The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co.,...

85
The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT RESEARCH Co., LLC August 10, 2012

Transcript of The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co.,...

Page 1: The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co., LLC August 10, 2012.

The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel

of Tomorrow?

ACT RESEARCH Co., LLC

August 10, 2012

Page 2: The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co., LLC August 10, 2012.

Presentation Contents

• This file contains all of the tables, graphs, charts, and pictures that were included in the companion report at the time it was published.

ACT Research Co., LLC, Copyright 20122

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Presentation Overview

• The Hypothesis

• Executive Summary

• The Case– Natural Gas and the U.S. Energy Market

– Changes in the Past

– Internal Combustion Engines: The Basics

– The Present

– Factors Impacting Change

– Trucker Surveys and Industry Panel Interviews

– ACT Volume Predictions and Timing

• The ConclusionACT Research Co., LLC, Copyright 20123

Page 4: The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co., LLC August 10, 2012.

The Hypothesis

• The North American commercial vehicle truck market will see a measured shift to the use of natural gas as a fuel for heavy duty and class 8 vehicles, displacing currently used diesel fuel.

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Executive Summary

• The abundance of available natural gas has changed the supply/demand equilibrium to the point that natural gas makes economic sense

• Combined with its inherently more environmentally friendly attributes, the door is now open for continued development of natural gas engines, vehicles, refueling infrastructure, and maintenance facilities

• Real economic savings and energy independence will be the driving forces as the U.S. Class 8 commercial vehicle market comes to the realization that no other alternative offers the same logical choice as natural gas.

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Chapter 1

NATURAL GAS AND THE U.S. ENERGY MARKET

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Selected Chapter 1 Highlights

• NG pump prices are relatively insensitive to changes in natural gas domestic spot prices

• In 2012, oil is about 7 times more expensive than natural gas (DGE)

• The U.S. has vast natural gas reserves• The combustion of natural gas relative to diesel

and coal is environmentally friendly• Gas has displaced coal as the second largest

source of energy in the U.S.

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Chapter 1 Conclusion

• Domestically sourced natural gas will ultimately become the dominant source of energy for the United States to include transportation as the many factors associated with this growth are resolved: technological, geological, environmental, political, geopolitical and economic. Energy independence will become one of the driving forces as well as cost.

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Force Field Analysis

Natural Gas Adoption as a Class 8 Fuel of Choice

Total Fuel Cost Per Mile

Forces For Change Forces Against Change

Engine Efficiency

Range

Environmental: Extraction (Frac’ing) Concerns:

Contamination of Water Table, Earthquake Risk, Escaped Gas*

Energy Content

Training (Drivers, Technicians, Sales, Marketing, Accounting, HR, etc.)

Little Refueling Infrastructure

* The radiative forcing (heat trapping ability) of methane is many times that of CO2. However, CO2 lasts many times longer in the atmosphere.

LNG/CNG Tank Cost

Sustainability Commitment(& Green Marketing)

Environmental:Combustion Advantage:

Least CO 2 of Fossil Fuels

Major Investment to Bring Repair Facilities Up to Codes

LNG Handling (Cryogenic)

Uncertain Truck Residual Value

Long Term Oil/Diesel Prices

Energy Independence

80% ENGINE Part Commonalitywith Diesel

Price Stability (Pump Price Insensitive to NG Spot Prices)

No Aftertreatment(No SCR System, No DEF Additive)

Nat

ural

Gas

Bec

omes

a “

Fuel

of C

hoic

e” fo

r Cla

ss 8

Tru

cks

In th

e U

.S.

