Natural Gas Vehicles (NGV) and Fueling Options. Justin Stiff and Jim Tilley CenterPoint Energy

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1 Natural Gas Vehicles (NGV) and Fueling Options Justin Stiff and Jim Tilley CenterPoint Energy 1

2 Which Comes First? Vehicles or Infrastructure 2

3 Overview Natural Gas as a Transportation Fuel CNG Compressed Natural Gas LNG Liquefied Natural Gas Environmental Advantages Economic advantages over other fuels Economic/Technologies that have changed supply and prices Tax Credits CNG & LNG Availability Station Examples Contacts Questions 3

4 Facts About Natural Gas Compressed Natural Gas (CNG) Gas delivered to site by the local gas utility and compressed and stored onsite and/or distributed directly to vehicles Onboard 3,600 psi vehicle cylinders CNG is measured in Gasoline Gallon Equivalents NGVs are proven and reliable (11,000+ transit buses and 4,000 + refuse trucks. Cummins Westport has 10,000 + natural gas engines in the field.) NGVs are quiet (80-90% lower decibel level than diesel) 4

5 Typical Natural Gas Compressor Station How it works The natural gas enters the compressor station going through the dryer to the compressor. If a slow fill system, no storage is required. If Fast Fill, storage required. To the dispensing equipment into a NGV. Stations can range from $5,000 for an individual homeowner unit to several million dollars. The price is dependent upon number of vehicles to fuel, number of gallons per hour and if storage is required. Information Needed: # Vehicles Miles per Gallon Gallons per Day Timeliness of Refueling and time of day Delivery Pressure Volume per Hour Flow 5

6 Liquefied Natural Gas (LNG) Facts Natural Gas cryogenically cooled to (-260 Degree)F, stored in liquid form onboard vehicle and vaporized back to a gas before it enters engine cylinder. Natural gas replaces the energy (Btu s) in gasoline or diesel with the energy (Btu s) in natural gas. Preferred by many heavy-duty fleets due to its higher energy density and space requirements Most vehicular LNG used today is produced at a limited number of plants and trucked to fleets onsite storage vessels. Transportation of LNG to the fueling location is a consideration. 6

7 Typical LNG Station How it works LNG is stored in the Storage vessel. Upon Demand, LNG is pumped to the dispenser using a cryogenic pump into a NGV. LNG Stations vary in price based on the amount of fuel dispensed per hour and the amount of storage on site. The prices range from several hundred thousand to several million dollars. Flow 7

8 Environmental Advantages Natural gas is cleaner than other fuels Reduces carbon monoxide emissions 70-90% Reduces carbon dioxide emissions 20-30% Reduces nitrogen oxide emissions 75-95% (less smog and soot) Potentially reduces non-methane hydrocarbon emissions 50-75% Emits fewer toxic and carcinogenic pollutants Emits little or no particulate matter Eliminates evaporative emissions Natural gas produces less greenhouse gases than diesel Heavy Duty Vehicles (HDV s) about 20-23% Light Duty Vehicles (LDV s) about 26-29% 8

9 Economic Advantages - Price Stability Compared to Diesel Price of Natural Gas per Dth Gas Commodity Cost DGE Note 1 Delivery Cost DGE Note 2 Electricity Cost DGE Note 3 Compressor Maintenance Cost DGE Note 4 Capital Amortization Cost DGE Note 5 Federal & State Fuel Tax Cost DGE Note 6 Total DGE Note 7 $3.00 $0.375 $ $0.12 $0.27 $0.45 $0.464 $ $4.00 $0.50 $ $0.12 $0. 27 $0.45 $0.464 $ $5.00 $0.625 $ $0.12 $0. 27 $0.45 $0.464 $ $6.00 $0.75 $ $0.12 $0. 27 $0.45 $0.464 $ $7.50 $ $ $0.12 $0.27 $0.45 $0.464 $ $10.00 $1.25 $ $0.12 $0.27 $0.45 $0.464 $ $12.50 $ $ $0.12 $0.27 $0.45 $0.464 $ $15.00 $1.875 $ $0.12 $0.27 $0.45 $0.464 $ Cost of Natural Gas Commodity/Dth/ Delivery Charge Based on Rate Class Dth/7.194, including demand charge ($1.95/Dth) 3.Per NGV America. Includes Kwh + demand 4.Per NGV America 5.Per NGV America 6.Federal and State Excise Tax Diesel ($0.244 Federal + $0.22 State) 7.Total is before potential $0.50/DGE tax rebate/credit. 9

