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  1. 1. The Compelling Case for Natural Gas Vehicles in Public and Private Fleet Applications <ul><li>Advanced Vehicular Fleet Fuels </li></ul><ul><li>August 6, 2008 </li></ul><ul><li>Bill McGlinchey </li></ul>
  2. 2. Signs of the Times
  3. 3. Market Drivers for NGVs <ul><li>AQ Goals, NAAQS and EPA Vehicle Emissions Requirements </li></ul><ul><ul><li>Clean Air Act and Amendments drive local/regional governments to reduce criteria emissions (NOx, PM, etc) </li></ul></ul><ul><ul><li>EPA and CARB vehicle/engine emissions requirements and their impact on OEMs’ product offerings, vehicle performance and fuel economy </li></ul></ul><ul><li>Fuel economy and performance trade-offs for diesel to achieve 2004 and 2007 emissions benchmarks </li></ul><ul><li>Complex exhaust after-treatment technologies are expensive and maintenance intensive </li></ul><ul><li>2010 NOx target will require SCR with urea for most diesels…$$$! </li></ul>1998 Stds 2002/2004 Stds 0.00 0.02 0.04 0.06 0.08 0.10 0.12 0.0 1.0 2.0 3.0 4.0 5.0 NOx (g/bhp-hr) PM (g/bhp-hr) 2010 Std (.20 g/hp-hr NOx) 2007 “Compromise” Std 1.2 g/hp-hr NOX +NMHC
  4. 4. Market Drivers for NGVs <ul><li>The E nvironmental, E nergy Security and E conomic </li></ul><ul><ul><li>Issue is quickly gaining traction internationally and here </li></ul></ul><ul><ul><li>California Adopts Low-Carbon Fuel Standard </li></ul></ul><ul><ul><li>Additional states are likely to follow as they have done with vehicle emissions standards (11 states have adopted CARB, 13-15 considering adoption) </li></ul></ul><ul><li>Natural gas vehicles reduce greenhouse gases between 20-29% </li></ul><ul><ul><li>For LDVs, about 20-23%; for HDVs, 26-29% </li></ul></ul><ul><ul><li>Depends on comparative vehicles and duty cycles </li></ul></ul>
  5. 5. Market Drivers for NGVs <ul><li>Global Energy Demand and the Impact at the Fuel Pump </li></ul><ul><ul><li>US = 5% of pop., 25% of oil use, 55+% of oil is imported, 66+% for transp. </li></ul></ul><ul><ul><li>Global demand growth is outpacing new discoveries </li></ul></ul><ul><ul><li>Existing refining capacity is at or near peak and new capacity is lengthy process </li></ul></ul><ul><ul><li>Cost ratio of natural gas MCF to BBL oil was 6-1, now 13-1, gap is growing!! </li></ul></ul><ul><li>Gasoline Gallon Equivalent (GGE) of CNG = $1.95-2.35 + fed/state taxes </li></ul><ul><ul><li>Basis: $10.75MCF @ city gate, $.10 LDC transportation fee, $.12kWh/gge compression, $.25/gge maintenance, $.45/gge capital equipment amortization LESS $.50/gge FEDERAL EXCISE TAX CREDIT (even to excise tax exempts!) </li></ul></ul>
  6. 6. <ul><li>NGVs are proven and reliable </li></ul><ul><ul><li>About 7 million NGVs in use worldwide </li></ul></ul><ul><ul><li>About 100,000 operating on US roads </li></ul></ul><ul><ul><li>Fleets are best application: </li></ul></ul><ul><ul><ul><li>11,000+ transit buses (1 in 5 on order), 2500 refuse trucks, 3000 school buses, 10-12,000 MDVs in shuttle and wide variety of work truck applications, est. 20,000 fleet LDVs </li></ul></ul></ul><ul><li>NGVs are lower in emissions </li></ul><ul><ul><li>HC, CO, NOx, PM all documented. </li></ul></ul><ul><li>NGV life-cycle costs are lower </li></ul><ul><ul><li>Fuel costs are far lower! </li></ul></ul><ul><ul><li>Maintenance costs are =/< than gasoline or diesel vehicles </li></ul></ul><ul><ul><li>Life-cycle cost advantage improves with new federal tax credits </li></ul></ul>Benefits of NGVs
