Energy Efficiency Consulting Competencies & Capabilities Presenter’s Name Presenter’s Title Client Name/Location Date

Agenda Business Case for Energy Efficiency Energy Efficiency Practice DuPont Energy Efficiency Track Record References 2

External Drivers are pressuring companies to improve Energy Efficiency Volatility, magnitude and escalation of energy costs are increasing the urgency to drive improvements in energy efficiency. 1. Volatility of resource costs Governments and global institutions are introducing new energy management regulations and policies, pressuring companies & societies to re-think energy consumption. 2. Public policy The Investment community is increasing the weight of a company’s energy efficiency commitments and capabilities when making investment choices. 3. Access to capital Companies are expected to publish energy improvement goals and are being held accountable for delivering results. 4. Public accountability These are the key drivers that are pressuring companies around the world to improve their energy position. Of the five drivers, four seem particularly relevant to the objectives in Russia. Let’s start with volatility of resource costs and public policy. According to the June 2010 wiiw report, the government’s intent is to increase oil production exports by 10% and gas exports by 40%, while constraining domestic gas consumption through tariff hikes. Russia must free up energy carriers for export to keep its domestic energy costs low. Reducing energy consumption is critical to achieving this. Behavioral changes will take the form of tightening technical energy requirements for various types of equipment to increase efficiencies and (over time) moving energy users from gas to coal and nuclear through increased tariffs. [KEY CONNECTIONS: NEEDED MANAGEMENT SYSTEMS, PRIORIZATION OF INITIATIVES, CULTURAL CHANGE MODELS] Improvements in energy efficiency will require facility, equipment and infrastructure upgrades which, in turn requires attracting increased investment. Investors will be more willing to invest if companies can show that they can be more responsible and capable of reducing their energy consumptions and controlling their costs. And finally, reduced energy demand will lower the cost of goods which increases the region’s competitiveness. [KEY CONNECTIONS: SELECTING HIGH GAIN LOWEST COST INITIATIVES, QUICK WINS THAT CAN BE SHOWCASED TO ESTABLISH TRUST, GOOD WILL AND ATTRACT INVESTMENTS, LOWER CONSUMPTIONS LEADING TO LOWER COSTS TO BETTER COMPETE] It’s clear that Russia’s economic success relies on reducing energy intensity across its economy. Based on Russia’s Energy Strategy, a large portion of the reductions will need to come from energy intensive industry. The reductions in these industries are expected to come from both capital projects requiring increased investments as well as no, or low capital initiatives. A combination of energy policy, technology and behavioral solutions will be needed to achieve the aggressive goals set forth in the Energy Plan. ADDITIONAL [Access to Capital: The ‘Energy Strategy until 2030’ (approved Aug. 2009), which appears to be in line with the government’s announced programme of modernization and innovation will require significant investment. Investment needed for the development of oil and gas deposits alone is estimated at 1 – 3 Trillion USD through 2030. When combined with investments in infrastructure upgrades, the need goes well beyond the current investment trajectory.] [BACKGROUND FROM wiiw Report: The prospects of the Russian energy sector are to be seen against the background of the government’s plans to reduce the energy intensity of economy. The idea behind it is to boost the international competitiveness of Russian products (particularly in the energy-intensive industrial branches) and to free up additional volumes of energy carriers for exports. Indeed, despite the recent impressive progress Russia still has one of the most energy-intensive economies in the world. As demonstrated by Figure 11, in order to produce one unit of GDP, the Russian economy consumes twice as much energy as the United States or the world on average, and three times as much as e.g. Austria or the EU -27. This is partly a consequence of using the old Soviet-era energy-intensive technologies, but also reflects the structural backwardness and the energy-wasting behaviour of economic agents.] [The government’s target is to increase, by the year 2030, oil production by 10% and gas production by some 40%, with half of the latter to be provided by the so-called ‘independent’ (from Gazprom) producers. The increase in the oil output would be largely channelled to domestic consumption, while crude exports should stay flat and those of oil products rise only marginally. At the same time, the planned tax reforms should facilitate a shift in the structure of the Russian energy export mix away from crude oil towards higher value-added oil products. In contrast to oil, half of the additionally produced gas should be exported: gas exports are to rise by about 50%. In turn, the rise in domestic gas consumption will be constrained by the planned tariff hikes, which should facilitate the substitution of gas by coal and nuclear energy, and induce energy-saving behaviour. The announced target is to lower the energy intensity of the economy by about three times and bring it close to the levels observed in developed countries with similar climatic conditions. Domestic gas savings resulting from higher energy efficiency, but also reduced flaring and leakages.] Energy efficiency is being used as a powerful strategy to lower the cost of goods and attract customers at every level. 5. Competition

