El Paso Corporation is a major natural gas company that owns pipelines and conducts exploration and production. The presentation discusses the implications of carbon regulation for natural gas companies and El Paso's strategies. Regulations could significantly increase costs for natural gas. El Paso aims to make its new Ruby Pipeline project carbon neutral through offsets, efficiency measures, and allowing trading. The company also commits to assessing and reducing its emissions footprint to prepare for a carbon constrained future. Natural gas may play a bridging role but its role depends on regulation stringency and other energy sources.

1. El Paso Corporation
Fiji C. George
Manager, Corporate Development
2012 & Beyond: Operating in a Carbon
Constrained Environment—Perspectives from a
Natural Gas Company
12th Annual Energy and Environmental
Conference and Expo
February 3, 2009
Phoenix, AZ

2. Cautionary Statement
Regarding Forward-looking Statements
This presentation includes certain forward-looking statements and projections. The company has made every
reasonable effort to ensure that the information and assumptions on which these statements and projections are
based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ
materially from the projections, anticipated results or other expectations expressed in this presentation, including,
without limitation, our ability to implement and achieve our objectives in the 2008 plan, including earnings and
cash flow targets; our ability to meet production volume targets in our E&P segment; uncertainties and potential
consequences associated with the outcome of governmental investigations; outcome of litigation; our ability to
comply with the covenants in our various financing documents; our ability to obtain necessary governmental
approvals for proposed pipeline projects and our ability to successfully construct and operate such projects; the
risks associated with recontracting of transportation commitments by our pipelines; regulatory uncertainties
associated with pipeline rate cases; actions by the credit rating agencies; the successful close of our financing
transactions; our ability to successfully exit the energy trading business; our ability to close our announced asset
sales on a timely basis; changes in commodity prices and basis differentials for oil, natural gas, and power and
relevant basis spreads; inability to realize anticipated synergies and cost savings associated with restructurings
and divestitures on a timely basis; general economic and weather conditions in geographic regions or markets
served by the company and its affiliates, or where operations of the company and its affiliates are located; the
uncertainties associated with governmental regulation; political and currency risks associated with international
operations of the company and its affiliates; competition; and other factors described in the company’s (and its
affiliates’) Securities and Exchange Commission filings. While the company makes these statements and
projections in good faith, neither the company nor its management can guarantee that anticipated future results
will be achieved. Reference must be made to those filings for additional important factors that may affect actual
results. The company assumes no obligation to publicly update or revise any forward-looking statements made
herein or any other forward-looking statements made by the company, whether as a result of new information,
future events, or otherwise.
2

3. Agenda
Introduction
The View
Implications for Natural Gas
Corporate Strategies
3

4. Overview of El Paso Corporation
Wyoming
Colorado
Tennessee
Interstate
Interstate Gas
Gas Pipeline
Cheyenne
Mojave Plains Pipeline
Pipeline
Southern
Natural Gas
El Paso Elba Island
Natural Gas LNG
Gulf LNG (50%) Florida Gas
2011 Transmission (50%)
Premier Pipeline Franchise Top 10 independent E&P
10%+ EBIT growth 2008–2013 2.8 Tcfe proven reserves*
42,000 miles of interstate pipeline
Top 10 independent domestic
17 Bcf/d throughput (28% of gas gas producer
delivered to U.S. consumers)
International developments
Nearly $8 billion committed project
backlog
*As of 12/31/07 excluding reserves related to properties divested in 2008; also includes reserves from
4
proportionate share of Four Star

5. The View

6. 6

7. Federal—EPA…the Pandora’s Box?
Advanced Notice of Proposed Rule Making (ANPR)
Developed in response to the U.S. Supreme Court’s decision
in Massachusetts v. EPA
Can the Clean Air Act could be used to
regulated GHGs?
NSR, NSPS, Title V, NAAQs, etc.
Could result in dramatic over regulation of small natural gas
industry sources
For example:
60 HP internal combustion engines
45 KW gas turbines
7

8. State and Regional Programs
Source: © Point Carbon, 2008, reprinted by permission 8

9. Timeline
Source: © Point Carbon, 2008, reprinted by permission 9

10. View From Outside the Beltway
President’s commitment to Climate Change and
“green jobs”
Congress
Senate
House
EPA rule making
Mandatory reporting
Use of CAA provisions
SEC reporting & disclosures
Cap-and-trade with “complimentary” measures
will likely be the federal design
10

11. Implications for Natural Gas

12. Natural Gas Sector Business Impacts:
Impact of Allowance Price on Fuel
Natural Gas Gasoline Coal
$/Tonne CO2 ($/MMBtu) ($/gallon) ($/MMBtu)
$10 $0.53 $0.10 $0.95
$20 $1.06 $0.21 $1.90
$30 $1.60 $0.31 $2.85
$40 $2.13 $0.41 $3.80
$50 $2.66 $0.51 $4.75
12

