Energy Facility Project Drivers Wyoming Pipeline Authority July 2006

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Energy Facility Project DriversWyoming
Pipeline AuthorityJuly 2006
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UniField Profile

• Markets
• 70 Power Generation, Hydrocarbon, Basic
  Chemicals
  
• 20 Cement, Minerals Metals
• 10 Advanced Materials Specialty Chemicals
• Distribution
• West Upper-Midwest
• Billings, Vancouver WA
• Bismarck
• 10 annual growth

• Product
• Process Facility Capital Projects
• Up to 250MM
• Facility Revamp Expansion
• Pilot Demonstration Plants
• Technology Support Not a Driver
• History
• Hydrocarb, Power Metals - 87
• Intl Process Technology - 96
• Specialty Chem - WA in 97
• ND MN - 04
• Leader of Industry Followers

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25 Yr Market Profiles

• Petroleum Refining
• Industrial/Commercial
• Power Generation
• Oil Gas

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Regional Profile

• WY Dakotas
• Fossil Resources
• No Markets
• Market Access Impediments
• Open to Development
• WA, OR, UT Idaho
• Few Fossil Resources
• Hydro Wind
• Mod to Large Markets
• Less Open to Development

• Montana
• Fossil Resources
• No Markets
• Long Distance to Markets
• Less Open to Development

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Petroleum Refining

• 1970s Arab Oil Embargo - Bought Coal, Oil
  Shale started SynFuels.
  
• 1980s 90s EPA Solid Waste Mandates
  Cleanup, Closures Consolidation Adapted
  Gasification Sold Coal Reserves.
  
• 2000 - 04 EPA Air Mandates - Low Sulfur Diesel
  Gasoline Investment Higher Natural Gas
  Hydrogen Demand Tighter Fuel Supplies Higher
  Prices Ethanol Production Blending.
• 2004 - 05 Political Instabilities - Higher
  Crude Fuel Prices Coker Upgrades Conserv
  Consider Coke Gasific Ethanol Speculation
  
• 2006 - 10 Better Syn-Crude Supply Crude Unit
  Upgrades - Higher Fuel Coke Supply in Rockies
  Liquid Pipeline Expansions Start of
  Gasification Cellulose Ethanol Projects.

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Industrial Commercial

• 1970s 80s Large Central Stations Low Power
  Prices - Small Coal-fired Plants Closed Low
  Cogeneration Starts - Conversion from Coal to Gas
  Low Capital Spending.
• 1990s - 02 Low Gas Supply CAA Compliance
  Industrials Convert from Gas to Coal PRB Coal
  Development Prices Increase - Rail
  Transportation Tightens High International
  Capital Spending.
• 2003 - 05 High Fuel Power Prices Some
  Convert from Coal to Coke Aluminum Metals
  Move Offshore - Wind, Biomass Solar Considered
  Unprecedented Industrial Spending.
• 2006 - 10 Fuel Power Prices, Tight Transport
  Global Warming Concern Coal Cogeneration at all
  Scales Green Buildings, LEED EnergyStar
  Increase - CHCP, Solar Conservation Projects
  Tighter Money Supply Lower Commodity Prices
  Higher Imports.

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Power Generation

• 1970s - 90 Low Gas Prices Large Central
  Plants High Installation of Gas Plants - Low
  Installation of Coal-fired Plants Coal CFB
  Commercialization.
• 1990s - 02 Low Gas Supply CAA Compliance
  PRB Coal Compliance Coal Conversions Low New
  Plant Construction.
  
• 2002 - 05 Blackouts - High Power Prices Higher
  Gas Plant Install - Enron Cancellation of Gas
  Projects Housing Construction Gas Prices
  Continue Coal Plant Construction Increase
  IGCC Super Criticals Commercialized.
• 2006 - 10 High Power Prices, Tight Transmission
  Global Warming Concern Continued Gas Projects
  Low Coal Power Acceptance Continued High Gas
  Prices - Increased IGCC, SC, CO2 Capture
  Gasification Transmission Constrained.

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Oil Gas

• 1980 - 2000 Low Gas Prices Low onshore ED
  Development of EOR, CO2 cycling CBM
  Extraction.
  
• 2000 - 02 Low Gas Supply Increased Gas Prices
  Technology Deployment.
  
• 2003 - 05 Continued High Gas Prices
  Initiation of CO2 Sequestration Increased
  Production EOR Demand Increased interest in
  CO2 Capture.
• 2006 - 10 Tight Power Transmission, Rail Low
  Coal Generation Acceptance Stranded Coal, Coke
  Lignite High Oil Gas Prices EOR, Merchant
  Refinery Gasification, Pre Post Combustion CO2
  control Pipeline Capacity Expansion.

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Project Drivers

• Capital
• Technology
• Production Scale
• Site
• Escalation
• Market Timing
• Lead-times
• Project Duration

• Infrastructure
• Utilities, Transportation Interconnect
• Air permitting Water availability
• Construction Operating labor
• Finance
• Margin
• Term
• Interest rate

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General 2006 10 Outlook

• Low Acceptance of Coal-fired Power Global
  Warming Concern Increased interest in CO2
  Control Technology Investment.
  
• Tight Power, Rail Pipeline Transmission -
  Continued High Fuel Prices - Stranded Coal,
  Crude, Coke Lignite Assets Project
  Investment.
• Tightened International Money Supply
• High Fuel Power Prices Increased Imports
  Interest Rates Softening in Demand, Greater
  Commodity Supply Lower Margins - Decreased
  Technology Projects Investment.
• Contingent on Political Stability

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Thank You.