The North American NGV MarketSnapshot of Market Metrics, Recent Trends, Future Outlook

Katrina Bell

Marketing/CNG Business Development – ANGI Energy Systems

On behalf of

NGVAmerica

• Technology improvements are expanding our

economically recoverable base so much so

that the estimated supply is now @ 115+ yrs.!

• Natural gas and crude oil are decoupled

Currently, CNG saves $1.25-1.75 vs

gasoline, $1.50-2.00+ vs diesel.

• Major difference between crude oil and

natural gas as % of total fuel cost

Natural Gas Abundance Drives Price Differential

PGC Resource Assessments, 1990-2012

NG and Crude Oil Prices 1997-2012 Impact of base commodity on pump fuel price

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$4.00 Diesel($86 WTI)

$2.00Natural Gas

$3.50Natural Gas

$7.00Natural Gas

Retail Markup

Refining/Compression,Distribution, Taxes

Raw Commodity

$4.002%

40%

58%

$1.5022%

60%

18%

$1.7420%

52%

28%

$2.30

19%

39%

42%

Translating Abundance into Savings

One MMBtu is ~8.0 GGE of (uncompressed) natural gasOne MMBtu is ~7.2 DGE of (uncompressed) natural gas.

If average MMBtu is ~$4.75, commodity % is $.59/GGE ($.66/DGE) . Add gas company delivery, compression, maintenance, equipment amortization: ~$1.50-1.70/GGE ($1.67 -1.89/DGE) + fed and state taxes. LNG pricing derived differently but base gas cost is same

Snapshot of US NGV Market Today

• Existing NGV inventory: ~142K

• ~22-24,000 MDVs

– 9,000 gov’t

– 1,700 package delivery

– 3,000 airport/university/

community shuttle

– 9,000 utilities, F&B, comm.

services, household goods,

construction, misc.

• ~33-35,000 HDVs

• 11,000 buses

• 5,300 school bus

• 7,500+ refuse

• 5,000 ports/regional haul

• 4,500-5,000 muni/F&B/Misc.

• ~83,000 LDVs

(fleet and consumer vehicles)

• Cars/SUVs, trucks/vans

• 2012: ~17,450 NGVs added to US roads (net gain of ~10K vehicles)

• 2013: ~19,600 NGVs added (net gain of ~ 12K vehicles)

Growing Selection of NGVs from OEMs, SVMs

LD/MD Retrofits*

• Altech-Eco

• LandiRenzo/Baytech

• IMPCO Automotive

• Westport/BAF Technologies

• NGV Motori USA

• NatGasCar

• Auto Gas America

• Greenkraft

• PowerFuel Conversions

• World CNG

Retrofits of GM, Ford, Dodge, VW, Mazda,

Mitsubishi, Workhorse, Isuzu, JAC,

UtiliMaster, Freightliner Custom Chassis

LD OEMs

• American Honda

• General Motors

• Chrysler Ram Trucks

HD Truck OEMs• Freightliner Truck

• Volvo

• International

• Kenworth

• Peterbilt

• Mack

• Thomas Built Bus

• Blue Bird Bus

• Optima/NABI

• El Dorado

• New Flyer

• Motor Coach Ind.

• Gillig

• DesignLine

HD Bus OEMs

• Mack

• Peterbilt

• Crane Carrier

• Autocar Truck

• ALF Condor

• Elgin

• Johnston

• Schwarze

• Tymco

• Capacity

HD Vocational OEMs

HD Retrofit/Repowers• American Power Group

• Clean Air Power

• Fyda Energy Solutions

• NGV Motori

• Omnitek Engineering

Dual fuel retrofits and SING repowers of

Cummins, Daimler, Navistar, Detroit

Diesel, Mack, Volvo, Caterpillar

Snapshot of US NGV Market Today

• Vehicular natural gas consumption :~10-12% AGR past 6 years

– 2005: ~200MM GGE

– 2011: ~325MM GGE

– 2012: ~350MM GGE

– 2013: ~400MM GGE

– Medium- and Heavy-duty fuel use is growing

dramatically . Growth rate will accelerate with

new niche market successes, new platform

availability for MD/HD truck sector…and consumer market?

– Factors affecting timeframe include pace of worldwide economic

recovery, petroleum-natural gas differential, vehicle choices…

….vehicle and station tax credits, grants that accelerate adoption

Snapshot of US NGV Market Today

• Station count is now ~1485 after steady growth in past 36

months; installed capacity is up significantly.

