Chevron s Business-Driven Greenhouse Gas Emissions Management: CO2 Capture and Storage in a Portfolio of Actions

1. Chevron�s Business-Driven Greenhouse Gas Emissions Management: CO2 Capture and Storage in a Portfolio of Actions World Energy Council Committee on Cleaner Fossil Fuels Systems Carbon Sequestration Workshop

2. Key Messages Public-private and intergovernmental partnerships (e.g., � CO2 Capture Project Carbon Sequestration Leadership Forum (CSLF) have the potential for facilitating: Demonstration projects and technology collaborations Progress towards widespread, commercial deployment CSLF can further facilitate defining roles and responsibilities of member nations, their industries and research institutions, in contributing to the research, development, deployment of CO2 capture and storage Key issues still remain, especially on: National policies and incentives Public awareness and acceptance International conventions

3. Key Messages National policies should: Take into account project-specific factors that enable success of commercial projects � predictability, transparency, costs of policies and regulations Increase certainty in criteria for decommissioning and do so early in project approval Limit long term liability post-closure (i.e., after decommissioning) Continue to provide incentives for R&D for new technologies to lower costs of capture, storage, monitoring

4. Key Messages Public awareness and acceptance Needs NGOs and industry to share key roles in educating the public International conventions (e.g., London, OSPAR) Parties to the conventions need to cooperate to clarify key issues that are potential barriers for widespread deployment

5. CO2 Capture and Storage Technology in Chevron�s Portfolio Being a leader in CO2 capture and storage technology is an essential element of Chevron�s medium- to long-term GHG emissions management strategy. This focus on CO2 capture and storage technology deployment reflects our pragmatic, action-oriented approach to advancing energy technologies. This focus emphasizes finding new ways to produce cleaner, lower-carbon energy from fossil fuels today, while at the same time developing a portfolio of advanced energy and infrastructure technology necessary for an emerging hydrogen economy in the long term.

6. Business-Driven Actions on Greenhouse Gas Emissions Management Strong Centralized Greenhouse Gas Management Management Processes and Tools Integrated to Business Carbon Markets Team Partnerships

7. Importance of Climate Change Issue to Chevron

8. Four-Fold Plan of Action

9. Organization of the Climate Change Steering Council and Supporting Teams

10. Actions and Results Greenhouse Gas Emissions Accounting To Become Standardized --CVX SANGEA� software has role CVX Energy Efficiency Improved 24% from 1992. US Refinery Plans an Additional 10% by 2012 via API Commitment to the US. CVX OpCos Set Emission Goals for 2005 and Forecast 2005-07 CVX To Reduce Upstream Flaring/Venting in Nigeria and Angola. F/V is 24% CVX GHG Gorgon Project � State-of-art CO2 Reinjection Program Planned in Australia (2-3 million metric tons per yr)

11. Finally, learnings should be captured to help improve the greenhouse gas analysis process for future projects.Finally, learnings should be captured to help improve the greenhouse gas analysis process for future projects.

12. Greenhouse Gas Emissions Management at Chevron Corporation: Path Forward

13. Signposts

14. Climate Change Policy Drivers Technology common ground G8 nations disagree over the Kyoto Protocol G8 Plan of Action is the common ground. In the transport area, G8 Gleneagles Plan of Action commits the nations to: Launch a Global Bioenergy Partnership to support wider, cost-effective, biomass and biofuels deployment, particularly in developing countries where biomass use is prevalent Encourage the development of cleaner, more efficient and lower-emitting vehicles Promote their deployment by adopting ambitious policies to encourage sales of such vehicles, including public procurement to accelerate market development

15. Carbon Markets Team (CMT) Organizational Functions

16. Business-Driven Actions Climate Change Related Joint Industry Projects Operating Companies� and Business Units� Activities in Support of 4-Fold Action Plan �Practical Hydrogen� � Hydrogen Infrastructure Development

17. Climate Related JIP Involvement Partial List � CO2 Capture Project CO2CRC IEA Weyburn MIT Carbon Sequestration Initiative WestCarb (DOE Regional Partnership) Global Gas Flaring Reduction Partnership Industry Consortia: API, IEA, IPIECA (chairs Climate Change Working Group), CO2NET

