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For NPC Study Discussion Only1

National Petroleum CouncilFuture Transportation Fuels Study

Proposed Coordinating Subcommittee Conference Call

May 27, 2010

1

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Safety

22

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For NPC Study Discussion Only

Antitrust Reminders – NPC Studies

• Remember the Antitrust Guidelines, and don’t– Coordinate your companies’ plans, prices, outputs– Disclose your company’s non-public information– Use the study process to create competitive harm

• Check with counsel before you– Collect or discuss non-public data– Evaluate public data about future prices and costs– Discuss topics about whose legality you’re unsure

• Antitrust resources include: your lawyer, and– Mike Young (Anadarko) 832-636-7555– Doug Melin (Marathon) 419-421-3265– Jim Haynes (Chevron) 925-842-1298– Courtney Lynch (Chevron) 925-842-6474 – Kenly Webster (NPC) 202-898-0780

05/27/2010 v.29

CSC Meeting Attendees

Linda Capuano, Chair Marathon Oil Corporation

Michael Leister, Asst Chair Marathon Oil Corporation

Andy Oliver, Secretary National Petroleum Council

Joseph Caggiano, Alt for S. Shariq Yosufazai Chevron Corporation

Supply Task Group Chair

Deanne Short, Demand Task Group Chair Caterpiller

Stephen Brand, Technology Task Group Chair ConocoPhillips

Steven Hart, Member ExxonMobil Refining & Supply

Deron Lovaas, Member Natural Resources Defense Council

Jan Mares, Member Resources for the Future

Margaret Montana, Member Shell Downstream, Inc.

Chris Sultemeier, Member Walmart

Todd Werpy, Member Archer Daniels Midland Company

Nelson Almond, Alt Asst to Chair Marathon Petroleum Company LLC

Ken Croy Marathon Oil Corporation

Clay Bretches/Scott Moore Anadarko Petroleum Corporation

Courtney Lynch, Alt for Doug Melin Chevron Corporation

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Agenda

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CSC Meeting AgendaThursday 11:00 AM to 1:00 PM EST

SafetyAnti-trust Reminders A. OliverReview/Confirm Meeting Notes N. AlmondCalendar N. AlmondAction Item Review N. AlmondReport Outs

– Coordinating Subcommittee L. Capuano• NPC View of DOE Roles M. Nichols• June 10th Executive Committee Presentation

– Demand Task Group D. Short– Supply & Infrastructure Task Group S. Yosufzai– Technology Task Group S. Brand

• ARPA-E Review – Biofuels Sub Task Group T. Binder

New Business – Round Robin AllSummarize New Action Items N. Almond

05/27/2010 v.29

Coordinating Sub-Committee Calendar

Date Time (EST) Highlight

Recurring Meetings• Tues 2:00 pm (30 Min) CSC/Supply & Infrastructure• Tues 3:00 pm (30 min) CSC/Demand• Tues 4:00 pm (30 min) CSC/Bio Fuels• Wed 10:00 am (30 min) CSC/Technology• Thu 11:00 am – 1:00 pm Weekly CSC call• Fri 9:30 am Weekly Fuels/Resource Chair one-on-oneDetails• June 9 (W) 8:30-5:30 CSC meeting in Washington - One Day• June 10 (Th) 10:00-12:00 Executive Committee call• July 26-27 (M-T) 8:00-5:00 CSC in Houston - Marriott Bush International• Sept 14-15 (Tentative) Full National Petroleum Council Meeting• Sept 20-22 (M-W) CSC meeting in Washington – Three Days• Nov (TBD) CSC meeting in Washington – Two Days• Nov (TBD) Executive Committee – Two hour conf. callResources Study Dates for Reference• Thursday (PM) Weekly Resource CSC• June 2, 2010 Resources CSC meeting• July 2010 Resources Executive Committee• Sept 2010 Resources Executive Committee

77

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Coordinating Sub-committee and Task Group Timeline

Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Coordinating Subcommittee Meetings

Supply & Infrastructure Task Group Supply & InfrastructureTechnology Task Group Technology

Biofuels Subgroup BiofuelsFossil Liquids Subgroup Fossil LiquidsElectric Subgroup ElectricNatural Gas Subgroup Natural GasEngine/Vehicle Subgroup Engine /VehicleNew Fuels Subgroup New Fuels

Define Fuel Characteristics of Interest

Demand Task Group Demand

Integration and Iterations of ScenariosDemand Task Group DemandSupply & Infrastructure Task Group Supply & InfrastructureTechnology Task Group

