FILED: NEW YORK COUNTY CLERK 06/19/2018 12:51 PM NYSCEF DOC. NO. 300 INDEX NO. 451962/2016 RECEIVED NYSCEF: 06/19/2018 Oleske » Aff. i INDEX NO. 451962/2016 FILED: NEW YORK COUNTY CLERK 06/19/2018 12:51 PM O NYSCEF DOC. NO. 300 RECEIVED NYSCEF: 06/19/2018 0 0. 0 GHG Emissions 3 EU ETS GHG ~ Basis Planning Plan '14 with aligned Outlook Energy CO2 $100/T in 2050 -- 0 0 U - Option 1 Option 2 Option 3 '13 ~ Plan EU/NZ ETS: $10/T CO2 for 2014-18 40 O 0 ~ Actuals I EU/NZ 30 ETS ' ', I I I ~ 10 10 10 A ustralia 24 25 10 California 12 12 13 2019 Alberta 15 15 20 2020+ 2016 0 ~ Continue credits Futures I to total to are identify material corporate projects to decision where GHG economics costs or emissions 2010 2015 2020 2025 2030 +on O C3 C) C) material 0 2005 m or obil INDEX NO. 451962/2016 FILED: NEW YORK COUNTY CLERK 06/19/2018 12:51 PM NYSCEF DOC. NO. 300 RECEIVED NYSCEF: 06/19/2018 6) g I- Confidential / FOIL Treatment Requested by Exxon Mobil Corp. Pursuant to Pub. Officers Law g 87(2) EMC 000539904 INDEX NO. 451962/2016 FILED: NEW YORK COUNTY CLERK 06/19/2018 12:51 PM NYSCEF DOC. NO. 300 GHG • Over the past several disconnected basis (CP for for 2. In recent have • The • EU ETS be Australia power pricing of the basis EU/NZ reflects current based, versus discussed California outlook oversupplied consumption In 2013 as a result we we included as well non-OECD case sensitivity 75% of EU-ETS to tie programs basis have been a conservative to bring these CP prices cost and when / growth capacity etc.) - Carbon the Managing we risk") investments. evaluating $80/T conservation energy evaluating / flaring "Energy by reaching evaluating for / venting of carbon is driven for in 2040. This is our outlook price for for where above The market year. economic meeting, in 2020, as in 2019, GHG binding consistent 8 Trade Cap to increasing with program COP 2011 transitions a decision reflecting reduction commitments 17 Durban from effective Platform. fixed price regulated floor is currently The over supplied was supply consistent price, over with driven mainly with demonstrated market allowances and is expected by reduced power to downturn. regulation adopting this begins At this repeal 10% several shifted 21). implementation regulatory areas then 2018, (COP start date and linking with We are to 2019. the also EU ETS requesting in 2016. that Due to lack methane of emissions be as CO2. we are not be included We are also China). We propose view (combustion Climate" and through regulation next of the have costs to provide was view non-conservative proxy line flat credit pricing - current). the OECD showed activity, regulatory For for ETS meeting outlook 2013 emissions this projects. a conservative an for in Paris nations reflects provides it provides remains by member (January for plants. of Parties made CP EO basis the to market remain • slope fired outlook performance • and coal Conference should • new in the emission creation (" EM and by ("Energy use rational likely reductions GHG released we GHG Outlook Energy The / emissions investments, that and reasons: basis involve reports implied on at the • that direction CCS cost reduction investments Plan in 2030). conservation following a lower using emissions the Corporate EO $60/T and energy in 2014 While the years, $40/T evaluating together 1. RECEIVED NYSCEF: 06/19/2018 Emissions where requesting price together, basis GHG including which despite there that any might recent cost or credits is a material material to reduce through market We are economics. of domestic possibility options be captured CDM in base GHG international GHG emissions offsets: however regulation that Likely requesting (e.g. could long that Kazakhstan, be attractive term a at mechanism collapse Background • Cap & Trade systems exist today in the EU, Australia, Quebec, New Zealand, California and 9 U.S. Northeastern states (CN, DE, ME, MD, MA, NH, NY, RI and VT). Carbon taxes exist in some form today in Costa Rica, Ireland, Sweden, Denmark, Finland, Norway, Switzerland Alberta and British Columbia. EU Emission Trading Scheme (ETS) • ETS prices remain weak at ~6 euros as the market is oversupplied by ~1.5G allowances, from prior year carryover. Carryover mainly drive by economic downturn and overlapping directives (mainly renewable energy) which had the effect of lowering emissions, as well as influx of international offsets. In an effort "backloading" to correct an oversupply and raise prices of allowances, the European Parliament approved a carbon market plan to temporarily remove a combined 900 million allowances (2014-2016) for reinjection into the market in 2019 & 2020 (3rd phase of the ETS 2013-2020). Activates Outside the EU • US Federal Regulation: In June 2013, the President issued a Climate Action Plan, setting a firm schedule for EPA's GHG NSPS rulemaking. The plan called for a proposal of a rule for NEW power generating facilities by September 2013, proposal of a rule for EXISTING power generating facilities by June 2014 with finalization by June 2015, and state implementation plan submittal to EPA by June 2015. Considerable regulatory and academic is focused on the industry's papers" methane emissions. In April 2014, the EPA released five "white on oil and gas methane emissions as part of the Administration's climate change sector," initiative and as a prelude to regulations. The papers target "potentially significant sources of emissions in the oil and gas specifically: (1) compressors, (2) oil well completions, (3) leaks in production, processing, transmission and storage, (4) liquids unloading, and (5) pneumatic devices • California: Under Assembly Bill 32 (AB32), California implemented a Cap & Trade program (January 1, 2013) which calls for a 15% reduction in emissions between 2012 and 2020. On January 1, 2014 the California Cap & Traded program became linked with the Quebec program. In 2015, mobile source emissions will be brought into the program. CA also has a low carbon fuel standard (LCFS) • Alberta: Specified Gas Emitters Regulation (SGER) began in 2007. The program requires a 12% intensity reduction from 2003-2005 base line. For any shortfall in actual performance versus the base line, a $15/tonne cost applies. The program will be renewed in September 2014. Current proposals range from is" "hold as to increasing intensity reduction to 28% and cost to $30/tonne. • Australia: The Australian House of Representatives voted to repeal the carbon pricing system which became effective in 2012. Although the Senate voted down the repeal, a new Senate coming in July 2014 is expected to vote for the repeal. If not repealed, the Cap & Trade system will tied to the EU system July 2015. • New Zealand: The New Zealand Cap & Trade program began in 2010 and is linked to the EU ETS. Of note about the about this program is that the full regulatory obligation can be satisfied with international offsets. 2 Confidential / FOIL Treatment Requested by Exxon Mobil Corp. Pursuant to Pub. Officers Law g 87(2) EMC 000539905