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Tyler J. Krutzfeldt, CFA Managing Director Mont Vista Capital

Ethanol & Innovation Investment Overview. Tyler J. Krutzfeldt, CFA Managing Director Mont Vista Capital. June 25, 2012 EPAC Meeting Billings, MT. What we will discuss. Energy Market Overview Biorefinery 2.0, 3.0 Our Focus Conclusion. Who we are .

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Tyler J. Krutzfeldt, CFA Managing Director Mont Vista Capital

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  1. Ethanol & Innovation Investment Overview Tyler J. Krutzfeldt, CFA Managing Director Mont Vista Capital June 25, 2012 EPAC Meeting Billings, MT

  2. What we will discuss Energy Market Overview Biorefinery 2.0, 3.0 Our Focus Conclusion

  3. Who we are • T. Krutzfeldt founding Board member of Algae Biomass Org, speaker at FEW, Platts Biofuel Financing, and published Billings Gazette, Ethanol Producer. A specialized merchant banking team focusing on clean energy, water, and infrastructure opportunities with a sustainable investment strategy.

  4. Chindia

  5. China’s appetite

  6. Fuel Switch

  7. Fuel Switch

  8. Fuel Switch

  9. Crude to Nat Gas

  10. Fuel Switch

  11. Power Cost – full carbon

  12. Power costs – low carbon

  13. Gas – bearish, mid-term • 2011, the US accounted for half of natural gas supply increase, globally • Because of new supply, natural gas prices have dropped 85% since 2008 • Fracking and coal economics • Peak oil doesn’t mean we’re running out of oil. It means we have to spend more to get the remaining oil …bearish for gas

  14. A Biorefinery • Fuel molecule is lower % gross revenue than non-fuel co-products • Revenue diversification via food, chemical, and premium* drop-in fuels • Premium* = D5 RINS • Capital markets keen on biochemicals & biomaterials displacing under current specs • Biochemical supply constrained

  15. Biorefinery Pathways • Ethanol + biogas fuel switch

  16. Biorefinery Pathways • Ethanol + algae • Co2 • Nutrients • H20 • Addressable Markets • Pharma • Fertilizer • Chemicals/Fuels

  17. Other Pathways • Cellulosic • Supply chain/capex/cap markets uncertainty • Fractionation to Clean Sugars (Biorefinery) • $0.12 - $0.15 per pound dextrose @ $6/bushel sorghum • Compelling for downstream product pathways • CCS/EOR Significant uncertainty

  18. Our Focus • 6-8 key clean energy/clean water businesses, not technologies alone • Problem solvers, not seekers • Substitutes in existing supply chains • Lifecycle GHG targets assist in defining strategy over investment horizon. • Projects not ideas • Series of little bets

  19. Conclusionopening gates…

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