Infrastructure Investments & Announcements

(Clean Energy, Trillium, and Shell )

Recent Major Engine and OEM Vehicle Product Announcements

Few Product Offerings

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20

40

60

80

100

120

Qua

drill

ion

BTU

Chart 1 - US Energy Usage(Source: EIA)

3.6%

0.8%

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200

250

300

350

400

Mill

ion

BTU

Chart 2 - Per Capita Energy Use(Source: EIA)

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4

6

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1819

49

1954

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1974

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1984

1989

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2014

2019

2024

Thou

sand

BTU

/$1

RDG

PChart 3 - Energy per Dollar of GDP

(Source: EIA)

Energy per real GDP projections

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38% 31%

27% 28%

20%23%

16%

19%

0.0

20.0

40.0

60.0

80.0

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drill

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BTU

Chart 4 - Energy Usage by Sector(Source: EIA)

Commercial

Residential

Transportation

Industrial

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40% 37%

23%21%

23%

25%7%

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8%

0.0

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Chart 5 - Energy by Source(Source: EIA)

Renewable

Nuclear Electric

Natural Gas

Coal

Petroleum

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Chart 6 - Primary Energy Flow by Source and Sector - 2010

Source: U.S. Energy Information Administration, Annual Energy Review 2010, Tables 1.3, 2.1b-2.1f, 10.3, and 10.4, October 19, 2011.

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Table 1.1 – Energy Usage by Sector and Source

Percent

Source: EIA

1990 Petrol Renew Nat Gas Electric Loss Electric Sales Coal Total

Industrial 25.9 5.4 26.6 23.3 10.1 8.7 100.0

Transport 96.5 0.3 3.0 0.2 0.1 0.0 100.0

Residential 8.2 3.8 26.5 42.7 18.6 0.2 100.0

Commercial 7.4 0.7 20.1 49.3 21.5 0.9 100.0

2010 Petrol Renew Nat Gas Electric Loss Electric Sales Coal Total

Industrial 26.6 7.5 26.9 22.8 10.9 5.3 100.0

Transport 93.2 4.0 2.5 0.2 0.1 0.0 100.0

Residential 5.5 2.5 22.8 46.8 22.3 0.0 100.0

Commercial 3.9 0.7 18.0 52.2 24.9 0.3 100.0

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0.000.501.001.502.002.503.003.504.004.505.00

0.000.501.001.502.002.503.003.504.004.505.00

Axi

s Titl

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Chart 7 - Select Energy PricesDiesel Gallon Equivalent Cost

(Source : EIA)

NG Spot Rate

Diesel

Coal

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Table 1.2 – BTU Content of Select Energy SourcesSources: EIA, U.S. DOE

Energy Source Standard UOM BTU Content MBTU/UOM DGE Current Price

(Std UOM)

Current Price (DGE)

Crude Oil Barrel (42 gal) 5,800,000 0.172414 41.72662 $94.72 $2.27Diesel (Pump Price) Gallon 139,000 7.194245 1.00000 $3.98 $3.98Natural Gas 1,000 cubic feet (Mcf) 1,028,000 0.972763 7.39568 $2.49 $0.34Natural Gas (Pump Price) $2.32

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-5.00-4.50-4.00-3.50-3.00-2.50-2.00-1.50-1.00-0.500.000.501.00

-5.00-4.50-4.00-3.50-3.00-2.50-2.00-1.50-1.00-0.500.000.501.00

Axi

s Titl

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Chart 8 - Select Energy Price DifferentialsDiesel Gallon Equivalent Cost

(Source : EIA)

NG Spot Rates

Coal

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YEAR WTI Price/BBL Natural Gas Price/Mcf WTI/GAS Ratio WTI Price Natural Gas Price WTI/GAS Ratio1994 17.20$ 1.95$ 8.8 0.41$ 0.26$ 1.61995 18.43$ 1.69$ 10.9 0.44$ 0.23$ 1.91996 22.12$ 2.51$ 8.8 0.53$ 0.34$ 1.61997 20.61$ 2.49$ 8.3 0.49$ 0.34$ 1.51998 14.42$ 2.09$ 6.9 0.35$ 0.28$ 1.21999 19.34$ 2.27$ 8.5 0.46$ 0.31$ 1.52000 30.38$ 4.31$ 7.0 0.73$ 0.58$ 1.22001 25.98$ 3.96$ 6.6 0.62$ 0.54$ 1.22002 26.18$ 3.38$ 7.8 0.63$ 0.46$ 1.42003 31.08$ 5.47$ 5.7 0.74$ 0.74$ 1.02004 41.51$ 5.89$ 7.0 0.99$ 0.80$ 1.22005 56.64$ 8.69$ 6.5 1.36$ 1.17$ 1.22006 66.05$ 6.73$ 9.8 1.58$ 0.91$ 1.72007 72.34$ 6.97$ 10.4 1.73$ 0.94$ 1.82008 99.67$ 8.86$ 11.2 2.39$ 1.20$ 2.02009 61.95$ 3.94$ 15.7 1.48$ 0.53$ 2.82010 79.48$ 4.37$ 18.2 1.90$ 0.59$ 3.22011 94.88$ 4.00$ 23.7 2.27$ 0.54$ 4.22012 94.72$ 2.32$ 40.8 2.27$ 0.31$ 7.2