  7. 7. NGVs Are a “Good Fit” for Many Fleet Applications <ul><li>Local/State Government </li></ul><ul><ul><li>All Depts. </li></ul></ul><ul><li>Airports </li></ul><ul><ul><li>Terminal Buses, Hotel/Parking Shuttles, Taxis, Door-to-Door </li></ul></ul><ul><li>Refuse </li></ul><ul><ul><li>Collection/Transfer </li></ul></ul><ul><li>Transit </li></ul><ul><ul><li>Buses, Maintenance, Supervisors </li></ul></ul><ul><li>School Districts </li></ul><ul><ul><li>Buses, District personnel, Maint. </li></ul></ul><ul><li>“ Short-Haul” Delivery </li></ul><ul><ul><li>Food & Bev., Port-Rail, Linen Svc, </li></ul></ul><ul><li>Utilities </li></ul><ul><ul><li>Gas/Electric/Water, Communications </li></ul></ul>
  8. 8. Natural Gas Powered Engines and Vehicles <ul><li>American Honda –Civic GX </li></ul><ul><li>BAF Technologies (Ford) </li></ul><ul><ul><li>4.6L (Crown Vic/Gr. Marquis/Town Car) </li></ul></ul><ul><ul><li>5.4L (E350 passenger and cargo vans; F150/250/350 certificates expected soon) </li></ul></ul><ul><ul><li>6.8L (E-450 cutaway) </li></ul></ul><ul><li>Baytech Corporation (GM) </li></ul><ul><ul><li>6.0L L/M/HD (Pick-ups, vans, cutaways, W3500 CF, Isuzu NPR, NPR HD, Workhorse W42) </li></ul></ul><ul><ul><li>8.1L (HD pick-ups, C4500/-8500 Topkick; W4500, Workhorse W62 </li></ul></ul><ul><li>FuelTek (Ford) </li></ul><ul><ul><li>5.4L F250/350 bi-fuel </li></ul></ul><ul><li>IMPCO (GM) </li></ul><ul><ul><li>6.0L Bi-fuel pick-ups, vans) </li></ul></ul><ul><li>Cummins Westport </li></ul><ul><ul><li>5.9L “B Gas Plus” – 195-230hp (Shuttles, sweepers, work trucks) </li></ul></ul><ul><ul><li>8.9L “ISL-G” – 250-320hp (Refuse, bus and work trucks) </li></ul></ul><ul><li>Emission Solutions Inc. </li></ul><ul><ul><li>7.6L Phoenix NG – 175-265hp (re-power for Int’l DT466 : buses and trucks) </li></ul></ul><ul><ul><li>9.0L 300-330Hp engine certs are in process, due in 2008 </li></ul></ul><ul><li>Westport Innovations Inc </li></ul><ul><ul><li>15L “ISX-Gas” – 400/450hp </li></ul></ul>
  9. 10. CNG Station Development and Ownership-Operations Options <ul><li>Station Location Options: </li></ul><ul><ul><li>Offsite – use existing public access station (either full public access or limited public access); development usually driven by anchor fleet </li></ul></ul><ul><ul><li>Onsite - private access only </li></ul></ul><ul><ul><li>Onsite - with public access “outside the fence” </li></ul></ul><ul><li>Ownership & Operations Options: </li></ul><ul><ul><li>Fleet owned & operated station </li></ul></ul><ul><ul><li>Fleet owned/leased station but contracted out operations for a fee (usually on a GGE basis) </li></ul></ul><ul><ul><li>Outsource station O&O entirely via independent fuel provider and contract gas price </li></ul></ul>
  10. 11. CNG Station Design Considerations <ul><li>Station Type </li></ul><ul><ul><li>Time-Fill, Fast-Fill, Combo Fill </li></ul></ul><ul><li>Station Size and Design Considerations </li></ul><ul><ul><li>Number of vehicles per day </li></ul></ul><ul><ul><li>Fueling pattern of vehicles </li></ul></ul><ul><ul><li>Maximum daily flow </li></ul></ul><ul><ul><li>Maximum hourly flow </li></ul></ul><ul><ul><li>Available back-up fueling, redundancy? </li></ul></ul><ul><ul><li>Metering/Data/Payment needs </li></ul></ul><ul><ul><li>Amount of space available </li></ul></ul><ul><ul><li>Funding available </li></ul></ul>
  11. 12. NGV Tax Incentives and Grants for Vehicles, Stations and Fuel
  12. 13. Federal Tax Credits and How to Take Advantage of Them <ul><li>Three-Legged Stool </li></ul><ul><ul><li>Fuel Station Tax Credits (little impact) </li></ul></ul><ul><ul><li>Vehicle Tax Credits (good impact) </li></ul></ul><ul><ul><li>Motor Fuels Excise Tax Credits (most impact) </li></ul></ul>