18. Chevron Energy Solutions �Energy Efficiency Project (US Postal Service, West Sacramento, CA)

19. Chevron Energy Solutions -Solar Photovoltaic Installation (Public Library, City of Richmond, CA)

20. Linking the Gas Value Chain I�ve mention the pieces of Global Gas� but the key to success is linking those pieces together to commercialize natural gas resources in order to grow the presence of natural gas as clean fuel in the world�s future. For us to realize the benefits of natural gas as a clean fuel, and to make headway in reducing and eliminating such practices as gas venting flaring, we need to ensure there is a market for gas. And those markets need to have stable delivery mechanisms and gas producers need to have assured outlets for gas in order to support the frequently high development costs. This is why linking the gas value chain is so important. All the links need to be in place for there to be commitments to both produce and consume gas. Because gas is less easily transported than other energy commodities it demands a greater degree of managed integration across the activities that range from the well-head to the burner tip. I�ve mention the pieces of Global Gas� but the key to success is linking those pieces together to commercialize natural gas resources in order to grow the presence of natural gas as clean fuel in the world�s future. For us to realize the benefits of natural gas as a clean fuel, and to make headway in reducing and eliminating such practices as gas venting flaring, we need to ensure there is a market for gas. And those markets need to have stable delivery mechanisms and gas producers need to have assured outlets for gas in order to support the frequently high development costs. This is why linking the gas value chain is so important. All the links need to be in place for there to be commitments to both produce and consume gas. Because gas is less easily transported than other energy commodities it demands a greater degree of managed integration across the activities that range from the well-head to the burner tip.

21. West African Gas PipelineNigeria to Ghana

22. Australia: Vast Resources Offer Clean Fuels Promise and GHG Advances Switching now to Australia I�d like to briefly touch on a couple of projects that are key to Chevron and are also examples of our commitment to conscientious development of resources and the reduction of GHG's. Chevron is the largest private holder of natural gas resources in Australia � a country whose Northwest Shelf region has an abundance of natural gas. Chevron is the lead developer of the Gorgon project which is slated to be developed on Barrow Island, a Class A nature preserve, and the company is also a one-sixth owner in the Northwest Shelf (NWS) Project, which currently supplies natural gas to the domestic Australian market and Liquefied Natural Gas to Japan, equivalent to 8% of the world's supply of LNGSwitching now to Australia I�d like to briefly touch on a couple of projects that are key to Chevron and are also examples of our commitment to conscientious development of resources and the reduction of GHG's. Chevron is the largest private holder of natural gas resources in Australia � a country whose Northwest Shelf region has an abundance of natural gas. Chevron is the lead developer of the Gorgon project which is slated to be developed on Barrow Island, a Class A nature preserve, and the company is also a one-sixth owner in the Northwest Shelf (NWS) Project, which currently supplies natural gas to the domestic Australian market and Liquefied Natural Gas to Japan, equivalent to 8% of the world's supply of LNG

23. Greenhouse Gas � the Gorgon commitment Gorgon CO2 sequestration will be the largest such project in the world. It will be managed through: Greenhouse Gas Management Strategy Environment, Social and Economic Review commitments Greenhouse Gas Management Plan Environmental Impact Assessment process (EIS/ERMP) �Greenhouse gas management is part of our business� Why is Australia � and Gorgon in particular � so vital to Chevron? For one the very size of the deposits there classify the Greater Gorgon are as one of the world�s great accumulations of natural gas, meaning that it has the potential to provide a stable source of clean energy to the world for a very long time. And, just as important, it illustrates the company�s commitment to proper development. I want to highlight the issue of CO2 sequestration: Greater Gorgon gas � although plentiful � also has in some of the reservoirs significant concentrations of CO2 as well. Not uncommonly in LNG developments, CO2 that is removed is simply vented to the atmosphere. At Gorgon, Chevron and its partners have committed to the sequestration of the CO2 in deep saline aquifers to eliminate this source of GHG�s from the development of the resource. Why is Australia � and Gorgon in particular � so vital to Chevron? For one the very size of the deposits there classify the Greater Gorgon are as one of the world�s great accumulations of natural gas, meaning that it has the potential to provide a stable source of clean energy to the world for a very long time. And, just as important, it illustrates the company�s commitment to proper development. I want to highlight the issue of CO2 sequestration: Greater Gorgon gas � although plentiful � also has in some of the reservoirs significant concentrations of CO2 as well. Not uncommonly in LNG developments, CO2 that is removed is simply vented to the atmosphere. At Gorgon, Chevron and its partners have committed to the sequestration of the CO2 in deep saline aquifers to eliminate this source of GHG�s from the development of the resource.

24. Just to give you an idea of the relative size of the sequestration endeavor, not only will be it the world�s largest, it will be on the order of more than four times the size of any active or planned sequestration activities elsewhere. Just to give you an idea of the relative size of the sequestration endeavor, not only will be it the world�s largest, it will be on the order of more than four times the size of any active or planned sequestration activities elsewhere.