Table 1.3 - Relationship of Crude to Natural Gas Prices(Source: EIA)

DGE AdjustedUnadjusted

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$0.00$2.00$4.00$6.00$8.00$10.00$12.00$14.00$16.00$18.00

0200400600800

10001200140016001800

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e/M

cf

Rigs

Chart 9 - Natural Gas Drilling Rigs vs. NG Price(Source: Baker Hughes)

<<Gas Rigs

Gas Price>>

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$0.00

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Chart 10 - Oil Drilling Rigs vs. Oil Price(Source: Baker Hughes)

<<Oil Rigs

Oil Price>>

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Chart 11

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Chapter 2

CHANGES IN THE PAST

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Selected Chapter 2 Highlights

• The shift from gasoline to diesel took decades because there was no infrastructure

• In contrast and despite everyone’s expectation and with substantial investments by the OEMs, there was no shift from diesel to turbine in the 1970s.

• At one time electric automobiles were 30% of the market. They are now less than 1%, but will be much higher in the future as technology meets more clearly defined needs.

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Chapter 2 Conclusion

• History teaches us that profound changes in the powering of motor vehicles happen, but they are hard to predict and do not occur overnight. These changes are cost driven, only deviating within the constraints of law.

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Chapter 3

INTERNAL COMBUSTION ENGINES: THE BASICS

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Selected Chapter 3 Highlights

• The challenge of simultaneously engineering engine torque and power, fuel economy, low levels of multiple types of emissions, drivability, and reliability is an exercise in comprise

• NG engines come in two basic types: spark ignited and compression ignited

• To achieve emission requirements diesel engines require heavy and expensive modifications

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Selected Chapter 3 Highlights(con’t)

• Diesel and natural gas engines have many similarities:– Approximately 80% of the parts are the same– Natural gas engines (except Dual Fuel HPDI) are

spark ignited.

• There are two basic types of natural gas fuel: Compressed Natural Gas (CNG) and Liquid Natural Gas (LNG). Each type has pros and cons with respect to transportation, storage, cost, and other factors

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Chapter 3 Conclusion

• Total cost drives technology to achieve specified levels of power and emissions.

• Periodically the factors determining total costs require fundamental review.

• The decline in the cost of natural gas and new engine/vehicle offerings have brought us to such a point.

• The industry is at the front end of invention as it learns how to work with NG in the most efficient, productive manner.

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Energy Content and Volumeby Fuel Type

Energy Structure BTUs of Energy in a Gallon Energy Storage

(Relative Volume)

Diesel Fuel C18H36 128,000 1

Biodiesel C18H35O2 119,000 1.1

Natural Gas CH4 85,000 3.7 CNG

1.7 LNG

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NG vs. Diesel ComparisonEngine Component Diesel Natural Gas Remarks

1. Engine short block Same Same From the oil pan to the top of the cylinder block, the engine is the same except the piston design and compression ratio are different

2. Cylinder head Unique design for fuel injector

Unique design for spark plug

Very similar in design. A hole in the cylinder head for either the fuel injector or the spark plug. Number of intake and exhaust valves used may differ.

3. Engine accessory drive arrangement – air compressor and any hydraulic pumps

Same Same No change in design for multitude of engine driven accessories.

