Dr Tatanka

Tatanka Resources

Tatanka Resources

Tatanlka Resources

Carbon regulation is creating a complex web of opportunities and risks for managers. Tatanka Resources

BUFFALO SPARING TATANKA RESOURCES

Tatanka Resources

Winrock International

Relative Size of Carbon Markets (2008) OFFSET MARKETS ALLOWANCE MARKETS Kyoto Markets: CDM & JI 418.3 mil. tCO2e U.S. Regional & State Markets EU Emissions Trading Scheme 2,981 mil. tCO2e 27.4 mil. tCO2e Chicago Climate Exchange U.S. Voluntary & Pre-compliance Markets New South Wales 69.2 mil. tCO2 54 mil. tCO2e 30.6 mil. tCO2e Source: Source: Ecosystem Marketplace, New Carbon Finance, World Bank Group. Winrock International

Waxman-Markey H.R.2454 Reduction Targets (17% by 2020, 42% by 2030, 83% by 2050)

Options for Compliance Emissions Cap: 300 tCO2e metric tons CO2 equivalent Allowance transfer (A buys from B) Offset transfer (A buys from B) Tatanka Resources

AMEREN CO2 OUTPUT AND RISK Tons CO2 MWh Energy Intensity % Fossil % Hydro % Nuclear 2000: 55,600,000 60,000,000 1,855 80.59 1.77 16.66 Present: 66,000,000 74,400,000 1,773 87.37 2.24 10.16 Future: 66,600,000 75,100,000 87.49 2.22 10.07 TATANKA RESOURCES

So lets do a little math By 2015 AMEREN U.E. POTENTIAL CARBON LIABILITY 65,000,000 TONS PER YEAR x 20 % = 13,000,000 TONS TO BE REDUCED OR OFFSET AT $ 10 PER TON = $130,000,000 $ 20 PER TON = $ 260,000,000 $ 40 PER TON = $ 520,000,000 Tatanka Respurces

ESTIMATED TONS OF OFFSETS NEEDED BY THE U.S. POWER SECTOR BY 2020 2 BILLION TONS PER YEAR TATANKA RESOURCES

Winrock International Talking Points Winrock International

Winrock International

VOLUNTARY MARKETS HAVE PAVED THE WAY FOR COMING COMPLIANCE ( REGULATORY) MARKETS ASKING AND ANSWERING BASIC QUESTIONS DEVELOPING INFRASTRUTURE AND TEMPLATES MAKING THE FIRST ROUNDS OF MISTAKES, STANDING BACK UP AND CONTINUING ON Tatanka Resources

Tatanka Resources

CARBON MARKET INFRASTRUCTURE STANDARDS SETTERS REGISTRIES AND EXCHANGES ALL THE PEOPLE WHO GET THE WORK DONE (CONSULTANTS, AGGREGATORS, VERIFIERS, LAWYERS, FORESTERS, SOIL SCIENTISTS, CHEMISTS ETC. ETC.) Winrock International

ROLE OF STANDARDS SETTERS IN CARBON MARKETS DEFINITION MEASUREMENT CERTIFICATION RE-CERTIFICATION TATANKA RESOURCES

PRINCIPAL U.S. VOLUNTARY MARKET STANDARDS CHICAGO CLIMATE EXCHANGE CALIFORNIA CLIMATE ACTION REGISTRY AMERICAN CARBON REGISTRY REGIONAL GREENHOUSE GAS INIATIVE ( RGGI) U.S. E.P.A. CLIMATE LEADERS VOLUNTARY CARBON STANDARD GOLD STANDARD AND OTHERS TATANKA RESOURCES

Ex. - Project Types that Create Offsets Activity Category GHG Project Type Energy efficiency Transport Buildings Vehicle fleet efficiency Building insulation Forestry Tree planting Conservation Watershed reforestation Forest protection Methane capture & destruction Landfills Livestock Landfill gas capture and destruction Livestock manure management Renewable energy (LDCs) Grid connected Off grid Small hydro PV home lighting systems Industrial process Carbon capture & storage Fuel switching Enhanced oil recovery Coal-to-gas fired electricity generation Winrock International Winrock International

U.S. Carbon Offset Transactions (2008) Tatanka Resources

Tatanka Resources

How the Trading Process Works Project Owner/Sellers A project developer (e.g., company, government, individual) undertakes a project action to reduce/remove GHG emissions. For example, Methane capture Reforestation Solar water heating Independent verifier confirms proper GHG measurement, accounting and reporting A verified project action creates verified carbon offsets Project developer registers verified offsets on a registry Carbon Offset Buyers Through registries: Governments, companies, and individuals in the U.S. transaction with project developers to in order to buy carbon offsets Some buy carbon offsets to help satisfy state and regional mandatory obligations Others buy carbon offsets to apply toward voluntary reduction commitments, or to save them in order to meet anticipated federal mandatory obligations Carbon Offsets $$ This diagram illustrates how carbon trading works in concept. Tatanka Resources

What is a Transaction Carbon Registry? A transaction registry is a marketplace – a place where buyers and sellers meet to trade offsets A credible transaction registry uses standards and transparent rules to ensure legal ownership, environmental integrity, and market transparency for every offset traded Tatanka Resources

WHAT DOES A REGISTRY DO? REVIEWS AND ACCEPTS PROJECT DOCUMENTATION AS KEEPER OF THE KEYS CREATES A UNIQUE FINANCIAL ASSET ISSUES IT TO THE OWNERS TRACKS OWNERSHIP AND TRANSFERS CANCELS THE CREDITS WHEN THEY ARE USED AS OFFSETS TATANKA RESOURCES

Minimum Normative Reference Standards for a Credible Registry GHG Protocol for Project Accounting (2005) http://www.ghgprotocol.org/standards/project-standard ISO Series 14064: 2006, Parts 1-3, project GHG quantificatin ISO 14065: 2007, verifier accreditation requirements United States Environmental Protection Agency (U.S. EPA), Climate Leader Program, GHG Inventory Protocol (May 2005) http://www.epa.gov/climateleaders/resources/inventory-guidance.html Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (2007)http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr.pdf Winrock International

U.S. Offset Market Characteristics The U.S. carbon offset market (excluding CCX) grew from US$262 million in 2007 to US$397 million in 2008; estimated growth to US$ 1 billion in 2009. Both volumes and prices still going up, in spite of market uncertainties, on average price of $7.34 in the U.S. Range from US$2 to US$15. Corporations continue to set reduction targets, but pre-compliance demand is beginning to dominate with the anticipation of cap-and-trade as part of the American Clean Energy and Security Action (ACESA). Voluntary buyers interested in low risk, “high charisma” carbon (e.g., forest, energy efficiency). New administration is serious about climate change. This helps with the US market Charismatic carbon  carbon offsets of special interest to investors, such as forest preservation and community development, school lighting, etc. in contrast with e.g., gas flaring offsets. These offsets command a premium in the market. Tatanka Resources

Winrock International Who Buys, Who Sells & How Buyers include companies that buy carbon offsets for their own operations and/or on behalf of their customers (e.g., airlines), events (e.g., 2005 Gleneagles G8 Summit), and individuals who want to be “carbon neutral”. Includes hedge funds who buy as speculators. Buys from a transaction registry. Sellers include project developers who invest and undertake a qualifying project action that reduces or removes GHG emissions. Sells on a transaction registry. Market intermediaries include offset wholesalers who buy offsets from project developers and sell them to retailers, and brokers who connect project developers and wholesalers to compliance buyers, CSR buyers, aggregators, and other large buyers. Convene buyers and sellers on a transaction registry. Winrock International

Tatanka Resources

Tatanka Resources