1. NREL is a national laboratory of the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy operated by the Alliance for Sustainable Energy, LLC SEDS Review Walter Short For Don Remson of NETL 5/7/09 SEDS Gas and Coal Modules

2. Gas and Coal in Context of SEDS Macroeconomics Biomass Coal Natural Gas Oil Biofuels Electricity Hydrogen Liquid Fuels Buildings Heavy Transportation Industry Light Vehicles Macroeconomics Converted Energy Primary Energy End-Use

3. Coal and Gas Data Flow Liquid Fuels Buildings Heavy Transportation Industry Light Vehicles Coal Oil Oil Price Natural Gas Demand Incoming Data Outgoing Data Natural Gas Coal Demand Hydrogen Electricity Liquid Fuels Buildings Heavy Transportation Industry Light Vehicles Hydrogen Electricity Natural Gas Price by Customer Type Coal Price by Customer Type

4. Major Components of Natural Gas Module Domestic Supply Curve Canada Imports S C Arctic S C Methane Hydrate S C LNG Supply Combined Supply Curve Annual Demand Sector-specific Gas Price** NETL MARKAL/ NEMS Recoverable Reserves Finding rates Initial year of recovery Proven reserves R/P ratio Production rate ReGas plant approval rate* ReGas plant capacity Capacity utilization limits* LNG price floor Oil Price *Correlated to oil prices Year ANGTS opens* **Function of oil prices

5. Direct Relationship between Oil and Gas Prices Oil Price Baseline Oil Price Ratio Year ANGTS Pipeline Opens* Maximum New LNG Regas Capacity Permitting and Building Lag Time* ReGas Plant Approval Rate ReGas Average Plant Capacity Annual Utilization Rate Adjustment Minimum Capacity Utilization Maximum Capacity Utilization Alaska Supply Parameters LNG Supply Parameters Correlated (*Negative Correlation) Natural Gas Price N.G. Price Adjustment

6. Gas Annual Supply Curves Quads/year 2007$/MMBtu

7. Uncertainty in Gas Prices Over Time 2007$/MMBtu Technology, fuel price, and policy uncertainty are included in this graph. The prices shown do not include the cost of carbon.

8. Uncertainty in Gas Prices Over Time 2007$/MMBtu Technology, fuel price, and policy uncertainty are included in this graph. The prices shown do not include the cost of carbon.

9. Gas Issues and Future Work Update Domestic Supply Curves Ensure shale gas is captured Refine oil/gas price relationship Update hydrate and LNG data as it becomes available

10. Major Components of Coal Module Annual Supply Curve Annual Demand Sector-specific Coal Price AEO cases

11. Coal Annual Supply Curves 2007$/MMBtu Million Short Tons/Year 2007$/Short Ton

12. Uncertainty in Coal Prices Over Time 2007$/MMBtu Technology, fuel price, and policy uncertainty are included in this graph. The prices shown do not include the cost of carbon. 2007$/short ton

13. Uncertainty in Coal Prices Over Time 2007$/MMBtu Technology, fuel price, and policy uncertainty are included in this graph. The prices shown do not include the cost of carbon. 2007$/short ton

14. Sources of Data Gas –Markal 2007 Supply curves for domestic gas, Canadian imports, and Arctic gas. –NETL Hydrate estimates (Don Remson) –NETL LNG estimates (Don Remson) Coal –Annual supply curves based on regressions from AEO 2007

15. Coal Issues and Future Work Ensure market prices – past, present and future - are covered by the range of uncertainty Add volatility and increasing uncertainty over time Add correlation to oil and gas prices

16. Backup

17. Historical Coal Prices (EIA) Business Week Ended April 17, 2009