4. Fuel system Common rail diesel injection pump and injectors

Natural gas fuel system – a means of mixing natural gas with air.

The heart or basic difference in the engines. Note that the fuel system is the same whether the engine uses CNG or LNG as the supplied fuel.

5. Exhaust system including the turbocharger, EGR valve, and exhaust cooler.

Same technology Same technology Minor differences in turbocharger design – variable geometry versus waste gated. EGR valve to mix air with cooled exhaust gases is essentially the same.

6. EGR cooler Same technology Same technology May be minor mounting differences but same basic technology.

7. Spark plugs and ignition system Not Required Add to engine Along with the fuel system, the use of an ignition system differentiates the two engines. Ignition system uses modern coil over plug design.

8. Flywheel or flex plate mounted to the crankshaft.

Same Same Difference is whether the engine will be used with a manual or automatic transmission.

9. Engine oil lubrication system Same Same Both engines use spin on combination full flow and by-pass oil filters. Different low ash oil is used in the natural gas engine.

10. Engine cooling system Same Same Both systems utilize a water pump to circulate coolant through the entire cooling system.

11. Electronic engine controls Very Similar Very Similar Minor differences due to fuel used and ignition system.

12. Engine and system diagnostic controls Same Same Basically, a laptop computer that can read the engine control system, read fault codes, and record data.

13. Engine starters and battery charging systems

Same Same Numerous options to meet customer requirements.

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EPA Emission Standards

0.010.01 0.100.10

0.20.2

1.21.2

2.52.5

4.04.0

5.05.0

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PARTICULATE [g/ HPPARTICULATE [g/ HP--hr]hr]0.00.0

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SULFURSULFUR

Page 35: The Future of Natural Gas Engines in Heavy Duty Trucks: The Diesel of Tomorrow? ACT R ESEARCH Co., LLC August 10, 2012.

Chapter 4

THE PRESENT

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Selected Chapter 4 Highlights

• Although there are few natural gas product offerings today, there are two game changers in process:– A dramatic decline in the cost of natural gas– New HD engine and OEM truck offerings are

expected to enter the market place in 2013-2015 with more expected to follow

• Numerous natural gas suppliers are working to expand refueling infrastructure

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Chapter 4 Conclusion

• A number of factors favorable to a substantial adoption of natural gas propulsion in commercial trucks are in place.

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Top 5 NGV Countries

Country Number of Vehicles % Total Global NGVs

Iran 2,859,386 19.31%

Pakistan 2,850,000 19.25%

Argentina 2,077,581 14.03%

Brazil 1,702,790 11.50%

India 1,100,376 7.43%

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Proposed Clean Energy NG Stations

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FMVSS 121 – Stopping Distance

Phase Axle Configuration GVWR Pounds New Requirement Compliance DatePhase 1 Standard 6X4 Below 59,000 250 Feet August 2011Phase 2 6X4 Severe Service 59,600-70,000 250 feet August 2013Phase 2 6X4 Severe Service Above 70,000 310 Feet August 2013Phase 2 All 4X2 Heavy Tractors All 250 Feet August 2013Source: U.S. Code of Federal Regulations 2009. Title 49: Transportation Section 571.121 – Air Brake Systems.

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2017 Combination Tractor StandardsEPA Emission Standards

(Grams of CO2/ton Mile)

Low Roof Mid Roof High Roof

Day Cab Class 7 103 103 116

Day Cab Class 8 78 78 78

Sleeper Cab Class 8 64 69 71Source: EPA Website

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2017 Combination Tractor StandardsNHTSA Fuel Consumption Standards

(Gallons of fuel/1,000 ton mile)

Low Roof Mid Roof High Roof

Day Cab Class 7 10.1 10.1 11.4

Day Cab Class 8 7.7 7.7 8.5

Sleeper Cab Class 8 6.3 6.8 7.0Source: EPA Website

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2017 Vocational Vehicle StandardsEPA Emission Standards

(Grams of CO2/ton Mile)

EPA Full Useful Life Emissions Standards

(grams CO2/ton mile)

NHTSA Fuel Consumption Standards

(gallons/1,000 ton-mile)

Light HeavyClass 3-5

344 33.8

Medium HeavyClass 6-7

204 20

Heavy Heavy Class 8

107 10.5

Source: EPA Website

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Chapter 5

FACTORS IMPACTING CHANGE

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Selected Chapter 5 Highlights

• The primary determinants of fuel selection include the following:– overall fuel economy– fuel cost and long term availability– emission characteristics– engine reliability and durability– national and world politics– national security

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Chapter 5 Conclusion

• The share of NGVs will grow because of cost and environmental advantages over diesel.

