1) Clean coal use has tripled as regulated emissions have declined over 80%, providing a path to near-zero emissions through technologies like carbon capture and storage. 2) Studies show that achieving climate goals would cost 40% more without carbon capture and storage, which can reduce costs of meeting emissions targets by 15-50% compared to other low-carbon options like nuclear and renewable energy. 3) Major carbon capture and storage projects are accelerating around the world, with plans for 10 commercial demonstration projects in the US by 2016 called for by the Secretary of Energy to advance the technology.

1. Clean Coal… Green Coal…
Clean coal use triples as regulated emissions decline 80%+;
Green coal now provides a path to near-zero emissions.
near-
1

2. Coal Recognized as
Low-Cost, Low-Carbon Option
European Union International Energy Agency
● Costs of achieving ● Without CCS, cost
climate goals would be to meet climate goal is
40% higher without
g $
$1.3 trillion more by 2050
y
carbon capture and – 71% higher than if coal with
storage CCS is included
$ $
Carnegie Mellon Study: Coal with CCS
15% to 50% Below Nuclear, Wind or Natural Gas with CCS
2

3. Peabody: A Global Leader in
Btu Conversion and Clean Coal Solutions
Advancing Signature Climate Projects in U.S.,
China and Australia
BTU is a member of
BTU has Only non-Chinese
non Chinese BTU is a long-
long
Australia’s
A t li ’ COAL21
investment equity partner in standing supporter
Fund to advance
in GreatPoint GreenGen, China’s of the Vision 21
near-zero emissions
Energy to develop centerpiece coal / and FutureGen
through technologies
coal-to-gas plants climate initiative clean coal projects
such as oxyfuel
3

4. Carbon Capture and Storage Projects
Accelerating Around the World
Statoil’s Sleipner, Norway
Great Plains Synfuels Plant, USA
G t Pl i S f l Pl t
Planned GreenGen, China
Peabody is equity partner
AEP’s Mountaineer Plant, USA
Schwarze Pumpe, Germany
S h P G
Current CO2 Capture Projects
Gasification Synfuels Plant
Current CO2 Storage Demonstration Projects
Major Pilot Plants (Post-Combustion)
ECBM Projects
CO2 Separation from
Natural Gas for CCS EOR Projects
Food-grade CO2/Carbonation of Brine/ Gas Production Fields
Urea (Post-Combustion) Saline Aquifer
Source: International Energy Agency Greenhouse Gas R&D Programme; National Mining Association, 2009. 4

5. Global Clean Coal Projects:
Advancing to Critical Mass
● United States: $3.4 billion to CCS and U.S. Energy
Department announces intent to move FutureGen forward
● Australia: $100 million in annual funding for 20 commercial
scale projects worldwide by 2020; Queensland oxyfuel project
under wayy
● Canada: $860 million in research funds for reducing carbon
● China: GreenGen near-zero emissions power project under
construction as centerpiece climate initiative
● United Kingdom: Four CCS demonstration projects to be
developed, historic £3.5 million study of storage
● Europe: New initiative with China, India and other emerging
economies to help develop and finance low-carbon
technologies
5

6. FutureGen: America’s Path
to Green Energy
Peabody is a Founding Sponsor of the FutureGen Alliance
6

7. FutureGen History: Powerful Progress
February 2003: March 2006: 7 November 2007:
FutureGen states issue 12 Environmental Impact
announced proposals to Statement issued on
host site preferred sites
December 2007: Feb 2008: March 2009: $1B
Alliance selects FutureGen stimulus for near-zero
Mattoon, Ill. restructured; emissions power
Alliance continues projects, bold vision
to fund, receives from new DOE
Illinois grants • Alliance contributions
of ~$300MM, $2B+ gap
June 2009: “Statement July 2009: DOE
of Principles,” Limited cost sharing
Scope Cooperative restored, Record of
t d R d f
Agreement Decision issued
7 7

