Supply Chain Quality Control for Alternative Fuels Angel Fontenot-Staley

1. Supply Chain Quality Control for Alternative Fuels Angel Fontenot-Staley Laboratory Business Development Manager-Americas Intertek Oil, Chemical & Agri Division total customer focus

2. Introduction • Intertek’s Role in the Supply Chain • Activities in the Region Related to Alternative Fuels • Intertek Services • Inspection & Survey • Analytical Testing • Activities in Southeast Louisiana Region Related to Alternative Fuels and Intertek Operations • Overall Product Quality-Intertek’s View

3. Europe 88 Offices 56 Laboratories Asia/ Pacific 105 Offices 34 Laboratories North & South America 191 Offices 107 Laboratories Middle East 19 Offices 15 Laboratories Africa 37 Offices 14 Laboratories Intertek’s Role in the Supply Chain Presence in most industrial centers, ports and major cities globally

4. Intertek’s Role in the Supply Chain SIMPLIFIED SUPPLY CHAIN FOR ALTERNATIVE FUELS Feedstock & Raw Materials Storage Processing Storage Distribution Blending Storage Distribution POS - Storage End User - Operability

5. Intertek’s Role in the Supply Chain • Protecting the interests of individual parties within supply chain regardless of position • Client nomination defines interests • Unbiased Inspection & Testing Service • Intertek is not a producer, trader or shipping • We only provide data • Being the “Eyes and Ears” of our clients • What we see and hear during the operation that affects timing, quantity and quality • Understanding Operational and Technical aspects of cargo under evaluation • Alternative Fuels are “new” and in their infancy of handling • We must consider those aspects that are traditional to the petroleum industry and those unique to alternative fuels

6. Inspection & Survey Services • Inspection of vessel tanks • Cleanliness and appropriateness for loading • Considering previous cargoes and potentials for contamination • Reporting of Ship and Shore quantities • Documenting Activities and Time Logs • Sampling at Key Points for Traceability • Investigation of discrepancy/loss • Who’s responsibility for loss? • Stock audit and analysis at Storage Installation • Inventories – What does the client have on sight in their installations, volumes and quality aspects per product • 24/7 Operations support real time product movements

7. Analytical Testing Services • Feed Stock Analysis • What am I putting in production? • Allows client to assess what they should expect the final product to be with respect to product specifications • Key Point Testing During Product Movement • Does the product maintain quality during movement? • Transportation modes are not product dedicated unless client owned • Product Analysis • Industry Specifications for Trade Value • Octane as an example • Intertek does not define these specifications, rather industry organizations drive the properties measured • Contamination Issues • What is in my compromised product? Could it be a previous cargo or contamination from storage or transportation?

8. Analytical Testing Services • By Products Testing • DDG’s, Glycerin • Traditional Petroleum Testing • Gasoline, Diesel, Heating Oil • Alternative Fuels Blended into traditional fuels, therefore considered extenders of fuel • Raw Materials Used in Production • Methanol, Catalysts

9. Activities in Southeast Louisiana Region Related to Alternative Fuels and Intertek Operations • Historically, alternative fuels for our business have been concentrated in the production areas • Midwest and Inland Waterways • Ethanol and Biodiesel production concentrated in areas where biomass feed stocks are grown • Coastal Production is growing in marine trade areas due to feed stocks being sourced internationally • Transition of production and trade model • Feed stocks are marine imported, processed and then distributed domestically or internationally • Significant upswing in the West Gulf Coast Region with further expectations in growth in the East Gulf Coast Region • New Production facilities coming online in Louisiana • To Date, NBB indicates only two local producers in La • May change due to increasing costs of feedstocks

10. Activities in Southeast Louisiana Region Related to Alternative Fuels and Intertek Operations • Approximately 10-12 volume movements per month (FAME) • In volume, this relates to approximately 20,000 barrels per movement • Barge Movements from Midwest down Inland Waterways to coastal terminals in Louisiana • Importation of Ethanol from Latin America distributed domestically for blending with gasoline • Domestic Ethanol Production Biorefineries in Production (139) Biorefineries under Construction (62) U.S. Ethanol Biorefinery Locations *Source: Renewable Fuels Association 01.24.08

11. Overall Product Quality-Intertek’s View • Ethanol is a mature industry, therefore, product quality from production inherently “on spec” • Producers have overcome production issues typical to an immature industry • Water content an issue with product storage, regional consideration • Analysis on both purity ethanol and ethanol/gasoline blends • Biodiesel quality significantly improved due to maturing of producers • Due to proven process technology • Improved understanding of industry specifications • Interactions with product traders • Product failures • unreacted glycerides • water contamination • blended product attempting to meet contract specifications outside of traditional domestic specifications

12. What is Intertek’s Contribution? • Assist clients in ensuring “off spec” product does not get to market • Educating clients proactively and reactively • Operationally • Technically • Understanding specification and technical changes and aligning services consistent to the client needs • Two changes to ethanol specifications • Seven major specification changes to biodiesel specification since inception • Analysis requirements were not diesel consistent, rather unique to the product

13. Conclusion-Points to Take Home • Products are “Inspected and Tested” relatively at all points within the supply chain • Increase in these activities when multiple traders are involved • Non dedication of transportation and storage requires consideration to ensuring product quality • Increased alternative fuel product movement in Louisiana, local production moving slowly • Product quality can be compromised anywhere within supply chain • Intertek assists in protecting product quality during trading activities

14. Questions or Comments?Offline QuestionsAngel Fontenot-StaleyLBD Manager-USA, Canada, Latin AmericaIntertek Oil, Chemical and Agri713.456.1137 Directangel.fontenot@intertek.com