Natural Gas Vehicles NYCLHVCC CNG Workshop March 13, 2012 Natural Gas Vehicles NYCLHVCC CNG Workshop March 13, 2012

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!! Why the NGV Market Will Grow

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

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

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

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

US Target Markets 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

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

Expanding Infrastructure

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)

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

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

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)

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

Questions? Contact Paul C. Kerkhoven Questions? Contact Paul C. Kerkhoven