Compressed Natural Gas (CNG) Infrastructure Update

Ian Skelton

Director, Natural Gas Vehicles

AGL Resources’ Footprint

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•  NGVs use the same internal combustion engines as gasoline/diesel

•  Inherently cleaner fuel because it is 97% Methane, or CH4, compared to other fuels with higher carbon content (Diesel – C14H30; Gasoline – C8H18)

•  Two types of NGVs:

1.  Compressed Natural Gas (CNG) – still in gas state, dispensed at 3,600 psig

2.  Liquefied Natural Gas (LNG) – Refrigerated to – 260 degrees F to convert to liquid, 1/600 of volume

What is a Natural Gas Vehicle (NGV)?

Methane Molecule – CH4

Butane

PentaneHexane

Ethane

Propane

Other

CNG Units and Conversions

•  State of Georgia 560-9-1-.07 “To calculate the gallon-equivalent basis of compressed natural gas, multiply the amount of Therms by 0.8, then multiply result by applicable motor fuel excise tax.”

•  CNG Station Sizing Rules of thumb: Compressor capacity 2 cfm per GGE/hr. Electricity for compression ~ 1 kWh per GGE CNG storage available for fast-fill 0.4 x SCF at 4500 psig

Therms per gal. Efficiency loss Multiplier

Gasoline ~ 1.25 - 1.25 therms/GGE

Diesel ~ 1.38 5 – 10% 1.5 therms/DGE

•  Abundant Domestic Energy Supply

•  98% produced in North America

•  Development of shale has increased supply to > 100 years

•  Reduced Emissions

•  Reduces emissions up to 90% over diesel and gasoline

•  Meets EPA 2010 NOx levels without urea injection, etc.

•  Reduced Greenhouse Gases

•  NGVs emit 20 – 29% less CO2 than diesel and gasoline

•  Cost Savings

•  July 2012 NYMEX = $0.28/therm

•  $0.28 x 1.25 therms/Gasoline Gallon Equivalent = $0.35/GGE

•  Underlying commodity is $0.35/Gallon!

Market Drivers for NGVs

Market Driver: Abundant Domestic Supply

~98% of natural gas consumed in the U.S. is produced in North America –  U.S. natural gas reserves

exceed 100 years at current consumption levels

–  Recent discovery and development of natural gas shales have increased supply

Energy Independence

North America Natural Gas Reserves

Market Driver: Oil and Natural Gas Prices

7 WTI and Henry Hub Gas Price Spread

$/mmBtu Pre-2005 Historical Spread <$1/mmBtu

2005-2010 Avg. Spread ~$5.7/mmBtu

Forwards Spread ~$10/mmBtu

Market Driver: Lower Emissions

Air Quality Goals, NAAQS and EPA Emissions Requirements •  Clean Air Act and Amendments drive local/regional governments

to reduce criteria emissions (NOx, PM, etc.) •  EPA/CARB vehicle emissions requirements and impact on

OEMs’ product offerings, vehicle performance and fuel economy 1998 Stds

2002/2004 Stds

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.0 1.0 2.0 3.0 4.0 5.0

NOx (g/bhp-hr)

PM (g

/bhp

-hr)

2010 Std (.20 g/hp-hr NOx)

2007 “Compromise” Std

1.2 g/hp-hr NOX +NMHC

•  Fuel economy and performance trade-offs for diesel to achieve 2004 and 2007 emissions

•  Exhaust after-treatment technologies are expensive and maintenance intensive

•  2010 NOx target will require SCR with urea for most diesels

Honda Civic Natural Gas

•  Currently the only Original Equipment Manufacturer (OEM) vehicle •  Dedicated CNG, so eligible for $2,500 State of Georgia tax credit •  8 Gasoline Gallon tank (~ 220 miles range) •  Call Robert Thompson, Honda Mall of Georgia, 678-614-3744

Recent Announcements From OEMs

“Chrysler now selling Dodge Ram 2500 Bi-fuel Pickup Truck” “General Motors will sell CNG Bi-fuel Commercial Pickup

