© 2008 NORA

Working Toward a Sustainable Futurewith Liquid Fuels

May 2, 2008

John Huber

President

National Oilheat Research Alliance, NORA

2

© 2008 NORA

Industry Vision

The liquid fuels industry is uniquely positioned to deliver to homeowners, businesses and industry, energy efficient and renewable liquid fuels and fuel blends of the future. Investment in these fuels of the future will place America in the forefront of energy security and sustainability.

3

© 2008 NORA

Five Strategic Goals

The liquid fuels industry has identified five strategic goals that are critical to achieving its vision. The goals respond to the trends and drivers shaping energy markets and the needs of customers, shareholders, and the public.

4

© 2008 NORA

Technology Growth

The industry is committed to improving the prices, performance and installation of its core products, blend new liquid fuels and develop new end-use technologies to draw new customers and increase sales to the existing customer base.

• Focusing on a Fuels Pathway transitioning to sustainable B20 blends and beyond to higher percentages and other liquid blends,

• Core Technology Pathway taking advantage of non-condensing high performance characteristics of fuel oil, and

• New Technology Pathway developing the next levels of efficiency with thermal heat pumps, solar thermal hybrid systems instantaneous water heaters, self-powered appliances and beyond.

5

© 2008 NORA

Liquid Fuels Research Center

LFRC performs fuel and combustion research, advanced heating, cooling and energy systems, new burner concepts, and component, equipment and system optimization.

6

© 2008 NORA

Business Model Transformation for the Future

Household energy efficiency is projected to continue to increase which will mean a continued reduction of heating and hot water fuel use. The industry is focusing on strategies to increase the variety and quality of liquid fuels services for the existing customer base while, reducing operating and other costs. It is clear that consumers will increasingly use the Internet to choose energy services and specific sources of supply and the Industry intends to be the supplier of choice.

7

© 2008 NORA

Public Policy and Regulatory Improvement

• Need to clear the air about efficiency and CO2E

2020 Fuel Cycle Emissions - NY/NJ/PA

0

25

50

75

100

125

150

175

200

225

lb C

O2e

/MM

Btu

Natural Gas LNG BiodieselHeating Oil

*CO2 equivalent based on 100 year GHG warming potential*CO2 equivalent based on 100 year GHG warming potential

8

© 2008 NORA

Public Policy and Regulatory Improvement

• Need to improve energy efficiency rating standards

• Incentives to encourage change out of existing in-ground storage tanks, and

• Incentives to encourage low sulfur and sustainable bio/liquid fuel blends.

9

© 2008 NORA

Strategic Alliances

Strengthen alliances with entities that benefit from our Vision of the future including: city and state energy planners, renewable fuels providers, solar thermal industry and energy efficiency advocates.

10

© 2008 NORA

Public Awareness

Policy makers, media, manufacturers, dealers and consumers need to understand and support the Industry’s Strategic Vision. Increasing public awareness of the unique properties, uses, and benefits liquid fuels offer. The industry also has the opportunity to provide information about new and exciting liquid fuels-based appliances, energy solutions, and business models.

11

© 2008 NORA

Implementing the Vision

• NORA has worked to eliminate regulatory obstacles

Study on Biodiesel

Working with Manufacturers to Ensure Fuel “Works”

12

© 2008 NORA

NORA Licensing Bioheat Distributors

• 175 Retailers Executed Agreement with NORA• Goal to Use a Uniform Name• Provide an Assurance of Quality • Provide Marketing Support

13

© 2008 NORA

Suppliers of Bioheat

Worley and Obetz, PA, B-5, 10,000 sites Wilson Fuel Co., Halifax, B-2 to B-100 Columbia Fuels, Pacific Northwest, B-20, 14000

sites Fred M. Schildwachter and Sons, Inc, Bronx, NY,

B-20, 7800 sites*

14

© 2008 NORA

Experience with Bioheat – Worley and Obetz

•Large fuel marketer in Pennsylvania

•Started in 2001 – varied blend ratios

•Standardized @ B-5, currently estimated 10,000 customers

•Spin-off company, Amerigreen

•Computerized in-line injection terminal

•Exploring B-100 in small number of homes

15

© 2008 NORA

Experience with Bioheat – Columbia Fuels

•Large fuel marketer in Pacific Northwest

•Currently offering B-20 / ultralow sulfur heating oil blends to 14000 customers

•Splash blending at 6 locations

•Exploring a 500 unit new construction project with B-50 as foundation fuel

16

© 2008 NORA

Experience with Bioheat – Wilson Fuel Company

•Large fuel marketer in Halifax, Canada

•Fish-oil source for biodiesel

•Mixed stationary and transportation applications

•Combined volume - 3 million liters per year of biodiesel

•B2, B-5, B-20, B-50, and even B-100 used in stationary applications (mostly lower blends)

17

© 2008 NORA

18

© 2008 NORA

Consumer Education

© 2008 NORA