1. Gas To Power North America June 6, 2006 David M. McClanahan

2. 2 Gas To Power North America Natural Gas – The Fuel of Choice for Over a Decade Low prices Perceived adequate supplies Significant technology enhancements Environmental advantages Recent Studies Continue to Predict Natural Gas Usage for Power Generation to Increase Significantly Full utilization of current idle capacity New capacity (60% of new generation)  Lower construction costs  Shorter lead times  Environmental advantages

3. 3 Gas To Power North America Some in Industry are Challenging Gas Usage Predictions Supply Outlook  Can the Rockies and unconventional sources reverse production declines?  Will LNG meet incremental gas demands?  Can we count on Alaskan gas?  What about OCS? Price Forecasts  At what price will natural gas remain competitive to alternative fuels: $4.50? $5.50?  What price attracts LNG to U.S.? Is price set on world markets?  What is critical price point?

4. 4 Gas To Power North America Competitive Alternatives  Will price differentials between natural gas and coal and nuclear make gas uncompetitive?  Do environmental and construction costs/lead time advantages continue to tip scale in favor of gas?  What is the impact of government policies supporting coal and nuclear?  What about clean coal technology? Renewables? Market Structures  What is the impact of a shift to utility-owned generation from merchant-owned generation?  Does fuel diversity and price stability favor coal and nuclear?

5. 5 Gas To Power North America Panelists Curtis R. Frasier Executive Vice President, Americas Shell Gas & Power William F. Hederman, Jr. Executive Director Energy Resources Group Walter M. Higgins Chairman, President & CEO Sierra Pacific Resources Christopher Hunt President-Global Power BP