• NG is a domestic resource that could ultimately supply 100% of transportation’s fuel needs.

• It is no longer a question of using NG, but exactly when, where, and how much.

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Fuel Type Comparison

Liquid Fuel

GGE BTU per Gallon

Lb. per Gallon

BTU per Pound

Energy vs. Gasoline

Diesel #2 0.880 129,500 7.08 18,291 113.64%B20 Bio-diesel 0.900 127,250 7.13 17,847 111.11%B100 Biodiesel 0.960 118,300 7.33 16,139 104.17%Gasoline 1.000 114,000 6.25 18,240 100.00%Gasoline + 10% Ethanol 1.019 111,836 6.30 17,751 98.14%LPG (Propane) 1.350 84,300 4.24 19,882 74.04%Flex-fuel (Ethanol E85) 1.390 81,800 6.57 12,450 71.94%Ethanol (E100) 1.500 76,100 6.61 11,513 66.67%LNG 1.536 75,000 3.75 20,000 65.10%Methanol (M100) 2.010 56,800 6.63 8,567 49.75%Note: GGE mean Gasoline Gallon EquivalentSource: U.S. Department of Energy, LNG Research, “Fuelishness Article from June 2012, Lube’N’Greases, Volume 18, Issue 6.

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Annual Fuel Cost ComparisonsDiesel Fuel Natural Gas

@ 90% EfficiencyNatural Gas

@ 85% Efficiency

Natural Gas@ 80% Efficiency

MPG 6.0 5.4 5.1 4.8Gallons of fuel required for 100,000 miles

16,667 18,519 19,608 20,833

Cost of fuel at $4.00 per gallon $66,668 -- -- --Cost of natural gas fuel at $2.50 per gallon DGE

$46,298 $49,020 $52,083

DEF consumption in gallons 333.34 Not Required Not Required Not RequiredDEF cost at $2.00 per gallon $666.68 -- -- --Diesel particulate filter cleaning $275.00 Not Required Not Required Not RequiredTotal fuel cost $67,610 $46,298 $49,020 $52,083Fuel cost savings $21,312 $18,590 $15,527Five year savings $106,560 $92,950 $77,635

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Chapter 6

TRUCKER SURVEYS AND INDUSTRY PANEL INTERVIEWS

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Fleet Owner Operator

Respondent Type 102 294

0

50

100

150

200

250

300

350Re

pond

entt

Typ

e

Respondent Type

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No Answer Short or Long Line Haul Route Delivery Speciality (Refuse, Dump, etc.)

Fleet 4 81 11 6

Owner Operator 3 273 14 4

0

50

100

150

200

250

300

Num

ber o

f Res

pond

ents

Primary Use of Vehicle

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No Answer 1 to 99 100 to 250 250 to 1,000 More than 1,000

Fleet's No. of Tractors 2 30 31 21 18

0

5

10

15

20

25

30

35

Num

ber o

f Res

pond

ents

Number of Tractors (Fleets Only)

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No Answer 1 to 9 Million 10 to 25 Million 26 to 50 Million 51 to 100 Million Over 100 Million

Fleet Revenue (Mils) 17 5 23 25 8 24

0

5

10

15

20

25

30

Num

ber o

f Res

pond

ents

Fleet Revenue (Millions)

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Chapter 7

ACT’s NG VEHICLE PENETRATION FORECASTS

AND CALCULATORS

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Current NG Truck OfferingsTABLE 7.1

