The Outlook for Natural Gas VehiclesThe Outlook for Natural Gas Vehicles

33RD ANNUAL CONFERENCE OF 33RD ANNUAL CONFERENCE OF THE AMERICAN ASSOCIATION OF BLACKS IN THE AMERICAN ASSOCIATION OF BLACKS IN

ENERGYENERGY

May 20, 2010 May 20, 2010 Columbus, OHColumbus, OH

Growth in World NGV MarketGrowth in World NGV Market

• 2003: 2.8 million

• 2007: 7 million

• Today: 11.1 million

Notable NGV GrowthNotable NGV GrowthCountry NGVs 2003 NGVs 2010 Stations '03 Stations ‘10

Pakistan 350,000 2,250,000 200 3,000

Argentina 1,000,000 1,800,000 1000 1,850

Iran * 1,735,000 * 1,080

Brazil 550,000 1,614,000 535 1,770

India 137,000 700,000 116 500

Italy 400,000 588,000 490 730

China 69,300 500,000 270 1,340

Colombia * 300,000 * 485

Global Total 2,814,438 11,110,000 6,455 16,554

International Vehicle AvailabilityInternational Vehicle Availability

• Every major car manufacturer is making natural gas vehicles for some market somewhere:– GM/Opel ­ Chevrolet ­­Ford ­ Mercedes

– Volkswagen ­­Fiat ­­Citroen ­ Hyundai

– Renault ­­Peugeot ­­Tata ­­Mitsubishi

– Toyota ­­Honda ­­Nissan ­­Isuzu

– Skoda ­­Volvo ­­Geely ­­Lifan

• GM alone makes 9 natural gas models

U.S. OverviewU.S. Overview

• Number of vehicles: 120,000 (out of 220 million)

• Total vehicle count has been growing -- but slowly

• Vehicle count masks volume growth since US focus is on urban fleets -- especially, trucks and buses

• 30 percent volume growth in 2007; 25 percent growth in 2008

Achievable NGV Gas Usage and Vehicle Growth

Trucks (Thousands)

Energy Use in On-Road TransportationEnergy Use in On-Road Transportation

• Total energy usage: 22.23 quads or Tcf (2008):– Light-duty: 16.47– Heavy-duty freight: 5.15– Commercial light trucks: 0.62– Buses: 0.27

• About 25-30% of total is diesel:– The majority of MD/HD use is diesel

6.04 Tcf

Target MarketsTarget Markets• Heavy-duty freight trucks:

– Water ports and rail

– “Less-than-Load” (e.g., Yellow-Roadway, Forward Air, Swift)

• Transit buses/shuttle buses/school buses

• Major metro fleet management and public works departments

• Trash, recycling, cement and other vocational work trucks

• Medium-duty delivery and commercial service trucks:– Telecom ─ food ─ beverage ─ snack food ─ newspapers

– linen/laundry ─ grocery ─ furnishings/appliances ─ office products

• Taxis and light-duty service vehicles

We Have the Fuel – And It’s OursWe Have the Fuel – And It’s Ours• Historic barrier to NGV growth: Concern over US gas

supply:– Is supply adequate?

• That concern is now put to rest:– Navigant study– PGC study– EIA projections

• NGVs have the strongest foreign oil displacement message of all alts fuels

Substantial Air Quality: Urban PollutionSubstantial Air Quality: Urban Pollution• NGVs produce less criteria pollutants than gasoline and diesel

vehicles (NOx, CO, VOCs, PM)

• Examples:– First vehicles certified to EPA’s tighter standards:

• Ultra-low emission• Super-ultra low-emission• Tier 2/Bin 2 standards

– Honda Civic GX rated the “Greenest Car in America” by ACEEE – for seven years in a row

(continued)

Substantial Air Quality: Urban PollutionSubstantial Air Quality: Urban Pollution– Majority of light duty NGV models currently available have

been certified to the Federal Tier 2/Bin 2 standard:• Only Bin 1, which requires zero emissions, is more demanding.

– Cummins Westport’s and Emission Solutions’ heavy-duty natural gas engines were the first engines to certify to the full-2010 federal emission

• Air pollution benefits of NGVs are expected to continue to improve as new automotive technologies become available

• EPA’s call to tighten ozone standards will make NGVs even more attractive

Substantial Air Quality: GHGsSubstantial Air Quality: GHGs• NGVs produce less greenhouse gases:

– 22% less than diesel vehicles– 29% less than gasoline vehicles– These are well-to-wheels numbers developed for CARB:

• Include methane

• This is equal or better than some renewable fuels

• Rebuts “you-are-a-fossil fuel” argument

Biomethane Makes GHG Case StrongerBiomethane Makes GHG Case Stronger• Biomethane (renewable natural gas) can be produced

from any organic material:– landfill gas, sewage, animal and crop waste and even energy

crops

• CARB: Biomethane reduces GHG emissions by almost 90 percent

• Blending a little biomethane with natural gas makes further reduces GHG benefits of NGVs

Only Natural Gas Can Displace Only Natural Gas Can Displace DieselDiesel

• Light-duty consumer vehicles use 500 gallons of gasoline per year (12,000 miles x 25 mpg)

• Diesel trucks and buses use much more:– e.g., 18-wheeler: 20,000 gallons (120,000 miles x 6 mpg)

• Trucks and buses use about 25% of on-road fuel:– Equivalent to 4.5 Tcf

(continued)

Only Natural Gas Can Displace Only Natural Gas Can Displace DieselDiesel

• Many options for light-duty vehicles:– e.g., natural gas, ethanol, electricity, plug-hybrids

• Only two available options for diesel trucks and buses: biodiesel and natural gas

• Biodiesel is limited and has small diesel displacement benefits

• That leaves natural gas as only option

(continued)

Only Natural Gas Can Displace Only Natural Gas Can Displace DieselDiesel

“Electrifying the auto fleet, using natural gas for the 18- wheelers and the heavy vehicles as a transition -- then we can get off of all those imported liquid fuels that come from foreign oil and foreign products and solve the security and economic problem and put people to work in the process.” 

