The Future of Natural Gas Engines for Truck and Bus David Lynch Cummins Westport Inc.

Why Diesel?

Why Natural Gas?

Complex Hydro Carbon Simplest Hydro Carbon Highest hydrogen-to- carbon ratio of any hydrocarbon

Fuel Price History Natural gas has been % cheaper than Diesel over last 14 years

OEM Availability-Transit Neoplan AN 440 TLF Neoplan AN 440 LF NABI 60LFW Orion VII LF NABI 40LFW

OEM Availability-Refuse Autocar WXLL Peterbuilt 320Sterling Condor Autocar Expeditor

U.S. Emissions Standards Continue to Evolve Urban Bus Phase-In Period

What is changing? Higher vehicle pricing for new technology Higher cost of Ultra Low Sulfur diesel fuel SCR for 2010 The shifting economics of diesel operation

Consider the Natural Gas Alternative Things have changed Natural gas not for everyone Natural gas as the lower cost alternative

Diesel / NG Pathways to 2010 Diesel ULSD Active Diesel Particulate Filters CEGR (ISC/ISL) NOx Adsorber or SCR SCR more efficient but a liquid that will be regulated and taxed Crank Case Ventilation (CV) 07 Lube Oil Will require new, low ash oil New Oil Filters = 1.2 NOx PM in NOx PM in 2010 Natural Gas No change- CNG or LNG capable Replace Oxicat with Three Way Catalyst Add- CEGR (ISL G) No NOX adsorber required No CV required–reduced maintenance vs. LBSI No Change- Low Ash Oil in use today CES20074 Fleetguard Filter = 0.2 NOx PM in 2007

Engine Technology for 2007

The Two Key Emission Technologies for 2007 Natural Gas Engines Cooled Exhaust Gas Recirculation (CEGR) Three Way Catalyst (TWC) Cummins Fleetguard

Natural Gas Technology Featuring Stoichiometric Cooled EGR Lowest emissions with use of simple passive TWC Higher efficiency with combustion enhancements 8.9 litre stoichiometric EGR engine with ratings hp Improved clutch engagement torque Higher efficiency/improved fuel economy Reliability/Durability Cummins diesel parts 0.2 NOx in 2007 vs. 1.2 Phase in Provision

Introducing Next Generation 2007 Natural Gas Engine Technology ISL G will meet 2010 emissions standards ahead of schedule (0.2 g/bhp-hr NOx, 0.01 g/bhp-hr PM) 85% lower NOx than C Gas Plus 34% more torque at idle Improved efficiency=improved fuel economy No exhaust related maintenance costs

Specifications Maximum Horsepower 320 bhp 300 bhp 280 bhp 250 bhp* 238 kW 224 kW 209 kW 186 kW Peak Torque 1000 lb-ft 860 lb-ft 900 lb-ft 660 lb-ft* 1356 Nm 1166 Nm 1220 Nm 895 Nm Governed Speed 2200 rpm Engine Displacement 540 cu. in.8.93 L Aftertreatment Three Way Catalyst (Maintenance Free) * Note: ISL G 250 will be available Jan 2008

Highway/Energy Bill Private Fleets LNG $/ DGE CNG$ / DGE To Fleet To Fuel Provider Old TaxNew Tax Oct 1, 2006 Net Benefit Oct 1, 2006 Up to $32,000 Vehicle Tax Credit Up to $30,000 Infrastructure Tax Credit To Fleet Energy Bill* Highway Bill* All Infrastructure Dont Own Infrastructure Own Infrastructure Tax Credit To Fleet Net Tax Increase * CWIs Interpretation Subject to IRS Rule Making

LCC Life Cycle Costing

LCC Analysis – US Urban Bus ($15,000) ($10,000) ($5,000) $0 $5,000 $10,000 $15, Relative Annual Costs (US$/unit/yr) DieselDiesel Electric HybridNatural Gas Model Year $1472 $2269 $655 $3191 ($836) ($955) Natural Gas with Energy & Highway Bill Provisions ($9263) ($10,305) ($10305) $1746 Diesel Electric Hybrid with Energy Bill Provisions $2786 $1067 $1370 $1496

LCC Analysis - Refuse Collection ($15,000) ($10,000) ($5,000) $0 $5,000 $10,000 $15, Relative Annual Costs (US$/unit/yr) DieselCummins Westport Model Year Cummins Westport with Energy & Highway Bill Provisions Private ($4144) Private ($4144) Private ($3337) $5743 $1675 $2498 $2573 $2498 Public ($5962) Public ($6644) Public ($6644) Baseline NOx Emission Level (g/bhp-hr)

Conclusions The economics of vehicle operations are shifting Energy/Highway Bill funding makes Natural Gas a Bargain. Some businesses will profit from the opportunity.

Key Characteristics-Diesel vs. NG Natural Gas Engines Continuous Improvement L 10 GC 8.3C Plus07 Gas Emissions Better Reliability Worse Similar Fuel Cost/Mile Worse SimilarBetter Durability Worse Similar LCC Worse Better Timeline

What is over the Horizon ? LCNG LFG to LNG HCNG

What is Next? Think about what happens next with Diesel. Think about using Natural Gas for the right applications. Find the best alternative for your duty cycle.

Change is Inevitable except from a vending machine