Natural Gas For Transportation: Going Green and Saving Green John Somers Director, Business Developm

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Natural Gas For TransportationGoing Green and
Saving GreenJohn SomersDirector, Business
Development

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Agenda

• Clean Energy and Natural Gas For Transportation
• The Case for Natural Gas Vehicles (NGVs)
• Cheaper, Cleaner Domestic
• Key World Oil Market Issues
• NGV Applications and Offerings
• Questions and Comments

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Clean Energy

• Comprehensive Services
• Design, build operate CNG/LNG fueling stations
• LNG production delivery
• Grant writing services
• Natural Gas Vehicle (NGV) financing leasing
• Background
• Founded in 1997 as Pickens Fuel Corp
• Became Clean Energy in 2002
• Based in Seal Beach, California
• Publicly-traded as CLNE on NASDAQ
• Industry Leading Statistics
• 173 CNG/LNG fueling stations
• Over 14,000 customer vehicles fueled daily
• 75 million gallons dispensed and 117 million in
  revenue in 2007

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Natural Gas Fundamentals

• Produced at on-shore off-shore wells
• Methane from decaying organic matter trapped
  underground
• Completely renewable when generated from
  landfill, sewage treatment and cattle operations
• Transported through extensive network of
  inter-/intra-state and local pipelines
• CNG Compressed Natural Gas
• Pipeline natural gas compressed to 3,600 psi
• Same natural gas we use in our homes
• On-board fuel storage based on size of vehicle

Underground gas pocket
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Natural Gas Fueling Stations

• CNG Fast-Fill Station
• Larger compressor skid with dryer
• Three or more storage vessels
• Rapid succession CNG vehicle fueling

• CNG Time-Fill Station
• Small compressor skid with dryer
• One storage vessel for limited fast-fill
• Dual hose or single hose posts
• Offers overnight fueling for any CNG vehicle

• Public Access Option (All Stations)
• Allows smaller fleets public to use NGVs
• Per gallon royalty and reduced fuel rate to land
  owner or tenant

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Why Natural Gas for Transportation?
Cheaper
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Retail Fuel Price Comparison June 23, 2008
April 2, 2008
Retail CNG Price in GGEs (Gasoline Gallon
Equivalent 125,000 BTUs). LNG Retail Price in
DGEs is 3.699 (Diesel Gallon Equivalent
139,000 BTUs).
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Price Comparison Natural Gas Crude Oil
April 2, 2008
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U.S. DOT FTA Report Abstract

• Transit bus life cycle cost (LCC) analysis for MY
  2007 buses
• Covers 4 bus types ULSD Diesel, B20 Bio-diesel,
  CNG, DEH
• LCC factors include
• Capital Costs
• bus procurement
• Infrastructure
• emissions equipment
• Operation Costs
• Fuel
• propulsion-related systems maintenance
• facility maintenance
• battery replacement

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U.S. DOT FTA Report
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U.S. DOT FTA Report
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U.S. DOT FTA Report Conclusions

• DEH higher capital cost than Diesel
• Capital cost slightly higher for CNG than Diesel
• Operation cost analysis similar for all
• CNG operation cost was the lowest
• Partly due to lower fuel price which more than
  compensates for variation in fuel economy and
  cost of compression electricity
• Better fuel economy of DEH offset by battery
  replacement cost

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Financial Incentives for NGVs
Presidents Energy Bill Tax Credits through
December 2010

• Allows for up to 80 of incremental cost of
  dedicated natural gas vehicle based on vehicles
  GVWR (Gross Vehicle Weight Rating)

• GVWR
• Passenger cars, Vans and light trucks
• GVWR 8,500-14,000 lbs 10,000 (80 8,000)
• Vans, Cutaways and light-medium trucks
• GVWR 14,000-26,000 lbs 25,000 (80 20,000)
• Shuttle buses and medium trucks
• GVWR 26,000 lbs 40,000 (80 32,000)
• Transit Buses, Refuse trucks, street sweepers,
  heavy trucks

State and Local Grant Funding

• 3,000 to 100,000 available now for NGVs in
  parts of California

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NGVs Produce Significantly Less Emissions
Greenhouse Gases

• 23 GHG reductions compared to diesel
• 30 GHG reductions compared to gasoline

O
C
O
Source South Coast Air Quality Management
District 2007 Air Quality Management Plan Summit
Panel
Source California Energy Commissions Well to
Wheels Analysis of Various Alternative Fuels
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Large, Domestically Available Supply of NG
Natural Gas

