The Future of Natural Gas Engines

for Truck and Bus

David LynchCummins Westport Inc.

Why Diesel?

C15 Rev 6/98

Why Natural Gas?

Complex Hydro Carbon

Simplest Hydro Carbon

Highest hydrogen-to-carbon ratio of any

hydrocarbon

Fuel Price History

Price History for Crude Oil, Diesel Fuel, and Pipeline Industrial Natural Gas

0

50

100

150

200

250

300

350

Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07

Pri

ce

US

ce

nts

pe

r d

iese

l-e

qu

iva

len

t g

allo

n].

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Pri

ce

US

Do

llars

pe

r B

arr

el

U.S. No 2 Diesel Retail Sales by All Sellers [Cents per Gallon]

Price of Natural Gas Sold to Commercial Consumers in the U.S. [Cents per Diesel-Equivalent Gallon (Westport unit conversion)]

Cushing, OK WTI Spot Price FOB [Dollars per Barrel]Diesel Fuel

Natural Gas

Crude Oil

Natural gas has been 25- 42% cheaper than Diesel over last 14 years

OEM Availability-Transit

Neoplan AN 440 TLF

Neoplan AN 440 LFNABI 60LFW

Orion VII LF

NABI 40LFW

OEM Availability-Refuse

Autocar WXLL

Peterbuilt 320

Sterling Condor

Autocar Expeditor

U.S. Emissions Standards Continue to Evolve

0.010.01 0.100.10

0.20.2

1.21.2

2.52.5

4.04.0

5.05.0

19941994

19981998

20022002

20072007

20102010

PARTICULATE [g/ HPPARTICULATE [g/ HP--hr]hr]0.00.0

0.00.0

NO

x /

NO

x+

NM

HC [

g/H

PN

Ox /

NO

x+

NM

HC [

g/H

P-- h

r]hr]

15 PPM15 PPM

500 PPM500 PPM

SULFURSULFUR

0.010.01 0.100.10

0.20.2

1.21.2

2.52.5

4.04.0

5.05.0

19941994

19981998

20022002

20072007

20102010

PARTICULATE [g/ HPPARTICULATE [g/ HP--hr]hr]0.00.0

0.00.0

NO

x /

NO

x+

NM

HC [

g/H

PN

Ox /

NO

x+

NM

HC [

g/H

P-- h

r]hr]

15 PPM15 PPM

500 PPM500 PPM

SULFURSULFUR

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

DieselULSDActive Diesel Particulate FiltersCEGR (ISC/ISL)NOx Adsorber or SCR

SCR more efficient but a liquid that will be regulated and taxed

Crank Case Ventilation (CV) ’07Lube Oil

Will require new, low ash oilNew Oil Filters

=1.2 NOx + 0.01 PM in 20070.2 NOx + 0.01 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 + 0.01 PM in 2007

Engine Technologyfor 2007

The Two Key EmissionTechnologies for 2007 Natural Gas Engines

Cooled Exhaust Gas Recirculation (CEGR)

Three Way Catalyst (TWC)

Cummins

Fleetguard

Natural Gas Technology Featuring Stoichiometric Cooled

EGRLowest emissions with use of simple passive TWCHigher efficiency with combustion enhancements8.9 litre stoichiometric EGR engine with ratings 250- 320 hp

Improved clutch engagement torqueHigher efficiency/improved fuel economyReliability/DurabilityCummins 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 Plus34% more torque at idle Improved efficiency=improved fuel economyNo exhaust related maintenance costs

Specifications

Maximum Horsepower

320 bhp300 bhp280 bhp250 bhp*

238 kW224 kW209 kW186 kW

Peak Torque 1000 lb-ft860 lb-ft900 lb-ft660 lb-ft*

1356 Nm1166 Nm1220 Nm895 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 BillPrivate Fleets

0.067 0.203 0.136 0.55 0.419

LNG $/ DGE

CNG$ / DGE

CNG$ / DGE

To Fleet

To Fuel Provider

To Fuel Provider

Old Tax

New TaxOct 1, 2006

Net BenefitOct 1, 2006

Up to $32,000 Vehicle Tax Credit

Up to $30,000 Infrastructure Tax Credit To Fleet

Energy Bill*

Highway Bill*

All Infrastructure

Don’t Own Infrastructure

Own Infrastructure

0.067 0.203 0.136 0.55 0.419

TaxCredi

t

0.202 0.413 0.211 0.85 0.639

To Fleet

Net Tax

Increase

* CWI’s 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

$15,000

2004-2006 2007-2009 2010+

Rel

ativ

e A

nn

ual

Co

sts

(US

$/u

nit

/yr)

Diesel Diesel Electric Hybrid Natural 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

$15,000

2004-2006 2007-2009 2010+

Rel

ativ

e A

nn

ual

Co

sts

(US

$/u

nit

/yr)

Diesel Cummins 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

NO

x E

mis

sio

n L

eve

l (g

/bh

p-h

r)

0

0.5

1.0

1.5

2.0

2.5

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 G C 8.3 C Plus ’07 Gas

Emissions Better Better Better Better

Reliability Worse Worse Similar Similar

Fuel Cost/Mile Worse Worse Similar Better

Durability Worse Worse Similar Similar

LCC Worse Worse Worse Better

Timeline 1989 1996 2001 2007

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”