World Crude Oil Prices, 1980-2035 1. Volatility of resource costs Rising energy prices are focusing great attention to more efficient use of resources World Crude Oil Prices, 1980-2035 $51 $125 $200* "The high oil prices will encourage us all to focus on renewable energy. We will have to push harder." Krairit Nilkuha, director-general of the U.S. Alternative Energy Development and Efficiency Department (Jan 2011) Forecasted energy prices will encourage industries to: Invest in development of new technologies that are less energy intensive and improve productivity Increase the demand for sustainable energy sources that generate less GHG emissions Promote efficient use of fossil fuel energy sources Natural Gas Prices, (1990 -2035) *Nominal oil price – the higher projected oil price. **% consumption as reported by EIA in the 2011 Energy Outlook early release Source: International Energy Agency (IEA) – World Energy Outlook 2010; U.S. Energy Information Administration (EIA) website SLS › Sustainable Operations › EE › DuPont Resume › Business Case

2. Public Policy Many countries are developing and implementing policies to promote efficient use of energy sources and reduction of energy-related carbon emissions Example Policies Sources: International Energy Agency (www.iea.com) , World Energy Outlook 2009 SLS › Sustainable Operations › EE › DuPont Resume › Business Case

Example energy performance reported in sustainability report 4. Public Accountability The number of Fortune Global 250 companies publishing Sustainability reports has been increasing in the last 15 years Many of these companies include energy goals and performance in their sustainability reports Example energy performance reported in sustainability report Chevron website, Chevron Corporate Responsibility Report 2009 GRI: Global Reporting Initiative SLS › Sustainable Operations › EE › DuPont Resume › Business Case

5. Competition As energy is becoming more expensive, companies are strategically focusing on its efficient use as a way to gain competitive advantage For much of the global economy, energy has become one of the strategic factors driving business decision-making. Business and consumers are increasingly considering the energy efficiency of the products and services they buy and use. In Industrial production, companies are searching for the most energy-efficient process design solutions. (…) these development are the results of economic and political facts: the long-term depletion of fossil fuels and public policy decisions to curb greenhouse gas emissions (GHG). Thus, energy has become a key factor in gaining a competitive edge, and the relevant global markets are growing rapidly. McKinsey & Company, Energy: A key competitive Advantage New sources of growth and productivity, April 2009. More than 80% of surveyed companies rated energy to be “extremely “ or “very” important to their business, making energy an strategic factor to focus on to gain competitive advantage. Source: The Conference Board, Strategic Energy Management, 2004. SLS › Sustainable Operations › EE › DuPont Resume › Business Case

DuPont’s enterprise-wide management systems & cultural change approaches drive energy efficiency results Identifying and elevating energy cost as a strategic business issue Understanding business implications of energy consumption and escalating costs Understanding implications of energy cost variability on portfolio profitability Benchmarking and quantifying the total opportunity value Developing skills and capabilities of the people in the organization Building collaborative teams Providing enabling tools Identifying and executing the right projects to drive highest gain results Prioritizing highest gain / lowest investment opportunities Utilizing leading methods for improvement opportunity execution (six sigma, lean, etc) Bringing deep technical expertise, in both energy systems & core processes Implementing a vertically integrated management approach to drive results Driving leadership and management commitment to breakout performance Instituting organizational structures and accountabilities to drive results Designing and implementing managing processes to sustain results