10 Economic Advantages - Continued Conversions from commodity to GGE or DGE: 6.22 pounds of LNG = 1 DGE per NWCM (National Conference of Weights and Measures) 5.66 pounds of natural gas (CNG) and cubic feet = 1 GGE per NWCM One cubic foot = ~1,000 BTUs (Note: cf = volume, BTU = energy) One Dth = 1,000 cubic feet One Dth = 1,000x1,000 = ~1,000,000 Btus (MMBtu or dekatherm) One Gasoline Gallon Equivalent (GGE) is 125,000 Btu/GGE therefore One Dth = roughly 8 GGE of (uncompressed) natural gas. One Diesel Gallon Equivalent (DGE) is 139,000Btu/DGE...therefore... One Dth = roughly DGE of (uncompressed) natural gas Fuel Unit of Measure BTU Content Natural Gas Dth Conversion Natural Gas Dth 1,000,000 CNG GGE 125, LNG Gallon 81, Propane Gallon 91, Gasoline Gallon 125, Diesel Gallon 139,

11 Annual Fuel Savings Estimator Annual Fuel Consumption (values in DGE per year per truck) Miles per DGE 25,000 50,000 75, , , , , , ,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Annual Fuel Savings (values in dollars per year per truck) Fuel Price Diff $DGE 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 $ 1.00 or $.20/Mile $ 1.25 or $.25/Mile $ 1.50 or $.30/Mile $ 1.75 or $.35/Mile $ 2.00 or $.40/Mile $ 5,000 $ 10,000 $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 35,000 $ 40,000 $ 45,000 $ 6,250 $ 12,500 $ 18,750 $ 25,000 $ 31,250 $ 37,500 $ 43,750 $ 50,000 $ 56,250 $ 7,500 $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000 $ 67,500 $ 8,750 $ 17,500 $ 26,250 $ 35,000 $ 43,750 $ 52,500 $ 61,250 $ 70,000 $ 78,750 $ 10,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 70,000 $ 80,000 $ 90,000 $ 2.50 or $.50/Mile $ 12,500 $ 25,000 $ 37,500 $ 50,000 $ 62,500 $ 75,000 $ 87,500 $ 100,000 $ 112,500 11

12 Operating Cost Data Natural Gas vs. Diesel and Gasoline Refuse Transit Local Haul Long Haul Municipal /Utility Airport/ Regional Taxis Airport Regional Shuttles School Buses Annual Fuel Savings Incremental Cost $12,0 00 $45,0 00 $16,500 $12,000 $18,000 $4,500 $3,750 $6,000 $3,000 $40,000 $45,000 $65,000 $40,000 $10,000 $20,000 $40,000 Payback Period Annual Fuel Use (Gallons) ,000 11,000 8,000 12,000 3,000 2,500 4,000 2,000 Comparison Fuel Diesel Diesel Diesel Diesel Diesel Gasoline Gasoline Diesel Fuel Cost Calculations based upon $1.50 per gallon (DGE or GGE) price difference, actual price difference in February 2013 is approximately $1.80 per gallon. No incentives. 12

13 Recent Trends Recent decoupling of natural gas and crude oil Increased demand for energy worldwide(india, China, Latin America, Other Asia Pacific countries, Middle East and Africa) Shale Gas Development in US 13

14 Price Creates Incentive to Switch $/MMBtu $30 $25 $20 Crude Oil $15 $10 $5 Natural Gas shale $ Source: Clearport NYMEX

15 Supply By Source Source: EIA Annual Early Release Energy Outlook

16 Supply- Short & Long Term Storage inventories are still at record levels and are well above historical five-year average levels. Average wellhead prices are predicted to remain low for the foreseeable future due to the extensive shale gas resources. Natural gas produced from shale currently accounts for 23% of domestic production and is forecasted to continue to rapidly grow. Despite low natural gas prices, drilling continues at a strong pace, particularly in Pennsylvania and West Virginia as producers target combination oil-and-gas wells. Source: EIA Short-Term Energy Outlook, January