MAKE MODEL ENGINE GVW HORSEPOWER TORQUE LNG (DGE) CNG (DGE) CLASS Range SOURCE

Autocar LCF REFUSE HAULER CUMMINS ISL-G 320 HP CNG 8http://www.autocartruck.com/Refuse/Files/Documents/News/laf%20press%20release%20101310_634225564125299611.pdf

Ford E450 Cutaway Ford 5.4L V8 19.2 - 37.2 4

up to 150 miles w 2 tanks & 275 miles w 4 tanks

http://www.ford-trucks.com/news/idx/7/088/2000/article/05082000__Ford_expands_natural_gas_offerings_with_new_E450_Cutaway.html?ref=esp-link

F250/F350 FORD SD V8 6.2L CNG OR Gasoline 2/3

http://www.ford-trucks.com/article/idx/25/809/article/Ford_to_Offer_Clean_Natural_Gas_BiFuel_System_in_2012_Super_Duty.html?ref=esp-link

Freightliner Cascadia 113Cummins Westport ISC12 G (year 2013 ) up to 60,600 lbs 400 HP 1,450 lb-ft 168 155 8

www.freightlinertrucks.com/Trucks/Alternative-Power-Trucks/Natural-Gas

M2 112 Cummins Westport ISL G up to 62,000 lbs 260-320 HP 660-1,000 lb-ft 65 and 86 60 and 75114SD Cummins Westport ISL G up to 62,000 lbs 260-320 HP 660-1,000 lb-ft 65 and 86 60 and 75 7/8

GM SAVANA CARGO VAN GMC 6L V8 CNG 2/3

up to 200 miles with 3 tanks & up to 300 miles w 4 tanks http://www.gmc.com/savana-cargo-van.html

International Workstar CNG ESI 7.6L 27,500-72,000 lbs 210-300 HP 520-860 lb-ft 30-60http://www.internationaltrucks.com/trucks/naturalgas#cng_and_lng_offerings

Durastar CNG (summer 2012) ESI 7.6L 32,000 300 HP 860 lb-ft 55

Transtar CNG (late 2012)Cummins Westport ISC12 G (year 2013 ) 52,000 320 HP 1,000 lb-ft 75

Prostar LNG (late 2013) Dual Fuel MaxxForce 13 NG 52,350 430 HP 1,550 lb-ft 50-119

Kenworth W900 Cummins Westport ISL G 320 HP 1000 lb-ft 63 - 160 or more 76 - 81 8800LNG - 400CNG http://www.kenworth.com/trucks.aspx

W900Cummins Westport ISC12 G (year 2013 ) up to 400 HP up to 1,450 lb-ft yes yes 8

T800Westport HD 15L (95% LNG - 5% Diesel) 80,000 to 100,000 lbs 400 HP - 475 HP 1,450-1,750 lb-ft 100 500

T800Cummins Westport ISC12 G (year 2013 ) up to 400 HP up to 1,450 lb-ft yes yes 8

T660Cummins Westport ISC12 G (year 2013 ) up to 400 HP up to 1,450 lb-ft yes yes 8

T440 Cummins Westport ISL G 320 HP 1000 lb-ft 63 - 160 or more 76 - 81 7800LNG - 400CNG

T370 7T270 6

Paccar MX 380-485 HP 1,450-1,750 lb-ftMack TerraPro NG (refuse) Cummins Westport ISL G 300-320 HP http://www.macktrucks.com/default.aspx?pageid=4338Peterbilt 384 Cummins Westport ISL G 69-139 69-139 8 http://www.peterbilt.com/eco/index.htm

365 Cummins Westport ISL G 69-139 69-139 8320 Cummins Westport ISL G 69-139 69-139 8382 Cummins Westport ISL G up to 66,600 lbs 69-139 69-139386 LNG Cummins ISX 450 HP 1,750 lb-ft 49-114 8

Volvo VNM DAY CAB Cummins Westport ISL G 320 HP 1000 lb-ft yes yes 8

http://www.volvotrucks.com/trucks/na/en-us/news_and_events/news_releases/2011/_layouts/cwp.internet.volvocom/newsitem.aspx?news.itemid=106245&news.language=en-gb

