Presentation title second line if required

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Presentation titlesecond line if required

• Introducing BP Biofuels

a growing alternative
Adam J. Schubert Farm to Fuel Conference August
31st, 2006
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Questions for the Day

• What are the issues that biofuels can solve?
• What is needed for biofuels to meaningfully
  address these issues?
• What is BP doing to address these issues?
• What public policies will encourage appropriate
  solutions in the marketplace?
• What are the unique issues for Florida?

BP Biofuels a growing alternative
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Drivers for Change

• Key drivers in moving towards sustainable
  mobility solutions
• Security of supply energy diversification
• Climate change issues
• Biofuels can address both these issues.

BP Biofuels a growing alternative
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Security of Supply and Energy Diversification

• Biofuels will help governments achieve their
  energy security goals and reduce dependence on
  imported oil
• In the near-term, logistics play a key role in
  defining what is feasible and what increases
  supply security
• Biofuels have the added benefit of helping the
  agriculture sector
• Current price environment brings popular focus to
  energy policy

BP Biofuels a growing alternative
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Conventional bio-components

• Conventional biofuels are a positive first step
  in use of biomass
• GHG reductions
• Benefit rural economy
• Limitations
• Competing land use issues food vs fuel
• Not ideal fuel molecules material compatibility
  handling/quality issues
• Ethanol issues
• Significant additional infrastructure costs due
  to Water Solubility
• Success at scale requires whole of market
  introduction

BP Biofuels a growing alternative
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What is needed?

• Fuels that can be produced from domestic,
  renewable resources in high volume and reasonable
  cost.
• Fuels that can be used in existing vehicles and
  existing infrastructure
• Fuels that offer good value to consumers
• Fuels that meet the evolving demands of vehicles

BP Biofuels a growing alternative
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BPs bio-fuels activity

• Europe
• British Sugar plant in UK for biobutanol
  production
• First major to introduce 5 FAME blend in Germany
• Across Europe ETBE replaces MTBE
• EBI Institute University TBD

• Asia
• Round table sustainable Palm Oil

• US
• Largest user of Ethanol in gasoline
• 20 new markets added in 2005
• Biodiesel to small number of B2B, evaluating
  more widespread customer offer
• EBI Institute University TBD
• E85 introduction in selected markets by end of
  2006

India 9.4M project of Jatropha oil bearing
crops for diesel fuel

• ANZ
• Supplying Ethanol to retail sites in QLD
• Renewable diesel via tallow

BP Biofuels a growing alternative
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Issues for Florida

• Dependency on Waterborne Imports
• Maximize Utilization of Storage Capacity
• Avoid Duplicative Boutique Fuel Burdens
• Encourage Diversity of Supply Sources
• Hurricane Vulnerability
• Reduce Supply Disruption Potential
• Prefer Fully Fungible Fuels
• High Price Sensitivity
• Focus on Low Cost Solutions
• Minimize New Capital Requirements

BP Biofuels a growing alternative
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Next generation Biofuels

• Advanced bio-fuels respond to all drivers -
  deliver on GHG, security of supply support
  agriculture sector
• Biobutanol has a number of attractive properties
• Easily blended into gasoline
• Can use existing fuel infrastructure without
  major modification
• Potential to be used at higher blend
  concentrations than ethanol in unmodified
  vehicles
• An energy content closer to that of gasoline than
  ethanol reducing the impact on fuel economy for
  the consumer
• Biobutanol is complementary to ethanol
• Can be used together with ethanol
• It can enhance the performance of ethanol blends
  in gasoline
• It can be produced from the same feeds as ethanol
• Other Advanced biofuels will be explored through
  Biomass gasification and lignocellulosics

BP Biofuels a growing alternative
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BPs New Biofuels Business

• Formed a new Biofuels business in June
• Announced plans to invest 500 M in new Energy
  Biosciences Institute to provide a pipeline of
  biofuels technology for the business
• Will partner with science company DuPont to
  develop advanced biofuels-the first introduction
  is biobutanol.
• BP DuPont collaborating with British Sugar to
  convert an ethanol fermentation facility to
  produce biobutanol
• Initial production targeted in the UK during 2007

BP Biofuels a growing alternative
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Public Policy Framework

• Focus on goals
• Give the market room to develop innovative
  solutions
• Flexibility provides space for quicker response
  to changing conditions
• Emphasize solutions that can be used in existing
  vehicles and delivered through existing
  infrastructure
• These will provide the quickest results at the
  lowest cost
• These will minimize logistics requirements
• Make room for innovation
• Yesterdays molecules may not be the best answer
  for todays vehicles
• Research can produce improved solutions for
  tomorrow but only if they are allowed room to
  compete in the marketplace

BP Biofuels a growing alternative
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Presentation titlesecond line if required

• BP Biofuels

a growing alternative