17 Domestically Produced Shale Basins in the U.S. 17

18 Where is the Shale Gas? Groundwater aquifers Private well, about 500 ft deep Public well, about 1,000 ft deep Several layers of steel tubes encased in cement protect groundwater supplies Protective steel casing encased in cement extends to shale depth Fracking depth from the surface is typically more than 1.5 miles (7,700 ft. avg.) and 1+ miles below the depth of public wells. For a video detailing the shale hydraulic fracking process, visit: 18

19 Bakken Formation Oil & Gas Fields At Night Illustration by NPR/NASA 19

20 Source: Global Natural Gas Vehicle Growth by Region Millions of Vehicles 10 8 Asia-Pacific 38.7% 6 4 Latin America 14.8% 2 Europe 16.2% Africa 16.1% -1.2% North America 20

21 Tax Incentives-Current Fuel Tax Credit Tax credits of $.50 per GGE (Gasoline Gallon Equivalent) of CNG (per 121 cubic feet) and $.50/gallon of LNG when used as a transportation fuel. (Tax Credit Goes to Fleet owner or party dispensing CNG/LNG, party that adds value) For business property, a tax credit = 30% of the cost of fueling infrastructure up to a maximum credit of $30,000 per station. For residential home fueling units, the credit is worth 30 percent or a maximum of $1,000. All of the above tax credits are available through 12/31/13 and are retroactive to 2012! Bonus depreciation allows 50 percent depreciation for 2012 expenditures. 21

22 CNG and Diesel Blending Techno Carb Eco Dual 22

23 Engines Available for Conversion NGV America Vehicles_and_Engines.pdf 23

24 Automotive and Truck Kit Manufacturers IMPCO Technologies L_Upload/pdfs/IMPCO-CK-Product- Offerings.pdf Altech Eco ons.htm 24

25 Light Duty Truck Availability 2013 Bi-Fuel Silverado/Sierra 2500HD (3/4 Ton) Extended Cab Pick-up ¾ Ton, 6.0L Vortec V8 engine Available for long or short-bed models in both 2WD and 4WD Combined 17 GGE CNG tank and 36 gallon gasoline tank provide a range of more than 650 miles Bed space used by tank / weight= 24 / 450 lbs. Two fuel gauges installed directly on the dash provide reliable readings for CNG and gasoline levels GM Bi-Fuel Silverado/Sierra comprehensive 5-year/100,000-mile transferable Powertrain Limited Warranty Incremental cost = Approximately $9,000-$12,000 Available

26 Light Duty Truck Availability- Cont. Ford F-250, ¾ Ton/350, 1 Ton, Bi-fuel Super Duty Truck 6.2L V8 engine 4X2 or 4X4 Standard 18.4 GGE (24.5 GGE optional) composite CNG fuel tank (behind cab) With 35 gallon gasoline tank provides combined range over 650 miles Bed space used by tank/weight = 26 / 308 lbs or 8 ft. cargo box lengths Incremental cost = $9,500 - $10,700 Available beginning in

27 Light Duty Truck Availability- Cont Dodge Ram HD 2500 (3/4 Ton) CNG, Crew Cab 4X4 Standard 5.7-liter V-8 Hemi engine 18.2 gallon CNG tank in the bed = 255 mile capacity at 14 MPG Bed space used by tank/weight = 39 / 600 lbs.+ Eight-gallon gas tank provides 100+ miles of range. (35 Gallon option for $350) Total combined range for both tanks is around 370 miles Incremental cost = $10,000 + Available

28 Heavy Duty Vehicle Options OEM Freightliner Peterbilt Kenworth Volvo Model M T800SH W900S T440 T470 VHM Engine ISL G 320 ISL G 300 ISL G 320 ISL G 320 ISL G 320 Application 6X4 Tractor 4X2 Tractor 4X2 Truck 6X2 Truck Vocational Tractor Vocational Mixer Tractor Tractor 28