Subgroups

Study Activities

Communication and Outreach

TechnologySubgroups

Base Case and Acceleration Analysis

Develop and Pilot Sensitivity Analysis / Scenarios

Integrate and Iterate

Policy Insights - Report Validation and Review

Communications and Outreach

Base Case and Acceleration Analysis (Discovery)

Validate, Review and Document

Develop and Pilot Sensitivity Analysis / Scenarios

Provide Prel Findings to the Resources Study

Receive Prel Findings from Resources Study

Staffing

Study Meetings

NPC Council Meeting

Executive Committee Meeting

Staffing of Task Groups and Subgroups

Submit Draft and Final Report to Study Committee

Characteristics

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ARPA-E Review

Technology Task Group

9

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Why is ARPA-E important to the FTF study?

10

• Energy Secretary Chu highlighted ARPA-E in this supplemental letter

• These are examples of technology breakthroughs that would dramatically change the cost curves and the 2050 fuel mix

• Virtually none of these technologies are considered in supply/demand energy forecasts

• Many ARPA-E funded technologies need to be considered by sub groups and little, outside of ARPA-E applications, will have been documented

05/27/2010 v.29

ARPA-E Funded Projects relevant to FTF Study (1 of 2)

11

Project Technology Description Organisation Contact FTF subgroup

Catalytic biocrude production in a novel short-contact time reactor

Single-step catalytic biomass pyrolysis RTI International David Dayton Biofuels

Conditionally Activated Enzymes Expressed in Cellulosic Energy Crops

Cell wall degrading enzymes produced at high concentration within plants

Agrivida Michael Raab Biofuels

High Yielding, Low Input Energy Crops New varieties of energy grasses Ceres Roger Pennell Biofuels

MacroAlgae Butanol Isobutanol from seaweed Du Pont, Butamax Michael Grady Biofuels

Scaling and Commercialization of Algae Harvesting Technologies

More energy efficient algae harvesting dewatering and drying system

Univenture / Algaeventure Systems

Ross Youngs Biofuels

Sustainable Cyanobacteria Designed for Solar-Powered Highly Efficient Production of Biofuels

Modify synechocystis to convert sunlight and carbon dioxide into fatty acids

Arizona State University

Willem Vermaas Biofuels/

A Genetically Tractable Microalgal Platform for Advanced Biofuel Production

Modifying an acquatic microorganism, Chlamydomonas, to generate feedstock for the production of biofuels

Iowa State University Martin Spalding Biofuels/

Shewanella as an Ideal Platform for Producing Hydrocarbon Biofuels

Engineer Shewanella bacteria to produce higher levels of hydrocarbons from carbon dioxide, thus removing carbon dioxide from the atmosphere

University of Minnesota

Lawrence Wackett

Biofuels

Towards Scale Solar Conversion of CO2 and Water Vapor to Hydrocarbon

Sunlight. Carbon dioxide and water vapour are combined to create hydrocarbon fuels

Penn State University

Craig Grimes Post 2050 Fuels

Quaternary Phosphonium Based Hydroxide Exchange Membranes

Fuel cells. New class of hydroxide exchange membranes that can eliminate the use of platinum and replace it with nickel and silver

UC Riverside Yushan Yan Post 2050 Fuels

05/27/2010 v.29

ARPA-E Funded Projects relevant to FTF Study (2 of 2)

12

Project Technology Description Organisation Contact FTF subgroup

Sustainable, High Energy Density, Low Cost Electrochemical Energy Storage Metal Air

Battery- Metal Air Iconic Liquid. Air cathode, iconic liquid electrolyte, anode (M)

Arizona State University Cody Friesen Electric

Gallium Nitride Advanced Power Semiconductor & Packaging

Electrical energy conversion device that will improve cost and energy efficiency of hybrid/electric

Delphi Automotive Systems LLC

Han Lee Electric

High Energy Density Lithium Batteries

Lithium batteries using silicon carbon nano-composite anodes

Envia Systems Herman Lopez Electric

Low Cost, High Energy and Power Density, Nanotube-Enhanced Ultracapacitors

Combining ultracapacitors (made of carbon nanotubes) and batteries

FastCap Riccardo Signorelli

Electric

Silicon Coated Nanofiber Paper as a Lithium Ion Anode

Silicon-coated carbon nanofiber for use in lithium ion batteries

Inorganic Specialists David Firsich Electric

High Energy Permanent Magnets for Hybrid Vehicles and Alternative Energy

Develop materials that can be used to fabricate the next generation of permanent magnets with magnetic energy density 2x higher than the current value of the strongest Nd-Fe-B magnets

