Statewide Clean Cities Conference A Perspective of 2006 and 2007Astor Crowne Plaza HotelJanuary 25, 2007New Orleans, LA

David Shiflett VP of Business Development, SE RegionWith World Energy since May 2006Area covers 11 states in SE15 years experience in the oil and petroleum industry with large regional retailer and wholesaler

World Energy: A Global LeaderRecognized and Respected brand Diversified BQ-9000 productionExporter

Largest supply infrastructure in the industry

Premier source of quality fuel to petroleum companies worldwideAGGREGATOR

Biodiesel Has Arrived!

And It's Here To Stay

GAP

Source: Transportation Energy Data Book: Edition 19, DOE/ORNL-6958, September 1999, and EIA Annual Energy Outlook 2000, DOE/EIA-0383(2000), December 1999

Millions of Barrels per Day

Domestic Oil Production

Heavy Trucks

Automobiles

Light Trucks

Energy Security

Passenger Vehicles

The U.S. situation is a harbinger of future world trends. Domestic oil production is declining gradually. Petroleum use is steadily rising. Two-thirds of the petroleum consumed in the U.S. is for transportation. Until recently, vehicle fuel efficiencies have shown steady improvement since the 1970s, but increases in population and per capita miles driven have more than offset these gains. In fact, the number of U.S. light vehicles is projected to increase from 183 million today to 230 million in 2020. We now consume more oil just for transportation than we produce and, as the chart shows, the gap is expected to get bigger over the next 30 years.

The Biodiesel Curve

Distribution Locations

What happened in 2006?Major focus on plant constructionIntense interest from capital marketsState Incentives remain importantPetroleum prices were the main driver

2006 Encouraged Plant ConstructionHigh petroleum + Low Ag Fats/Oils = Be close to Production (Production Margin)Low petroleum + High Ag Fats/Oils = Be close to Customer (Opportunity to Buy with right infrastructure)

Both markets are highly volatile Disconnect between Biodiesel and Diesel

State Incentives Are Increasing

2004: 130 biodiesel bills proposed / 27 passed

2005: 170 biodiesel bills proposed / 31 passed (22 states)

2006: 275 initiated / 53 passed

International MarketsEuropean market is largest; significant feedstock constraints (EU Directive)

Asian market is growing; significant source of palm oil

South America is growing; significant source of soybean oil

Is Europe a glimpse of our future?

Looking Ahead to 2007Too many plant dealsCapital markets will coolScale does matterQuality, quality, ASTM D 6751Logistics will be the keyCrude Oil????

Plant Logistics

ExampleA 50 mm gal/yr plant with rail service will have . --2500 Rail car movements annually

With 12 turns/year, the plant will need 200 RCs

How Available Are Rail Cars:Delivery in 2008 (Maybe)??$800/month lease10 year Lease?

Other Considerations

How often do you get rail service??How fast can you load trucks??Glycerin disposal? Waste water disposal

Nothing will shut a big Biodiesel plant down faster than not having big logistics!!!!!!!!!!

The Nimble PlayerFeedstock Sourcing

Robust Logistics Capability

Market & Risk Diversification

Reliable Supply to Customers??

Independent Model: Go it Alone!

Mandates / Incentives Trigger Motivation

Production delays

Quality Problems

Marketing Setbacks

Distribution Bottlenecks / Cant get to Market

Discount Price reduce returns

Risks Improperly Managed

Projects falter

2007 Regulatory Issues?RFS from 7.5b by 2012

New Farm Bill

Tax Credit Extensions to 2015??

CCC Producers Credit

Cold Flow PropertiesBiodiesel realizes cold temperature issues faster than most petroleum dieselUntreated B20 freezes 6-10F faster than #2 petroleum diesel, depending on:the cold flow properties of the biodieselthe cold flow properties of the petroleum dieselB2 to B5 nearly identical to Petroleum DieselUtilize the same precautions!Utilization of an additive that enhances cold flow propertiesStorage of the vehicles in or near a building when not in use

Feedstock DifferencesSoy Most common in US Largest availabilityBest Cold Temp Ops 35Poultry / TallowLower feedstock costFull Tax BenefitLimited SupplyPoorer Cold Temp Ops 38 / 50Recycled oils / fatsLower cost / tax benefitLimited supplyMid Cold Temp Ops 40 / 45Imports: Palm Very Large Supply PalmHas Full Tax BenefitWorst Cold Temp Ops 60

Enhanced Lubricity B2 has approx. 60% more lubricity than #2 Diesel

Chart3

571450

547450

485450

373450

374450

366450

346

374

380

374

Ultra-low Sulfur Diesel

Biodiesel Blend (%)

HFRR WSD (micron)

Ultra-low Sulfur Diesel

Sheet1

#2 Low Sulfur Diesel0450

04291450

23652450

53723450

4450

5450

#1 Low Sulfur Diesel

0692

2369

5376

Canadian #2 Winter Diesel

0571

2368

5356

Ultra-low Sulfur Diesel

0571

0.25547

0.50485

0.75373

1.00374

1.25366

1.50346

1.75374

2.00380

5.00374

JP-8

0726

2382

5373

Sheet2

Lubricity testing of various Biodiesel treat rates

in a variety of diesel fuels using an HFRR. (3/8-26/2001)

Sheet2

429450

365450

372450

450

450

450

#2 Low Sulfur Diesel

Biodiesel Blend (%)

HFRR WSD (micron

#2 Low Sulfur Diesel

Sheet3

692450

369450

376450

450

450

450

#1 Low Sulfur Diesel

Biodiesel Blend (%)

HFRR WSD (micron)

#1 Low Sulfur Diesel

571450

368450

356450

450

450

450

Canadian #2 Winter Diesel

Biodiesel Blend (%)

HFRR WSD (micron)

Canadian #2 Winter Diesel

571450

547450

485450

373450

374450

366450

346

374

380

374

Ultra-low Sulfur Diesel

Biodiesel Blend (%)

HFRR WSD (micron)

Ultra-low Sulfur Diesel

726450

382450

373450

450

450

450

JP-8

Biodiesel Blend (%)

HFRR WSD (micron)

JP-8

Emerging Markets for GrowthFederal and State Incentives

Fuel Regulations RFS

ULSD markets

High Crude Prices

BioHeat

Checklist to ImplementationSpecify D6751Specify cloudpointUse 20% blend or BXXDoes not Void WarrantyPay more per gallon?*Clean tankPour into tankSchedule early filter changeResume business as usual

* pre-incentive?

World EnergyCorporate Headquarters90 Everett AvenueChelsea, MA 02150617-889-7300

www.worldenergy.net

David Shiflett10 West 8th AveRome, GA 30161706-234-7646davids@worldenergy.net