  13. 14. Fuel Station Tax Credit IRS Form 8911 <ul><li>Equal to 30% of cost of alt refueling equipment placed in service that year, up to $30,000 </li></ul><ul><li>Credit may be taken by seller if buyer is tax exempt entity (tax exempts should leverage this in negotiations) </li></ul><ul><li>Cr edit is effective on equipment placed in service after December 31, 2005 and expires on December 31, 2009 (legislation extending) </li></ul>
  14. 15. V ehicle Purchase Tax Incentive IRS Form 8910 <ul><li>A income tax credit to the buyer of a new, dedicated alternative fuel vehicle: </li></ul><ul><ul><li>50 % of the incremental cost of the vehicle PLUS an additional 30% if the vehicle meets certain tighter emission standards </li></ul></ul><ul><ul><ul><li>( ALL certified natural gas engines/NGVs meet this benchmark) </li></ul></ul></ul><ul><ul><li>Incremental cost cap based on four GVWR ranges </li></ul></ul><ul><ul><li>Tax credit may be taken by seller if the buyer is a tax-exempt entity </li></ul></ul><ul><ul><li>(continued) </li></ul></ul>
  15. 16. <ul><li>Credits range from $2,500 to $32,000 depending on GVWR </li></ul><ul><ul><li>$2,500-$4,000 for vehicles under 8,500 lbs. </li></ul></ul><ul><ul><li>$5,000-$8,000 for vehicles between 8,500-14,000 lbs. </li></ul></ul><ul><ul><li>$12,500-$20,000 for vehicles between 14,000-26,000 lbs. </li></ul></ul><ul><ul><li>$20,000-$32,000 for vehicles over 26,000 lbs. </li></ul></ul><ul><li>Credit is effective for vehicles placed in service after December 31, 2005 and currently set to expire on December 31, 2010 . (Note: Extensions of this credit are in various bills currently before Congress) </li></ul><ul><li>“ Conversions” qualify, if retrofit/re-power was done after 12/31/05 </li></ul>V ehicle Purchase Tax Incentive
  16. 17. Motor Fuels Excise Tax Credit <ul><li>The Volumetric Excise Tax Credit for Alternative Fuels (VEETC) </li></ul><ul><ul><li>JOBS Act of 2004 created VEETC for ethanol and biodiesel </li></ul></ul><ul><ul><li>SAFETEA-LU (“Transportation”) Act of 2005 made CNG, LNG, LPG, and hydrogen eligible when those fuels are used in on-road vehicles (and some off-road vehicles, such as forklifts) </li></ul></ul><ul><li>A 50 cent motor fuels excise tax credit is paid to the seller: </li></ul><ul><ul><li>Per GGE of CNG or per liquid gallon of LNG </li></ul></ul><ul><li>The credit is applied/paid to eligible recipients without regard to the amount of excise tax paid , if any (including tax exempts) </li></ul><ul><ul><li>(continued) </li></ul></ul>
  17. 18. <ul><li>Provision also bumps up excise tax rate on CNG and LNG. </li></ul><ul><ul><li>CNG excise tax increases from $.0607/GGE to $.183/GGE </li></ul></ul><ul><ul><li>LNG excise tax increases from $.119/LNG gal to $.243/LNG gal </li></ul></ul><ul><li>Credit began October 1, 2006, Expires on 9-30-09 (Note: Legislation before Congress is expected to extend sunset date ) </li></ul><ul><li>Tax credit may be taken as excise tax credit, income tax credit, or direct payment, depending on circumstances </li></ul><ul><ul><li>(continued) </li></ul></ul>Motor Fuels Excise Tax Credit
  18. 19. Natural Gas Vehicle Incentives <ul><li>Federal Tax Incentives </li></ul><ul><li>Federal Grants: </li></ul><ul><li>DOT Congestion Mitigation & Air Quality (CMAQ) grant </li></ul><ul><li>DOE State Energy Program (Clean Cities) grants </li></ul><ul><li>EPA </li></ul><ul><ul><li>SEP/(“penalty fund”) project grants </li></ul></ul><ul><ul><li>Diesel Emission Reduction Program grants </li></ul></ul><ul><ul><ul><li>Although referred to as “Nat’l Clean Diesel Campaign,” NGV projects qualify </li></ul></ul></ul><ul><li>State Grants: Work with your Clean Cities Representatives </li></ul>