VNM 2014 Volvo 13L LNG w/ Diesel yes w/ diesel

http://www.volvotrucks.com/trucks/na/en-us/news_and_events/news_releases/_layouts/CWP.Internet.VolvoCom/NewsItem.aspx?News.ItemId=123985&News.Language=en-gb

VNL DAY CAB 2013Cummins Westport ISC12 G (year 2013 ) yes

http://www.volvotrucks.com/trucks/na/en-us/news_and_events/news_releases/2011/_layouts/cwp.internet.volvocom/newsitem.aspx?news.itemid=106245&news.language=en-gb

VNM 2014 Volvo 13l LNG w/ Diesel yes w/ diesel

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Aftermarket NG ConvertersTABLE 7.2

Company Address City State Zip Country Contact Phone Email WebsiteAltech_Eco 101 Fair Oaks Road Arden NC 28407 USA Mike Cerven 842-654-8300 [email protected] www.altrecheco.comAmerican Alternate FuelAmerican Power Group, Inc 2503 Poplar Street Algona IA 50511 USA Ed Wolf 515-395-1360 [email protected] www.americanpowergrouping.comAuto Gas AmericaBAF Technologies 2415 Beatrice Street Dallas TX 75208 USA Brent Pope 866-931-8940 [email protected] www.baftechnologiesClean Air Power, Inc. 13615 Stowe Drive Poway CA 92064 USA Kevin Campbell 909-393-7933 [email protected] www.cleanairpower.comCNG Store (dba Auto Gas Store) 1596 West 2650 s, Suite 103 Ogden UT 84401 USA 866-931-8940 [email protected] www.autogasamerica.comEcoDual 601 Bay Street Beaufort SC 29902 USA Doug Thomson 617-855-7999 [email protected] www.ecodual.comFuel-Tek Conversions Corp 5660 E 58th Avenue Commerce City CO 80022 USA 702-941-2791 [email protected] www.fueltek.bizGo Natural CNG 2023 South 625 West Woods Cross UT 84087 USA Lucas Kjar 801-281-4766 [email protected] www.gonaturalcng.comGreenkraft Inc 2530 S. Birch Street Santa Ana CA 92707 USA Sos Bardakjian 714-545-7777 [email protected] www.greenkraftinc.comHigh Pressure Group 1468 James Road Garnerville NV 89460 USA Trent Colbert 775-455-4059 [email protected] www.highpressuregroup.comIMPCO Automotive/Evotek 1274 South State Road 32 Union City IN 47390 USA Beverly Osborne 765-305-2091 [email protected] www.impcoautomotive.comLandi Renzo USA/Baytech 23535 Talo Avenue Torrence CA 90505 USA Gianluca Maso 310-283-8661 [email protected] www.landiusa.comNatGasCar 17000 St. Clair Ave Cleveland OH 44110 USA Joe Wray 216-692-3700 [email protected] www.natgascar.comNaturaldrive Partners 13765 W Auto Drive #122 Goodyear AZ 85338 USANGV Motori/NGV Conversions, Inc. 5589 Callcott Way, Suite 1416 Alexandria VA 22312 USA Michelle Guzzone 866-636-2289 [email protected] www.ngvus.com Parnell USA 1720 E Deer Valley Rd #101 Phoenix AZ 85024 USA 623-581-8335 [email protected] www.usealtfuels.comPowerfuel CNG 650 NW 27th Avenue Fort Lauderdale FL 33311 USA 800-963-4375 [email protected] www.powerfuelcng.comWestport LD 101-1750 West 75th Ave Vancouver BC V6P 6G2 CAN John Howell 734-233-6869 [email protected] www.westport-ld.comWise Gas, Inc. P.O. Box 266774 Weston FL 33326 USA Sara Neal 954-636-4291 [email protected] www.wisegasinc.com

Source: NGVAmericaFor full detail by engine size and model, please see: http://www.ngvamerica.org/about_ngv/available_ngv.html

As of 8/6/2012

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Aftermarket NG Convertersby Original Fuel Type

