PRESENTED BY GRANT FERRIER ENVIRONMENTAL BUSINESS INTERNATIONAL INC. PUBLISHERS OF

1. SAME: The New Future June 9, 2016 PRESENTED BY GRANT FERRIER ENVIRONMENTAL BUSINESS INTERNATIONAL INC. PUBLISHERS OF ENVIRONMENTAL BUSINESS JOURNAL CLIMATE CHANGE BUSINESS JOURNAL Pacific Northwest Environmental Industry Summit, July 28, 2016, Seattle EBI Fall Strategy Summit, November 17-18, 2016, Washington DC

2. TOP TRENDS in the New Future • Infrastructure • Water • Information • Renewable & Distributed Energy • Transportation • Resilience & Adaptation • ‘Flat is the new up’ in Remediation

3. Economic & Industry Headlines • Economy on Modest Growth Track: Low inflation, low interest, low wages, low morale • Oil & Energy stabilizing at low-price scenario: Potentialfor Elusive Equilibrium in Supply and Prices • Global Climate Commitments: Growth in Renewable Energy and Emergence of Adaptation & Resilience • Battle over Clean Power Plan and Supreme Court • Infrastructure is key driver of growth & investment; Emphasis on transportation, water and power

4. Environmental C&E in Context: Growth vs GDP SOURCE: EBI Inc., San Diego CA SOURCE: EBI Inc., San Diego CA; Annual segment-by-segment research; government shutdowns in 1995-96 and October 2013

5. 4 Key Growth Factors in 2004-2008 ALL ++ or + in 2004-2008 Economic Growth: GDP growth drives environmental markets. Real Estate: Property Values drive development, transactions, speculation, infill, brownfields. Federal Markets:DOE and DOD budgets and accelerated cleanup & closure; energy programs Oil & Gas Prices; Commodity Prices:Record prices and record profits by oil companies; same in Mining & Natural Resources; Growth driving global development Source: EBJ

6. Key Growth Factors in 2004-2016 Source: EBJ

7. U.S. C&E Industry: $29.6 billion in 2015 Source: Environmental Business International Inc., San Diego, CA, based primarily on annual surveys of C&E firms, units in $mil. Share of revenues derived from government clients has gone from 59% in 2004 to 49% in 2014.

8. Distribution of Environmental Consulting & Engineering Firms in 2013-2014 ($mil) Source: Environmental Business Journal's annual model of the U.S. environmental consulting & engineering industry based on annual surveys of C&E firms by EBJ, EBJ interviews, compiled revenue data derived from various sources including ENR, EFCG, ZweigWhite and public company data.

9. Global Coal Consumption in Million Tonnes Source: BP Statistical Review of World Energy; Asia 71% of total in 2014; USA peaked 2005-2008 and is down 20% from that peak in 2013 and 2014 (down only 0.3%)

10. Non-Hydro Renewables: % of US Electricity Generation Source: EBJ 2016 Snapshot Survey; Renewables: U.S. DOE's Energy Information Administration says non-hydro renewable sources were 2.1% of U.S. electricity generation in 2006, and grew to 6.2% in 2013, 6.8% in 2014 and 7.2% in 2015, largely on the growth of generation from wind. What percentage of U.S. electricity generation do you believe non-hydro renewable sources will represent in 2020-2050? (RE includes wind, solar, geothermal, waste, landfill gas, wood & biomass: 2015 US electricity generation shares through 11/2015 were 34% coal, 33% natural gas, 19% nuclear and 6% hydro; Other RE was 7.2% with wind at 4.5% and solar finally at 1.0%)

11. State Renewable Energy Standards

12. Environmental Information Growth Source: Environmental Business Journal Environmental Information Systems & Services Survey 2015. Results are mean or averages.

