Obiective climate policy should minimize overall cost to society of reducing climate risks

Policy should be market based and ensure a uniform and predictable cost of Gl?lG emissions across the economy
Policy should provide a GHG emission cost signal to consumers and long term investors
Policy should be revenue neutral and funds generated equitably returned to society to encourage economic growth
9 We support EC proposal to eliminate fuels mandates and subsidies post 2020 given that they do not align with the
principles of free market and are not cost effective
Transport fuel consumption policy should be limited to covering emissions from fuel combustion in vehicles. Other policies
should cover upstream emissions.
0 A GHG emissions fee on transport fuels is the preferred market based policy option to address fuel combustion in vehicles,
where the price component of the GHG emissions fee is linked to the ETS.
Bringing transport under the ETS cap could achieve the same objectives as a ?linked GHG emissions fee?, but with:
higher complexity from not using existing tax processes
lower transparency from not having a visible GHG component in the consumer fuel price
the higher risk of ETS allowance price instability due to inelasticity of the transport sector (demand response)
-- the need to implement a potentially more complex ETS cap
in the near term other sectors are likely to provide more direct cost effective ?02 abatement solutions than the transport

sector; however, a market based policy will allow fuel and technology options in transport to compete

10

 

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Cost versus conventional gasoline ICE

?1,800 :Cost versus new coal plant

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Many factors can influence on-road fuel economy of vehicles:
Traffic congestion results in wasted fuel and additional emissions
-- Poor road conditions may result in poor on-road fuel economy

Driver behavior may result in poor fuel economy
improving road safety has the additional benefit of improved fuel efficiency

Technology, Policy, and investment directed towards road infrastructure
and intelligent traffic control, and driver education can enable vehicles to
achieve their full potential in fuel economy

Without simultaneous investment in congestion reduction, improved road
infrastructure, and driver education the hard-earned gains in nameplate fuel
economy of vehicles will not produce actual benefits to society in terms of
reduced fuel consumption or less emissions

 

 

Liquid petroleum fuels will remain the primary transportation fuels in the
foreseeable future

Food crop?based biofueis have not delivered the expected   benefits

Advanced biofuels derived from biomass and waste are currently limited by
low technical maturity, poor scalability, and high cost

ExxonMobil is pursuing research in a broad array of advanced biofuels
options, including basic science research to develop algal biofuels with
Genomics, inc.

As a major global natural gas producer, ExxonMobil is committed to
exploring opportunities to meet the increasing demand for natural gas in
marine and land transportation

Switching transportation from petroleum to renewable or alternative fuels
is not the most cost-effective way to reduce GHG emissions; actions in
other sectors power generation) typically cost less per ton of 002
avoided

 

 

- Many Eight duty vehicle technologies are avaiiabie for reducing  
emissions and energy demand from transport over the next few decades

5. More fuei efficient conventionai vehicies
ii. Hybrids, advanced dieseis, and vehicies

Battery eiectric vehicies and fuei ceEE vehicies require further deveiopment
and cost-reduction to be commerciaiiy viabie at a iarge scaie

0 Heavy duty vehicle fleet owners have a strong incentive to impiement
reasonabie fuel economy measures because fueE costs are a maJEor
portion of their totai operating costs

Pubiic?private partnerships, such as the EPA Smaga:   program, are an
effective way to encourage the adoption of fueE efficiency technoiogies

 

 

 

Convenient, affordable, and versatiie mobimy of peepie 
goods is a basic need

Deiayed or deferred travei or transport of goods has economic and sociai
consequences and can impact competitiveness

a Good transportation poiicies are based on

Free market: ievei piaymg fieid, technoiogy?neutrai and 
promote innovation whiie Eetfing the market drive the Sow, Meme
choice of soiutions, no mandates .

Sound science: impact anaiyses on a "weil to wheeis? Reamabae
basis, take into account reaiistic projections for consistentu

enforced

iechnoiogy deveiopmenf I

Appropriate cost/benefit considerations: cost-effective to Cosygene?,

implement, economicaiiy sustainabie without subsidies, Cmdemm
benefits to society shouid exceed overaii costs

Ciear reasonabie reguiatory framework: appropriate,
flexible, consisiemiy enforced compiiance scheme

Free Market

 

 

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This presentation includes forward-looking statements. Actual future conditions (including economic conditions, energy demand, and energy supply) could differ neteria?y due to changes in technology,
the development of new supply sources, political events, demographic changes, and other factors discussed herein (and in Item 1A of BoronMobil?s latest report on Form 10-K or set forth
under "factors affecting future results" on the "investors" page ofour website at wwemnmobilcom). This material is not to be reproduced without the permission of Enron Mobil Corporation.