8. FutureGen: A Bright Future Ahead
Strong Political Support from Administration, Congress
Alliance and DOE have
Alli d h DOE: Visionary Leadership
agreed to scope of with Practical Utility, R&D
work as part of LSCA Experience
● DOE to provide $15M to Secretary of Energy Steven Chu
y gy
fund scope of work
● Dan Poneman
● Alliance to provide $3M to Deputy Secretary of Energy
fund scope of work ($2M
● Dr. Kristina Johnson
retroactive)
Under Secretary of Energy
● No further funding required
● Dr. James Markowsky Asst.
in 2009
Sec. for Fossil Energy 8 8

9. Coal’s Carbon Content =
Competitive Advantage
g
Robust Enhanced Oil Recovery Market
Increases U.S. Energy Supply
Over the next three decades:
● Best practices 64 billion
barrels EOR
● Next generation 87 billion
barrels EOR
● Net new market 12 billion
tons of CO2 best practices
● Net new market 14 billion
tons of CO2 next generation
● Total coal use: 6 - 7 billion
tons for EOR
Source: National Energy Technology Laboratory, U.S. Department of Energy, “Storing CO2 and Producing Domestic Crude Oil with Next Generation CO2-EOR
Technology,” Jan. 9, 2009. 9

10. U.S. Has Massive CO2, EOR Capabilities
In Red, U.S. Basins/Regions Studied for Future CO2
Storage and Enhanced Oil Recovery
The 27 states with shading are included in the 11 Advanced Resources International updated “basin studies” of CO2 storage with enhanced oil recovery.
Source: National Energy Technology Laboratory, U.S. Department of Energy, “Storing CO2 and Producing Domestic Crude Oil with Next Generation CO2-EOR
Technology, Jan. 9, 2009. 10

11. The Clear Path to Clean Air and
Near-Zero Emissions with Green Coal
New Supercritical Plants and CCS Demonstration Essential
Advanced Supercritical Combustion Plants
Demonstrating Carbon Capture / Storage (CCS)
D t ti C b C t St
Commercial CTG/CTL with CCS
Commercial IGCC with CCS
Retrofitting PC Plants with CCS
2007 2010 2020 2030
11

12. Coal and Btu Conversion:
A Fuel for All Seasons
A Flexible Power Source for the 21st Century
12

13. Kentucky NewGas to Transform
Clean Coal to Natural Gas
Peabody Energy and ConocoPhillips Partner to Develop
High-
High-Tech Energy Center in Heart of Kentucky
● Project would 1 200 jobs during
1,200
the four-year construction period
and over 500 long-term, skilled
jobs.
jobs
● Ultra clean gasification process
removes virtually all impurities.
● Over 99% of the sulfur will be
recovered and marketed for use
in the fertilizer industry.
● Project would be carbon storage
ready
● Western Kentucky Carbon
Storage Foundation helping fund
study to evaluate geology for
CO2 storage
13

14. U.S. Call to Action in Letter
to Energy Ministers
gy
Dr. Steven Chu Calls for 10 Demonstration CCS Plants by 2016 in
Letter to Carbon Sequestration Leadership Forum
“ We must make it our goal to advance
carbon capture and storage
technology to the point where
widespread, affordable deployment
can begin in 8 to 10 years.
It will require an aggressive global
effort, harnessing the scientific talent
and resources of governments as well
as industry. The U.S.’s commitment
industry U S ’s
could bring up to ten commercial
U.S. Secretary of Energy
demonstration projects online by
Dr.
Dr Steven Chu 2016. ”
Source: Secretary of Energy Chu: Oct. 12, 2009 Letter to Carbon Sequestration Leadership Forum in London, U.K. 14

15. Carbon Capture & Storage is Essential to
Any Carbon Reduction Plan
● “CCS is therefore essential to the achievement of
deep emission cuts.”
“CO2 capture and storage – or CCS – is one of the most
vital options for revolutionising power generation, with
CCS projected to d li
j d deliver 20% of the total CO2 savings
f h l i
needed to cut global emissions by 50% by 2050.”
– IEA Executive Director Nobuo Tanaka
● “The vast majority of new power stations in China and
India will be coal-fired, not may be coal-fired will be. So
coal-fired coal-fired, be
developing carbon capture and storage technology is not
optional, it is literally of the essence.”
– Former British Prime Minister Ton Blair
Tony
15