Natural Gas Vehicles NYCLHVCC CNG Workshop March 13, 2012

1. Natural Gas VehiclesNYCLHVCC CNG WorkshopMarch 13, 2012

3. Why the NGV Market Will Grow • 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 • Policymakers are Recognizing the Value of NGVs • Money!!

4. Barriers to NGV Development • Initial high cost of vehicle and fueling infrastructure • Economics not compelling enough for fleets that do not use enough fuel • Many fleets require very short payback periods • Anywhere from 3-5 years

5. Barriers to NGV Development • Reluctance of fleets to share private fueling stations (security, insurance, safety issues) • Resistance to new technology • Lack of light duty OEM products • Lack of bi-fuel LDVs in CARB states

6. How to Overcome Barriers • Target high fuel use fleet applications first • Develop open access stations – public or private locations • Provide incentives for station owners to build large stations

7. Overcoming Barriers • Provide incentives for station owners to build near major transportation corridors • Provide incentives to help buy-down incremental cost of vehicles to accelerate payback, increase demand for vehicles

8. US Target 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

9. NGV Market Development Creates Jobs • Exploration & Production Jobs • Manufacturing Jobs • Installation / Service Jobs • Indirect /Secondary Job Creation • Local businesses (stores, restaurants) • Increased profitability; fleets save 30-50% • Freight Hauling • F&B Delivery, Consumable services • Refuse Collection/Transfer • Transit • Taxi/Shuttle • Energy/Communications Utilities

10. Expanding Infrastructure

11. US Incentives • Fuel Use Credit. • 50 cents per gge goes to the seller of CNG/LNG when used as a transportation fuel • Expired on 12/31/2011 (Extension possible) • Infrastructure Credit • The lesser of $30,000 or 30 percent of the cost of a fueling station • $1,000 for a home refueling unit • Expired on 12/31/2011 (Extension possible) • Various State Incentives (continued)

12. Innovative State Legislative Proposals • Offer tax credits on a competitive basis or first-come-basis • Capping annual tax credits so as to limit budgetary impact

13. Innovative State Legislative Proposals • Allowing tax credits to count against income taxes as well as other types of taxes • Allowing tax credits to be transferred or sold • Targeting credits to fueling stations located near corridors and/or requiring open access

14. US Legislative Proposal • New Alternative Transportation to Give Americans Solutions (NAT GAS) Act of 2011 : • To accelerate use and growth of NGVs • Introduced in both the House and the Senate • Key tax credit provisions would address: • Fuel use • Vehicle purchase price • Fueling infrastructure installation • Indian Tribes (continued)

15. US Legislative Proposal • Key provisions would address: • OEM Vehicle Production Incentives • NGV RD&D • Streamlining EPA conversion systems certification

16. Questions?Contact Paul C. Kerkhoven202.824.7363pkerkhoven@ngvamerica.orgwww.ngvamerica.org