13. Natural Gas Sector Business Impacts:
Summary of Allowance Prices
$/tonne CO2 $/tonne CO2
Bill Design Study
2015 2030
S.2191 Upstream - EPW version CRA/EEI $48 $76
S.2191 Duke Univ.
Downstream - Prior to $18 $38
EPW
Upstream - EPW version EPA
S.2191 (avg of $38 $78
ADAGE cases)
S. 2191 (Low Cost) Upstream - EPW version NAM $42 $228
S.2191 (avg of all Upstream - EPW version $36 $94
EIA (2006$)
cases)
Upstream - EPW version CATF (2004$)
S.2191 (avg of all $17 $45
cases)
S.2191 (avg of all Upstream - EPW version $52 $93
MIT (2005$)
cases)
$36 $93
AVERAGE (S.2191) PROJECTIONS
$38 $78
MEDIAN (S.2191) PROJECTIONS =
Upstream EIA
S. 1766 (Core $10 $25
case)
S. 280 (CORE) Downstream EIA $15 $48

14. Natural Gas Sector Business Impacts:
Example of Compliance Liability
IMPACTS TO NATURAL GAS SECTOR—2015
Processing/ Transmission
Bill Production Importers & Storage Distribution
1 S.2191 (Median
Allowance
Price)— $Billion $50.39
1 S. 1766— $Billion $13.60
2 S. 280—$Billion $1.25 $0.80 $1.04 $0.41
1Based on 2006: Median Price Forecast ($37.83/tonne) and 2006 U.S. Processing: Natural Gas = 14.68 Tcf; natural gas liquids =
637 MMBbl; U.S. gas imports = 4.18 Tcf
2Based on 2005 emissions from USEPA Inventory and S.280 EIA analysis
14

15. Operating in a Carbon Constrained Environment:
“Mega” Design Considerations for Natural Gas
Definition of a “covered entity” Existing regulatory framework and
disclosures
Consistent with CAA?
FERC, PUC, SEC
Point of regulation
Pass-through and cost recovery
How to minimize “unintentional
consequences”? Transitional assistance
Treatment of fugitive emissions Free Allocation vs. Auctions
In the cap or via offsets or as Supply/demand dynamics
“complimentary measures”?
LNG in an unconstrained world
Treatment residential and market?
commercial sector Will natural gas be the bridge in
In the cap or via the early years?
“complimentary measures”?
Emissions reporting
Protocols? Frequency?
15

16. S.2191 and Natural Gas
EIA 2191—Henry Hub Gas Price EIA S. 2191—Natural Gas Consumption
16

17. WCI and Natural Gas
Allowance
Estimated Natural Gas Use Price (2007
4,500
$/ MMT
4,000
Year CO2e)
Reference Case
3,500
Dem and (TBtu's)
2012 5
Broad with Offsets
3,000
2013 5
Broad no Offsets
2,500
Narrow with
2,000 2014 6
Offsets
1,500
2015 6
1,000
2016 7
500
2017 13
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2018 19
Year
2019 20
2020 24
Source: WCI Economic Modeling Results, September 2008 17

18. Implications for Natural Gas - Conclusions
Natural gas is the cleanest, lowest carbon fossil fuel
The role of natural gas in a carbon constrained environment
is a function of:
Stringency of the cap and associated allocation design
Role of complimentary policies
Efficiency measures and RPS
Limits on offsets
CCS and Nuclear
Natural gas prices
Supply/demand
Weather
Political reality
Natural gas = bridge to a low carbon economy
18

19. Corporate Strategies

20. El Paso Corporate:
Greenhouse Gas Commitment
“Assess, engage and act”
Commitment statement http://elpaso.com/profile/mainneighbor.shtm
Carbon Disclosure Project (CDP) 5 & 6
http://www.cdproject.net/
Issued first CSR in June 2008
http://elpaso.com/CSR/index.html
California Climate Action Registry (CCAR)
First company in CCAR history to certify without significant errors
First company to achieve Climate Action Leader™ for 2007
First natural gas company to join CCAR
First natural gas company to certify all GHG emissions from
operations in the entire US
20

21. El Paso Corporate:
Greenhouse Gas Commitment
Serves on Advisory Committee—The Climate Registry (TCR)
El Paso Natural Gas and Colorado Interstate Gas are
TCR “Founding Reporters”
Coalition for Emission Reduction Projects (CERP)
2008 Southern Gas Association (SGA) Environmental
Excellence Award for leadership on GHG matters
Committed to developing the $3 billion proposed
Ruby Pipeline as a carbon-neutral project
21

22. El Paso GHG Organizational Response
Board and Executive Committee leadership
Executive in charge
Optimizing GHG tasks between corporate and
business units
GHG teams at business units
Climate risk management
Shadow pricing
Disclosures
22

23. Ruby Pipeline’s Goal of Approaching
Carbon Neutrality
http://www.rubypipeline.com/
Our goal to achieve a
carbon-neutral project
Mitigate construction and
operational Scope I emissions
relative to a “business as usual”
design
“Portfolio” approach
Electric compression
Best (methane) management
practices
Internal pipe coating
Allowances, VERs and
re-forestation
23

24. Conclusions
CO2 regulations are here
Complex factors will dictate the role of natural gas
in a carbon constrained environment
Natural gas should be the “bridge” under reasonable
forecasts
Assess and incorporate carbon risks
Need to initiate NOW
Certifiable grade inventory took three years
24

25. El Paso Corporation
Fiji C. George
Manager, Corporate Development
2012 & Beyond: Operating in Carbon
Constrained Environment—Perspectives of a
Natural Gas Company
12th Annual Energy and Environmental
Conference and Expo
February 3, 2009
Phoenix, AZ