Sustainable Energy Rebecca KujawaVice Presidentgy

Solutions from Clean Coal

Vice President Business Development

Indian Energy ForumMarch 1, 2012

Sustainable Energy Solutionsfrom Clean Coal

C l M k t

Key Discussion PointsKey Discussion Points

●Coal Markets●Clean Coal Technologies●Clean Coal Technologies●Sustainable Partnerships

2

Coal is the Power Energizing the WorldOur Energy Needs in Perspective: In Just One Day… Our Energy Needs in Perspective: In Just One Day…

Global Population Will Increase By

300,000Twitter Accounts Will Be Opened

210,000

650,000People Open an Internet Account

100,000People Will Move to Cities in China and India

160 000160,000New Cars Will Be Sold

19 Million Metric Tonsof Coal Will Be Used 3

World is Experiencing an Enormous Wave of Energy Demand

Extraordinary Global Growth by 2050…• World population reaches 9 billionWorld population reaches 9 billion • Electricity generation up 130% • Steel production up 275%• Steel production up 275% • Global GDP up 270%• 16 billion tons of coal used annually• 16 billion tons of coal used annually

Guangzhou, ChinaGuangzhou, China4

Coal Powers Economies in Perfect Step with GDP Growth

$100,00016,000 GlobalGlobal

“The Economic Miracle” Powered By Coal“The Economic Miracle” Powered By Coal

$100

$80,000

$90,000

$100,000

14,000

16,000

Wh)

Wor

Global Global Electricity Electricity from Coalfrom Coal

$100

90

80

$60,000

$70,00010,000

12,000

rom

Coa

l (TW

rld GD

P (trill

WorldWorldGDPGDP 70

60

$40,000

$50,000

6,000

8,000

Elec

tric

ity fr

ions of 2005

50

40

$10 000

$20,000

$30,000

2 000

4,000

,E 5 $)30

20

$10,0002,0001970 1980 1990 2000 2010 2020 2030

Source: Developed from International Energy Agency World Energy Outlook (1995-2011); USDA 2011. 5

10

Global Coal Use Overtakes Oil as Largest Energy Source by 2035

● Energy growth from coal:6 000

Coal Demand GrowthCoal Demand Growth((2009 2009 –– 2035)2035) from coal:

– 30% greater than natural gas growth

5,000

6,000

)

65%natural gas growth

– Double the oil growth3,000

4,000

man

d (M

toe)

growth – Twice the current

global use of2,000

,

Ener

gy D

em

global use of nuclear, hydro and other renewables 0

1,000

2009 2035 combined2009 2035

Source: International Energy Agency, World Energy Outlook 2011. 6

Coal the Long-Term Leader for U.S. Power

2500Coal

Coal Powers More Than Nuclear and Gas Combined in 2035 Coal Powers More Than Nuclear and Gas Combined in 2035

2000

Coal

1000

1500

wat

t Hou

rs Natural Gas

N l

500

1000

Tera

w Nuclear

Other

01985 2010 2035

Hydro

Coal Natural Gas Nuclear Hydro Other

7Source: International Energy Agency, World Energy Outlook 2011; Current Policies Scenario.

Cl C lCl C lClean Coal Clean Coal TechnologiesTechnologiesTechnologies Technologies

8

GreenGen Power Plant and GreenGen Power Plant and Carbon Research Center; Tianjin, ChinaCarbon Research Center; Tianjin, China

Advanced Technologies Drive Environmental Progress

150% U.S. CoalU.S. Coal--BasedBased + 170%

U.S. Emissions Decline 87% Since 1970 as Coal Use Nearly TriplesU.S. Emissions Decline 87% Since 1970 as Coal Use Nearly Triples

100%

150%

103%

U.S. CoalU.S. Coal BasedBasedPower GenerationPower Generation + 170%

50% GDP per Capita+ 103%

0%

Lbs. Criteria Emissions/MWh

-50% - 87%from Coal

-100%1970 1975 1980 1985 1990 1995 2000 2005 2011

Source: USDA 2011; Energy Information Administration 2012; U.S. EPA Air Trends Data, 2012; Peabody analysis 2012. GDP in 2005 $. 9

Clean Coal Creates Green Jobs, Environmental Benefits

● Prairie State expected to generate 1,600 MW for

Prairie State Prairie State Energy Campus, Energy Campus, Southern IllinoisSouthern Illinois generate 1,600 MW for

grid by May 2012● $1 billion invested in

environmental technologies ● Emissions rate 80% below

average of U.S. fleet● CO2 emissions rate 40% lower

than oldest plants● Generates $100+ million in

l i b fit10

annual economic benefits ● 450 jobs at plant and mine

Peabody Plan: Boosts U.S. Energy, Economic and Environmental Solutions

● Ensure at least half of new Five Key Steps to Alleviate Energy InequalityFive Key Steps to Alleviate Energy Inequality

generation from coal● Replace older coal plants

with supercritical plantswith supercritical plants● Develop 100 CCS projects

in a decadein a decade● Deploy coal-to-gas, coal-

to-chemicals, coal-to-liquids

● Commercialize near-zero i i t h lemissions technology

GreenGen Power Plant, TianjinGreenGen Power Plant, Tianjin 11

Peabody Plan Energizes Economies With Green Coal

● Replacing traditional U.S. coal plants with supercritical plants would drive reindustrialization

● Benefit of constructing these plants includes:– $1.2 trillion increase in economic outputp– 5.9+ million jobs– $505 increase in personal income$ p– $213 billion in tax revenues

12Source: International Energy Agency, Management Information Services and Peabody analysis.

