11/15/2010 National Petroleum Council Future Transportation Fuels Study L1 Peer Review December 3, DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand) 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 2 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 3 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Selected Engines/Platforms Pinchpoints Technology PinchpointPotential Resolution High cost of advanced batteries, electric motors, power electronics, re-gen brakes, etc R&D, stable incentives/ policy to promote investment and volume High material and manufacturing cost for lightweight materials R&D Passive safety technologies add massR&D Gasoline stratified charge, HCCI, and diesel R&D on controls and aftertreatment High volume, low cost biofuelsR&D to reduce cost, investment in full scale biorefineries to drive learning cycles Congestion mitigation technologies (e.g. V2X) R&D / demos / “races / challenges” 4 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Engines/Platforms points for discussion What is the potential SI engine fuel economy impact of increasing gasoline octane? What is the fuel economy potential, in miles per gallon gasoline equivalent, for a dedicated engine optimized on E85? What would be the most fruitful research&development pathway for reducing costs for strong hybridizaton? What has been the primary barrier to use of carbon fiber bodies in high volume vehicles? What reduction in fuel consumption/GHG could be achieved by deployment of intelligent transportation systems? What are we missing? What might be really disruptive to technologies and/or business models we have today or are thinking about in the future? 5 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 6 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Natural Gas Pinchpoints 7 NGV Infrastructure Vehicle Pumps Site Storage Site Production CNG Storage On-site Liquefaction CNG Compression LNG Storage CNG Pumps LNG Cryogenic Pumps Digesters and Upgrading Facilities Engines OEM Integration Vehicle Fuel Tanks LNG Tanks CNG Cylinders Vehicle Conversions Specific NGV Designs Dual Fuel Engines Engine Types & Sizes Engine Performance High Medium Low Priority of resolution to drive NGV deployment Need to ensure engine efficiency growth, and remain compatible with new auxiliary technology such as heat recovery Expand range of engine types and sizes to increase user compatibility Need to increase diesel substitution and robustness Increase purpose-design NGV vehicles with optimised perf/packaging Important to support for early roll out, but need to standardise and cost reduce Increase storgae capacity/density for range, and reduce storage pressure requirements Reduce cost, increase production scale. Improve fuel level sensing On-site compression is widespread. Standards and cost reduction required. Technology for small fleet/ home refueling Small scale liquefaction plants will allow wider, economic LNG site deployment. Digesters & biogas upgraders are commercially available & widely used in Europe/China Reduce site costs to improve infrastructure economics Widespread LNG storage will require low-cost modular tanks Cryogenic pumps not as reliable as CNG/Gasoline. Further dev’t of automated unmanned pumps. Home and small fleet pumps are reasonably mature but not economic Peak shavers/LNG Terminals Better utilisation of existing LNG production Fuel quality consistency Standards required for RNG. Auto- sensing & correction will increase product robustness DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Natural Gas points for discussion What improvements may be expected in diesel and gasoline engine efficiency/ fuel economy over the next 40 years? What levels of system cost reduction- engines and components such as cryogenic pumps and tanks- may be expected over next 40 years for natural gas engine systems, some of which are just now being deployed in demonstration level volumes? How can the development of technologies for the commercialization of Renewable Natural Gas/Biomethane be accelerated, so as to capitalize on the percent reduction in GHG emissions made possible by RNG, compared to conventional oil and diesel transport use? 8 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 9 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Biofuels Crop Residue Sustainable harvest Forestry residue Sustainable harvest Energy crops No affect on food crop acreage Municipal solid waste segregation Logistics Densification for efficient storage and transport Biochemical conversion ethanol or other fuels Thermochemical gasification Minimize inputs during hydrolysis: dilution, enzymes, chemicals Produce clean syngas via steam or oxygen blown reforming Selected Biofuels Pinchpoints

11/15/2010 Biofuels points for discussion What is a realistic time frame and cost to advance and deploy advanced technologies for basic technologies like energy that require large amounts of infrastructure? Are there any current energy based technologies with leapfrog potential and how will such technologies overcome the huge inertia current technologies have? Will expanding our energy supply be the biggest driver in the future or CO2 abatement? 11 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 12 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Electric Pinchpoints DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Electric Detail of Battery Pinchpoints DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Electric points for discussion (1 of 2) The basic premise of our "barriers" chart is that with current Li-Ion-based batteries, there is not a pathway to achieve a larger-format (larger than midsize vehicle, e.g. Explorer), longer-range (e.g. 200 miles) EV at a competitive price – that some other chemistry will need to be discovered and/or developed. Based on this premise, we evaluated three representative vehicles that were all mid-size or smaller and had different operating modes, but that could reach cost competitiveness and market acceptance. 1.Do you agree with this premise? 2.Is this vehicle classification useful? For Battery costs in the PHEV-10 case, we assigned a rating of "Green" by This is based on the anticipation that the USABC goal of $500/kWh can be achieved no later than For the PHEV-40 and BEV-100 case, cost is rated at "Red” for the next 2 decades. 1.Does the panel concur with our conclusion that battery cost competitiveness for PHEV40 and EV100 applications by 2020 is high risk and a significant barrier to mass adoption? 2.Does the panel agree with our conclusion that the pathway to bring battery costs for PHEV40 and EV100 applications to cost parity before 2035 is achievable with Li-Ion batteries, given investment and time? 3.The literature suggests that achieving an energy density of 300 Wh/kg at the cell level (reducing pack weight to approx. 80 Kg (~180 lbs) in the timeframe is achievable. Is this assumption reasonable? If so, can it be achieved at a competitive cost? DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Electric points for discussion (2 of 2) In a review of various battery cost studies, we found wide disparity in both current and projected costs for Li-Ion batteries for EVs. When reviewing those studies that used a “bottom-up” costing methodology, the range of costs was much smaller. How do you evaluate a battery study to assess credibility? Which studies in particular do you find credible? For both Li-ion and “beyond Li-Ion” batteries 1.What will be the most important advances be in the next years? 2.Which areas specifically need the most R&D investment in the next 10 years? 3.How can we determine an appropriate R&D investment level that does not cross over into diminishing returns? DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 17 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Hydrogen Pinchpoints 18 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Hydrogen points for discussion In your view, what are the key significant challenges and barriers for the success of hydrogen mobility in addition to the ones we have identified? What criteria needs to be met for any new fuel or vehicle propulsion system to achieve significant market introduction? Our subgroup is currently prioritizing fuel cell vehicles over hydrogen internal combustion engine vehicles. What do you see the scope of the application for hydrogen as a transportation fuel and the order of market entry. –Do you agree with prioritizing fuel cells vehicles over hydrogen ICEs –Which vehicle segments would you prioritize over others (e.g. long haul trucking over busses over light duty vehicles, etc…)? 19 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

11/15/2010 Agenda 11:00 - Introduction (John Deutch/Stephen Brand 11:05 - Engines/Platforms 11:50 – Natural Gas 12:35 - Biofuels 13:20 – Electric 14:05 – Hydrogen 14:50 - Wrap-up and next steps (John Deutch/Stephen Brand) 20 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only