El Paso Corporation

Fiji C. George Manager, Corporate Development

2012 & Beyond: Operating in a Carbon Constrained Environment—Perspectives from a

Natural Gas Company12th Annual Energy and Environmental

Conference and Expo February 3, 2009

Phoenix, AZ

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Cautionary Statement Regarding Forward-looking Statements

This presentation includes certain forward-looking statements and projections. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to implement and achieve our objectives in the 2008 plan, including earnings and cash flow targets; our ability to meet production volume targets in our E&P segment; uncertainties and potential consequences associated with the outcome of governmental investigations; outcome of litigation; our ability to comply with the covenants in our various financing documents; our ability to obtain necessary governmental approvals for proposed pipeline projects and our ability to successfully construct and operate such projects; the risks associated with recontracting of transportation commitments by our pipelines; regulatory uncertainties associated with pipeline rate cases; actions by the credit rating agencies; the successful close of our financing transactions; our ability to successfully exit the energy trading business; our ability to close our announced asset sales on a timely basis; changes in commodity prices and basis differentials for oil, natural gas, and power and relevant basis spreads; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; general economic and weather conditions in geographic regions or markets served by the company and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; political and currency risks associated with international operations of the company and its affiliates; competition; and other factors described in the company’s (and its affiliates’) Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise.

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Agenda

Introduction

The View

Implications for Natural Gas

Corporate Strategies

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Overview of El Paso Corporation

10%+ EBIT growth 2008–201342,000 miles of interstate pipeline17 Bcf/d throughput (28% of gas17 Bcf/d throughput (28% of gas delivered to U.S. consumers)delivered to U.S. consumers)Nearly $8 billion committed project backlog

Premier Pipeline Franchise

El Paso Natural Gas

Mojave Pipeline

Colorado Interstate Gas

Wyoming Interstate

Cheyenne Plains Pipeline

Tennessee Gas Pipeline

Southern Natural Gas

Florida Gas Transmission (50%)

Elba Island LNG

Gulf LNG (50%) 2011

*As of 12/31/07 excluding reserves related to properties divested in 2008; also includes reserves from proportionate share of Four Star

2.8 Tcfe proven reserves*

Top 10 independent domestic gas producer

International developments

Top 10 independent E&P

The View

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Federal—EPA…the Pandora’s Box?

Advanced Notice of Proposed Rule Making (ANPR)Developed in response to the U.S. Supreme Court’s decisionin Massachusetts v. EPACan the Clean Air Act could be used toregulated GHGs?

NSR, NSPS, Title V, NAAQs, etc.

Could result in dramatic over regulation of small natural gas industry sources

For example:60 HP internal combustion engines45 KW gas turbines

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State and Regional Programs

Source: © Point Carbon, 2008, reprinted by permission

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Timeline

Source: © Point Carbon, 2008, reprinted by permission

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View From Outside the Beltway

President’s commitment to Climate Change and “green jobs”Congress

SenateHouse

EPA rule makingMandatory reportingUse of CAA provisions

SEC reporting & disclosures

Cap-and-trade with “complimentary” measures will likely be the federal design

Implications for Natural Gas

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Natural Gas Sector Business Impacts: Impact of Allowance Price on Fuel

$/Tonne CO2

Natural Gas ($/MMBtu)

Gasoline ($/gallon)

Coal ($/MMBtu)

$10 $0.53 $0.10 $0.95

$20 $1.06 $0.21 $1.90

$30 $1.60 $0.31 $2.85

$40 $2.13 $0.41 $3.80

$50 $2.66 $0.51 $4.75

Natural Gas Sector Business Impacts: Summary of Allowance Prices

Bill Design Study$/tonne CO2 $/tonne CO2

2015 2030S.2191 Upstream - EPW version CRA/EEI $48 $76 S.2191 Downstream - Prior to

EPWDuke Univ. $18 $38

S.2191 (avg of ADAGE cases)

Upstream - EPW version EPA $38 $78

S. 2191 (Low Cost) Upstream - EPW version NAM $42 $228

S.2191 (avg of all cases)

Upstream - EPW version EIA (2006$) $36 $94

S.2191 (avg of all cases)

Upstream - EPW version CATF (2004$) $17 $45

S.2191 (avg of all cases)

Upstream - EPW version MIT (2005$) $52 $93

AVERAGE (S.2191) PROJECTIONS $36 $93

MEDIAN (S.2191) PROJECTIONS = $38 $78

S. 1766 (Core case)

Upstream EIA $10 $25

S. 280 (CORE) Downstream EIA $15 $48

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Natural Gas Sector Business Impacts: Example of Compliance Liability