• Less than .01 used for transportation in U.S.
• 10 million NGVs would use about 3
• World NG reserves estimated at 3x that of oil
• Huge advances being made in bio-methane
• landfill gas (LFG), dairy farms, wastewater
  treatment plants
• NGVs offer solution to dependence on foreign oil
• U.S. imports up to 70 of its oil at a cost of
  700 billion a year
• The Pickens Plan

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Key World Oil Market Issues

• Supply
• While the exact timing of peak oil occurring is
  subject to considerable debate, the inevitability
  is not
• An inverted V shaped peak is not likely, but
  rather a 4-year plateau, then a gentle decline
• The world may already be past a peak in light,
  sweet crude oil production
• The available marginal barrel, or spare capacity,
  in the market is almost exclusively heavy and/or
  sour crude for which the world has very limited
  capacity to refine into gasoline
• Key producing regions are past their peak (U.S.,
  UK, Norway, Indonesia, China, Mexico etc.) and
  several areas of recent growth are showing signs
  of stagnating (Russia, Canada, etc.)
• Potential geopolitical wildcards include supply
  disruptions from Iraq, Nigeria, Saudi Arabia and
  from the Axis of Diesel Russia, Iran and
  Venezuela
• Demand
• Emerging economies are driving world oil demand
  growth (China 5.5, Middle East 5.6, South
  America 4.7, India 4.8) while oil demand from
  developed economies wanes (U.S. 0.5, Europe
  -2.1, Japan -3.6
• Developed economies are more efficient and less
  energy intensive than three decades ago and are
  more able to withstand higher oil prices
• Oil prices have only recently risen high enough
  to begin to change consumers buying habits
• U.S. consumers just now beginning to respond to
  higher gasoline prices by reducing miles driven
  and seeking greater fuel efficiency (still most
  using discretionary dollars to pay for high fuel
  costs)
• The weak U.S. dollar has dampened the oil price
  surge for non-dollar denominated economies
• Energy prices are subsidized in many emerging
  economies resulting in no meaningful incentive to
  conserve
• Higher energy prices increase demand in many
  areas of the world

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Has crude oil production already peaked?
While the exact timing of peak oil production is
subject to considerable debate, the inevitability
is not the U.S. peaked in 1971 with production
down 50 since then
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Growing Demand Despite Higher Oil Prices
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The World is Nowhere Near Peak Demand!
Rising standards of living and industrialization
are on the verge of dramatically increasing per
capita consumption in key emerging economies
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NGVs Are Used Around the World
Source International Association for Natural Gas
Vehicles, Includes Both OEM and Converted NGVs
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Major NGV Applications in the Americas

• Airports
• Taxis
• Rental Car, Parking and Hotel Shuttles
• Transit
• Refuse and Recycling
• Collection and Transfer
• Transit
• Fixed Route
• Paratransit
• On Demand Services
• Goods Movement
• Port and Regional Trucks
• Yard Hostlers
• Pickup Delivery

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Customers and Stations Nationwide
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180 Natural Gas Fleet Models Available in the USA
Airport
Transit
Refuse
Taxis
Delivery Trucks
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NGV Options for all Classes of Vehicle
Light Duty Medium Duty Heavy
Duty
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Clean Energy in San Diego Transit Facilities

• Metropolitan Transit System
• 400 CNG transit buses by end of 2008
• Three CNG stations (Kearny Mesa, Downtown South
  Bay)
• North County Transit District
• 91 CNG transit buses
• Two CNG stations (Oceanside Escondido)

MTS Kearny Mesa
NCTD Oceanside Escondido


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NGV Outlook in CA is Strong

• Highest Fuel Prices in the Nation
• CNG offers over 1.00 savings per gallon today
• As economy rebounds gasoline and diesel prices
  will rise as oil returns to 110-130/barrel
• Increasing Environmental Concerns
• Federal, State and Local Level
• Current Future Funding Mechanisms
• Federal Tax Credit
• Air Resources Board and Local Air Districts
• California Energy Commission
• CA Renewable Energy and Clean Alternative Fuel
  Act
• Increasing NGV Availability
• NGVs are available for fleets and consumers today
• Home fueling for light duty vehicles!

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Thank You Questions?
John Somers Director, Business Development (562)
477-9395 jsomers_at_cleanenergyfuels.com