  19. 20. Passenger van for Limo <ul><li>GVWR: 9300-9600 lbs . </li></ul><ul><ul><li>Ford E-350 passenger van </li></ul></ul><ul><ul><li>Chevy/GMC 3500 passenger van </li></ul></ul><ul><li>MPG: 10/12 City/Hwy, 50K miles/year </li></ul><ul><li>Fuel Use: 9-12 gge/day; 4100-4500gge/yr </li></ul><ul><li>CNG Premium: $15,500 (before fed tax credit) </li></ul><ul><li>Fed Tax Credit: $8000 (>8500#, <14000#) </li></ul><ul><li>Simple Payback: 1.1 -1.3 years (based on $1.55/gge savings @ retail station: $2.45/gge ($4.00 gas) </li></ul><ul><li>Life-cycle cost advantage: $18-23K (depending on use and mpd, cost differential) </li></ul>
  20. 21. Step Van <ul><li>Sample Applications </li></ul><ul><ul><li>Pkg. Svc, Bakery/Snack Food, Linen </li></ul></ul><ul><li>GVW-14,000-19,000 lbs. </li></ul><ul><ul><li>Workhorse (GM 8.1L), FCC MT45/55 (CWI 5.9L B Gas) </li></ul></ul><ul><li>MPG: 4.0 – 6.5, 75-90mpd x6 days/wk, 26K/year </li></ul><ul><li>Fuel Use: 13-19gge/day; 4050-5800gge/yr </li></ul><ul><li>CNG Premium: $28,000 / $50,000 (before fed tax credit) </li></ul><ul><li>Fed Tax Credit: $20,000 / $32,000 </li></ul><ul><li>Simple Payback: 1.1 - 1.5 years (based on 1.55 savings/gge @ retail station : $2.45/gge ($4.00 gas) (based on 2.10 savings/dge @ retail station: $2.75/dge ($4.85 diesel) </li></ul><ul><li>Life-cycle cost savings: $40-50,000+ !!!! </li></ul>
  21. 22. Utility Crew Cab/Work Truck Beverage Delivery Truck <ul><li>GVW - 26,000+++ lbs. </li></ul><ul><ul><li>Int’l 4000 Series, Sterling L, GMC 7500/8500 </li></ul></ul><ul><li>MPG: 3.5 – 4.75 (depending on application) </li></ul><ul><li>Fuel Use: 14-25 dge/day; 5000-6800 dge/yr </li></ul><ul><li>CNG Premium: $53,000 (before fed tax credit) </li></ul><ul><li>Fed Tax Credit: $32,000 </li></ul><ul><li>Simple Payback: 1.5 - 2.0 years (based on $2.10 /dge savings for retail: $2.75/dge ; 4.85 diesel) </li></ul><ul><li>Simple Payback: 1.2 – 1.75 years (based on 2.50/dge savings for O&O station: $2.35/dge; $4.85 diesel) </li></ul><ul><li>Life-cycle cost savings: $60,000-70,000+!!! </li></ul>
  22. 23. Refuse Truck <ul><li>GVW - 26,000+ lbs. </li></ul><ul><ul><li>Sterling L Series, Crane Carrier LET, Autocar Xpeditor, Peterbilt LCF 320 , ALF – Condor (all with CWI ISL-G engine) </li></ul></ul><ul><li>MPG: 2.5 – 3.0 (lots of idle and PTO time) </li></ul><ul><li>Fuel Use: 35-40gge/day; 8500-10,000dge/yr </li></ul><ul><li>CNG Premium: $55,000 (before fed tax credit) </li></ul><ul><li>Fed Tax Credit: $32,000 </li></ul><ul><li>Simple Payback: 1.25 years (based on 2.10 savings /dge @ retail: $2.75 /dge (4.85 diesel) </li></ul><ul><li>Life-cycle cost savings: $85,000 - $95,000 </li></ul><ul><li>(based on 8-year life) Still only a 3.2 year payback if no tax credit available!! </li></ul>
  23. 24. Summary <ul><li>E nvironmental, e nergy security and e conomic market drivers are favorable to fleets’ use of NGVs </li></ul><ul><li>Many light-, medium- and heavy-duty NGVs are available </li></ul><ul><li>Variety of fueling options available </li></ul><ul><li>New federal tax credits further improve NGVs’ already favorable life-cycle advantages </li></ul><ul><li>Resources are available to help you investigate your options </li></ul>
  24. 25. For more information please contact: NGVAmerica Stephe Yborra Director of Marketing & Communications [email_address] [email_address] (301) 829-2520 Bill McGlinchey [email_address] (740) 205-2107
  25. 26. Questions? Thank you for your time and interest!
  26. 27. NGV Safety History <ul><li>NGVs have had an uneventful safety history. </li></ul><ul><li>No fatalities in over 278 M vehicle miles traveled (VMT). </li></ul><ul><ul><li>(This compares to 1.28 deaths per 100 M VMT for gasoline vehicles) </li></ul></ul><ul><li>Injury rate equal to 52 per 100 M VMT vs 79 for gasoline. </li></ul>