Joe Kiely Vice President of Operations, Ports-to-Plains Alliance Progressive 15 Fall Meeting April 22, 2010

Ports-to-Plains Alliance It’s about connections …. A pipeline!

Why Does the Alliance Matter? Nearly half of U.S. oil and gas production Source: U.S. Department of Energy

Why Does the Alliance Matter? Primary pipeline corridor for North America’s oil

Why Does the Alliance Matter? 7 of America’s top 10 wind states Source: U.S. Department of Energy

Why Does the Alliance Matter? America’s agricultural heartland. Source: U.S. Department of Agriculture

Why Does the Alliance Matter? Percent Population Change – Source: U.S. Census Bureau

It’s about a Common Economy … Energy … Agriculture … Trade … Tourism …

It’s about an Energy Economy … Its Jobs!

Energy Sector as Jobs Provider Oil and Gas Industry 9.2 million jobs Alberta Oil Sands 343,000 new jobs in US – Electricity Generation250,000 direct jobs Ethanol Industry supports 220,000 jobs Energy = Jobs

The American Economy Relies on Affordable, Reliable Energy More than 3.7 million manufacturing jobs lost since 2007 High energy prices a major factor 4,200 trucking companies closed due to high diesel prices between 2Q 2007 and 4Q Airlines shut down due to high jet fuel prices in 2008 alone Over 360,000 jobs lost Energy = Jobs

Energy Jobs along the Ports-to-Plains Corridor PartnershipForEnergy.com

A Measure of the Opportunity

US Generation Mix (Thru to Nov. 2009)* *From Energy Information Administration

Wind & Solar Facts Wind Facts*: United States wind power generation now totals 35,159 MW and is produced in 35 states  Powers close to 9.7 million American homes.  Capacity grew 39% between 2008 and The American Wind Energy Association (AWEA) estimates 38 manufacturing companies were brought online, announced or expanded in the United States in The United States ranks 1 st in the world in wind power generation above China and Germany for 2009, per the Global Wind Energy Center (GWEC). * Numbers provided by AWEA unless otherwise noted.

Wind & Solar Facts Solar Facts*: United States solar power generation now totals 8,775 MW  Powers close to 1.5 million American homes.  Capacity grew about 10% between 2007 and 2008 * Numbers provided by the Solar Energy Industries Association (SEIA) unless otherwise noted.

Utilization Dictates Transmission Rates (HPX) TRANSMISSION RATE $/MWh How to Improve Transmission Utilization Geographic Diversity (wind in multiple locations) Blending wind with solar and other renewables Use of gas-fired generation for “firming” and meeting load

Local Market versus Export Market Estimated wind energy potential exceeds local needs. –NREL estimate of Ports-to-Plains states: 5 to 9 million MW –US installed generating capacity 2008 (all fuels) 1.1 million MW Everyone wants to export to either California or southeast States are trying to be first to market: –Competing with each other for economic development opportunities –Want to change transmission planning philosophy to focus on wind export in addition to reliability Export scenarios will put tremendous stress on existing transmission built primarily to serve local load. Electric system stability will limit installed wind generation installation to a fraction of the theoretical capability.

What About Those Oil Sands? -- The Opportunity There are 1.7 trillion barrels of oil in the Canadian Oil Sands Over half of this potential resides in the Athabasca McMurray Sandstone Only 20% can be mined – the rest is too deep ٭Ft McMurray

Fort McMurray

Oil Sands Reclamation: Before and After

Energy Development in Alberta Alberta’s oil sands in context

Global Crude Oil Reserves by Country Source: Oil & Gas Journal Dec Includes 170 billion barrels of oil sands reserves Other Accessible Reserves Other Accessible Reserves Other Accessible Reserves State owned or controlled Accessible Canada’s Oil Sands World Oil Reserves Other Accessible Reserves 53% 47% Accessible Oil Reserves

Significant Source of US Supply

Bitumen under SAGD Water Cream Olive Oil Maple Syrup Ketchup Peanut Butter Viscosity (cP) Typical oil in the ground Bitumen at virgin reservoir conditions ,000 10, ,000 1,000,000 10,000, Temperature (deg C) The Challenge: Viscosity

Oil Sands: In Situ Recovery Cyclic Steam Process Steam-Assisted Gravity Drainage In Situ Recovery: 80% of resource 45% of production No tailings ponds No water from the Athabasca River

Transportation Corridors Slide 29

Why Colorado? … It’s about Domestic Trade … Over $10.47 billion

Why Colorado? … It’s about North American Trade … Mexico … Exports … Truck …$788m up 32% since 2004 Mexico … Imports … Truck …$694m up 23% since 2004

Why Colorado? … It’s about North American Trade … Canada … Exports … Truck …$1.6b up 18% since 2004 Canada … Imports … Truck …$1.1b up 35% since 2004

Why Colorado? … Almost 73% of Truck Trade with Mexico goes through PTP Ports of Laredo, Eagle, Pass and Del Rio. The market share of Colorado’s trade with Canada has increased 7.5% since 2004 through PTP Ports of Sweetgrass, Wild Horse, Raymond and Portal.

It’s about the rural heartland … Most communities have little voice in Washington, D.C. Most communities are a long way from their state capitals. Most communities under 20,000 population

How can we be heard about … The importance of connecting rural areas to markets The value of freight corridors The importance of a national transportation vision

How can we be heard about … The expansion of these corridors The value of Border Infrastructure to Commerce and Security The importance of NHS High Priority Corridors connecting to new markets north and south.

How can we be heard about … Opposition to legislation that limits the opportunities for expansion of rural highways The opportunity for North American energy security The need for a pilot project addressing truck permitting, weights and combinations

How can we be heard about … All these items through a multi-state caucus!

How can we be heard about …

Joe Kiely Vice President of Operations P.O. Box 9 Limon, CO P: C: