U.S. Natural Gas Pipeline Network

FUTURE NATURAL GAS DEMAND ( ) Source: Energy Information Administration, Annual Energy Outlook

FUTURE NATURAL GAS SUPPLY ( ) Source: Energy Information Administration, Annual Energy Outlook

3 North American Supply

NATURAL GAS SUPPLY (JANUARY 1-DECEMBER 31, 2008) Source: Bentek Energy LLC, Energy Market Fundamentals, December 31, Mar Sep 4

Shale Basins and the U.S. Pipeline Grid Source: American Clean Skies Foundation.

U NCONVENTIONAL R ESOURCE D EVELOPMENT Traditional Natural Gas Production Unconventional Gas Resources Shales, Tight Sands, Coal Seams

Natural Gas Production Barnett Shale Source: Texas Railroad Commission

General Characteristics of Productive Shales Source: William Grieser, Halliburton Company.

SHALE GAS RESOURCE ESTIMATES SHALE GAS RESOURCE ESTIMATES Potential Gas Committee added about 200 Tcf to U.S. resource assessment between 2004 and 2006 – almost all attributed to new shale-related data Navigant Consulting, Inc. (2008) estimates Tcf from 17 U.S. shale plays

SELECTED SHALE GAS RESOURCE ESTIMATES SELECTED SHALE GAS RESOURCE ESTIMATES Shale PlayEstimate (Tcf)Max Gas In-Place (Tcf) Antrim Appalachian Marcellus Haynesville Fayetteville Barnett Lewis (New Mexico) Lewis (Wyoming) Mean estimate for U.S. shale resources, 274 Tcf Gas in-place estimates as high as 3,765 Tcf (Navigant Consulting, Inc.)

SHALE GAS PRODUCTION ESTIMATES SHALE GAS PRODUCTION ESTIMATES Depending on the source, some analysts estimate that shale production now at about 5 Bcf per day will grow to Bcf per day by the end of the next decade Will this be additive to current production rates or will it only replace other declining production capability?

Daily Natural Gas Consumption by Sector January 1-December 31, 2008 Source: Bentek Energy LLC, Energy Market Fundamentals, December 31, 2008.

P OUNDS OF CO 2 P ER MMB TU NATURAL GAS IS BY FAR THE CLEANEST OF ALL FOSSIL FUELS. Source: U.S. Energy Information Administration. 13

CONSUMPTION PER RESIDENTIAL NATURAL GAS CUSTOMER MMBtu/Year Source: U.S. Energy Information Administration and American Gas Association. NOTE: Data is “weather normalized” or adjusted to reduce the impact of abnormally warm or cold weather. 32% Efficiency Improvement 14

GREENHOUSE GAS EMISSIONS RESIDENTIAL NATURAL GAS CUSTOMERS ARE GROWING, BUT THEIR GREENHOUSE GAS EMISSIONS HAVE DECLINED MILLIONS OF TONS/YR. MILLIONS OF CUSTOMERS Source: U.S. Environmental Protection Agency, U.S. Energy Information Administration and American Gas Association. 15

M ILLION Btu TOTAL ENERGY EFFICIENCY (SOURCE ENERGY REQUIRED TO DELIVER 100 MMBtu TO END-USE CUSTOMER) NOTE: National average electricity generation mix. 16

DIRECT NATURAL GAS USE REDUCES GREENHOUSE GAS EMISSIONS T ONS OF CO 2 /Y EAR 17

NUMBER OF NATURAL GAS CUSTOMERS INCREASING 18 MILLIONS OF CUSTOMERS

19 OUR INDUSTRY’S FUTURE LOOKS BRIGHT Abundant domestic supply resource base to meet demand growth at reasonable costs Innovative rate designs to align interests of utility and customers Increased direct use of natural gas can reduce energy consumption and costs, lower carbon emissions and enhance national energy security Gas utility industry is a solid, safe, responsible investment

20 Utility Operations Technologies on the Horizon Smart Meters Expanded Use of Mapping and Other Informational Systems Enhanced Locating Technologies Improved Leak Detection (Vehicles and Handheld) Improved Design, Construction and Materials Enhanced Pipeline Repair/Rehabilitation