1. INERG, LLC The Energy Climate Era Challenges & Opportunities Brian Rouch Partner, Inerg, LLC

2. INERG, LLC Energy Climate Era: Problems Costs Reliability of Supply Environment/Global Warming Non-Renewable Anachronistic regulation Dated/Insufficient Infrastructure

3. INERG, LLC Cost Problem Increased demand (demand spike) –China, India, high growth countries Rising production costs –e.g., Extraction costs

4. INERG, LLC Reliability Problem U.S. imports approximately 60% of oil –Most OPEC oil passes through Straight of Hormuz Lack of control: -production -extraction -costs

5. INERG, LLC Global Warming Problem Fossil fuels emit Carbon Dioxide (CO 2 ) Greenhouse gases insulate atmosphere

6. INERG, LLC Fossil Energy is Short Term Fossil fuels are not renewable Petroleum reserves, particularly those with cheap extraction costs, are in decline Global warming & oil don’t mix

7. INERG, LLC Regulatory Problem Under NEPA and state law (e.g., CEQA) energy is generally regulated in one category -Therefore, Green energy and Brown energy are the same There is a need for a more sophisticated regulatory regime that segregates the Green from the Brown

8. INERG, LLC Infrastructure Problem Transmission Lines Substations Generation

9. INERG, LLC Solutions Must Be… Deliverable –Technology must have a supply chain, be available Economical –In general, competitive with fossil fuels Scalable –Meet national/global supply

10. INERG, LLC Cost Solution Scale up Size –200 MW v. 50 MW Technology –Lots of energy per acre or per sq. ft. of equipment Efficient process –Modular v. custom fabrication

11. INERG, LLC Reliability Solution Domestic energy production -Immune from foreign affairs Consistent -Immune from weather/ growth seasons

12. INERG, LLC Global Warming Solution Fuels that are low to zero carbon –Transportation fuels=hybrid, electric, second generation biofuels –Electricity=wind & solar thermal Conservation

13. INERG, LLC Regulatory Solution Need to segregate Green and Brown Energy –NEPA/CEQA limit energy development –Due to global warming/fossil intense energy infrastructure  need to replace brown infrastructure with green infrastructure We must be able to permit and build renewable generation

14. INERG, LLC Infrastructure Solution Transmission –Need an Eisenhower type transmission infrastructure project NEPA approved renewable energy zones

15. INERG, LLC Stimulus Package Explained: Retrofit Buildings=long life spans & energy use=60% of CO 2

16. INERG, LLC Stimulus Package Explained: Transmission Antiquated Inadequate capacity Smart Grid

17. INERG, LLC Stimulus Package Explained: Renewable Generation We need more energy to power our economy We need lower carbon energy

18. INERG, LLC What you can do transportation energy home energy Support good policy –Floor for $ gas Support higher energy costs, but more efficiency=same annual costs but less energy consumed

19. INERG, LLC Summary The energy source that wins will be: –Economical (make $) –Low carbon –Reliable & Renewable –Will be scalable –Will mitigate infrastructure problems –Effectively navigate permitting/regulatory hurdles What energy types potentially meet these requirements? –Solar –Wind –Tide

20. INERG, LLC Question & Answer Brian Rouch Partner, Inerg, LLC 559.827.8282 brianrouch@gmail.com