NATURAL GAS USAGE

April 11, 2011

Shale Gas: A Global Phenomenon

3 | MARCELLUS SHALE COALITION

Source: Energy Information Administration

Shale Gas Revolution Across the U.S.

4 | MARCELLUS SHALE COALITION

Source: Energy Information Administration

Marcellus and Utica Shales

• Below the Marcellus

• Bigger, deeper, denser

• One of the last U.S. unconventional energy fields

• Particularly attractive in OH

• Success in the Marcellus will lead to success in the Utica

Clean, Abundant, and Versatile Resource-How will things be different?

• Heating and cooling sources

• Light duty and heavy duty transportation Fuels

• Generation of electricity

• Combined heat and power applications

• Feedstock for industries

• Utilization of liquids in Wet Natural Gas

6 | MARCELLUS SHALE COALITION

Natural Gas Fundamentals

Three Industry Segments

Upstream: bringing natural gas to the surface (drilling)

Midstream: storing and transporting natural gas (pipelines, etc.)

Downstream: selling and distributing natural gas (your supplier)

Types of Natural Gas

Dry Gas: Home, business heating and fueling

Wet Gas: Contains Natural Gas Liquids, or NGLs; Raw material for other products (polymers, paints, plastics, fertilizers, etc.)

Growth Areas in Pennsylvania

Natural Gas Power Plants 46 % by 2035Natural Gas Vehicles

U.S. has 110,000 (.9167%)Worldwide 12 Million

Infrastructure (Fueling Choices) Industrial Feedstock

Shell Picks Pittsburgh Area For Major Refinery

• Several BILLION $ to build the plant• 500 -1,000 Full time jobs• 10,000 +/- construction jobs for several years• Plus additional downstream Industries with additional job and state revenue opportunities.

Average Composition in Wet Gas Region

Methane, 74.2%Ethane, 15.6%

Propane, 5.5%

Iso Butane, 0.7%Normal

Butane, 1.4%Iso Pentane,

0.5%Normal

Pentane, 0.5%

Hexanes+, 1.1%

Liquids, 25.3%

Mol%

Source: Pace Global; NiSource Gas Transmission and Storage Presentation to WVONGA Spring Meeting May 6, 2010 p.5

Industries that will Benefit• Pulp and Paper• Metals• Chemical plants• Petroleum refining• Stone • Clay & Glass• Plastics• Food Processing

Why Chemical Makers Love Cheap Natural Gas

Margins at U.S. chemical companies are at their highest in years due to the glut of natural gas. New factories are being planned, and current ones are running at full capacity.

European and Asian chemical manufacturers use oil-derived naphtha to make ethylene.

With ethane prices currently around 70 cents a gallon, it costs U.S. producers about $730 to make a ton of ethylene, while manufacturers that use naphtha to make polyethylene are paying nearly $1,250 a ton.

Adding insult to foreign rivals’ injury, U.S. chemical manufacturers can take advantage of cheap natural-gas-fired electricity to run their refining operations.

Every 10-cent drop in the cost of ethane boosts Dow’s earnings by nearly $200 million.

Mar 2, 2012, 6:00 am EDT   |   By Aaron Levitt, InvestorPlace Contributor

Comparing the importance of natural gas to the chemical industry to flour in a bakery, Babe said there’s great promise for the region’s chemical industry in Shell Oil’s recent announcement that it has chosen a location in Beaver County to build a $2 billion ethane cracker.

Greg Babe, president and CEO of Bayer Corp. and Bayer MaterialScience LLC, speaks May 23 at a VisionPittsburgh event at the Duquesne Club.

“It really could signal the revival of America’s petrochemical industry,” Babe said.

That competitive advantage stems from the abundance of the supply, Babe said, which will help create cost advantages and provide a predictable feedstock.

Friday, May 25, 2012

WHY LNG?Liquefied Natural Gas

LNG is a clear, colorless, non-toxic liquid that can be transported and stored more easily than natural gas because it occupies up to 600 times less space.