University of Delaware George Hadjipanayis

Electric

Upgrading Refinery Off-gas to High-Octane Alkylate

Technology to make productive use of Refinery off -gas

Exelus Systems Mitrajit Mukherjee Fuels

Wave Disc Engine Novel generator that uses 60% of fuel for propulsion (vs. 15%) for use in hybrid automobile engines

Michigan State University Norbert Meuller Engine

Lightweight Thermal Energy Recovery System

System for recovering waste heat in automobiles using shape memory alloys to increase fuel economy

General Motors Alan Browne

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Future Transportation Fuels Study Action Items

•Refer to attached “Action Items Listing – Dated May 24, 2010”

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Future Transportation Fuels Study Core Committee Structure

Study Committee LeadershipChair Clarence Cazalot (Marathon)Government Cochair Dan Poneman (DOE)Alternate Gov Cochair Kristina Johnson (DOE)Supply & Infrastructure Vice Chair John Watson (Chevron)Demand Vice Chair Jim Owens (Caterpillar)Technology Vice Chair John Deutch (MIT)Secretary Marshall Nichols (NPC)

Supply & Infrastructure Task GroupChair S Yosufzai (Chevron)Govt. Cochair C Difiglio (DOE)Alt. Govt. Cochair T. White (DOE)Asst. Chair J Caggiano (Chevron)Secretary TBD (NPC)

Coordinating Subcommittee LeadershipChair Linda Capuano (Marathon)Government Cochair Steve Koonin (DOE)Alternate Government Cochair David Sandalow (DOE)Assistant Chair Mike Leister (Marathon)Supply & Infrastructure Task Group Chair Shariq Yosufzai (Chevron)Demand Task Group Chair Deanne Short (Caterpillar)Technology Task Group Chair Stephen Brand (ConocoPhillips)Secretary Andy Oliver (NPC)

Demand Task GroupChair D Short (Caterpillar)Govt. Cochair J Conti (DOE)Alt. Govt. Cochair P. Holtberg (DOE)Asst. Chair TBDSecretary TBD (NPC)

Technology Task GroupChair S Brand (CoP)Govt. Cochair J Beaudry-Losique (DOE)Alt. Govt. Cochair TBD (DOE)Asst. Chair TBDSecretary TBD (NPC)

05/27/2010 v.29

Future Transportation Fuels Coordinating Sub-Committee Rosteras of May 11, 2010

Alternate

Chair Linda Capuano Marathon Oil

Gov’t Co-Chair Steve Koonin Department of Energy (DOE) Avi Gopstein

Alt. Gov’t Co-Chair David Sandalow Department of Energy (DOE) Carmen Difliglio

Asst. Chair Mike Leister Marathon Oil Nelson Almond

Demand Task Group Chair Deanne Short Caterpillar

Supply & Infrastructure Task Group Chair Shariq Yosufzai Chevron Joseph Caggiano

Technology Task Group Chair Stephen Brand ConocoPhillips

BioFuels Subgroup Chair Todd Werpy Archer Daniels Midland (ADM) Tom Binder

Fossil Liquids Subgroup Chair Steve Hart ExxonMobil Gene Tunison

Electric Subgroup Chair Bill Reinert Toyota

Natural Gas Subgroup Chair TBD

New Fuels Subgroup Chair Targeted for July

Engine/Vehicle Subgroup Chair Alan Taub General Motors

Member Arthur Rypinski Department of Transportation

Member Chris Sultemeier Wal-Mart

Member Mitch Jackson FedEx

Member Paul Sankey Deutsche Bank Adam Sieminski

Member Peggy Montana Shell Claudia Kolbinger

Member Jan Mares Resources for the Future

Member Deron Lovaas Natural Resources Defense Council Roland Hwang

Member Richard Newell EIA John Conti

Member Matt Rogers Department of Energy (DOE)

05/27/2010 v.29

Secretary Chu’s Request Letter – September 19, 2009Secretary Chu’s Supplemental Question – April 30, 2010Summary: Secretary Chu’s RequestOperating PrinciplesGuiding QuestionsFuel Clusters-Technology-Supply ChainCluster In a Practical WayTask Group Composition MatrixDOE Organization of Future Transportation Fuels ParticipantsKey Milestones for NPC Resource and Fuels Studies Reference Material From Resources Study

