Industry Questions on Applying a LCFS to Residential Heating & Hot Water Systems How does a LCFS interact with current and t future Federal, regional and state building energy efficiency and environmental ? If fuel switching is employed based on CO 2e alone how do you account for: – Keeping the life-cycle emissions data current – Appliance efficiency differences – Impacts of other air pollutants on the region – Additional infrastructure costs – Homeowner conversion costs – Projections of fuel supply, demand and cost – Other life cycle emissions impacts – Required homeowner lifestyle changes – Impact on current R&D efforts 1

Liquid Fuels Industry Plans The industry has decided to move to ultralow sulfur fuel as soon as practicable either in 2010 or 2011 at the latest. There is no silver bullet Multiple energy sustainable pathways are required In the future liquid fuels can redefine ZEBs to include ZCBs (zero carbon footprint buildings) The industry is committed to accelerate the blending with sustainable biofuels as soon as infrastructure, end-use storage and combustion technology can accommodate it. The industry is accelerating the use of solar thermal integrated liquid fueled hydronic systems to increase fuel use reduction while maintaining the reliability and convenience of stored liquid fuels 2

Liquid Fuels Industry Plans Near-Term Carbon Footprint Reduction Pathway 3

Liquid Fuels Industry Plans On the pathway toward ZEBs and ZCBs ZEB – zero fossil energy buildings ZCB – zero carbon footprint buildings 4

Issues to consider – how to encourage rapid adoption of ULS fuels to encourage accelerated blending of biofuels up to 5% near-term to encourage research in expanding bio-blending beyond the 5% currently recognized by ASTM to encourage homeowners to change out old furnaces, boilers and control systems to encourage homeowners to increase the energy efficiency of their homes to increase research on cellulosic material (like forest residue) conversion to liquid fuels e.g. ethyl or butyl – levulinate 5