Biodiesel Industry Update Jess Hewitt President Gulf Hydrocarbon gulfhydrocarbon

1. Biodiesel Industry Update Jess Hewitt President Gulf Hydrocarbon www.gulfhydrocarbon.com

2. Gulf Hydrocarbon, Creator of 24/7 biodiesel • Biodiesel marketer with terminals in • Houston and Amarillo, Texas • Hammond, Indiana • ILTA Booth #806 • www.gulfhydrocarbon.com

3. Terminal access is 24/7 • 24 hours per day • 7 days per week • Petroleum Style Loading • Meters • High Speed Pumps • Overfill Protection

4. Case Studies • ACTIVE TERMINALS: • Intercontinental Fuels, Houston Texas: Zero to Full in 1 year, Biodiesel, Low Sulfur Diesel • Wolf Lake Terminals, Hammond, Indiana: Added biodiesel in less than 30 days, converted terminal to 24/7 access. • Kendrick Terminal, Amarillo, TX: Added biodiesel in less than 30 days.

5. Add a little green to your terminal

6. Gulf Hydrocarbon See our ad in BIODIESEL MAGAZINE Production Off Take Agreements Biodiesel Producer signs letter of intent to sell biodiesel production before constructing production facility. Allows for investors and bankers to confirm demand for biodiesel before plant is built.

7. Availability • About 1,800 petroleum distributors now offer biodiesel • More than 1,000 retail locations • Half are truck stops or truck accessible locations (biotrucker.com) • 37 terminals

9. Production Locations (November 05) 44 locations

10. BQ-9000 Accredited Producers Production Locations (9/13/06) 86 Plants

11. BQ-9000 Accredited Producers Production Locations (1/31/07) 105 Plants

12. Production Locations (6/7/07) 148 Plants

13. Industry Plant Size Industry Capacity 1.39 billion gallons per year Average Plant Size 9.4 million gallons per year

14. Production Capacity by State (6/7/07)

15. Construction & Expansion Construction Capacity 1.89 billion gallons per year Average Plant Size 18.7 million gallons per year

16. No Window Plant Status Construction (77) Expansion (8) Construction & Expansion (6/7/07)

17. With Growth Comes Challenges….Fuel Quality Changes to ASTM D-6751 V 07a Methanol Content by Gas Chromatograph (<0.2% vol) OR Flash Point of 93 C (from 130 C) Added Stability Test: Rancimat 3 hours minimum Added Metals Test Ca/Mg and Na/K Deleted footnote A: Mutual agreement for Different Limits Fuel Quality Web Resource www.biodiesel.org

18. BQ-9000 Overview

19. Objectives of BQ-9000 • To promote the commercial success and public acceptance of biodiesel • To help assure that biodiesel fuel is produced to and maintained at the industry standard, ASTM D 6751 • Program is voluntary for producers and marketers

20. Change in BQ-9000 • Marketer requirements for unlimited warranty were removed. More marketers will now participate in program

21. Awareness & Perceptions of Biodiesel Jan. 2007 Consumer Survey

22. June 2004 Yes, heard of 27% No, not heard of 73%

23. January 2007 “Are you familiar with a product called biodiesel?” (Q1)

24. (Ranked by “1” ratings)

25. NBB OEM Program

26. Goals of OEM Program • Gain positive statements of support for B20 in existing engines and vehicles • Use increased OEM support to garner coordinated public relations for positive public exposure

27. Increasing OEM Support • Cummins: B20 • New Holland: B20 • Caterpillar: B30 • DaimlerChrysler approves B20 in 2007 Dodge Ram pickups used in fleets • B5 factory fill for pickups • Jeep Grand Cherokee B5 factory fill • Case IH approves B20 for most models and B100 in many • Deere: B5 or lower recommended for now, B20 later • GM: B5, B20 in some models • Detroit Diesel: B5 • VW: B5 across board

28. Economic Impact LECG Study, November 2006

29. Assuming 650 m/gal annually by 2015, Biodiesel Will: • Add $2.4 billion annually to GDP between 2006-2015, making the economy $24 billion larger. • Put an additional $6.3 billion annually in the pockets of American households. • Create as many as 39,100 permanent new jobs in all sectors of the economy by 2015.

30. Biodiesel Will Pay for Itself • The biodiesel industry will generate $8.3 billion in new Federal tax revenue. • Extending the biodiesel tax credit past 2008 will cost $3.5 billion for a net surplus of $4.8 billion.

31. Biodiesel Will Pay for Itself • Expanding the industry to 650 mil/gal by 2015 will displace 242 million barrels of crude oil. • This displacement will reduce the outflow of dollars largely to foreign oil producers by $13.6 billion over the 10-year period. These dollars will remain in the U.S. and will help finance the capital expansion.

32. Impact on Agriculture • Demand for soy oil to make biodiesel will increase crush demand for soybeans and other oilseeds. • 650 mil gal of biodiesel means 4 billion pounds of oil and nearly 400 million bushels of soybeans. • Farm-level soybean prices will increase at least 10% due to biodiesel demand.

33. Biodiesel Issues in 2007 • Extend the blenders credit $1/gallon? • Renewable Diesel: Gets the credit but who will make it? • Export of Blenders Credit: Can it be stopped from crossing borders? • New Feedstocks: Jatropha? Algae? • Prices: Can biodiesel price exceed diesel?

34. For More Information Contact: Gulf Hydrocarbon Phone: +1-713-523-7755 www.gulfhydrocarbon.com