13. Key Issues in USA Water Market • Water Industry is many segments, not always integrated or working together • Regional variations: water stress, rates, secondary water, reuse, energy cost/supply • Municipal orientation of basic water & sewage: Follow the Money: Bonds, Initiatives, P3 • Oil & Gas; Opportunity in Technology Niches • Policy/Pricing pointed in right direction but change is very slow

14. The U.S. Water Industry: $150 billion+ SOURCE: Environmental Business International, Inc., San Diego, CA. * Delivery Equipment is pipes, fixtures, pumps and valves for treatment and delivery; Maintenance Service is mostly industrial & municipal plumbing contractors performing routine maintenance on lines and stations. This defintion of the water industry does not include consumer products, mostly bottled water and sinktop, container or pitcher filters.

15. TOP TRENDS in the New Future • Infrastructure: Next Big Driver • Water: Evolution &/or Revolution • Information: Useful Applications • Renewable & Distributed Energy: Power Grid • Transportation: Fuels, Self, Electricity • Resilience & Adaptation • Flat is the new up

16. Does turnout in flux put a few more states in play ? TOSSUPS 173 in a dozen states ? ? ? ? ? ?

17. Election 2016: Narrow set of Scenarios If Dems keep Presidency; they will not take House. Senate narrows GOP keeps House; Dems take Senate GOP keeps House / Senate 50-50 “GRIDLOCKED GRISTMILL” Pentagon budget grows less Tax Reform difficult Urban renewal, city water projects Battle on EPA Regs intensifies Fight over Clean Power Plan Lots of veto threats, some vetoes “WHITE HOUSE LEVERAGE” Pentagon budget flat Tug of war on agency priorities EPA Budget cuts fended off Some agency plans for Climate Change, urban resilience Dems get 2 or 3 Supreme justices 30% 40% Dems retain Pres. 10% 20% “SENATE CLOTURE BATTLES ” Bigger push for domestic drilling, usage, pipelines, grid upgrades Federal land sales, projects DOD budget grows; more Navy? More energy R&D, incentives Republican Supreme justices RIGHT-SIZING GOVERNMENT Spending cut fights in Senate Tax Reform a big priority in 2017 Cuts in DOD are reversed EPA withers with wave of retirees Moderate Supreme justices GOP wins Pres.

18. Volume XXVIII: EBJ in 2015-2016 EBJ Vol XIX No 3/4: Environmental Contracting EBJ Vol XIX No 1/2: M&A EBJ Vol XXVIII No 12: Executive Q&As and 2015 EBJ Awards EBJ Vol XXVIII No 10/11: Consulting & Engineering 2015 EBJ Vol XXVIII No 9: Environmental Industry Overview 2015 EBJ Vol XXVIII No 7/8: Sustainability & Climate Adaptation EBJ Vol XXVIII No 5/6: Environmental Information Systems 2015 EBJ Vol XXVIII No 4: Remediation 2015 EBJ Vol XXVIII No 3: The Water/Wastewater Industry 2015 EBJ Vol XXVIII No 1/2: Industry Outlook 2015: EBJ Snapshot Survey

19. EBJ Subscriptions EBJ corporate electronic subscription: includes PDF file of editions, excel files of industry, segment and survey data for internal use. Special data sets and presentation files. up to 5 readers one year $1,250 up to 10 readers one year $1,500 up to 20 readers one year $1,750 up to 30 readers one year $2,000 up to 50 readers one year $2,500 over 50 readers one year $3,000 Discounts available for individuals and companies <50 people

20. CCBJ: Volume VIII in 2015 • 2016 Executive Review & 2015 CCBJ Awards (December 2015) • U.S. Local Government Market for Climate Resilience (Q4 2015) • Climate Change in Environmental Impact Assessments (Q3 2015) • Water Utilities & Climate Change (Q2 2015) • Climate Change Consulting Projects & Profiles (Q1 2015)

21. Grant Ferrier President, Environmental Business International, Inc. Chairman, Environmental Industry Summit Editor, Environmental Business Journal Editor, Climate Change Business Journal 4452 Park Blvd. #306, San Diego CA 92116, 619-295-7685 ext.15 grant@ebimailbox.com; gf@climatechangebusiness.com Sign up for free EBJ & CCBJ weekly news at Environmentalbusiness.org CCBJ: Volume VIII in 2015