## Joe Jobe, CEO National Biodiesel Board Kansas City, Missouri September 9, 2008“We’re producing 3 million barrels a day at $120 a barrel. You do the math.” Hussain al-Nowais, a prominent UAE businessman. here & here hereNational Biodiesel Board 3

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  National Biodiesel Board 4 

### ◦ Actual 2007 production of 500 mgy ◦ Estimated 2008 production of 600 mgy ◦ 171 plants in 40 states.**Plant Status Construction**  **(57) Expansion**  **(3)** No Window 

## 5% on - road displacement by 2015 ≈ 1.85bgy (met in various blend levels)  

## 5% ≈ amt of US diesel refined from Iraqi crude  

## 5% ≈ 1⁄4 of diesel equivalent refined from Persian Gulf Crude.  

## 5% ≈ a volume relevant to greenhouse gas reduction, energy security, and feedstock supply ◦ Finding realistic replacements are especially important for heavy duty. Many future options will be effective in reducing gasoline in light duty. Energy Security – US spending well over $1B per day on foreign oil.  Exploding trade deficit with largest transfer of wealth in human history to nations hostile to America.  Biodiesel adds to fuel supply, refinery capacity, green jobs  Environment – biodiesel < viturally all regulated emissions PM and NOx past drivers for diesel. Now HC, air toxics, renewability, and carbon... all things biodiesel addresses better than any current commercially available fuel. Climate Change – biodiesel reduces lifecycle CO2 by 78% Sustainability – highest energy balance of any fuel 3.5: 1 Performance – better on lubricity, cetane, oxygen, and sulfur; worse on stability, cold flow; same on horsepower, torque, fuel ef ficiency.1. 

## Enforcement of Standards ◦ Vigorous enforcement by government ◦ NCWM, State W&M, IRS, EPA, others 2. 

## Education and Outreach ◦ Education of Petro industry & regulatory authorities 3. 

## Encouragement ◦ BQ- 9000

### BQ- 9000 program virtually all in spec  Only one sample was out of spec for water, which was most likely sample contamination 

### Spec enforcement and BQ- 9000 are WORKING!!! 

# NREL Fuel Survey 90% of total biodiesel volume in spec •Small companies still high percent out of spec but doesn’t represent much volumeNational Biodiesel Board 10 

## Grocery Manufacturers Association (Cal Dooly)  

## $15m PR campaign with Glver Park Group Stated Goal : revisit biofuels policies to contain rising food costs Unstated goal : divert negative attention about record profits during record prices

# Kraft Foods

-- $732 Million Quarterly (April - June) Profit

-- Raised prices overall by 7 percent Sara Lee

-- $242 Million Quarterly Profit

-- Net sales increase of 10 percent Record-Breaking Profit$ 

# Food Companies’Profits Soaring Result of Food Price Increases

### The Record (2 nd 

### Quarter 2008) : $11.68 Billion Exxon’s Excellent 2007

-- Profit $40.6 billion

-- Every second of every day: $1,287 of profit

-- Exxon’s 2007 profits of $404 billion, exceed the gross domestic product of 120 countries. Chevron’s 2007

-- Annual profit of $18.7 billion in 2007

-- Fourth consecutive year that they made record profits Record-Breaking Profit$ 

# Historic Quarterly Profits Matches Historic Oil Prices 

### Biodiesel can be made from a wide variety of feedstocks including inedible and waste materials. More inedible feedstocks in devel.  

### Soy currently predominant feedstock. 80% of soybean processed into meal for food & feed  

### Sending economic signals to agriculture and plant science research. Soy could provide an additional 2B gallons of oil by 2015 without adding a single acre and with less inputs 

## According to United Nations Food and Agriculture Organization (FAO), of the land available for agricultural use, only 3.7B acres of the 10.4B is in production, and of that only 1% is used for biofuels including ethanol.  

## Agricultural policies which aim at keeping food and grain prices lower, hamper agricultural development efforts in developing countries and result in less food. 

### According to DOE and USDA, the most significant cause of food price inflation is increased energy prices. Crude oil has risen by 300% in 4 years.  

### In 1974, when fuel prices rose to their second highest mark, signficant food price inflation occurred. Biofuels were not around to blame. According to the Bureau of Labor statistics, adjusted for inflation, fuel prices are approx 30% higher today than they were in 1974, but grain prices are about half the price today compared to ‘74.  

### According to Meryl Lynch strategist and others,

without the 8B gallons of biofuels in the fuel supply, fuel prices would be as much as 15% higher making food prices even higher 

## Support private equity investment in near term opportunities  

## Advocate a development program focused on..... ◦ Algae ◦ Non - edible feedstocks ◦ Feedstocks that can be grown on under- utilized acreage ◦ Virtual acres of existing oilseeds 

### Several production pathways being pursued

◦ Open Ponds ◦ Bioreactors ◦ Enzymatic Fermentation  

### Very little biodiesel to date has been made from algal lipids ◦ Several algae production companies have indicated that the biodiesel that has been produced will meet the ASTM D6751 specification. ◦ Oil quality appears to vary significantly between algae species.  

### Oil production potential estimates range from 2,000 gallons per acre to the absurd. 

## Near term ◦ Support of commercialization efforts through economic development tools (federal loan guarantees, etc.)  

## R&D ◦ Improving production processes to lower production costs ◦ Algae harvesting & dewatering ◦ Oil separation technology ◦ Strain identification for optimal oil production and fatty acid profiles ◦ Recommend re - establishment of a comprehensive federal algae program to address commercialization

# Ques**tions?**