Simplified Energy Cost Flow Sourcing Efficiency Energy cost is a function of pricing, consumption, GHG credits/options, and incentives Pricing is driven by market dynamics, but is negotiable Efficiency efforts are focused on minimizing waste Improvements to efficiency: Core Technology, capital-driven Energy System improvements, low capital/cost Changing behaviors – minimal investment Core Manufacturing Process Energy Input Energy Systems Energy Source Mix Energy Pricing Improvements… Modifications to core technology, mostly capital investment driven (new technologies, heat integration, etc) Improvements to the energy systems, low capital/cost investment (ie pump efficiency) Changing the behaviors to operate with discipline around reducing energy waste, minimal investment Energy Culture Energy Waste

Energy Planning Process Overview Recognize the Energy Challenge Develop an Energy Plan Energy Goals Workshop Assess Process Energy use Identify Opportunities Develop Capital Projects Appropriate Capital Funds Internal Capital External Funds (Performance Contracting) Energy Plan Template Plant Energy Assessment Template Energy-related Six Sigma Projects Virtual Workshops “Top Ten” Energy Projects Initiative The strength of our methodologies lies in the ability to communicate and operationalize a strong set of process phases and steps. These have been customized to hundreds of different operations across DuPont. The approach has been tested, fine tuned and proven in a variety of situations.

Agenda Business Case for Energy Efficiency Competencies and Capabilities DuPont Energy Efficiency Track Record References 11

We help you achieve cost reductions and security of supply through efficiency and improved operating team capabilities Energy Efficiency Providing an effective energy management system that’s rooted in leadership enablement, clear organizational goals, effective staffing and training, and specific processes and actions Integrating energy efficiency management into the strategy and execution of the ongoing business processes (capital, cost, resources, etc.) Designing a practical and enduring energy management process to sustain and build on achieved goals – customized at each level of the organization Emissions Resources Supply Chain Energy People Management Culture Quality Reliability Maintenance Safety 12

Competitive Advantage Through Proactive Approaches “We are uniquely able to combine knowledge, experience and technology to identify, capture, and deliver real and lasting energy savings across your portfolio of assets.” Risk Mitigation Competitive advantage Cost Reduction Revenue generation Awareness and Compliance Influence on Society and the competitive landscape Operational efficiency (inside out approach prevailing) Product innovation (outside in approach prevailing) Moving from discrete energy reduction initiatives to integrated energy management strategies that return significant cash.

Corporate Approach to Strategic Issues Recognize strategic value & drive from the top Line accountability Appropriate support resources Integrated Management System Consistent implementation approach across entire operations portfolio Rigorous performance management Prioritize no-capital & low-capital improvement

Energy Management System (EMS) Strong Leadership Integrated Energy Management Culture Engaged & Committed Leadership Challenging Goals, Policies, & Principles Metrics and Data-Driven Decisions Appropriate Organizational Structure Integrated Energy Efficiency Organization Responsible Line Organization Timely Recognition of Success Focused Processes and Actions Consistent & Targeted Business Planning Process Commitment to Training & Development Effective Communication System Standard Improvement Methodology These elements, and the system for realizing them, form the best practice reference model against which we implement change

