Fueling a Renaissance in American Manufacturing Peter A. Molinaro Senior Advisor, Government Affairs The Dow Chemical Company Dow.com

business | Updated October 2, 2013, 8:10 p.m. ET

U.S. Is Overtaking Russia as Largest Oil-and-Gas Producer By RUSSELL GOLD and DANIEL GILBERT

The U.S. is overtaking Russia as the world's largest producer of oil and natural gas, a startling shift that is reshaping markets and eroding the clout of traditional energy-rich nations. U.S. energy output has been surging in recent years, a comeback fueled by shale-rock formations of oil and natural gas that was unimaginable a decade ago. A Wall Street Journal analysis of global data shows that the U.S. is on track to pass Russia as the world's largest producer of oil and gas combined this year—if it hasn't already. The U.S. ascendance comes as Russia has struggled to maintain its energy output and has yet to embrace technologies such as hydraulic fracturing that have boosted American reserves‌ Dow.com

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Shale Gas Fuels America’s Competitive Advantage Spot Price ($/MMBtu)

Brent Crude Oil Competitive Advantage

Henry Hub Natural Gas

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High & Volatile Gas Prices = Fewer Jobs Manufacturing Jobs (1000s)

Price $/MMBTU

Manufacturing Jobs

6 Million Jobs Lost Average U.S. Wellhead Price

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The Nation’s Stake in Natural Gas • • • • • • • • •

Aluminum Chemicals Fabricated Metal Fertilizer Foundries Glass Iron & Steel Paper Plastic & Rubber Products

• 126 Projects • > $110 billion in investments • 16 States • 5 million new jobs • $80-120 billion in annual output • 7-9 bcf/d of new demand

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Natural Gas Enables Over $1 Billion Worth of Dow Products Shipped to Midwest $266MM $327MM $418MM $88MM

U.S. Gulf Coast

Dow products produced from natural gas feedstock deliver tremendous value to our industrial customers 7

business | October 1, 2013, 7:23 p.m. ET

Foreign Firms Tap U.S. Gas Bonanza By KEITH JOHNSON

The U.S. boom in natural-gas production is luring investment from foreign manufacturers eager to tap a cheap, abundant supply of fuel and feedstocks. Companies from the U.S. and abroad have invested or are planning to invest billions of dollars through the rest of the decade in plants that would churn out chemicals, fertilizers, plastics, metals and fuel from gas. Many foreign companies, alone or in joint ventures with U.S. partners, are taking advantage of gas that costs a fraction of what it does in Europe or Asia to expand production in the U.S. Boston Consulting Group estimates that international companies will invest at least $50 billion through the end of the decade on projects that take advantage of low-price natural gas‌

Dow.com

State Job Impacts – Energy Intensive Investments

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Snapshot of the Ohio Chemical Industry

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Power Sector Gas Frenzy Slows but Returns After EPA Rule Enforcement • Coal-to-gas displacement of 2012 slows in 2013, temporarily easing demand • EPA regulation already triggering coal retirements and no new coal • Over 1/3 of coal capacity not equipped with necessary pollution control equipment • Nearly half of coal capacity is 45 years or older • Nuclear retirements late decade appearing more likely 12

New Demand Growth Requires Unprecedented Production Natural Gas Supply / Demand (Bcf/d)

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U.S. can have it all‌ but it will take a thoughtful, balanced approach

Labor & Equipment

Industry

Financing

Electric Power

Regulation

Transportation

Infrastructure

LNG & Pipeline Exports

Supply

Demand 14

Thank You @PeterMolinaro www.Dow.com/Energy ®™Trademark of The Dow Chemical Company (“Dow”) or an affiliated company of Dow