25. Darajat Geothermal Expansion

26. Darajat Geothermal Expansion

27. Chevron Technology Ventures Find, Launch, and Grow New Energy Technology Businesses Each of CTTV�s 4 Investment Groups has a different focus: Venture Capital Group will invest in technology start-up companies external to CT and facilitate transfer of technology into CT businesses, and earn venture capital returns Energy Technology Systems will incubate/grow game changing alternate energy technologies (advanced batteries, fuel cells, hydrogen storage) Technology Solutions will combine internal Techco and Opco capabilities with external to fund, manage, and grow new businesses, and grow and harvest existing assets (eg: Alto) eVenture Development will work with the Opcos to invest in or develop e-business opportunities, and commercialize internal e-business solutions CTTV brings together exciting ventures from Texaco and Chevron into a new Techco which will generate value and help create a high tech and environmentally responsible image for Chevron Each of CTTV�s 4 Investment Groups has a different focus: Venture Capital Group will invest in technology start-up companies external to CT and facilitate transfer of technology into CT businesses, and earn venture capital returns Energy Technology Systems will incubate/grow game changing alternate energy technologies (advanced batteries, fuel cells, hydrogen storage) Technology Solutions will combine internal Techco and Opco capabilities with external to fund, manage, and grow new businesses, and grow and harvest existing assets (eg: Alto) eVenture Development will work with the Opcos to invest in or develop e-business opportunities, and commercialize internal e-business solutions CTTV brings together exciting ventures from Texaco and Chevron into a new Techco which will generate value and help create a high tech and environmentally responsible image for Chevron

28. Technology Ventures: Renewable Energy Systems Solar Mine project in the Midway-Sunset heavy oil field

29. Advanced Batteries The power behind hybrid vehicles COBASYS has completed construction of an NiMH Battery Plant COBASYS signed a cost-sharing contract to continue the development of NiMH batteries under the sponsorship of the U.S. Department of Energy�s FreedomCar initiative

30. Practical Hydrogen - Navigating the Transition Public - Private partnerships play a central role The hydrogen economy is beginning to expand from its petrochemical base: Prototype fuel cell vehicles Specialized stationary power Growing R&D Early demonstration projects Formulation of national and international policies for hydrogen Drivers for the transition: Greenhouse gas emissions National and global energy security Emerging energy markets Electric power grid reliability Power quality in the digital economy The hydrogen future is option rich and will require social, technical, and commercial choices. Complex transition issues must be addressed systematically. Transition challenges: Viable business models need to be developed and validated Policy issues such as safety, standards and public acceptance need to be addressed Key technology components have long R&D pathways Social Safety Public acceptance Political National energy policies Regulatory and fiscal regimes Technological Technical hurdles Cost reduction, and sustained performance Greenhouse gas reduction Codes and standards Competitive Investment attractiveness and risk Market nature and development The hydrogen economy is beginning to expand from its petrochemical base: Prototype fuel cell vehicles Specialized stationary power Growing R&D Early demonstration projects Formulation of national and international policies for hydrogen Drivers for the transition: Greenhouse gas emissions National and global energy security Emerging energy markets Electric power grid reliability Power quality in the digital economy The hydrogen future is option rich and will require social, technical, and commercial choices. Complex transition issues must be addressed systematically. Transition challenges: Viable business models need to be developed and validated Policy issues such as safety, standards and public acceptance need to be addressed Key technology components have long R&D pathways Social Safety Public acceptance Political National energy policies Regulatory and fiscal regimes Technological Technical hurdles Cost reduction, and sustained performance Greenhouse gas reduction Codes and standards Competitive Investment attractiveness and risk Market nature and development

31. DOE H2 Fleet and Infrastructure Demonstration and Validation Project ChevronConsortium leader and fuel supplier Hyundai MotorsVehicle supplier United TechnologiesFuel cell supplier UC Davis, Hyundai Technical Center, SoCal Edison,AC Transit and a cold-weather test siteFacilities sites / fleet operators Large, integrated H2 energy facility at UC Davis � power, heat, & fuel � onsite reforming H2 fueling station at Hyundai Technical Center, Chino, CA � onsite reforming Up to 6 other sites 32 H2 fuel cell vehicles Potential to upgrade sites Participation in codes and standards; extensive safety program Extensive community education and outreach

32. Vehicle Fleets Opportunities in Early Markets for Hydrogen High-Quality Distributed Power

33. The Hydrogen Highway:moving to the next phase

34. The Hydrogen Highway:moving to the next phase (18 February 2005)

35. Business-Driven Actions on Greenhouse Gas Emissions Management Strong Centralized Greenhouse Gas Management Executing the Four-Fold Action Plan Climate Change Steering Council Management Processes and Tools Integrated to Business Carbon management systems integrated into business planning Multiple emissions-reducing project activities Carbon Markets Team Centrally coordinates trading and credit activities worldwide Partnerships Key opportunity areas to address technology and business development