ATC FLEET SEMINARATC FLEET SEMINAR

Presentation by:Presentation by:Jill Hamilton, PresidentJill Hamilton, President

Sustainable Energy Strategies, Inc.Sustainable Energy Strategies, Inc.Jill.sesi@cox.netJill.sesi@cox.net703-322-4484703-322-4484

OverviewOverview

National Ethanol Issues: RFSNational Ethanol Issues: RFS Regional E10 SituationRegional E10 Situation Regional E85 ProgramRegional E85 Program Contact InfoContact Info

What is RFS?What is RFS?

Energy bill eliminated Oxygenate Energy bill eliminated Oxygenate requirementrequirement

Replaced it with a RFSReplaced it with a RFS Program to displace 10% of US Program to displace 10% of US

petroleum use with renewables by petroleum use with renewables by 20142014

Congress did not include an MTBE Congress did not include an MTBE liability waiver, creating a demand liability waiver, creating a demand for ethanol and biodieselfor ethanol and biodiesel

What do that mean for…What do that mean for…

ProductionProduction Yield of CornYield of Corn Economic ImpactEconomic Impact Energy SecurityEnergy Security

ProductionProduction

What Impact will RFS mean in terms of What Impact will RFS mean in terms of production needs?production needs?

RFS requires 8 billion gallons of ethanol RFS requires 8 billion gallons of ethanol annually by 2012.annually by 2012.

Our current capacity is 3.6 billion gal/dayOur current capacity is 3.6 billion gal/day In 2004, ethanol industry produced 3.4 In 2004, ethanol industry produced 3.4

billion gal/daybillion gal/day This was up 100% from 2002This was up 100% from 2002

Corn YieldCorn Yield

We will need 5.5 billion bu of corn by We will need 5.5 billion bu of corn by 2014 based on 2005 yields2014 based on 2005 yields

Yields are projected to increased Yields are projected to increased from 2.9 gal/bu…3.36 by 2014from 2.9 gal/bu…3.36 by 2014

Corn for ethanol is expected to Corn for ethanol is expected to increase from 15% to 40% of increase from 15% to 40% of market sharemarket share

Economic Impact of RFSEconomic Impact of RFS

$6 billion to build 4.3 billion gal. $6 billion to build 4.3 billion gal. capacitycapacity

$70 billion on goods and services to $70 billion on goods and services to get to 8 million gallons of capacityget to 8 million gallons of capacity

$200 billion in indirect$200 billion in indirect $43 billion in household income$43 billion in household income Create 234,840 new jobsCreate 234,840 new jobs

Energy SecurityEnergy Security

Will displace 2.13 billion bbl of crude Will displace 2.13 billion bbl of crude oil by 2012oil by 2012

Will reduce US dollars to foreign Will reduce US dollars to foreign producers by $64.1 billion between producers by $64.1 billion between 2005-20122005-2012

Foreign oil sales to be reduced by an Foreign oil sales to be reduced by an estimated 62%-67%estimated 62%-67%

DC Baltimore AreaDC Baltimore Area

E10 Has ArrivedE10 Has Arrived

MD, VA and DC blend 100% E10MD, VA and DC blend 100% E10 Ethanol can be railed and barged into Ethanol can be railed and barged into

BaltimoreBaltimore All being used for the E10 marketAll being used for the E10 market Being shipped to Virginia and DCBeing shipped to Virginia and DC

Public E85 StationsPublic E85 Stations

Pentagon Citgo on Joyce StreetPentagon Citgo on Joyce Street Ft. Meade Chevron in LaurelFt. Meade Chevron in Laurel Montgomery County in GaithersburgMontgomery County in Gaithersburg Annapolis Citgo on West StreetAnnapolis Citgo on West Street DC Fleet Maintenance on New Jersey DC Fleet Maintenance on New Jersey

AvenueAvenue

E85 Increased Sales E85 Increased Sales

Tri-State Area: ~ 400,000 Tri-State Area: ~ 400,000 gallons of E85,gallons of E85,

42 percent increase in E85 fuel 42 percent increase in E85 fuel sales from last yearsales from last year

’’06 to be over 500,00006 to be over 500,000

Promotion of E85Promotion of E85

Dispenser Signage Dispenser Signage Highway Road SignsHighway Road Signs Targeted Coupon ProgramTargeted Coupon Program Radio AdvertisingRadio Advertising

CharacteristicsCharacteristics

• Octane E85: 100-plus octane (as high as Octane E85: 100-plus octane (as high as 105)105)

• Lower heating value (27% less energy)Lower heating value (27% less energy)• Non-toxic, pleasant smellNon-toxic, pleasant smell• Handling: treat same as gasoline Handling: treat same as gasoline

(blended with gasoline)(blended with gasoline)• Dispensing: Aluminum replace with Dispensing: Aluminum replace with

stainless steel, nickel plated stainless steel, nickel plated components, 1 micron filtercomponents, 1 micron filter

Highway Road SignsHighway Road Signs

Before and After DispenserBefore and After Dispenser

CouponCoupon

We had targeted 6600 vehicle We had targeted 6600 vehicle driversdrivers

Mailed a sample to 2200Mailed a sample to 2200 Poor response to couponPoor response to coupon But, incredible response to lower But, incredible response to lower

price of E85 vs. gasoline so the price of E85 vs. gasoline so the promotion did impact consumers!promotion did impact consumers!

WRNRWRNR

• Two months of tag lines (250 Two months of tag lines (250 promos)promos)

• Ethanol Minutes (66)Ethanol Minutes (66)• Gas give-aways (60)Gas give-aways (60)• On-site radio spotOn-site radio spot• Two hours of gas sold at $1.03Two hours of gas sold at $1.03

WRNR AdvertisingWRNR Advertising

Picture of $103.1 day.Picture of $103.1 day.

Customers that heard the E85 Customers that heard the E85 ADAD

E85 E85 SignSign

WHAT’S AHEAD IN 2006WHAT’S AHEAD IN 2006

Baltimore Station OpeningBaltimore Station Opening UMD - College Park Contract SignedUMD - College Park Contract Signed Continued Marketing and AdvertisingContinued Marketing and Advertising

• GM – Live Green Go Yellow – TrailerGM – Live Green Go Yellow – Trailer• Looking for partner to do another radio Looking for partner to do another radio

adad Continue to support OEMsContinue to support OEMs Seeking potential E85 locationsSeeking potential E85 locations

ResourcesResources

MD Grain Producers: MD Grain Producers: marylandgrain.commarylandgrain.com

National Ethanol Vehicle Coalition: National Ethanol Vehicle Coalition:

573-635-8590/ E85fuel.com573-635-8590/ E85fuel.com National Corn Growers National Corn Growers

Association: 202-628-7001Association: 202-628-7001 Sustainable Energy Strategies, Inc: Sustainable Energy Strategies, Inc:

703-322-4484 703-322-4484