Why Go With Natural Gas?

Your Speaker:

Alicia Milner

Canadian Natural Gas Vehicle Alliance (CNGVA)

Your Host:

David Orton

Senior Vice President, Global Business Development & Marketing

IMW Industries

Your Speaker:

David VanLaar

Engineering Manager

IMW Industries

About IMW

IMW has been manufacturing industrial machinery since 1912, and has evolved to be a leading manufacturer of natural gas compression systems, serving all major markets Globally. Equipment is currently operating mid-east to North of the Arctic Circle.

• Quality Products & Leader in CNG Compression• Non-Lubricated Compression for Clean CNG

A variety of configurations for all applications

A Clean Energy Company

IMW operates as a wholly owned subsidiary of Clean Energy Fuels Corp. (NASDAQ: CLNE). Clean Energy is the largest provider of natural gas fuel for transportation in North America and a global leader in the expanding natural gas vehicle market.

Clean Energy has operations in CNG and LNG vehicle fueling, construction and operation of CNG and LNG fueling stations, biomethane production, and compressor technology.

Your Speaker

• Alicia Milner

• Canadian Natural Gas Vehicle Alliance (CNGVA)

Why Go With Natural Gas?Business Case for Natural Gas Vehicles in Canada– September 19, 2014

GoWithNaturalGas.ca

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Past 2 Years in Canada:

4 major CNG transit fleet projects announced 11 new CNG refuse fleet projects underway 12 new highway tractor projects launched

including use of both CNG and LNG tractors 23 new refueling stations serving:

― Return-to-base refuse, transit, trucking fleets― Regional trucking corridors

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By-Vehicle Type Details

• In total, 650 new vehicles in operation in BC, AB, MB, ON, QC

• 59% CNG vehicles; 41% LNG vehicles

• Return-to-base public & private sector fleets

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New Corridor Infrastructure – Eastern Canada

4 mobile LNG refueling stations with permanent to follow

ENN LNG Stations- London, ON- Woodstock, ON

Gaz Metro LNG Stations- Cornwall, ON- Levis, QC

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New Corridor Infrastructure – Western Canada

3 permanent & 2 mobile LNG refueling stations

ENN LNG Stations- Chilliwack, BC- Merritt, BC

Shell LNG Stations- Calgary, AB- Edmonton, AB

FortisBC LNG Station- Abbotsford, BC

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Presentation Overview

1. Why the renewed interest in natural gas?

2. What engines & vehicle models are available?

3. Adoption & fleet profiles: Transit Refuse Highway tractor

4. Supporting fleet interest in natural gas vehicles

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Your Presenter

Alicia Milner

Canadian Natural Gas Vehicle Alliance (CNGVA)

• CNGVA is Ottawa-based

• 45 corporate members including utilities, IMW, Cummins Westport, Ryder, Shell & other companies

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Renewed Interest - Abundant Resource

New markets are needed for Canada’s natural gas

Options:1. Power generation2. Export to Asia3. Transportation

Modest growth forecast for natural gas demand in traditional markets

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Renewed Interest - Lower Cost Energy

•

1 barrel of oil$93

5.8 MMBtu of natural gas@ $4/MMBtu = $23

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Renewed Interest - Lower GHG Emissions

- CNG

- LNG

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Renewed Interest – Improved Technologies

19851st CNG

transit bus

2001lightweight fuel systems

2013 ISX12 G engine

2007 ISL G 401 demo

HD engine

1998C Gas Plus

… Improved technologies

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Available Engines for Factory-Built Vehicles

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Factory-Built Tractors – 9 or 12 L

Mack

Pinnacle

+ Navistar TranStar

No DPF, no SCR; within 12% of diesel efficiency

579

T680

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Factory-Built Refuse Trucks & Transit Buses

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Transit Adoption in Canada

Hamilton CNG BusHamilton, ON

• Recent Canadian project announcements:

Nanaimo Transit – 25 CNG buses & new onsite station

Kamloops Transit – 25 CNG buses & new onsite station

Hamilton Street Railway – 18 CNG buses & new onsite station

Calgary Transit – new gas-safe transit facility for up to 400 CNG buses

• Both Canadian bus manufacturers (New Flyer and Nova) offer factory-built natural gas transit buses

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HSR Fleet Profile (1)

• HSR 35 CNG transit buses in fleet of 221 buses with an older CNG refueling station

• 1st in the world to use CNG buses; as of 2004, decision was made to return to diesel due to operating costs associated with earlier generation CNG buses

• But with diesel rising, “from $.75/litre to > $1.00/litre since 2009”, HSR did an in-depth analysis:

Fuel costs Maintenance & other costs

• Result was a recommendation to return to CNG transit bus use with a major transformation of the fleet over the next 7 years

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HSR Fleet Profile (2)

Price UnitFUEL Delivered natural gas $0.26 m3Dispensed natural gas incl compression $0.74 m3 - Add 12% for natural gas engine $0.83 m3 - Convert to diesel litre equivalent $0.80 DLEDiesel pricing $1.08 litresFUEL savings $0.28 DLE

PER BUSAnnual per bus mileage 70,000 kmPer bus annual fuel savings $10,889Estimated additional cost for CNG bus $35,000Payback 3.2 years

TOTAL NEW CNG FLEETFleet-wide annual fuel savings $381,108

NOTES1. Based on 35 buses purchased over two years at normal replacement rate2. Dispensed CNG estimated cost assumes commodity equals 35% of dispensed fuel cost.