Appendix

16

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Secretary Chu’s Request Letter – September 19, 2009

05/27/2010 v.29

Secretary Chu’s Supplemental Question – April 30, 2010

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For NPC Study Discussion Only19

Summary: 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

19

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For NPC Study Discussion Only20

Operating Principles

• Scope then execute– Develop a detailed scope of work for each task group before commencing work

• Diversify thought– Identify and involve a broad and diverse set of interests to participate in the study to

maximize input and acceptance

• Promote consensus based leadership

• Maximize the use of prior studies– Provide a broad review of current research– Conduct new studies only as needed

• Examine the facts then address policy– Advance basic analytical work sufficiently to reach consensus on the essential facts– Policy recommendation based upon an agreed upon factual environment

• Assess policy through three lenses– Environment– Economic– Security

• Integrate policy with NPC Resource Development study as necessary

• Plan communication and outreach – at inception and completion of the study

20

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For NPC Study Discussion Only21

Guiding Questions

1. Define criteria for 2030 transportation fuels and relative improvement– Environment less GHG, land and water use– Security available resources, reliable infrastructure– Economic capital investment, operating costs, achievable at scale,

competitive,subsidy requirements

2. Describe 2030 baseline for transportation fuels based upon available studies

3. Identify technological advances, changes in supply, infrastructure and demand that could accelerate the transition to a more environmentally friendly, secure and economically competitive fuel mix

4. Provide insight on government and industry investments 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

7. Consider 2050 – describe the potential 2030 interim states or scenarios which could accelerate progress to a more advanced fuels mix by 2050

21

05/27/2010 v.29NPC Draft – Do Not Cite or Quote

FEEDSTOCK / RAW

MATERIALS

FEEDSTOCKDISTRIBUTION

CONVERSION / MANUFACTURING

PRODUCTDISTRIBUTION

FUEL CLUSTERS

Fossil Hydrocarbon

Biofuels

Natural Gas

Electricity

Post-2050 Fuels

APPLICATION/ END USE

Auto

Truck

Rail

Water

Air

31

2

Classify fuels into clusters

Trace each cluster through baseline and alternative pathways along the supply chain -- use various assumptions about technology, volumes, infrastructure, unit costs, policy, etc.

Connect supply inputs to end-use options

Technology

Fuel Clusters -Technology - Supply Chain (Simple Flowchart)

05/27/2010 v.29 23

Supply & Infrastructure DemandTechnology

Cluster In a practical Way

Task Groups

FossilLiquids

Electric 2050 FuelsBiofuels Natural Gas

Fuel Clusters

Transportation Clusters

Auto Rail AirBus Truck Water

Cross Cutting Topics

Anti-Trust Communication GHG/CarbonPolicy Security Environment

Pipeline

Engine Clusters

Internal Combustion

Electric Turbine

Passenger Freight

Land Air Water

2050 Engines

EconomicFinancial

05/27/2010 v.29 24

Task Group Composition Matrix

Demand

Supply & Infrastructure

Technology

Potential Task Group MembersGov’t Resource

SuppliersDistributors (Resource & Product)

Resource Processing/ Conversion

Auto Makers/Component Suppliers

Non-auto Engines/ Prime Movers

Interest Groups/ NGO’sIndustry Association

Universities/ Laboratories/Technical Consortia

Consultancies/Professional Societies

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Office of the SecretaryDr. Steven Chu, Secretary