29 Heavy Duty Vehicle Options Cummins Westport, Inc. Primary Supplier to OEM s in: Refuse = ISL G &/or ISX12 G (American LaFrance, Autocar, Crane Carrier, Kenworth, Mack, Peterbuilt) Buses: (School, shuttles, Transit, Coach) = ISL G (Blue Bird, Thomas, El Dorado, Foton America, Gillig, NABI, New Flyer, Orion, Motor Coach) Sweepers = ISL G (Elgin, Schwarze) Tractors (short haul) =ISL G &/or ISX12 G (Freightliner, Kenworth, Mack, Navistar, Peterbuilt, Volvo) Yard Spotters = ISL G (Autocar, Capacity, Kalmar) 29

30 CNG Fueling Infrastructure Costs CNG Refueling Infrastructure Cost* Type Rate/Size Cost Range Application Time Fill-CNG.25 GGE/HR $4,500-$5,500 Home Time Fill-CNG 1.0 GGE/HR $9,000-$12,000 Home/Fleet Time Fill-CNG 10.0 GGE/HR $14,000-$50,000 Home/Fleet Time Fill-CNG GGE/HR $250,000-$500,000 Fleet Fast Fill-CNG GGE/HR $500,000-$850,000 Public/Fleet Fast Fill-CNG GGE/HR $800,000- $1,5000,000 Fast Fill-CNG GGE/HR $1,250,000- $3,200,000 Public/Fleet Public/Fleet *Illustration Purposes Only- Exact costs are dependent on gas quality, Inlet pressure, land costs, location, civil engineering, onsite storage, back/redundancy How much fuel in what period of time. 30

31 CNG Station Locations Link to Station locations in US or in your State App for Smartphone 31

32 Example of CNG Station City of Bossier 2580 E. Texas Street, Bossier, LA 220 GGE/Hour Fast Fill 28 PSIG Inlet) $1.5mm 240 GGE Storage Room to add storage and additional compression One acre site (compressor is 30 ft. x 90 ft.) 32

33 Example of CNG Station City of Bossier 2580 Barksdale Blvd., Bossier, LA 220 GGE/Hour Fast Fill PSIG Inlet) $1.5mm 240 GGE Storage Room to add storage and additional compression One acre site (compressor is 30 ft. x 90 ft.) 33

34 Example of CNG Station Ace Solid Waste 6601 McKinley Street NW., Blaine, MN 150 GGE/Hour Slow Fill (20PSIG Inlet) $1.5mm Propane Air Plant near this location 34

35 Example of CNG Station City of Shreveport 1731 Kings Highway, Shreveport, LA 175 GGE/hour Slow Fill (limited Fast Fill) $1.3 mm 1 additional compressor for redundancy. Compressor sized for 50 refuse trucks Small Footprint only 20 slow fill nozzles were installed originally (60 ft x 20 ft) 35

36 Example of CNG Station Sportran Transit Authority 1115 Jack Wells Blvd., Shreveport, LA 285 GGE/hour Fast Fill (125 PSIG Inlet) $1.3MM 240 GGE Storage (Fills 60 DGE in 7 Minutes) Large Footprint Saved on Compressor stage, with 125 PSIG Inlet 36

37 Example of CNG Station Public CNG Station Time It Lube 6828 Pines Rd., Shreveport, LA 120 GGE/hour Fast Fill $650, GGE Storage Small Footprint (60 ft x 20 ft) LA State Tax Credit $250,000 37

38 Why Natural Gas Vehicles? Abundant Affordable American Clean Proven Estimated natural gas reserves provide over 100 more years of supply The more you drive the more you save with average savings of $1.50 per gallon, payback in 2-4 years US Imports about 50% of oil consumption, while 98% of natural gas consumption is produced domestically Converting one refuse truck from diesel to natural gas = removing 300 vehicles off the road Millions of vehicles worldwide use this technology It just makes cents! 38

39 CenterPoint Energy CNG Contacts Minnesota Region Jon Williams or (LNG Sales) AR/OK Region Jose Laboy or Texas Region Justin Stiff or LA/MS Region Jim Tilley or

40 Working Together 40

41 Questions? 41