• Per litre fuel savings of $.28 or 26%

• 3.2 years payback on CNG vehicle upfront cost

• Fuel cost savings of $4.6 million over 12 years

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Refuse Adoption in Canada

Waste Management CNG Time FillCoquitlam, BC

• Recent Canadian project announcements:

EBI – 50 CNG trucks in Montreal

Emterra - 73 CNG trucks in Winnipeg & Surrey

Green for Life – 45 CNG trucks in Hamilton & Orangeville

Waste Management -50 CNG trucks in Ottawa & Coquitlam

Progressive – 120 CNG trucks in Surrey & Barrie

• More than 50% of all new refuse trucks in the U.S. are natural gas

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Waste Management Fleet Profile (1)

• Waste Management’s 2nd CNG fleet operation in Canada

• 25 Mack refuse trucks started operation in 2012

• Return-to-base with combination time fill/fast fill station in Ottawa area

• On-board fuel storage: 280-370 DLE (75-100 DGE)

• Company has a broad North American market commitment to CNG use with a plan to replace 80% of old trucks being retired with CNG trucks

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Waste Management Fleet Profile (2)

• Per litre fuel savings of $.32 or 30%

• 3.2 years payback on CNG vehicle upfront cost

• Fuel cost savings of $2.5 million over 7 years

Cost UnitFUEL Estimated diesel cost $1.08 litreEstimated CNG cost $0.76 DLEFuel savings with CNG $0.32 DLE

PER TRUCKDaily truck mileage 250 kmAnnual truck mileage 65,000 kmAnnual fuel usage per truck 44,200 litresPer truck annual fuel savings $14,144Estimated additional cost for truck $45,000Payback 3.2 years

NOTES1. Assumed fuel consumption with CNG of 68 litres/100 km.

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Highway Tractor Adoption

Vedder TransportLNG Highway Tractor

Abbotsford, BC

• Canadian projects:

Vedder Transport – 50 LNG tractors in Abbotsford

Robert Transport – 120 LNG tractors Montreal to Mississauga

Bison Transport – 15 LNG tractors in Calgary

Loblaw – 5 LNG tractors in Mississauga

• Cold Star is Canada’s 1st fleet of CNG tractors with 10 Mack tandem-axle tractors operating on Vancouver Island

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Cold Star Fleet Profile (1)

• Fleet has 10 CNG Mack tractors out of a fleet of 45 trucks

• Deliver refrigerated goods to customers on Vancouver Island

• Haul up to 80,000 lbs GVW with tandem-axle tractors

• On-board fuel storage is 335 DLE (90 DGE)

• Typically daily mileage is 210 km

• FortisBC built station to supply fleet and there is the option for other fleets to use this station

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Cold Star Fleet Profile (2)

• Per litre fuel savings of $.32 or 30%

• 1.4 years payback on CNG vehicle upfront cost

• Return-to-base with fuel purchase contract

Cost UnitFUEL Estimated diesel cost $1.08 litreEstimated CNG cost $0.76 DLEFuel savings with CNG $0.32 DLE

PER TRUCKDaily truck mileage 210 kmAnnual truck mileage 76,650 kmPer truck annual fuel savings $11,921Estimated additional cost for truck $65,000FortisBC incentive $48,750Payback after incentive 1.4 years

NOTES1. FortisBC incentive of 75% of incremental cost for CNG tractor2. Assumed fuel consumption with CNG of 48 litres/100 km.

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System Improvements - Codes & Standards

• CNG Updated CSA B108 allows for

3,600 psi refueling at public station – harmonized with U.S.

Updated CSA B109 harmonizes vehicle impact loading with U.S.

• LNG LNG permanent and mobile

refueling being added to CSA Z276 Annex D

Harmonized North American component standards work has begun

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System Improvements - Gas-Safe Facilities

• Technical Guideline available from CNGVA

• Industry to fund development of CSA B401 to create new gas-safe facility code for Canada

• Expect new code to be available mid- 2016

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System Improvements - Training

• Competency-based training coming to market in Canada

• Technical courses will include CNG & LNG vehicle routine service

• Interactive videos for CNG & LNG refueling

Vedder TransportLNG Refueling Station

Abbotsford, BC

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Information to Support Decision-Making

Contact Outreach Hubs at 1-844-242-8485

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Getting Started

Start your research now

Decision regarding CNG or LNG takes time and several factors need to be considered

Consult with multiple sources regarding vehicles & fuel

Visit GoWithNaturalGas.ca

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Thank You

Alicia MilnerCanadian Natural Gas Vehicle AllianceAlicia.Milner@cngva.orgTel: (613) 564-0181www.cngva.org

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