Thank you, members of the press in attendance as well as those joining us by teleconference.

Transcription

1 Thank you, members of the press in attendance as well as those joining us by teleconference. As many of you know, POET for years has sought to make ethanol production more efficient, and that focus has helped us continue to make strides, big and small, in producing more ethanol with fewer inputs into the process. Teams of creative scientists and engineers at POET have found many ways to do that - lowering water use, lowering energy use and finding innovative new co-products to maximize the use of each kernel of corn. In fact, since the company started 22 years ago, our water use has dropped by 80%. In just the last decade, we ve lowered our energy requirements by almost one-third. We have developed coproducts including Dakota Gold Dried Distillers Grains, which have an unprecedented standard of consistency in nutrient content. We have developed Inviz, a zein product that can be used to replace petroleum products such as plastic films and adhesives. We capture and sell carbon dioxide to the food and bottling industry. More co-products are on the way. And, of course, we ve continued to produce a large volume of clean, renewable ethanol to provide American drivers with a green alternative to gasoline. The only viable option to gasoline that exists today is grain-based ethanol - made from surplus corn - and it will continue to play an important role in our fuel mix. However, we also recognize the need to expand our sources for ethanol production so that we can offset even greater amounts of oil in the future. Project LIBERTY is our planned 25 million gallon per year cellulosic ethanol plant in Emmetsburg, Iowa that will make ethanol from corn cobs and other plant material left behind after the grain harvest. We break ground this summer on this revolutionary facility, which will be co-located next to the current grain-based ethanol plant, POET Biorefining Emmetsburg. POET engineers have been working hand-in-hand with our researchers to ensure that commercialization of our process will be a success. We continue to learn more about our feedstock and the process for converting it into ethanol each day. At our pilot plant in Scotland, S.D., we are installing an improved, $2 million pretreatment system to better simulate what will take place in Emmetsburg through Project LIBERTY. We have also recently learned that a

2 second anaerobic digester will be more effective than a solid fuel boiler in turning the waste stream into power for the plant. Although construction begins soon, we will continue to tweak the process and improve it. The pilot plant s work is never done. In fact, it s an often over-looked fact that our Scotland facility also houses a grain-based ethanol pilot plant, where we fine-tune new technology before installing it at our current biorefineries. POET s history and experience in improving efficiency will serve us well as we venture into commercial cellulosic ethanol production. We take seriously our commitment to being good stewards of the environment. That is why we commission research to determine emissions for Project LIBERTY and the adjacent POET Biorefining Emmetsburg. That s why we continue to enlist help from Iowa State University to conduct research regarding soil nutrient content and its relationship to corn cobs and other agricultural residues. That s why we continue to work with researchers from the Idaho National Laboratory to determine the best ways to store agricultural biomass for use in producing cellulosic ethanol. And that s why we see such extraordinary potential for the cellulosic ethanol industry to blossom in every state in America and help lead us to energy independence. Today I hope to provide for you a clearer picture of the clean energy future that is possible with cellulosic ethanol. New data from Project LIBERTY shows that this process will provide incredible environmental benefits to our country. POET recently commissioned an independent Life Cycle Analysis for Project LIBERTY based on our most current designs. A Life Cycle Analysis tracks the fuel greenhouse gas emissions from the biomass in the field in our case, corn cobs and other corn plant residue to its use in the fuel tank of drivers across America. All factors were considered in this analysis, including Environmental Protection Agency numbers for land use change and agricultural inputs. Factors specific to POET in the analysis include: - Harvesting the biomass - Transporting the feedstock - Storing the feedstock

3 - Converting the feedstock into ethanol - Producing co-products - and Storing and transporting the ethanol With all of these inputs considered, the analysis shows that POET s Project LIBERTY will provide a 111% percent emissions reduction compared to gasoline. Yes, that s right 111%. That means our process that produces 25 million gallons of clean transportation fuel annually for our nation s vehicles will be Green House Gas NEGATIVE. This impressive carbon reduction is possible thanks to a number of qualities of POET s process. 1. We use agriculture residue, so no planting or associated activities are required. Whether or not we produce ethanol from it, this material is grown and falls to the ground in our fields each year. 2. While we still disagree with the premise of the market theory known as Indirect Land Use Change, the Environmental Protection Agency has correctly noted that there is NO land use cost, either at home or abroad, associated with using this biomass source to make ethanol. 3. The waste stream from our process will be fed into two anaerobic digesters and will provide enough power to operate not only the cellulosic ethanol plant, but also to completely replace natural gas at the adjacent grain-based ethanol plant that is twice the size. The exported biogas replaces a known quantity of fossil fuel and therefore substantially lowers our greenhouse gas emission values. That last point is a very exciting aspect of this process. By putting our waste stream through the anaerobic digesters to create power, we will effectively eliminate the need for natural gas at the cellulosic ethanol plant AND the adjacent grain-based ethanol plant that is twice the size, with some additional power left over. We replace gasoline with the ethanol, and we replace natural gas another fossil energy source with biogas. Our next step is to update the Life Cycle Analysis of the grain-based ethanol plant, taking into account the adjacent cellulosic ethanol facility. We also will update the Project LIBERTY Life

4 Cycle Analysis periodically to reflect any changes in the science, technology or agriculture of the cellulosic ethanol process as we move to full commercialization. I recently announced POET s vision for its role in the future. It s what we call the 3.5 billion gallon plan. That plan calls for: - 1 billion gallons of ethanol by installing cellulosic technology at POET s 26 plants billion gallons by licensing our technology to other biorefineries in the Corn Belt billion gallons by applying the technology to new waste products and dedicated energy crops around the country. We hope to see emissions results similar to those at Project LIBERTY rolled out to existing and new ethanol plants across the country. This is an opportunity to create green jobs in any state, and clearly the environmental implications are tremendous. But Project LIBERTY is the first step, and our focus right now is doing things right at that first commercial plant. I mentioned that we will start construction soon, but that work will quickly stall if policy makers don t take needed steps to get the cellulosic ethanol industry off the ground. They must help provide market access and stability for this emerging industry. Drivers must be allowed to choose more ethanol for their vehicles. That can be done with EPA approval of E15 for standard cars and trucks and with a requirement for more Flex Fuel Vehicles from automakers. Department of Energy loan guarantees for the first cellulosic plants, such as Project LIBERTY, are also crucial, as are long-term extensions of the cellulosic ethanol production credit and the secondary tariff. Quite simply, due to the new technologies that will be employed at our first commercial cellulosic plant, and the need for lenders to take higher risks for this project, it cannot and will not be built without a federal loan guarantee from the Department of Energy. If our nation is serious about decreasing our reliance on foreign sources of energy, cleaning up our environment and creating American jobs, strong policies will be needed. One thing I can assure you is that under the right political environment, POET and our industry will continue our

5 quest to significantly reduce fossil energy use and make ethanol the competitor that has long been sought for gasoline. Thank you for your time.