– New stations are based on better economics, either higher

throughput with anchor accounts or aggregated loads and

better sizing of equipment to loads

– 2013 saw additional of ~250-275 stations

• About half are “public access;” emphasis today is on

upgrading experience to meet public expectations

• CNG able to handle local hub and spoke and many

regional trucking applications

• Increased LNG infrastructure is in place to serve

longer haul OTR trucking.

Multiple Stakeholders

Are Engaging NGV

Fueling Infrastructure

Development• Local Gas Dist. Co.

• NG Retailers

• NG Exploration & Production Co.

• Leasing Companies

• Customers

• “Traditional” Fuel Retailers

Q: How Do We Solve

The “Chicken & Egg” Conundrum?(A: Make a chicken-egg omelet*)

• Throughput (sales volume) is key to generating economies of scale for the

public access station owner, thus allowing pump price differentials that

drive reasonable payback and life-cycle savings for customers

• Minimum load thresholds vary based on a variety of factors including:

station type, station size, fuel price differential, ability to amortize

maintenance costs, equipment depreciation, grants …..ROI expectations

• Achieve minimum load thresholds by:

– Identifying an anchor fleet that justifies the investment…or

– Aggregate several semi-anchor fleets’ loads if their depots or operating areas are

geographically acceptable…or

– Create retail public access for small fleets and consumers….or

– All of the above

Observations/Predictions

“Crystal Ball” - Vehicle Sales in 2014

– 2014: 25K “new” NGVs will hit the road

• OEM LDV sales will benefit from:

– New sedan offerings (GM bi-fuel Impala, IMPCO bi-fuel Cruze)

– Increased OEM fleet sales division focus on van, pick-up products

• SVM LDV sales will grow slightly but they need to expand options

• LDV sales will hedge on NG-Gasoline price differential

– Gasoline has been relatively low (below $3.50 in most US markets;

$3.75 is the magic number that makes telephones ring

• SVM MDV sales will hedge on effort placed against the local

commercial services/delivery markets (step vans, COE units), better

integration of NG offering by FCCC, Isuzu, UtiliMaster, i/c/w SVM

“Crystal Ball” - Vehicle Sales in 2014(continued)

– HDV sales will be solid due to:

• Continued 8.9L sales gains in refuse sector (“2nd tier” firms are

embracing to compete with Republic and WM),

• Flat-to-low sales growth in 8.9L transit sector depending on new transit

agencies transitioning over to NG and/or current NG transits adding to

inventory. Gains will depend on ability to retain current bus counts in

fleets that are cycling out units purchased 10-14 years ago.

• Outlook for 11.9L engine sales is strong but not as optimistic as all the

hype; look for solid sales (~5-6K units) in 2014. Feedback from early

adopters is mixed but “cautiously optimistic.” Sufficient station

development is still a major concern as is residual value (unknown)

• Excitement over expected introduction of the CWI 6.7L and Volvo 13L

HPDI, but no impact until late 2015; Cummins 15L in 2016?

“Crystal Ball” – Station Counts in 2014

– Station count will continue at 225-275+ rate (avg. for past 2 yrs.)

• CNG will continue to get lion’s share (due to transit, refuse, etc.).

Regional trucking operations will continue to lean more toward CNG as

on-board fuel capacity and packaging issues are resolved. LNG will

continue to capture longer haul OTR accounts; pace has been

“painfully cautious.” Public “LNG vs CNG” debate is “off the mark”…

market needs both and will continue to support both.

• LNG station development will slow until current inventory is utilized

more completely; more opening of currently mothballed Clean Energy

locations, greater fuel throughput as 11.9L trucks hit the road.

Shell/TCA station development will face same challenges that leader

Clean Energy did in 2012-2013.

• Continued development of stations based on municipal/private fleet

partnerships but difficulty of process will hinder pace of development

For more information please contact:

Stephe Yborra

Director of Market Development

NGVAmerica

400 N. Capitol Street, NW - Suite 450

Washington, DC 20001

Director of Market Analysis, Education and Communications

Clean Vehicle Education Foundation

6011 Fords Lake Court

Acworth, GA 30101

syborra@ngvamerica.org / syborra@cleanvehicle.org

(301) 829-2520