Outlook 2012 ProjectionsHistory Industrial* Electric power Commercial Residential Transportation** 34% 17% 14% 32% 3% 31% 21% 13% 33% 3% 14 Howard Gruenspecht, LDC Forum September 11, 2012

15. U.S. production of shale gas in four cases, 2000-2035 15 dry natural gas production trillion cubic feet Source: EIA, Annual Energy Outlook 2012 Howard Gruenspecht, LDC Forum September 11, 2012 High EUR Reference Low EUR High TRR 2010 HistoryProjections Technically Recoverable Resource (TRR) Estimated Ultimate Recovery (EUR)

16. 16 lower-48 average natural gas wellhead price 2010 dollars per thousand cubic feet Source: EIA, Annual Energy Outlook 2012 Natural gas price projections vary based on resource base assumptions Low EUR Reference High EUR Projections History 2010 High TRR Howard Gruenspecht, LDC Forum September 11, 2012

17. Operating costs: existing plants with and without a value on carbon The “crossover point” for least-cost dispatch of coal and natural gas capacity depends on both fuel prices and the carbon value. At lower natural gas prices, the “crossover” occurs at a lower carbon value. Environmental operating costs and retrofit costs for pollution controls at existing coal-fired plants can “raise the bar” for their continued operation. –For retrofit decisions, the unit’s perceived “useful life,” which plays a critical role, can be affected by views regarding future climate policies Coal at $3 Natural Gas CC at $7 Natural Gas CC at $3 Natural Gas CC at $4 2010 dollars per megawatthour Fuel Cost for Existing Coal and Combined Cycle Natural Gas Units with a Value Placed on Carbon Dioxide Emissions Coal at $2 17 Howard Gruenspecht, LDC Forum September 11, 2012

18. While electricity consumption grows by 21% over the projection, the annual rate of growth slows percent growth (3-year rolling average) Projections History Period Annual Growth 1950s 9.8 1960s 7.3 1970s 4.7 1980s 2.9 1990s 2.4 2000-2010 1.0 2010-2035 0.8 Structural Change in Economy - Higher prices - Standards - Improved efficiency 2010 Source: EIA, Annual Energy Outlook 2012 18 Howard Gruenspecht, LDC Forum September 11, 2012

19. 18% 15% Electricity mix gradually shifts to lower-carbon options, led by growth in renewables and natural gas electricity net generation trillion kilowatthours per year Source: EIA, Annual Energy Outlook 2012 2010 24% 20% 45% 10% 1% 38% 28% 1% Nuclear Oil and other liquids Natural gas Coal Renewables 19 Howard Gruenspecht, LDC Forum September 11, 2012

20. The ratio of oil to natural gas prices remains high through 2035 in EIA’s AEO2012 Reference case projection ratio of oil price to natural gas price Source: EIA, Annual Energy Outlook 2012 HistoryProjections2010 Oil and natural gas prices 2010 dollars per million Btu HistoryProjections2010 20 Howard Gruenspecht, LDC Forum September 11, 2012

21. For more information Howard Gruenspecht August 28, 2012 21 U.S. Energy Information Administration home page | www.eia.govwww.eia.gov Today In Energy | www.eia.gov/todayinenergywww.eia.gov/todayinenergy Short-Term Energy Outlook | www.eia.gov/steowww.eia.gov/steo Annual Energy Outlook | www.eia.gov/aeowww.eia.gov/aeo Monthly Energy Review | www.eia.gov/merwww.eia.gov/mer EIA Information Center InfoCtr@eia.gov Our average response time is within three business days. (202) 586-8800 24-hour automated information line about EIA and frequently asked questions.

22. Howard Gruenspecht August 28, 2012 U.S. Energy Breakdown by Fuel and Sector 22 Source: EIA Annual Energy Review 2010

23. Underground sources of natural gas Source: modified from U.S. Geological Survey Fact Sheet 0113-01.U.S. Geological Survey Fact Sheet 0113-01 23 Howard Gruenspecht Washington, DC - May 16, 2011

24. Working Underground Natural Gas Storage Capacity Additions, 2008- 2011 Billion cubic feet Source: U.S. Energy Information Administration Peak Underground Working Natural Gas Storage Capacity Report 24 Howard Gruenspecht, LDC Forum September 11, 2012