Virginia Biodiesel Conference November 16, 2004 Bob Gray, Sales Director MidAtlantic

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Virginia Biodiesel ConferenceNovember 16,
2004Bob Gray, Sales Director Mid-Atlantic
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World Energy Provides Biodiesel Expertise

• Supplier for most American fleets
• Largest Military Supplier
• Largest biodiesel capacity in the U.S.
• Strategically allied with Gulf Oil
• Nation-wide distribution network
• Longest cold-weather experience

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World Energy Delivers

• World Energy sources from multiple production
  facilities including our own Purada facility in
  Lakeland, FL.
• All product meets ASTM-6751 biodiesel standards
  and is subject to World Energy quality control.
  (cold flow)
• Product is transported in insulated, steam-coiled
  jumbo railcars to rail distribution nodes across
  the U.S.
• Petroleum transport vehicles deliver B100 and
  blended products to distributors and end users.

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Biodiesel Production Facilities
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Biodiesel Potential

• Current Potential 1.7 Billion gals./biodiesel
• Displaces 5.5 of national on-hwy. demand.
• Near-Term Potential (2015) 3.5 Billion
  gals./biodiesel
• Displaces 7 of national on-hwy. demand.
• Long-Term Potential (2030) 10 Billion
  gals./biodiesel
• (Source NREL Biomass Oil Analysis Research
  Needs Recommendations. June 2004)

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Biodiesel Production Current v. Capacity

• Current Biodiesel Industry Production (NBB)
• FY 2003 25 million gallons
• FY 2004 30 million gallons (estimated)
• Current physical/engineering production capacity,
  which includes dedicated biodiesel plants and
  oleochemical companies producing biodiesel, is
  estimated to be between 150 and 200 million
  gallons per year.
• Current practical capacity is closer to the 50
  million gallons range due in part to complicated
  limitations within the production system.

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Current Market Military

• Langley AFB
• Peterson AFB
• Camp Pendleton USMC
• The US Navy
• Scott AFB
• Wright-Patterson AFB

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Current Market Government/Municipal

• Transit of Northern Kentucky
• The U.S.P.O.
• U.S. Dept. of Agriculture
• North Carolina, Ohio, Michigan DOTs
• The States of Alabama, Oregon
• Las Vegas fleets- city, school, etc.

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Current Market Utilities

• Commonwealth Edison
• San Diego Gas Electric
• Florida Power Light
• Alabama Power
• Georgia Power
• Reliant Energy
• Dominion and FirstEnergy

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Current Market Sensitive Locations

• Everglades NP
• Yellowstone NP
• Northstar at Tahoe
• Glacier NP
• Breckenridge
• Channel Islands

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Emerging Markets and Opportunities for Growth

• Federal Tax Credit and State Incentives
• Fuels Regulation
• ULSD markets
• Colder Temperature Operations
• Static Engine Operation
• Heating Oil
• OEMs

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Federal Biodiesel Tax Credit

• The new law takes effect Jan. 1, 2005.
• Regulations for the implementation of this law
  are not yet written.
• Creates a tax credit for biodiesel
• 1 per gallon tax credit for each gallon of pure
  biodiesel made from virgin oils derived from
  agricultural products and animal fats
• .50 per gallon tax credit for each gallon of
  pure biodiesel made from other oils
• All gallons allow the credit to be claimed in
  both taxable and tax-exempt markets
• Tax-exempt fleet fuel programs
• Off-road diesel markets (dyed diesel)
• Heating oil, Boiler Fuel, Power Generation
• Streamlines the use of biodiesel at the terminal
  rack
• The tax structure and credit will encourage
  petroleum blenders to blend biodiesel as far
  upstream as possible, which under the RFS or
  Minnesotas 2 volume requirement will allow more
  biodiesel to be used in the marketplace

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Meet EPA 2006 Standards for Ultra Low Sulfur
Diesel

• Soy Biodiesel at 0-1 ppm sulfur.
• Specify 15 ppm standard for blend
• Zero aromatics
• Lubricity
• Extender

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Cold Weather Performance

• Biodiesel realizes cold temperature operability
  issues faster than most petroleum diesel
• Untreated B20 freezes 2-5 F faster than 2
  petroleum diesel, depending on
• the cold flow properties of the biodiesel
• the cold flow properties of the petroleum diesel
• The same precautions taken with petroleum diesel
  can be used to ensure operability with
  biodiesel
• Utilization of an additive that enhances cold
  flow properties
• Blending with kerosene
• Storage of the vehicles in or near a building
  when not in use

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Engine Manufacturers

• B100 Must Meet ASTM D 6751
• Diesel Must Meet ASTM D 975
• Most Engine OEMs have B20 experience
• Wont void warranty
• OEMs dont make fuel and they dont warrant fuel
• Pressure must be put on OEMs to recognize the
  use of biodiesel

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Energy SecurityReduce Petroleum Dependence

• Energy consumption predicted to increase 40 and
  54 between now and 2025 (20 years) in the US
  and World, respectively
• China and India will begin to consume large
  quantities of petroleum as they enter the world
  economic picture
• Without question, this amplifies the need for the
  US to produce our own energy supplies.

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www.worldenergy.net

• Bob Gray
• Mid-West and Mid-Atlantic U.S.
• 628 Angiline Drive
• Boardman, Ohio 44512
• Office 330.629.2440
• bobg_at_worldenergy.net