Consulting Businesses & Offerings Sustainable Operations DuPont Sustainable Solutions helps clients achieve operational excellence Consulting Businesses & Offerings Safety Resources Sustainable Operations Training Solutions Clean Technologies Transform your workplace culture, develop employee skills, reduce incidents and injuries, which improve operational efficiency and sustain company growth. Maximize returns, minimize waste and reduce risks through sustainability, energy efficiency and sustainable assets management. Empower employees with critical training in safety, industrial skills and ethics and compliance by integrating eLearning tools, instructor-led courses and classroom training. Cleaner air and cleaner fuels are the result of best-in-class technologies, equipment and services combined with strong technical and engineering capabilities. Although these Practices are shown separately, the arrows show that our Teams work collaboratively and can leverage knowledge across the Practices to address our client’s most pressing issues. DuPont Sustainable Solutions is bringing customers the benefits of integrated global consulting, services and technology. DSS Practices apply DuPont real-world experience, a history of innovation, problem-solving success, and strong brands to help organizations transform their workplaces and work cultures to create safer, more efficient, and more environmentally sustainable workplaces. Our offerings are combined into 4 Practice Areas /Strategic Businesses: Safety Resources Sustainable Operations Training Solutions Clean Technologies Let’s take a brief look at each one… Background: Real-world experience. We help our clients succeed by applying over 200 years of accumulated first- hand knowledge and experience in safety, engineering, operations and environmental management. Our long history of implementing safety and process improvements both within DuPont and for clients globally enables us to deliver customized performance solutions that take into account cultural differences and industry requirements Collaboration. Our highly trained , experienced experts employ an inclusive, collaborative approach, thoroughly immersing themselves in an organization’s culture and operation. They work across all levels of the organization to implement solutions that are practical, impactful and embraced and sustain performance through ongoing training We develop collaborative relationships with clients to tailor solutions—big or small—to meet their needs for improved safety, environmental, operations, and employee performance. Our approach is based on the principle of felt leadership, which requires the commitment and involvement of upper management to help drive change and transfer knowledge throughout the entire organization. This is an essential component of all engagements. Every collaboration provides valuable learnings that may be leveraged and applied to other engagements. This accumulated knowledge is invaluable to us and to our clients. Transformation. DuPont Sustainable Solutions is a catalyst to bridge the gap between today’s business objectives and readiness for the future, by bringing together people, processes and technology to effect sustained business transformations. We have the people and methodologies to deliver customized, actionable solutions founded upon best practices in each of our practice areas. We take a holistic view so that we can build upon strengths, identify synergies and arm our clients with new capabilities to succeed in the face of ever changing business realities of today and tomorrow We employ proven managing systems and technologies that improve productivity, minimize risk, reduce energy usage and limit environmental impact to help clients achieve sustainable growth. 16

Agenda Business Case for Energy Efficiency Competencies & Capabilities DuPont Energy Efficiency Track Record References 17

DuPont Founded in 1802 A Fortune Top 100 Science Company Recognized for experience and success in operational excellence Active Leader in environmental sustainability since 1989 – “Laggard to Leader” (Name, Title), I’m with DuPont -- a Fortune top 100 science company, recognized for their experience and success in operational management. DuPont has been a very active leader in environmental sustainability since 1989. In fact, we’ve developed rigorous managing systems that have allowed us to transform our organization from laggard to leader so much so that today, we are taking those systems and learnings to the marketplace in the form of consulting services.

DuPont Sustainable Solutions Consulting, Technology, & Training Services: DuPont Sustainable Solutions Global Safety Consultants Since 1998* Clean Technologies Training Solutions Sustainable Operations Environment, Energy, Sustainable Assets DuPont has developed a strong set of consulting, technology, and licensing services as part of its diverse portfolio. This is managed by our Sustainable Solutions business. Our safety services are perhaps best known. We’ve been consulting in this space for over 35 years but the fact is, we’ve been building our knowledge, experience and managing systems in safety since our founding – over 200 years ago. These services have evolved from employee safety to include process safety and most recently, contractor safety. Clean technologies (fill-in per audience’s interest) Sustainable Operations focuses on Energy Efficiency, Environmental Management and Sustainable Assets. Our knowledge and practicalityCopyright © 2009 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™ and The miracles of science™ are registered trademarks or trademarks of E. I. du Pont de Nemours and Company or its affiliates. (10-09) runs deep in these areas. The approaches, methodologies and managing systems that we’ve developed as owner/operators have allowed is to free up large amounts of capital, improve performance at multiple levels across our organization while increasing shareholder and stakeholder value. I’ll share some examples later in the presentation. Improve Performance, Release Capital…Increase Shareholder & Stakeholder Value *Has existed as a safety services business since the early 1970's.