Truck in Fourth Quarter 2012” “Ford and Westport LD Announces New Compressed Natural

Gas (CNG) System for Ford F-250 and F-350 Super Duty Pickups in Second Quarter 2012”

Examples of EPA/CARB Approved NGVs For complete list go to http://www.ngvamerica.org/pdfs/Available_Vehicles_and_Engines.pdf

OEM Vehicles (Light duty) •  American Honda Civic (dedicated) •  Dodge Ram 2500 pickup truck (bi-fuel) •  Chevy Express/GMC Savana van (dedicated) •  Chevy Silverado/GMC Sierra pickup (bi-fuel)

Engines (Heavy Duty)

Cummins Westport •  8.9L “ISL-G” – 250 to 320hp •  11.9L “ISX12-G” - 320 to 400hp

Emission Solutions Inc. •  7.6L Phoenix NG – 175-260hp

Re-power Int’l DT466/MaxxForceDT Westport Innovations Inc

•  15L “GX” 400/450hp (LNG only)

Conversions (Dedicated or bi-fuel) Chrysler

•  Grand Caravan, Town & Country •  Dakota, Ram 1500

Ford •  Crown Vic, Grand Marquis, Town Car •  Focus, Fusion, Milan •  Escape, Mariner, Tribute •  F-150/250/350 pickup truck •  E-150/250/350 /450 van •  Transit Connect

General Motors •  Cadillac Escalade •  Impala, Lucerne, Malibu •  Avalanche, Tahoe, Suburban, Yukon •  4.8 - 8.0L Vans, pickups, cutaways

Heavy-Duty Natural Gas Engines

Manufacturer Engine HP and Torque CNG or LNG Availability

Cummins-Westport ISL-G 8.9L 320 HP – 1000 lb-ft CNG Available

Cummins-Westport ISX-G 11.9L 400 HP – 1400 lb-ft CNG or LNG 1Q 2013

Westport HD GX 15L 475 HP – 1750 lb-ft LNG Available

Navistar - ESI Phoenix 7.6L 300 HP – 860 lb-ft CNG Available

Navistar - ESI Maxxforce 9.3L 375 HP – 1280 lb-ft CNG 3Q 2012

Doosan Infracore GK12 11L 290 HP – 905 lb-ft CNG Available

Cummins-Westport ISL-G 8.9L

AGL’s CNG Experience

•  AGL Resources has been in the Compressed Natural Gas (CNG) vehicle business since the 1970s

•  AGL owns and maintains eight CNG refueling stations on customer premises for fleet vehicles in Georgia (city/county maintenance vehicles, forklifts, etc.)

•  AGL provides maintenance services to 30 additional fleet customers who own their own stations

•  AGL has a department of full time CNG technicians, 24-hr. emergency dispatch, etc.

AGL Partnership with MARTA

•  AGL and MARTA developed a CNG transit bus program in 1996 •  AGL maintains 2 CNG stations for MARTA’s 370 CNG buses

•  Program Benefits: –  Saves millions of dollars on diesel fuel costs –  Displaces about 150,000 barrels of oil each year –  Reduces emissions by millions of pounds of pollutants

AGL is a FuelMaker Dealer

Home Refueling Appliance (HRA or “Phill”) •  Fuels at rate of ~ ½ gallon/hr. •  Electrical: 240 VAC, 0.8 kWh •  Dimensions HxWXD: 30”x14”x13” Vehicle Refueling Appliance (VRA) FMQ-2-36 •  Fuels at rate of ~ 1 gallon/hr. •  Electrical: 240/208 VAC, 7 amps •  Dimensions LxWxH: 21"x20"x39"

FMQ-8-36 •  Fuels at rate of ~ 4 gallons/hr. •  Electrical: 240 VAC, 28 amps •  Dimensions LxWxH: 33"x48"x32"

