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© 2008 METHANEX CORPORATION

METHANEX CORPORATION

Presentation to the Set America Free Energy Freedom Summit

by Bruce Aitken

President & CEO, Methanex Corporation

October 24, 2008

Arlington Heights, Illinois



Who is Methanex?



Methanol - What is it?

• A simple molecule - CH3OH

• A colorless liquid at ambient conditions

• Occurs naturally in the environment

• Biodegrades quickly in all environmental media

• High octane, clean burning fuel

• Made from natural gas or coal, demonstrated production from biomass



The Case for Alternative Fuels

• World needs to develop diversity away from crude oil

• Alternative fuels must:

• Have a large resource base

• Be economically sustainable

• Have a positive environmental impact

• Be acceptable to consumers

“…methanol stood out clearly as having the best potential for

replacing petroleum on a widespread basis…”California Energy Commission



The Methanol Advantage

• Produced from natural gas, coal, biomass, atmospheric CO2

• Least cost alternative for fuel, infrastructure and vehicles

• Cleaner and safer than gasoline

• As a liquid, the methanol transition would be invisible to the consumer

• Fuel blending or M100 can extend the gasoline pool



Source: www.worldcoal.org• U.S. has largest coal reserves in the world

• Coal-based methanol is a commercial reality today Source: worldcoal.org



Natural Gas Available

• World natural gas reserve-to-production ratio estimated at 63 years

• Worldwide undiscovered natural gas estimated at 4,133 TCF

• U.S. has large shale gas natural gas reserves

• Methanex sourcing natural gas from Trinidad, Chile, New Zealand, Egypt

Sources: BP, EIA



Biomass to Methanol

• Methanol first produced commercially by wood distillation

• Can be produced from a wide range of organic materials:

• Wood waste

• Agricultural residue

• Municipal solid waste

• Animal manure

• Methanex evaluating sugar cane-to-methanol project



Methanol in the U.S.

• Methanol successfully used in transportation in the U.S.

• Used as racing fuel in the U.S. for decades

• Methanol/gasoline blends introduced in California in 1978

• Methanol fueled cars drove more than 35 million miles during the 1980s

• Opportunity for U.S. to develop coal-to-methanol and biomethanol



Methanol in China

“The clock is ticking, and China needs to start adopting alternative fuels now in order to lessen its dependency.”

Professor Ni Weidou, QingHua University-BP Clean Energy Research & Education Center



Methanol in China

• China looking at energy security and feedstock diversity

• Methanol fuels used in China for over 20 years

• 60% of methanol made in China comes from coal

• Estimated 1 billion gallons of methanol blended in gasoline in 2008



Methanol in China

• Over a thousand taxis and buses running on methanol

• Methanol powered cars being commercialized

• Diesel/methanol blends being developed

• Methanol fuel blending and DME standards being developed

• DME blended with LPG and being developed for transportation



China and the United States

• 3rd coal reserves

• 21st gas reserves

• Imports 50% of oil

• Limited renewables (no food for fuel)

• Methanol:10% of gasoline 2011-2013

• 1st coal reserves

• 6th gas reserves

• Imports 60% of oil

• Renewable Fuel Standard (7.76%)

• No methanol fuel (neat or blended)

Solution:

Use all alcohol fuels and available resources to maximize energy diversity



Summary & Conclusions

• Advocate fuel diversity and efficiency

• Use methanol as an energy carrier

• Promote all alcohol flex-fuel vehicles

• Advance coal-to-liquids and carbon capture in U.S. and China

• Maximize biodiesel use for vehicles, heating and electricity generation

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