-- Al Gore at the National Clean Energy Roundtable, Washington, D.C., 02/23/09

NGVs are a Here-and-Now TechnologyNGVs are a Here-and-Now Technology• For the foreseeable future, there is no one, silver-

bullet, panacea technology or alternative fuel that is going to replace petroleum.

(continued)

NGVs are a Here-and-Now TechnologyNGVs are a Here-and-Now Technology• For the foreseeable future, there is no one, silver-

bullet, panacea technology or alternative fuel that is going to replace petroleum.

• We have many options – natural gas, ethanol, methanol, propane, gasoline/diesel hybrids and plug-in hybrids and natural gas hybrids.

(continued)

NGVs are a Here-and-Now TechnologyNGVs are a Here-and-Now Technology• For the foreseeable future, there is no one, silver-

bullet, panacea technology or alternative fuel that is going to replace petroleum.

• We have many options – natural gas, ethanol, methanol, propane, gasoline/diesel hybrids and plug-in hybrids and natural gas hybrids.

• But we don’t have choices. We have to use all available technologies and fuels – and NGVs ARE AVAILABLE NOW.

Government Policymakers are Government Policymakers are (Finally) Recognizing the Value of (Finally) Recognizing the Value of

NGVsNGVs

Federal: Natural Gas CaucusesFederal: Natural Gas Caucuses

• What’s a Congressional Caucus?

• Dozens of such caucuses are in place:– Tourism -- Pro-life -- Steel --Beef– Rural --Taiwan -- Appalachian -- Bourbon

• In 2009, for the first time (ever), natural gas caucuses were established in both Houses:– House: 76 members (29 states)– Senate: 14 members (not yet offcial)

Federal: NGV Incentives LegislationFederal: NGV Incentives Legislation• The “New Alternative Transportation to Give

Americans Solutions” (NAT GAS) Act has been introduced in both Houses of Congress – HR 1835 and S. 1408– Would significantly extend/ expand NGV incentives.

• House: 142 bipartisan co-sponsors

• Senate: 7 bipartisan support:– Majority Leader Harry Reid is an original sponsor.

• California leads the way:– Carl Moyer Program– SCAQMD– LA/LB Ports Program

• Texas TERP Program

• Tax and other incentives:– Utah; NY; Oklahoma; Louisiana; others

State, Regional and Local State, Regional and Local Government SupportGovernment Support

• NGVs always cost more to buy or convert, but …

– They cost much less to operate

• On a life cycle basis, NGV scan save lots of money

Money!!!Money!!!

Refuse TruckRefuse Truck• GVWR: >26,000 lbs.

– Crane Carrier LET, Autocar Xpeditor, Peterbilt LCF 320 , ALF – Condor and Mack TerraPro (all with CWI ISL-G engine); Int’l with ESI 7.6L engine)

• MPG: 2.5 – 3.0 (lots of idle and PTO time)

• Fuel Use: 35-40gge/day; 8500-10,000dge/yr • CNG Premium: $50,000 (before tax credits)

• Fed Tax Credit: $32,000

• Remaining premium (assuming no grant): $18,000

• Simple Payback: 1.3 -1.4yrs• Life-cycle cost savings: $84-100K+! (based on 8-yr life)

Just a 3.3 - 3.9 year payback for tax exempt IF NO TAX CREDIT DISCOUNT is available from dealer

Step VanStep Van• Sample Applications (Bakery/Snack Food, Linen)

• GVWR -14,000-19,500lbs.– Freightliner Custom Chassis MT45 w CWI 5.9 B Gas+

• MPG: 5.0 – 6.5, 75-90mpd x6 dys/wk, 26-28K/yr

• Fuel Use: 13-16DGE/day; 4200-5000GGE/yr • CNG Premium: $28-30,000 (before tax credits)

• Fed Tax Credit: $20,000 (> 14,000#, < 26,000 #)

• Remaining premium (assuming no grant): $9000

• Simple Payback: 1.2 - 1.4 yrs• Life-cycle cost savings: $54-66K !!!

(based on 10 yr life and 1.50 savings/DGE at O&O station )

• We Have the Fuel – And It’s Ours

• Substantial Air Quality: Urban Pollution

• Substantial Air Quality: GHGs

• Biomethane Makes GHG Case Stronger

• Only Natural Gas Can Displace Diesel

• NGVs are a Here-and-Now Technology

• Government Policymakers are (Finally) Recognizing the Value of NGVs

• Money

Why the NGV Market Will GrowWhy the NGV Market Will Grow

Achievable NGV Gas Usage and Vehicle Growth

Trucks (Thousands)

Questions?Questions?

Contact Rich KolodziejContact Rich Kolodziej202.824.7366202.824.7366

rkolodziej@ngvamerica.orgrkolodziej@ngvamerica.org

www.ngvamerica.org www.ngvamerica.org

The Outlook for Natural Gas VehiclesThe Outlook for Natural Gas Vehicles

33RD ANNUAL CONFERENCE OF 33RD ANNUAL CONFERENCE OF THE AMERICAN ASSOCIATION OF BLACKS IN THE AMERICAN ASSOCIATION OF BLACKS IN

ENERGYENERGY

May 20, 2010 May 20, 2010 Columbus, OHColumbus, OH