1Based on 2006: Median Price Forecast ($37.83/tonne) and 2006 U.S. Processing: Natural Gas = 14.68 Tcf; natural gas liquids = 637 MMBbl; U.S. gas imports = 4.18 Tcf

2Based on 2005 emissions from USEPA Inventory and S.280 EIA analysis

IMPACTS TO NATURAL GAS SECTOR—2015

Bill ProductionProcessing/ Importers

Transmission & Storage Distribution

1 S.2191 (Median Allowance Price)— $Billion $50.39

1 S. 1766— $Billion $13.60

2 S. 280—$Billion $1.25 $0.80 $1.04 $0.41

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Operating in a Carbon Constrained Environment: “Mega” Design Considerations for Natural Gas

Definition of a “covered entity”Consistent with CAA?

Point of regulationHow to minimize “unintentional consequences”?

Treatment of fugitive emissionsIn the cap or via offsets or as “complimentary measures”?

Treatment residential and commercial sector

In the cap or via“complimentary measures”?

Emissions reportingProtocols? Frequency?

Existing regulatory framework and disclosures

FERC, PUC, SECPass-through and cost recoveryTransitional assistance

Free Allocation vs. AuctionsSupply/demand dynamics

LNG in an unconstrained world market?Will natural gas be the bridge in the early years?

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S.2191 and Natural Gas

EIA S. 2191—Natural Gas ConsumptionEIA 2191—Henry Hub Gas Price

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WCI and Natural Gas

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Year

Dem

and

(TB

tu's

)

Reference Case

Broad with Offsets

Broad no Offsets

Narrow withOffsets

Year

Allowance Price (2007 $/ MMT CO2e)

2012 52013 52014 62015 62016 72017 132018 192019 202020 24

Estimated Natural Gas Use

Source: WCI Economic Modeling Results, September 2008

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Implications for Natural Gas - Conclusions

Natural gas is the cleanest, lowest carbon fossil fuelThe role of natural gas in a carbon constrained environment is a function of:

Stringency of the cap and associated allocation designRole of complimentary policies

Efficiency measures and RPSLimits on offsetsCCS and NuclearNatural gas prices

Supply/demandWeather

Political reality

Natural gas = bridge to a low carbon economy

Corporate Strategies

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El Paso Corporate: Greenhouse Gas Commitment

“Assess, engage and act”Commitment statement http://elpaso.com/profile/mainneighbor.shtm

Carbon Disclosure Project (CDP) 5 & 6http://www.cdproject.net/

Issued first CSR in June 2008http://elpaso.com/CSR/index.html

California Climate Action Registry (CCAR)First company in CCAR history to certify without significant errorsFirst company to achieve Climate Action Leader™ for 2007First natural gas company to join CCARFirst natural gas company to certify all GHG emissions from operations in the entire US

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El Paso Corporate: Greenhouse Gas Commitment

Serves on Advisory Committee—The Climate Registry (TCR)El Paso Natural Gas and Colorado Interstate Gas areTCR “Founding Reporters”

Coalition for Emission Reduction Projects (CERP)

2008 Southern Gas Association (SGA) Environmental Excellence Award for leadership on GHG matters

Committed to developing the $3 billion proposed Ruby Pipeline as a carbon-neutral project

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El Paso GHG Organizational Response

Board and Executive Committee leadershipExecutive in chargeOptimizing GHG tasks between corporate and business units

GHG teams at business unitsClimate risk management

Shadow pricingDisclosures

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Ruby Pipeline’s Goal of Approaching Carbon Neutrality

http://www.rubypipeline.com/

Our goal to achieve a carbon-neutral project

Mitigate construction and operational Scope I emissions relative to a “business as usual”design

“Portfolio” approachElectric compressionBest (methane) management practicesInternal pipe coatingAllowances, VERs andre-forestation

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Conclusions

CO2 regulations are here

Complex factors will dictate the role of natural gas in a carbon constrained environment

Natural gas should be the “bridge” under reasonable forecasts

Assess and incorporate carbon risks

Need to initiate NOW Certifiable grade inventory took three years

El Paso Corporation

Fiji C. George Manager, Corporate Development

2012 & Beyond: Operating in Carbon Constrained Environment—Perspectives of a

Natural Gas Company12th Annual Energy and Environmental

Conference and Expo February 3, 2009

Phoenix, AZ