1. National Petroleum Council Future Transportation Fuels Study Supply & Infrastructure Task Group 1 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only Summary of 1 st Draft Feedback and Responses for Natural Gas April 7th, 2011

2. 2 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 1 st Draft Feedback & Response Summary April 7, 2011 Key Changes in NG First and Second Draft Chapters  Re-work of entire document to represent two major streams – Fuels and Engines  Some economics of LD and HD vehicles  Greater balance in GHG discussion  More economics in infrastructure section  More details RNG availability and costs  Greater differentiation types of engines  Some commentary added for venting/leakage and home refueling  Have received lots of feedback 1 st draft, incl from L1 peer reviewers and more recently from the Business Reviews  Team still going through all the comments, esp the Biz Rvws

3. 3 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 1 st Draft Feedback & Response Summary April 7, 2011 High-priority feedback from Peer Review 1.Clear economics - gas price assumptions and impact of the increase in demand for natural gas 2.More emphasis on light duty opportunity – potential with economic assumptions 3.Gas price assumptions and impact of the increase in demand for natural gas. 4.Focus the Finding Sections – currently too broad. 5.Clarity on LNG Leakage / venting. 6.More detail on home refueling

4. 4 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 1 st Draft Feedback & Response Summary April 7, 2011 High-priority feedback from Business Reviewers 1. More economics information throughout. 2. More balance and clarity on GHG range assumptions. 3. Clarification on analysis methodology and commercialization case premises 4. Review engine technologies text to better reflect situation today vs future 5. Amplify the RNG feedstock capacity – focus on RNG story for transportation versus other sector use. 6. More overall balance- articulate better the challenges and barriers/constraints to expansion 7. Clarify economics-pure raw economics vs economics achievable with incentives

5. 5 DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 1 st Draft Feedback & Response Summary April 7, 2011 Economics of CNG vs Gasoline

6. Various studies (EPA, NRC, NESCCAF, RMI) have examined the cost of significant reductions in fuel consumption for heavy trucks. Wide variety of technologies assessed, and each study assumes different packages of technology for highest fuel consumption reduction. Cost curve vs CO2 reduction developed. Note that for >45% reduction, generally assumed that double trailers, increased weight limits and higher cubic capacity required to improve ton-mile efficiency. DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only 6 HD DIESEL TRUCK – COST OF FUEL ECONOMY TECHNOLOGY April 7, 2011

7. STACKING FUEL ECONOMY TECHNOLOGY WITH NATURAL GAS Premise: fuel economy technologies are transferrable to Natural Gas trucks Assumed NG system cost: –SI $40,000, Dual Fuel $40,000, HPDI $75,000 – blended cost of $54,000 Assumed NG system efficiency penalty relative to diesel: –SI = 10%, Dual Fuel = 0%, HPDI = 0% –blended efficiency penalty = 5% Assumed NG system GHG reductions: –SI = 15%, Dual Fuel = 11%, HPDI = 22% –blended GHG reduction = 17% Greater CO2 reduction potential before LCVs required Higher initial cost of CO2 for fossil Nat Gas. However, fuel cost savings are more dominant in HD economics than first cost. Need to consider time to breakeven and lifetime cost savings. 7

8. Payback and Lifetime Cost Savings Assumption: Long Haul 120,000 miles/yr Diesel =$4/DEG, LNG = $2.50/DEG 6.1 mpg baseline diesel fuel economy 5% discount rate NG payback can match diesel at ~$40k NG system incremental cost. Over life of vehicle NG generates greater fuel savings with assumptions stated. Lifetime savings converge at greater CO2 reductions due to lower total fuel used. 8 NB – need to consider value proposition for first owner (5 to 7 year duration) Also need to consider parallel analysis for different HD segments with differing fuel economy, mileage and technology approaches