EXISTING IMPORT TERMINALS Today, there are 12 U.S. facilities (and one facility in Puerto Rico) capable of importing LNG.They are located in:Everett, MassachusettsCove Point, MarylandElba Island, GeorgiaLake Charles, LouisianaGulf Gateway Energy Bridge, Gulf of MexicoNortheast Gateway, Offshore BostonFreeport, TexasSabine, LouisianaHackberry, LouisianaNeptune LNG, Offshore Gloucester, MassachusettsSabine Pass, Texas Pascagoula, Mississippi

At present, the U.S. has one existing LNG export terminal located in Kenai, Alaska.

Natural Gas PowerPlants

What About This?You've heard this before: "Shale gas is a gamechanger."

Charles Patton, president and chief operating officer of Appalachian Power Co. said that as power plants in the company's fleet and elsewhere are retired, "there's just a run to natural gas."

Complex Hydro Carbon

Simplest Hydro Carbon

Natural Gas (methane) has highest hydrogen-to-

carbon ratio of any hydrocarbon

Diesel is a complex hydrocarbon, while natural gas or methane is a simple hydrocarbon. Simply, more carbon means more emissions have to be handled. The future looks toward hydrogen, minimal carbons.

Simpler Cleaner Fuel

Natural Gas is a Safe Fuel

• Lighter than air• Rises (rather than

pools)• Doesn’t accumulate in

low places• Rich mixture burns off

slowly• Ignites at temperatures

of approx. 600 C (higher flash point)

• Non toxic• Odorless-detection

fragrance is added• Evaporates quickly

• Heavier than air• Descends • Accumulates in low

places• Rich mixture explodes• Gas and diesel vapors

ignite at approx. 200 C• Toxic, especially

gasoline• Strong inherent odor• Evaporates slowly at

room temperature

CNG Liquid fuels

Target NGV Fleet Applications

• Refuse collection and transfer• Transit• Port drayage• Local trucking and distribution• Public works (street sweeping, road

maintenance, dump trucks, etc.)• Airport operations (taxi, hotel/parking shuttle bus)

Oil City NG Fueling within 50 miles

http://www.afdc.energy.gov/afdc/locator/stations/

The Pennsylvania Clean Transportation Corridor will:• Result in more than $200 million in investment in Pennsylvania’s

economy.• Have a direct impact on more than 1,350 jobs in Pennsylvania.• Save Pennsylvania fleet operators nearly $10 million in fuel costs

annually.• Yield more than $60 million in tax revenue for the Commonwealth of

Pennsylvania.• Reduce emissions of diesel soot (14.5 tons), 720 Tons Nox (Nitrogen

Oxide) ozone-causing pollution and 21,000 tons of greenhouse gas

NEED PA NG SUCCESS STORIES

The Pennsylvania Clean TransportationCorridor is a strategically planned networkof natural gas refueling infrastructureconnecting:

Philadelphia Scranton / Wilkes-Barre

Allentown Harrisburg Pittsburgh

This corridor will serve as the cornerstone ofa larger regional clean fueling networkthroughout the northeastern United States.

NG Fueling Stations

The Right Choice. Right Now

Environment, Energy Security and Economics Drive LocalGovernments’ Increased Use of Vehicles That Run on Natural Gas

Refuse Truck fuel usage=8,500-10,000 gallons per year. @$4.00/gallon =$34,000 to $40,000

Estimated savings between 30 and 50%Savings by using NG @ 30%= $10,200.00 to $12,000.00/yearSavings by using NG @ 50%= $17,000.00 to $20,000.00/yearPlus buying incentives of $32,000.00 per heavy duty truck and 90% quieter.As well as the cleaner burning fuel

http://www.afdc.energy.gov/afdc/locator/stations/ONE Trash Truck using NG will take 325 cars off the road!!

Thank You