TABLE 7.3

Ford

GM

Chry

sler

Cat

Cum

min

s

Detr

oit D

iese

l

Daim

ler C

hrys

ler A

G

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Altech_Eco X X X X XAmerican Alternate Fuel X XAuto Gas America X X XBAF Technologies X X X X XCNG Store (dba Auto Gas Store) X X X X XFuel-Tek Conversions Corp X XGo Natural CNG X X X XGreenkraft Inc X X XHigh Pressure Group X XIMPCO Automotive/Evotek X X X X X XLandi Renzo USA/Baytech X X X X X XNatGasCar X X X XNaturaldrive Partners X X X XNGV Motori/NGV Conversions, Inc. X X X X XParnell USA X X XPowerfuel CNG X X XWestport LD X XWise Gas, Inc. X X XAmerican Power Group, Inc X X X X X X X X X X X X X XClean Air Power, Inc. X X X X X XEcoDual X X X X X X XNGV Motori/NGV Conversions, Inc. X X X X X X

Source: NGVAmericaFor full detail by engine size and model, please see: http://www.ngvamerica.org/about_ngv/available_ngv.html

As of 8/6/2012

Dies

elG

asol

ine

or G

asol

ine/

E85

OEMs Model Year Participation

Orig

inal

Fue

l

Company

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Natural Gas Market Centers and Hubs in Relation to Major Natural Gas Transportation Corridors, 2009

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Natural Gas Spot Price (MMBtu)

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Henry Hub: Overview and Location

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Publicly Accessible CNG Fueling StationsSource: U.S. DoE AFDC, BatchGEO Map & Google

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LNG Stations (Public and Private)Source: U.S. DoE AFDC, BatchGEO Map & Google

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Clean EnergyPlanned CNG Station Locations

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Clean EnergyPlanned LNG Station Locations

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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Axi

s Ti

tle

Stages* of U.S. Class 8 Natural Gas Adoption--Baseline Scenario(Class 8 Truck Retail Sales Plus Transit Buses)

Preconditions for Takeoff

Traditional Diesel Dominates

Takeoff of Natural Gas Adoption

Drive to Maturity andSteady State Share

* These stages are inspired by W.W. Rostow's Stages of Economic Growth

NG in 2009 estimated at about 3%

About 53%NG in 2030

About 51% NG in 2025

About36% NGin 2020

Issues, which common in introduction of many new technologies, causes temporarypullback in rate of increase in adoption

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Payback Calculator Inputs

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Payback Calculator Results

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U.S. Class 8 Natural Gas Adoption Rates--Baseline Scenario

2013 2014 2015 2016 2017 2018 2019 2020 2025 2030FOR HIRE:TL 4% 5% 5% 6% 10% 18% 22% 30% 52% 53%LTL 4% 6% 6% 7% 11% 20% 30% 43% 60% 61%Expedited 6% 8% 9% 13% 20% 30% 40% 45% 73% 73%Owner Operator 0% 1% 1% 2% 2% 3% 3% 5% 6% 7%

PRIVATE 5% 8% 8% 9% 13% 23% 33% 45% 65% 67%

VOCATIONAL:Refuse 50% 65% 75% 90% 95% 95% 95% 95% 95% 95%Municipial 5% 8% 10% 13% 20% 30% 40% 48% 73% 73%Construction 1% 2% 2% 3% 5% 6% 8% 10% 15% 18%Other 0% 0% 1% 1% 1% 1% 1% 1% 1% 1%

TRANSIT BUS 50% 55% 67% 67% 67% 67% 67% 67% 67% 67%

NG SHARE OF CLASS 8 TRUCK AND BUS SALES 6% 9% 10% 12% 15% 22% 28% 36% 51% 53%

SALES OF NG TRUCKS AND BUSES (000) 15 21 22 21 33 52 63 75 125 134

Memo: 2009 2010 2011 2012Total NG Vehicles 2009-12 4 7 8 12 e

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The Conclusion

• By 2025, natural gas will become the fuel of choice for 50% of Class 8 on-highway vehicles.

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