The DuPont Energy & Enviornmental Challenge DuPont has addressed sustainability and energy reductions on a continuous basis since 1989 Our motivations: Recognized energy cost as a significant part of our total operating cost Experienced supply disruptions as costs were increasing rapidly Energy efficiency would provide the greatest cost savings among global warming initiatives, but emissions would gain ground Clearly viewed energy efficiency as a way to outperform competitors Overall, the health and welfare of the organization and its product lines would be at risk if we didn’t act.

DuPont Energy & Environmental Accomplishments 19% reduction in energy use since 1990 baseline while production increased by 21% Over $5 Billion in energy cost savings since 1990 baseline Gained industry recognition from “Laggard” to “Leader” With this knowledge and know-how, we have been able to accelerate progress and continue to raise the bar. Other Sustainability Results since 1990: Safety & Health World-Class Major Incidents 90% ↓ Air Toxics 75% ↓ Air Carcinogens 92% ↓ Hazardous Waste (Dry) 42% ↓ U.S. TRI “Releases” 77% ↓ * Sustainability accomplishments from 1990 through 2009 (per data available and used for the 2010 DuPont Global Reporting Initiative Report) ** TRI = toxic release inventory

Agenda Business Case for Energy Efficiency Competencies & Capabilities DuPont Energy Efficiency Track Record References 22

Example: Oil & Gas Client Project Objectives Possible Results Goal: 10% Energy Reduction by 2015 Objectives: Leadership commitment and cultural change that leads to a sustainable corporate best practice Energy Management process Performance management process and the metrics necessary for managing the activities and projects Pilot of new Energy Management System at a Refinery Estimated benefits from an Energy Efficiency Improvement Program Without investment: 3 – 5% With Capex <1000K$ 8 – 12% With Capex >1000K$ 16 – 24% World-Class Refineries consume ~25% less than average

Example: Oil & Gas Approach Corporate Energy Management System Corporate & Site Assessment/Survey Implementation Plan Development Management System & KPI Development Corporate Rollout Plan Development Organizational Development & Training Process Assessment & Continuous Improvement Plan 1/1/10 6/1/10 11/1/11

Example: Oil & Gas Approach Over $1.5 MM in direct benefit in less than 1 year Corporate system designed for sustainability Process, energy system, and culture opportunities identified and implemented Corporate Energy Management System Corporate & Site Assessment/Survey Implementation Plan Development Management System & KPI Development Corporate Rollout Plan Development Organizational Development & Training Process Assessment & Continuous Improvement Plan Energy Culture Survey Technical Review Management System Technical Assessment Leadership Alignment KPI Development Site Pilot Solution Design Over $1.5 MM in direct benefit in less than 1 year Corporate system designed for sustainability Process, energy system, and culture opportunities identified and implemented 1/1/10 6/1/10 11/1/11

Burning Platform Shared Vision First Practical Steps Are you ready to build a business case for energy? Escalating costs Supply limits Environmental impacts Stakeholder expectations Burning Platform Goals and Strategy Increased production Shareholder value growth Significant footprint benefits Shared Vision Rapid savings opportunities Leadership Organization and Structure Processes and Actions First Practical Steps 26

Success depends on an ability to create and execute the business case for energy efficiency Identifying and elevating energy costs as a strategic business issue Developing skills and capabilities of people across the organization Identifying and executing the right projects to drive highest gains Implementing an enterprise-wide management approach to drive results Identifying and elevating energy cost as a strategic business issue Understanding business implications of energy consumption and escalating costs Understanding implications of energy cost variability on portfolio profitability Benchmarking and quantifying the total opportunity value Implementing a vertically integrated management approach to drive results Driving leadership and management commitment to breakout performance Instituting organizational structures and accountabilities to drive results Designing and implementing managing processes to sustain results Developing skills and capabilities of the people in the organization Identifying and executing the right projects to drive highest gain results Prioritizing highest gain / lowest investment opportunities Utilizing leading methods for improvement opportunity execution (six sigma, lean, etc) Bringing deep technical expertise, in both energy systems & core processes Enterprise-wide systems that combine knowledge, experience and technology to identify, capture, and deliver real and lasting energy savings across your portfolio.”

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