Natural Gas Vehicles

Minnesota Energy Efficiency & Load Management Symposium

Natural Gas Vehicles (NGV’s)

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Dave PorettiCenterPoint EnergyOctober 12, 2012

Overview

• Natural gas as a transportation fuel - Why consider NGV’s?

• Environmental advantages

• Safety advantages

• CNG (Compressed Natural Gas) and LNG (Liquefied Natural Gas)

• Natural gas supplies and shale gas impacts on supply

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• Economic advantages over other fuels

• Tax credits

• CenterPoint Energy CNG & LNG availability in Minnesota

• Summary

• Questions

• Proven technology• Take control of your fleet’s fuel costs• Minimize the impact of out of control oil prices• Stable natural gas prices

Why consider NGVs?

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• Save up to $2 per gallon from gasoline or diesel• Potential paybacks in the 2-4 year range without

incentives

Natural Gas as a Transportation Fuel

Natural Gas is:

• Domestic

• Abundant

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• Abundant

• Economical

• Clean

• Safe

Environmental Advantages

Natural gas is cleaner than other fuels

Natural gas compared to diesel and other fuels• Natural gas is mostly methane: Methane - CH4• Diesel –C14H30• Gasoline –C8H18

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• Gasoline –C8H18 • Propane –C3H8• Less Nox (85% less smog) and soot than petroleum fuels

Natural gas produces less greenhouse gases than diesel • Heavy Duty Vehicles (HDV’s) about 20-23%• Light Duty Vehicles (LDV’s) about 26-29%

Safety Advantages

Natural gas is very safe

• Lighter than air… dissipates when released• High ignition temperature: 1000-1100F• Limited range of air/fuel combustion ratio (5-15%)• Doesn’t leak into groundwater and no spills from dispensing nozzle

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• Doesn’t leak into groundwater and no spills from dispensing nozzle • Comprehensive fuel tank, vehicle and station design/mfg codes &

standards• Onboard storage cylinders are manufactured to a higher standard

than those made for gasoline/diesel vehicles• Maintenance buildings will have to be modified to maintain NGVs

Compressed Natural Gas (CNG)

• Gas delivered to site by the local gas utility and compressed and stored onsite and/or distributed directly to vehicles

• Onboard 3,600 psi vehicle cylinders

Facts About Natural Gas

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• CNG is measured in Gasoline Gallon Equivalents

• NGVs are proven and reliable (11,000+ transit buses and 4,000 + refuse trucks. Cummins Westport has 10,000 + natural gas engines in the field.)

• NGVs are quiet (80-90% lower decibel level than diesel)

Typical Natural Gas Compressor Station How it works

• The natural gas enters the compressor station going through the dryer to the compressor.

• If a slow fill system, no storage is required.• If Fast Fill, storage is required.• To the dispensing equipment into a NGV.• Stations can range from $5,000 for an individual homeowner unit to several

million dollars. The price is dependent upon number of vehicles to fuel, number of gallons per hour and if storage is required.

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of gallons per hour and if storage is required.

Flow

Information Needed:• # Vehicles• Miles per Gallon• Gallons per Day• Timeliness of

Refueling and time of day

Liquefied Natural Gas (LNG) Facts

• Natural Gas cryogenically cooled to liquid @ (-260 Degree)F, stored in liquid form onboard vehicle and vaporized back to a gas before it enters engine cylinder. Natural gas replaces the energy (Btu’s) in gasoline or diesel with the energy (Btu’s) in natural gas.

• Preferred by many heavy-duty fleets due to its higher energy

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• Preferred by many heavy-duty fleets due to its higher energy density and space requirements

• Most vehicular LNG used today is produced at a limited number of plants and trucked to fleets’ onsite storage vessels.

• Transportation of LNG to the fueling location is a consideration.

Typical LNG StationHow it works

• LNG is stored in the Storage vessel.

• Upon Demand, LNG is pumped to the dispenser using a cryogenic pump into a NGV.

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pump into a NGV.

• LNG Stations vary in price based on the amount of fuel dispensed per hour and the amount of storage on-site. The prices range from several hundred thousand to several million dollars.

Flow

Natural Gas Supply- Short & Long Term

• Inventories are at record levels compared to both year-ago levels and 5 year levels.

• Average wellhead prices are predicted to remain low for the foreseeable future due to the extensive shale gas resources.

• Natural gas produced from shale currently accounts for 23% of

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• Natural gas produced from shale currently accounts for 23% of domestic production and is forecasted continue to grow.

• As a result of the increased supply from shale gas, it is estimated that there is over 100 years of supply at 2010 usage levels.

Source: EIA AEO 2012 Early Release, the Potential Gas Committee

Where is the Shale Gas?

Private well, about 500 ft deep

Public well, about 1,000 ft deep

Several layers of steel tubes encased in cement protect groundwater supplies

Protective steel casing

Groundwater aquifers

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Protective steel casing encased in cement extends to shale depth

Fracking depth from the surface is typically more than 1.5 miles (7,700 ft. ave.) and 1+ miles below the depth of public wells.

