Felmy api 2010

Economic Impact Study

Marcellus Shale report from economists and industry experts at Penn State

2010• $8 billion annual impact and

107,000 jobs•$900 million in state/local

tax revenue*

2020•$14 billion annual impact

and 175,000 jobs•$1.4 billion state/local tax

revenue

*30 percent tax revenue remains local

AAA Regular Gasoline and NYMEX Crude Oil Price

AAA Diesel and NYMEX Crude Oil Price

3035404550556065707580859095

2003 2004 2005 2006 2007 2008 2009 2010-2.5

-1.5

-0.5

0.5

1.5

2.5

3.5

4.5

5.5

China United States Other

Total consumption

Annual growth

Forecast

World liquid fuels consumption is projected toincrease by 1.5 million bbl/d in 2010

million barrels per day million barrels per day

Oil prices relate to many uncertain factors

Speculation, hedging, investmentSpeculation, hedging, investment

Global economic growthGlobal economic growth

OPEC production decisionsOPEC production decisions

Exchange rates and InflationExchange rates and Inflation

Spare production capacitySpare production capacity

Global Oil PricesGlobal Oil Prices

Non-OPEC supply growthNon-OPEC supply growth InventoriesInventories

Geo-political risksGeo-political risks

WeatherWeather

Price Summary

Year Percent Change

2008 2009 2010 2011 08-09 09-10 10-11

WTI Crudea ($/barrel) 99.57 61.66 80.74 83.50 -38.1 30.9 3.4

Gasolineb ($/gal)3.26 2.35 2.84 2.96 -27.9 20.8 4.4

Dieselc ($/gal) 3.80 2.46 2.95 3.12 -35.1 19.9 5.7

Heating Oild ($/gal) 3.38 2.52 2.91 3.10 -25.4 15.4 6.6

Natural Gasd ($/mcf) 13.89 11.97 11.59 12.54 -13.8 -3.2 8.2

Electricityd (cents/kwh)11.26 11.55 11.50 11.74 2.5 -0.4 2.1

a West Texas Intermediate. b Average regular pump price.c On-highway retail. d U.S. Residential average.

* Retail price minus crude oil cost minus taxes, per gallon

Summer retail regular-grade gasoline prices projected to average $2.92 per gallon

dollars per gallon

0.00

1.00

2.00

3.00

4.00

5.00

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11

Tax Crude Margin* Monthly retail price

2007Avg. $2.93

2008Avg. $3.81

2009Avg. $2.44

2010 Forecast

avg. $2.92

0.00

1.00

2.00

3.00

4.00

5.00

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11

Tax Crude Margin* Monthly retail price

2007Avg. $2.85

2008Avg. $4.37

2009Avg. $2.46

2010 Forecast

avg. $2.97

* Retail price minus crude oil cost minus taxes, per gallon

Summer retail diesel prices are projected to average$2.97 per gallon, up $0.51 from last summer

dollars per gallon

37.4

24.0

22.7

7.4

8.6

28.0

20.7

10.9

40.4

3436

26

0.2

4

71 95

1

1

23

16

5

42

% ChangeConsumption Quads % Share Quads % ShareLiquid Fuels and Other Petroleum 38.35 38.3% 42.02 36.7% 9.6%

Oil 37.40 37.4% 38.10 33.3% 1.9%Ethanol, Biodiesel and Green Liquids 0.95 0.9% 3.92 3.4% 312.6%

Natural Gas 23.91 23.9% 25.56 22.3% 6.9%

Coal 22.41 22.4% 25.11 21.9% 12.0%

Nuclear Power 8.46 8.5% 9.41 8.2% 11.2%

Hydropower 2.46 2.5% 2.99 2.6% 21.5%

Biomass & Renewables 4.27 4.3% 9.19 8.0% 115.2%Other* 0.24 0.2% 0.22 0.2%

Total 100.09 100.0% 114.51 100.0% 14.4%

Oil and Natural Gas 61.31 61.3% 63.66 55.6% 3.8%

Oil, Natural Gas and Coal 83.72 83.6% 88.77 77.5% 6.0%

2008 2035

Carbon Emissions Per Capita Assuming Waxman-Markey Targets Are Met

Source: Garrett A. Vaughn, “How Much Will Americans Pay to Meet President Obama’s Timetable for Cutting Greenhouse Gas Emissions?” Manufacturers Alliance/MAPI, ER-676, April 2009.

Metric Tons of CO2 Per Capita

Targeted Reductions