“Return-driven decision making in a resource constrained world.” That’s how CNX Gas defines Sustainable Development. But what does it really mean? To us, it means that while CNX Gas is committed to having a symbiotic relationship with the environment, we also continue to achieve shareholder value by utilizing our “Best in Class” leverage.

There are a number of areas in which we have achieved “Best in Class” status. We have an exceptional acreage position. We have the best raw assets in the E&P industry. We are the largest CBM acreage holder in Central Appalachia and Northern Appalachia. We have a leading position in the New Albany Shale in the Illinois Basin. But despite this wealth, we do not focus on growth just for the sake of growth. We make a concerted effort to create value for our shareholders by earning a rate of return above our cost of capital. In addition, we employ a culture of continuous improvement. We are continuously working on improving our costs, our operations, our profit margins, and our production.

When you think of Sustainable Development, the environment often comes to mind. But Sustainable Development is more than just environmental stewardship. It’s recognizing that “Best in Class” equals “Sustainable Development.” Our “Best in Class” mentality includes all of the following:

• Safety
• Methane Capture
• Environmental stewardship
• Philanthropy
• Employee standard of living
• Strong internal controls and governance
• Employee Empowerment
• Providing a product society wants and needs
• Tone at the top backed by action at the top
• Optimizing net present value and internal rates of return

Now, let’s look at some highlights:

SAFETY
CNX Gas continues to be an industry leader in the safety arena. Working safely has been, and always will be, a condition of employment at CNX Gas. In 2007, we continued our zero lost-time incident rating and are currently working at 2.8 million consecutive hours without a lost workday incident. We are the safest operator in the E&P industry and we have one of the lowest contractor incident rates. We are extremely proud to be in this position and we intend to continue to be able to say that.

We believe that the most profitable companies are also the safest - no matter which industry you examine. Safety is directly tied to rate of return and productivity. For this reason, CNX Gas has adopted the “At-Zero” mentality, which means only a ZERO incident rate is acceptable.

METHANE CAPTURE
Methane is a greenhouse gas over twenty times more potent than carbon dioxide. According to voluntary reporting to the U.S. Department of Energy in 2005, CNX Gas had the largest reduction in methane emissions of any company in the energy industry. And, CNX Gas is number two across the entire spectrum of U.S. industry. As a result of our methane collection efforts, emissions decreased by 20.8 million metric tonnes of CO2-equivalent in 2005 and 20.1 million tons in 2006. The 2006 figures (the latest available) reflect the impact of the temporary idling of the Buchanan Mine. In December 2007, CNX Gas made an environmental presentation to four governors and the energy heads of seven other states showing how methane capture not only increases indigenous energy production in Appalachia, but when done in advance of mining operations, also:

• Reduces the carbon footprint of the coal industry
• Improves the safety of the coal industry
• Realizes two saleable products from a given resource (coal alone vs. coal and gas), which increases energy efficiency.

In other words, methane capture increases production of Btus from a given energy source. Isn’t that what energy efficiency is all about?

OTHER ENVIRONMENTAL:
In addition to our achievements in methane capture, CNX Gas also partnered with the Virginia Department of Mining and Minerals Engineering and Virginia Tech on a carbon sequestration project. Carbon sequestration is increasingly being looked to as a potential vehicle in the fight against global carbon dioxide emissions while allowing for economic growth. CNX Gas contributed the use of a producing methane gas well in Russell County, Virginia as the host site for the first Virginia test of carbon dioxide sequestration in a partially depleted coalbed methane well. The research project will determine the viability of storing carbon dioxide in unmineable coal seams.

Both CNX Gas and Virginia Tech belong to the Southeast Regional Carbon Sequestration Partnership (SECARB), one of seven regional partnerships created by the U.S. Department of Energy. The project is aimed at further identifying carbon storage alternatives as part of the Global Climate Change Initiative started in 2003 by President George Bush. The initiative is designed to identify measures to successfully reduce greenhouse gas intensity by 18 percent by 2012.

In early October 2007, CNX Gas was the host to a Pennsylvania DEP/ U.S. EPA visit at our Mountaineer CBM Operations while they investigated coalbed methane water handling practices at Pennsylvania wells. Before heading out to the field for a tour of our operations, we educated the group on our drilling methods and water-handling procedures and costs.

PHILANTHROPIC
CNX Gas’ corporate giving philosophy is very simple: where we reap, we replenish. This falls in line with the concept of Sustainable Development. The areas in which we conduct a large part of our business are also the areas in which we focus our corporate giving. Whether we’re donating a pit liner to a Boy Scout troop, or refurbishing a flag pole at a Buchanan County Virginia High School, we are out in the communities in which we operate, helping where we can. In addition, our employees take an active role in their communities. When considering a donation, we give special attention to those causes held close to our employees’ hearts.