For a video detailing the shale hydraulic fracking process, visit: http://www.hydraulicfracturing.com/Pages/informatio n.aspx

Economic AdvantagesPrice Stability Compared to Diesel

Price of

Natural Gas

per Dth

Gas

Commodity

Cost

DGE Note 1

Delivery

Cost DGE

Note 2

Electricity

Cost DGE

Note 3

Compressor

Maintenance

Cost DGE

Note 4

Capital

Amortization

Cost DGE

Note 5

Federal &

State Fuel

Tax

Cost DGE

Note 6

Total DGE

$2.89 $0.401 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.0544

$3.00 $0.417 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.0704

$4.00 $0.56 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.2134

$ 5.00 $0.70 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.3534

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$ 5.00 $0.70 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.3534

$ 6.00 $0.83 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.4834

$ 7.50 $1.04 $0.1994 $0.13 $0.30 $0.50 $0.524 $2.6934

$ 10.00 $1.39 $0.1994 $0.13 $0.30 $0.50 $0.524 $3.0434

$12.50 $1.74 $0.1994 $0.13 $0.30 $0.50 $0.524 $3.3934

$15.00 $2.09 $0.1994 $0.13 $0.30 $0.50 $0.524 $3.7434

1. September 2012 CenterPoint Energy WACOG of $2.8948 /Dth / 7.1942. September 2012 Firm C Delivery Charge of $1.4343 per Dth / 7.194 3. Per NGV America. Includes Kwh + demand 4. Per NGV America5. Per NGV America6. Federal and State Excise Tax Diesel ($0.244 Feder al + $0.28 State)

Economic AdvantagesPrice Stability Compared to Gasoline

Price of

Natural Gas

per Dth

Gas

Commodity

Cost

GGE Note 1

Delivery

Cost GGE

Note 2

Electricity

Cost GGE

Note 3

Compressor

Maintenance

Cost GGE

Note 4

Capital

Amortization

Cost GGE

Note 5

Federal &

State Fuel Tax

Cost GGE

Note 6

Total GGE

$2.89 $0.362 $0.1793 $0.12 $0.27 $0.45 $0.464 $1.8453

$3.00 $0.375 $0.1793 $0.12 $0.27 $0.45 $0.464 $1.8583

$4.00 $0.50 $0.1793 $0.12 $0. 27 $0.45 $0.464 $1.9833

$5.00 $0.625 $0.1793 $0.12 $0. 27 $0.45 $0.464 $2.1083

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$5.00 $0.625 $0.1793 $0.12 $0. 27 $0.45 $0.464 $2.1083

$6.00 $0.75 $0.1793 $0.12 $0. 27 $0.45 $0.464 $2.2333

$7.50 $0.9375 $0.1793 $0.12 $0.27 $0.45 $0.464 $2.4208

$10.00 $1.25 $0.1793 $0.12 $0.27 $0.45 $0.464 $2.7333

$12.50 $1.5625 $0.1793 $0.12 $0.27 $0.45 $0.464 $3.0458

$15.00 $1.875 $0.1793 $0.12 $0.27 $0.45 $0.464 $3.3583

1. September 2012 CenterPoint Energy WACOG of $2.8948 /Dth / 82. September 2012 CenterPoint Energy Firm C Delivery Charge of $1.4343 per Dth / 8 3. Per NGV America. Includes Kwh + demand 4. Per NGV America5. Per NGV America6. Federal and State Excise Tax Gasoline ($0.184 Fed eral + $0.28 State)

NGV Tax Incentives

• Bonus depreciation allows 50 percent depreciation for 2012 expenditures

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• New Legislation • Natural Gas Act 2011- Currently 180+ co-sponsors

Key NGV Considerations

• Retrofitting garage for maintenance of vehicles

• Compression facilities properly sized• Purchase of new dedicated natural gas

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• Purchase of new dedicated natural gas vehicles

• Retrofitting existing vehicles

CenterPoint Energy CNG & LNG Availability in Minnesota

Public CNG Station Hours M-F 7:30 am to 6:00 pm501 West 61st StreetMinneapolis, MN 55419

LNG Tanker Loads

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LNG Tanker Loads11500 12th Avenue SouthBurnsville, MN 55337

If you are interested in purchasing CNG or LNG from either of the above facilities, please contact Jon Williams, 612-321-4390 or 612-321-4330.

Summary - Why Look at NGV’s

• Proven technology• Take control of your fleet’s fuel costs• Minimize the impact of out of control oil prices

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• Stable natural gas prices• Easily save up to $2 per gallon from gasoline or diesel• Potential paybacks in the 2-4 year range without

incentives

Where do we start?

X

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Infrastructure Vehicles

X

X=Both infrastructure and vehicles need to be worked on at the same time for NGV’s to succeed!

Questions?

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Questions?

Contact:CenterPoint Energy, Energy Sales

(612) 321-4330, 800-234-5800, ext. 4330CenterPointEnergy.com/NGV

Appendix-Conversions

Conversions from commodity to GGE or DGE: • One cubic foot = ~1,000 BTUs (Note: cf = volume, BTU = energy)• One Dth = 1,000 cubic feet• One Dth = 1,000x1,000 = ~1,000,000 Btus (MMBtu or dekatherm)• One Gasoline Gallon Equivalent (GGE) is 125,000 Btu/GGE …therefore….• One Dth = roughly 8 GGE of (uncompressed) natural gas.• One Diesel Gallon Equivalent (DGE) is 139,000Btu/DGE ….therefore....

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• One Diesel Gallon Equivalent (DGE) is 139,000Btu/DGE ….therefore....• One Dth = roughly 7.194 DGE of (uncompressed) natural gas

Fuel Unit of Measure BTU Content Natural Gas Dth

Conversion

Natural Gas Dth 1,000,000

CNG GGE 125,000 8.00

LNG Gallon 82,644 12.1

Propane Gallon 91,600 10.917

Gasoline Gallon 125,000 8.00

Diesel Gallon 139,000 7.194