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1

The message

America has the opportunity to lead the

world in a new industrial revolution:

To ensure American competitiveness,

Decrease of dependency on foreign oil,

And mitigate climate change.

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2

Temperaturerecord

1850 2006.

Northernhemisphere

Southern

hemisphere

Global average

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14C, produced through cosmic-ray bombardment, is incorporated intoplants and animals. Fossilized organic material is depleted of14C.

Atmospheric CO2 and the14C / 12C ratio

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03/09/

2010

03

/09/

2010

03/09

/2010

03/09/20

10

03/09/

2010

03/09/

2010

We are dependent on foreign oil

In millions of barrels per day

Consumption

Production

Transportation fuels, 2008

P e t r o9 5 %

B i o f

3 %

N a t u r

2 %

Imports

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Body Fat 38 Mj/kg 35 Mj/liter Kerosene, jet fuel 43 Mj/kg 32 Mj/liter Lithium ion battery 0.54 Mj/kg 0.9 Mj/liter

Energy densities of chemical fuels

and the best commercial battery

Mj/liter

Mj / kg

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Huge growth in oil demand is projectedfrom the developing world

IEA: World Energy Outlook 2009

Change in primary oil demand 2007 2030

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Richard Newell, SAIS, December 14, 2009 8

0

5

10

15

20

25

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035

Energy Information Administration Outlook 2010:Biofuels meet most of the growth in U.S. liquid fuels supply

million barrels per dayProjectionsHistory

Natural gas plant liquids

Biofuels including imports

Petroleum supply

Net petroleum imports

Source:Annual Energy Outlook 2010

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Advanced CombustionEngines

Engine improvements will help gasoline, natural

gas, biofuels, and plug-in hybrid vehicles

$5.9 billion in loans to Ford to raisethe fuel economy of 2 million new

vehicles a year by 20%

Includes the direct injection, smartturbocharging EcoBoost engine

$186 million in R&D to raise the fuel economy oftrucks (50%) and light-duty engines (25% to 40%)

Building EcoBoost engines at Fordsreopened Cleveland plant

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Next generation biofuels

Over $600 million from Recovery Act will support 19pilot, demonstration, & commercial-scale biorefineries.

Gasification offers another promising route to

advanced biofuels, from a wider range of feedstocks

Clean, renewable,domestic fuels thatcan directlyreplace

petroleum

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Electrifying Transportation

$2.5 billion to three of the worlds

first electric car factories$2 billion to support 30 battery and

component factories

$400 million to deploy EVs andchargers around the country

Long-term, game-changing

potential to reduce oil use andgreenhouse gas emissions

Fisker Karma

Chevy Volt

Nissan LEAF

http://upload.wikimedia.org/wikipedia/commons/c/cf/Fisker_Karma.jpg

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In September, I requested twonew studies from the NationalPetroleum Council:

Groundwork is underway to initiate these studies this spring

Prudent Development ofNorth American Natural Gas

and Oil Resources

To reassess the North Americanresources supply chain and

infrastructure potential, and therole of gas in a transition to a lower

carbon fuel mix

"Future Transportation Fuels

To analyze U.S. fuels prospectsthrough 2030 for auto, truck, air,

rail, and water transport

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14

Natural gas produces emissions, butfewer than other fossil fuels

EPA

Average CO2 emissionrates from U.S. power

generationlb CO2e/MWh

Average air pollutantemissions from U.S. power

generation

lb/MWh

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15

The response time of natural gas electricity generation ismuch faster than coal or nuclear power.

Output from an 8MW solar PVpanel in Colorado on 9/4/08

81 %

drop in 5minutes

BPA total wind generation23 Feb 2010 to 1 Mar 2010

Natural gas is a key enabler of renewable energy

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16

Natural gas can be used in compressed air energy storage.

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17Source: EIA

CBM program ended in 1982

Total funding: $30 million

Shale gas program ended in 1992

Total funding: $137 millionProdu

ction

(BCF

perYea

r)

DOE investments have led to massive increasesin recoverable coalbed methane and shale gas

Could methane hydrates be next?

DOE investing $64 million in early-stage research

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T d i $154 Milli f NRG E

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Today announcing $154 Million for NRG Energy

Part of DOEs Clean Coal Power Initiative (CCPI)

Goal is to accelerate advanced coal technologies forcommercial deployment

Will also helpenhance oil

recovery

6-year project inThompsons, Texas

will support 550 jobs

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200

1000

2000

3000

4000

5000

6000

7000

8000

9000

MillionmetrictonsCO

2e

U.S. Emissions Reductions UWaxman-Markey (H.R. 2454)

Waxman-Marke

Business as usual

Comprehensiveenergy bill

The most important policy that will stimulateinnovation is a declining cap on carbon emissions

A long term signal that there will be a price on

carbon is needed before business community willmake substantial investments.Mi

llionmetrictonsofCO2e

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21

The train is leaving the station.

America stillhas the opportunity to lead the

world in a new industrial revolution and secure

our future prosperity, but time is running out.

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23

Martin Luther King (1967) :

.We are now faced with the fact, my friends,

that tomorrow is today. We are confronted with the

fierce urgency of now. In this unfolding

conundrum of life and history, there is such a thingas being too late.

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U.S . F ue l E co nomy S ta

15

20

25

30

35

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

Ye a

Milespergallon

Cars

Trucks

Ne w c o mb in e d s ta n

Projected toreduce oil

consumption byapproximately 1.8billion barrels over

the lifetime ofvehicles sold innext five years

President Obama announced a new U.S. automobileand light truck fuel standard -- 35.5 mpg by 2016

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