Atlanta 2009 ARRA Grant Summary

CNG Stations - 6 1 - DeKalb County LFG-to-CNG Processing Plant and CNG Station 4 - PS Energy (operated by Clean Energy) 1 - American Fueling Systems CNG Vehicles - 160 40 - DeKalb County, new Heavy-Duty and Light-Duty vehicles 50 - UPS, replacing existing CNG delivery vans 36 - City of Atlanta/Hartsfield Jackson Airport, shuttle buses 32 - The Parking Spot, shuttle buses 2 - Atlanta Airport Marriott, shuttle buses

Atlanta Public Access CNG Stations

Existing (5) (2)(2) Clean Energy, College Park PS Energy - Whitehall St. PS Energy – Lithonia PS Energy – Stone Mtn. PS Energy – East Point

Under Construction (2) DeKalb Co. – Ellenwood American Fuel Systems – Buford Hwy.

AGL CNG Infrastructure Program

•  5 year program to invest $11.57 million from USF •  AGL will not be the CNG Retailer •  AGL will install, own and maintain the CNG compressors,

storage, controls, etc. (“CNG Equipment”) •  CNG Retailer/Applicant to lease land for CNG Equipment •  CNG Retailer to install, own, and maintain the dispensers,

card readers, etc. and make any site improvements •  Requires fleet commitment to use 20% of station capacity •  Includes Home Refueling Appliance (HRA) lease option

Eligibility Criteria

1) Fleet Operator – Contract to utilize at least 20% of station capacity –  Minimum 30,000 Gasoline Gallon Equivalents (GGE)/yr. for 5 years

2) CNG Retailer – Perform CNG retail function for a minimum term of 5 years –  Accept all major fleet cards, MasterCard, and Visa –  Purchase gas from certificated marketer at AGL meter

3) Property Owner – Commit to lease space for a minimum term of 5 years –  Accessible to other fleets and public 24/7

Equipment Sizing/Cost

CNG EQUIPMENT ESTIMATED INSTALLED COSTS

NOMINAL STATION SIZE STATION DESIGN WITH 50% REDUNDANCY

75 gals/hr. (75 cfm x 2) + 36,000 scf storage $642,000

150 gals/hr. (150 cfm x 2) + 36,000 scf storage $836,000

400 gals/hr (400 cfm x 2) + 36,000 scf storage $1,105,000

750 gals/hr. (500 cfm x 3) + 72,000 scf storage $1,685,000

1500 gals/hr (1000 cfm x 3)+ 72,000 scf storage $2,300,000

CNG Program Timeline

•  AGL issued RFP for project applications on March 1, 2012 •  Applications were due April 16 •  AGL issued notices of awarded project May 25 •  Applicants now have until Aug 23 to finalize and execute

contracts with AGL •  Construction will begin after the first of the year with the

first stations coming on line in Summer 2013 •  Any funds awarded to applicants who fail to sign contracts

with AGL will be made available to other applicants on a first-come-first-served basis

Metro Atlanta – FireSide CNG, Roswell – Horizon Fuels, an affiliate of Jacoby Energy Development, Midtown – Premier Transportation, Forest Park – City of Atlanta, North Avenue – City of Atlanta, Claire Drive

Macon –  Mansfield Oil, Pio Nono Avenue

Savannah – Colonial Group through its Enmark Subsidiary, O’Leary Road – Nopetro, Dean Forest Road

Valdosta – The Langdale Company, James P. Rogers Drive

AGL CNG Program - Awarded Stations

AGL CNG Program – HRA Lease Option

•  AGL is distributor of FuelMaker “Phill” Home Refueling Appliance (HRA)

•  Fuels at rate of approx. ½ gallon per hr. •  240 VAC power supply •  ~ $0.20 per GGE electric compression cost

Lease Payment Standard - $120/month (includes $2,000 installation) USF plan - Reduced to $60 for first 500 units

For More Information

See Atlanta Gas Light’s CNG Infrastructure Plan homepage: www.atlantagaslight.com/cngplan or contact: Ian Skelton Director, Natural Gas Vehicles AGL Resources iskelton@aglresources.com 404-584-4626