Oil Sands & Nuclear Energy: Our Integrated Energy Vision

Presentation for: Energy Roundtable, Calgary

Presentation by Wayne Henuset, DirectorSeptember 26, 2006

Our Mission

Energy Alberta Corp. will be a profitable energy provider, at the lowest cost, utilizing proven nuclear technology to supply low cost steam, electricity and hydrogen to oil sands operators

Increasing Natural Gas Requirements

• Oil sands production, and its cogeneration based natural gas demand, is expected to increase fourfold over the next decade, straining our natural gas supplies

• Energy Alberta Corp. will replace a portion of the expected oil sands natural gas demand, with nuclear energy

• By 2025, 70% of the oil sands production will be using in situ technology, requiring 4.2 bcf/d a natural gas

• A single CANDU 6 can support, on the order of, 100,000 to 150,000 barrels a day of SAGD production, replacing approximately 0.17 to 0.26 bcf/d of natural gas demand

Our Strengths

Zero Emissions• Cleanest energy alternative

Cost of Nuclear Fuel per year (150,000 b/d)• $18 Million• Long-term (20 to 30 year) fuel contracts• Off-take agreements fixed cost for 30

years, retrofit for another 30 years

Cost of Natural Gas Fuel per year (150,000 b/d)• $550 Million

Proven Technology• CANDU online refuelling

Spent Fuel• Safe storage at plant site (short-term)• Transported outside of Alberta (long-term)

Nuclear as a Hedging Tool

Nuclear energy is competitive in today’s natural gas price environment, and is clearly less expensive when emission costs are considered

Our fuel costs are fixed on a long-term basis– CANDU fuel costs are $18 Million Canadian

per year (using U3O8 at US$32 / pound)• Natural gas is based on the spot market,

and costs over $550 Million a year (2005 AECO-C average)

– A doubling of the contracted price of uranium would only increase our energy costs by 3%

Our “emissions” costs are fixed– Energy Alberta Corp. pays an annual amount

for the disposal and management of spent fuel; few other sources of energy generation currently pay for their “waste” products

Nuclear Renaissance

• 442 reactors operating today• 28 more reactors under construction• Over 50 reactors being proposed

Ontario, USA, Europe, China, and Southeast Asia

• Public opinionEAC commissioned Longwoods International to

conduct a public opinion survey (Alberta, November 2005) on the idea of using nuclear to power oil sands development

• 40% of respondents in favour• 36% of respondents were

neutral

Energy Alberta Corp.’s Business Model

• Partnered with world leader in new build nuclear reactors – Atomic Energy of Canada Ltd. (AECL)

• Long-term energy off-taker agreements with major energy companies

– 20 to 30 year commitments– Open season process starting in November 2007

• CANDU 6– Online refuelling– Highest plant uptime vs. competition

• Latest CANDU 6 performance uptime exceeds 90%, based upon improved operator performance

Atomic Energy of Canada Limited

10% of the nuclear reactors, worldwide– Canadian Crown Corporation

Ontario basedAECL and Team CANDU will provide

– Design– Turnkey construction for a guaranteed

fixed priceOn-time & On-budget Track record

Romania (1996, and 2007)China (2002 and 2003)South Korea (1997, 1998, and 1999)

– Operations support– Spent fuel management support

Corporate Milestones

July 2005– Concept formulated

July 2005 to July 2006– Discussions with industry

August 2006– EAC-AECL Exclusivity Agreement

November 2007– Open Season process begins

January 2008– Capacity is contracted

March 2008– Regulatory Process commences

March 2011– Construction commences

December 2016– Nuclear power plant is fully

operational