China Leads Global TechnologyPath With GreenGen

● Peabody only non-

GreenGen: Among World’s Largest NearGreenGen: Among World’s Largest Near--ZZerero Emissions Coal Plantso Emissions Coal Plants

Chinese partnerin GreenGenMulti phase power● Multi-phase power project with carbon capture and carbon presearch center

● First 250 MW unit i i i dcommissioning under

way● Expected on line firstControl Room at GreenGen in Control Room at GreenGen in ● Expected on line first

quarter 2012 13

Tianjin, China Tianjin, China

Sustainable EnergySustainable EnergySustainable Energy Sustainable Energy PartnershipsPartnershipsPartnerships Partnerships

14

Peabody is World’s Largest Private-Sector Coal CompanyLeadership Position in U.S. Market and Growing Global Presence Leadership Position in U.S. Market and Growing Global Presence

Ul bEssenLondon

Beijing

Ulaanbaatar

UrumqiSt .Louis

DTA New Delhi

Mining Operations Position Sales Reserves

Singapore

Jakarta

Balikpapan

Delhi

S. PRB #1 148 2,711Midwest #1 30 3,650Southwest #1 18 1,076Colorado #1 7 230Australia #5 25 1,185

Jakarta

Dalrymple Bay

NewcastlePort Kembla

Abbot Point

Gladstone

Tons in millions. 2011 sales volumes and 2010 proven and probable reserves. 15

Peabody Uses Sustainable Development Model

129-Year Business Track Record

Best Practices in Training

Peabody’s Peabody’s P M d lP M d l

7,500 Skilled Well-Paying Jobs

World-Class Safety & Mining Methods

Proven Model Proven Model

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Innovative Cultural Practices

Global Environmental Excellence

$16 Billion in Annual Economic Impacts

Recognized Globally for Setting the Environmental Standard

● Directed Mongolia’s first coal mine restoration project

Six Environmental Awards in the U.S. Australia and Asia in 2011 Six Environmental Awards in the U.S. Australia and Asia in 2011

mine restoration project ● Developed a government

standard for reclamation● Used best practices

pioneered on Black Mesa$Former Ereen Mine inFormer Ereen Mine in ● Spend $250 million on

programs annually

Former Ereen Mine in Former Ereen Mine in Northern MongoliaNorthern Mongolia

17

Peabody Has History of Successful Mine Development

50 Years Ago● Huge, untapped resource

housing America’s largestasin

Today● Largest U.S. coal region, leading

U S production for two decadeshousing America s largest reserve

● 100-foot low-sulfur coal seams among cleanest in the worlder

Riv

er B

a U.S. production for two decades● Provides fuel for one-third of U.S.

electricity from one county ● Peabody’s PRB flagship is world’samong cleanest in the world

● Landlocked, limited infrastructure, no mainline rail Po

wde ● Peabody s PRB flagship is world s

largest and most productive coal mine

esa

50 Years Ago● Remote, landlocked region

sparsely populated by

Today● 40+ year tribal partnership;

created $12+ billion in economic

Bla

ck M

e sparsely populated by traditional tribal people

● Sovereign nations own reserves and have able

created $12+ billion in economic benefits

● Model for sustainability recognized globally

workforceg g y

18

Arizona Operations: $12+ Billion In Economic Benefits Over Time

Lands Restored to a Condition More Than Lands Restored to a Condition More Than 10X P d ti N ti L d10X P d ti N ti L d10X as Productive as Native Lands 10X as Productive as Native Lands

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Quality of Restoration Important for Traditional Land Use

● Collaboration with area

“We Will Leave Land in a Condition Equal to or Better Than We Found it.”“We Will Leave Land in a Condition Equal to or Better Than We Found it.”

residents promotes good range

tmanagement● Residents have access

t d ti l i dto productive reclaimed range under Peabody controlcontrol

● Program provides framework for long-termframework for long term sustainability of range

Mining Builds Communities ThroughExcellence in Education

● Peabody contributes $360 000 annually in$360,000 annually in Navajo and Hopi scholarships

● Peabody helped develop infrastructure to “wire” town of Forest Lake; award-of Forest Lake; awardwinning program recognized nationally

● Virtual classroom contains 15 work stations with video conferencing & Internet gaccess to high school

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Sustainable Energy For the 21st Century

Coal is the sustainable Coal is the sustainable energy solution for the long energy solution for the long h lh lhaul… haul… and clean coal technology isand clean coal technology isand clean coal technology isand clean coal technology isthe path for green jobs and the path for green jobs and

i t l li t l lenvironmental goals. environmental goals.

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Sustainable Energy Rebecca KujawaVice Presidentgy

Solutions from Clean Coal

Vice President Business Development

Indian Energy ForumMarch 1, 2012