1. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative David Porter Texas Railroad Commissioner Oil & Gas Regulatory Conference San Antonio, Texas August 19, 2014

2. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division The RRC is required by statute to promote natural gas as an alternative fuel to benefit Texas’ economy, air quality and/or energy security. My Texas Natural Gas Initiative, launched last year, encourages more use of natural gas in vehicles and E&P activities. Railroad Commission Role

3. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Opportunity 96 percent of gas produced in the United States is for the domestic market. Source: U.S. Department of Energy, Energy Information Administration

4. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Dr. Ken Morgan, Director Texas Christian University Energy Institute George E. King, Distinguished Engineering Advisor Apache Corporation Lynn Lyon, Director, Fuel Market Development Pioneer Natural Resources Jason Isaac, State Representative Texas House of Representatives Panelists

5. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative Channel production from the Eagle Ford, Permian Basin and other plays into markets that deliver the greatest economic benefits to Texans.

6. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative: Engine Fuel Sales of natural gas engine fuel exceed projections. Natural gas is now the leading alternative fuel for vehicles in Texas.

7. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Initiative: Exploration & Production Retrofit or new build 8 engines/frac spread Capital cost of retrofit ~$1.2MM Price spread of $1.75/DGE, 50% diesel substitution Payback for retrofit = 1.4 years

8. RAILROAD COMMISSION OF TEXAS Alternative Fuels Research & Education Division Texas Natural Gas Summit October 23, 2014 Palmer Events Center, 900 Barton Springs Road, Austin 78704 Combination Job Fair and NG Vehicle Expo 60 exhibitors Panels/workshops on E&P, fleet vehicles, grants and incentives, regulatory issues