Governor Schwarzenegger today announced that the University of California Berkeley received a $500

million grant from BP to establish the Energy Biosciences Institute (EBI). Universities and research
institutions around the world competed for this prestigious grant from BP.

University of California Berkeley will partner with the Lawrence Berkeley National Laboratory and the
University of Illinois at Urbana-Champaign on this groundbreaking project. Announcing the grant, Governor
Schwarzenegger was joined by Governor Rod Blagojevich of Illinois, Robert C. Dynes, President, University
of California, Robert A. Malone, Chairman and President, BP America, and other state and university
officials.

“I can’t tell you how excited I am that BP has chosen UC Berkeley and California for its new $500 Million
Energy Biosciences Institute,” said Gov. Schwarzenegger. “I’m proud that the private sector has once again
recognized the world-class stature of the University of California and our state’s unshakeable commitment
to transforming to a clean energy future in an economy-boosting manner. This is a perfect complement to
our new low-carbon fuel standard which will more than triple alternative fuel demand in California by 2020,
and with research facilities like the Energy Biosciences Institute, California will continue to be the leader in
the Cleantech industry.”

EBI is the first public-private research lab dedicated to renewable fuels and clean energy. Last month, the
Governor included $40 million in lease revenue bonds for the EBI in his 2007-08 budget, demonstrating
California’s commitment to keeping the University of California system at the forefront of research and
innovation.

The Governor’s EBI funding proposal was a major factor in BP’s decision to select the University of
California and formed part of the Governor’s Research and Innovation Initiative announced on December
27, 2006 that provides funding for key innovation sectors, including cleantech, biotech and nanotech. Other
parts of the Initiative include $30 million in lease revenue bonds for the Helios Project, $19.8 million in
annual operating cost funds for the California Institutes for Science and Innovation, and the first $5 million
increment in state matching funds to enhance the University of California’s bid to build a $200 million
Petascale computer.

Also, the Governor and Administration officials met or spoke with BP executives on many occasions over
the last several months to discuss the $500 million grant proposal.

Last month, Governor Schwarzenegger established the world’s first low carbon standard (LCFS) for
transportation fuels that requires fuel providers to reduce the carbon intensity of transportation fuels sold in
California. Yesterday the European Union followed with a similar directive. This first-of-its kind standard
firmly establishes sustainable demand for lower-carbon fuels but without favoring one fuel or another. Fuel
providers can meet the LCFS through a variety of means, including producing and selling cleaner-burning
fuels such as those to be researched and developed by EBI.

Last September, Gov. Schwarzenegger signed the Global Warming Solutions Action of 2006, California’s
landmark bill that established a first-in-the-world comprehensive program of regulatory and market
mechanisms to achieve real, quantifiable, cost-effective reductions of greenhouse gases. Like the bill, the
LCFS relies on market-based mechanisms to reduce emissions at the lowest cost and in the most
consumer-friendly ways.