Daniel B. Poneman,Deputy Secretary

Office of the SecretaryDr. Steven Chu, Secretary

Daniel B. Poneman,Deputy Secretary

Office of theUnder Secretary

Dr. Kristina M. JohnsonUnder Secretary

Office of theUnder Secretary

Dr. Kristina M. JohnsonUnder Secretary

Office of theUnder Secretary for Science

Dr. Steven E. KooninUnder Secretary for Science

Office of theUnder Secretary for Science

Dr. Steven E. KooninUnder Secretary for Science

Assistant Secretary for Energy Efficiency & Renewable Energy

Catherine R. Zoi

Assistant Secretary for Energy Efficiency & Renewable Energy

Catherine R. Zoi

Principal Deputy Assistant Secretary

Dr. Henry C. Kelly

Principal Deputy Assistant Secretary

Dr. Henry C. Kelly

Deputy Assistant Secretary, Renewable

Energy

Jacques Beaudry-Losique

Deputy Assistant Secretary, Renewable

Energy

Jacques Beaudry-Losique

Assistant Secretary for Fossil Energy

Dr. James J. Markosky

Assistant Secretary for Fossil Energy

Dr. James J. Markosky

Deputy Assistant Secretary for Oil &

Natural Gas

Christopher Smith

Deputy Assistant Secretary for Oil &

Natural Gas

Christopher Smith

Energy Information Administration

Dr. Richard G. NewellAdministrator

Energy Information Administration

Dr. Richard G. NewellAdministrator

Office of Policy &International Affairs

David B. SandalowAssistant Secretary for Policy

& International Affairs

Office of Policy &International Affairs

David B. SandalowAssistant Secretary for Policy

& International Affairs

Deputy Assistant Secretary for Policy

Analysis

Dr. Carmen Difiglio

Deputy Assistant Secretary for Policy

Analysis

Dr. Carmen Difiglio

Office of the Chief of Staff

Matthew C. RogersSenior Advisor to the

Secretary

Office of the Chief of Staff

Matthew C. RogersSenior Advisor to the

Secretary

Office of Integrated Analysis & Forecasting

John C. ContiDirector

Office of Integrated Analysis & Forecasting

John C. ContiDirector

Immediate Office of theUnder Secretary for

Science

Avi GopsteinSenior Advisor

Immediate Office of theUnder Secretary for

Science

Avi GopsteinSenior Advisor

Office of Fossil Energy, Environmental Science

& Policy Analysis

Nancy L. JohnsonDirector

Office of Fossil Energy, Environmental Science

& Policy Analysis

Nancy L. JohnsonDirector

DOE Organization of Future Transportation Fuels Participants

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Key Milestones for NPC Resource and Fuels Studies

Resource Study Fuels Study

Review Proposed Study Plan - Executive Committee1 Meeting/Call (S-2/S-3) April 2010 Mid June 2010

Renew NPC Membership (S-1) May 2010

NPC Request/DOE Approval to Establish Study Committee2 with Proposed Committee Membership (NPC Chair/S-2). NPC Chair Appoints Committee Membership and Work Formally Commences.

May 2010 July 2010

Study Committee Review/Approval of Study Plan May/June 2010 (electronic) July 2010 (electronic)

CSC Updates to Executive Committee (S-2/S-3) July and Sept 2010 June and November 2010

Full NPC Meeting - Progress of Studies and Interactions with Study Leaders (e.g., possible Resources Study Committee Meeting and Joint Study Leadership Dinner on Preceding Day) (S-1, S-2/S-3)

September 2010

2-Study Integration and Outreach/Communication Ongoing Ongoing

Update on Initial Findings - Executive Committee Meeting/Call (S-2/S-3) November 2010 February 2011

Resource Study Committee Review/Approval of Draft Report (S-2/S-3) Janurary/February 2011

Resource Study Draft Report to NPC Membership (NPC) February 2011 (electronic)

Full NPC Meeting – Approval/Submittal of Final Resource Study Report by NPC, Update on Fuels Study, and Interactions with Study Leaders (e.g., possible Fuels Study Committee Meeting and Joint Study Leadership Dinner on Preceding Day) (S-1, S-2/S-3) March 2011

Fuels Study Committee Review/Approval of Draft Report (S-2/S-3) TBD

Fuels Study Draft Report to NPC Membership (NPC) TBD

Full NPC Meeting – Approval/Submittal of Final Fuels Study Report by NPC and Update on Resource Study Outreach (S-1, S-2/S-3) October 2011

Post Report Outreach and DOE Reply (NPC and DOE) April-May 2011 Nov-Dec 2011

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Reference Material From Resources Study

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Overlapping Areas – Per Resource Study Presentation

• Natural gas use as a transportation fuel will be examined in the transportation study. Natural gas transportation demand (direct and indirect use) will be incorporated into the resource study.

• Oil demand for the U.S. economy is predominately for transportation which will be covered in the transportation fuels study. The resource study will provide a high-level overview of oil demand for completeness.

• All conventional and unconventional North American natural gas and oil resources and production, including infrastructure needed to bring supply to the refinery or city-gate, will be addressed in the resource study.

*Source: “Resources Study – Draft Integration Plan April 19, 2010”

05/27/2010 v.29 *Source: “Resources Study – Draft Integration Plan April 19, 2010”