1. Strategy for Advanced Energyin North East Ohio July 2006

2. Summary • Why Advanced energy? The two most devastating crises we might ever face—Energy & Climate change and their genesis in conventional energy • Why now? Declining supplies and increasing demand • Why Ohio? Economy and health of the region • How?

3. Energy is not well Understood

4. Sources?

5. Future Oil Supply Uncertainties

6. Reliance on Foreign Oil www.pbs.org/.../stories/ colombia/oilb.html

7. Existing Oil Reserves by Country Based on data from: Oil & Gas Journal, Vol. 102, No. 47.

8. Imports soaring… Based on data from: EIA

9. Demand Far Outpacing Supply…

10. Global Oil Production Peaking? Source: www.romaenergia.org

11. By some estimates, there will be an average of two-percent annual growth in global oil demand over the years ahead, along with, conservatively, a three-percent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional 50 million barrels a day.

12. Solution-Discover Oil? Source: Durango Bill-Energy Analysis

13. Some comic relief

14. Not so comic oil price scenario Source: New Mexico Institute of Mining and Technology

15. Perspectives On Future Oil Prices • Oil markets have entered a ``super-spike'' period that could see 1970's-style price surges as high as $105 a barrel • ``Based on our analysis of gasoline spending and the economy, we estimate that U.S. gasoline prices may need to exceed $4 per gallon.''(Goldman Sachs) • “Oil prices may well remain high for a prolonged period of time . . . Further rises — if they materialize — may have more severe consequences than currently anticipated . . .”(Bank of International Settlements, BIS) • "Oil is far too cheap at the moment” (Matthew R. Simmons, Founder and Chairman, Simmons &Company International) • “People are beginning to expect $80 per barrel later this year. I can't tell you how high oil prices will rise. Nobody knows how much of a price increase will be needed to bring supply and demand back into balance."(Andrew Weissman, Analyst and Chairman of Energy Ventures Group in Washington)

16. Super-sized consumption patterns Based on data from: NationMaster Oil Statistics, US Census Bureau and Earth trends

17. Lost in transport!

18. US Fuel Efficiency

19. US CO2 Emissions Based on data from: EIA

20. Unprecedented CO2 Concentrations

21. Rising Global Temperatures Source: “Impacts of a warming Arctic: Arctic Climate Impact Assessment”, Cambridge University Press. 2004.

22. Mercury Rising Source: “Impacts of a warming Arctic: Arctic Climate Impact Assessment”, Cambridge University Press. 2004.

23. Melting Polar Ice Caps Arctic Ice Cover Changes, 1979-2005 Source: “Impacts of a warming Arctic: Arctic Climate Impact Assessment”, Cambridge University Press. 2004.

24. Historic and projected scenarios

25. Hurricanes in the US Atlantic Coast Source: www.abi.org

26. Tornadoes in the US Source: US Severe Weather Meteorology and Climatology

27. Insurance Losses Source: www.abi.org

28. Rising Sea Levels Source: NOAA

29. Impact on Coastal Areas Florida w/17 feet rise Florida w/170 feet rise Consistent with West sheet collapse Consistent with East sheet collapse Source: http://www.bio.psu.edu/greendestiny/publications/gdc-kyoto_primer.pdf

30. New York City in 2100 Source: www.net.org

31. Future CO2 emissions Source: www.pnl.gov

32. Gasoline Price Components Based on crude oil at 69.13$/barrel Source: EIA

33. Ohio gasoline Prices Based on data: ODOT, Financial and Statistical Report Fiscal Year 2005

34. Ohio Natural Gas Prices Based on data from: US Department of Labor, Bureau of labor Statistics.

35. Annual Heating Bills in Ohio

36. Ohio Electricity Prices Source: EIA

37. Ohio Electricity Generation By Source, 2004 Source: EIA

38. Ohio CO2 Emissions Based on data from: Ohio Greenhouse Gas emissions and Sinks Inventory

39. 2001 State CO2 Emissions Million metric tons Source: EIA

40. Ohio Particulate Non-Attainment Areas Source: NOACA, May 20, 2005. Nonattainment Factsheet.

41. Ohio Ozone Non-Attainment Areas Source: NOACA, May 20, 2005. Nonattainment Factsheet.

42. Ohio Health Care Expenditures Based on data from: Medical Expenditure Panel Survey, December 2005.

43. States with Renewable Portfolio Standards States that do not have RPS or renewable energy goal policies States that have an RPS States that have voluntary renewable energy goals or RPS-type legislation without enforcement provisions Source: REEP, RPS.

44. Advanced Energy • Central powerplants (coal, gas, nuclear) • Power grid • Natural gas heating/distribution • Inefficient end-uses • Efficient appliances, motors, lighting • Geothermal heat pumps • Solar thermal • Superconductivity • Wind • Solar PV • Coal gasification • Biopower • Fuel cells Stationary • Plug-in hybrids • Advanced diesels • Composites • Hydrogen • Fuel cells • Biofuels • Gas/coal to liquids • Unconventional hydrocarbons • Oil E&P and refining • Gasoline automobiles • Diesel trucks Transport Demand-reducing Supply-increasing Conventional energy Advanced energy

45. Advanced Energy System Source: John R. Wilson, TMG/ENERGY, Detroit.

46. Recap: Energy Issues • Customers spending much more on energy, with potential for even further increases: • Increasing concerns about future oil supplies, putting upward pressure on gasoline prices • Heating bills on the rise because of higher natural gas prices • Electricity price increases likely when rate caps end after 2008 • Increasingly challenging environmental issues because of energy consumption: • Ozone non-attainment, driven mainly by motor vehicles  poor local air quality • Global climate change as a result of all fossil fuel combustion (especially coal) • “Conventional” energy paradigm – multi-trillion dollar global industry – unlikely to continue to be adequate • “Advanced” energy industry will need to be built to meet growing global energy demands

47. Regional Advanced Energy Strategy Results REGIONAL ADVANCED ENERGY STRATEGY • Reduced customer expenditures on energy, without harming customer “experience” associated with energy consumption • Improved local air quality, and reduced contributions to global climate change 1. Develop and implement advanced energy supply and consumption plan for region Coherence, consistency and linkages • Increased economic activity: jobs, tax base, wealth creation • Technological leadership and culture of innovation • Improved public pride and civic reputation 2. Cultivate and achieve local excellence in supplying advanced energy to world markets

48. Advanced Energy in Ohio • Fuel cells: recognized as a leader in fuel cell technology development (Ohio Fuel Cell Coalition, Wright Fuel Cell Group) • Wind: decent wind resource, several developers evaluating sites/projects, good industrial/supply chain base to attract manufacturers • Bioenergy: large agricultural base, considerable ethanol and biodiesel fuel opportunities • Solar: leader in thin-film technologies (University of Toledo, First Solar) • Clean coal: FutureGen project proposal, AEP’s IGCC plant under development, coal gasification project exploration (Energy Industries of Ohio • Coal-to-liquids: proposal for demonstration project at Wright-Patterson • Energy efficiency: increasing “green building” efforts, cogeneration and steam loop potential in cities

49. Manufacturing Potential in Ohio Source: REEP

50. Consensus Building • Face-to-face discussions • Deliberations • Inclusion of multiple sectors • Flexibility of the process Through “working groups”