1. The Fundamentals of Natural Gas in Transportation
Florida Seaports Natural Gas Workshop
Rob Vickers
CDM Smith
Tallahassee, FL
April 10, 2014
The Fundamentals of Natural Gas in Transportation

2. Presentation Overview
Introduction to Natural Gas in Transportation Sector
Economic Considerations
Florida-Specific Findings
Other Modes: Rail and Seaports
Intermodal Opportunities
Florida Seaports Natural Gas Workshop

3. Florida Seaports Natural Gas Workshop
Natural Gas Basics
Compressed Natural Gas (CNG) - Natural gas under pressure (compressed to pressures above 3,000 pounds per square inch) which remains clear, odorless, and non-corrosive
Liquefied Natural Gas (LNG) - Produced when natural gas is cooled to minus 260 degrees Fahrenheit through a process known as liquefaction
Sold in units of diesel or gasoline gallon equivalents (DGEs or GGEs) based on the energy content of a gallon of gasoline or diesel fuel
More than 15 million natural gas vehicles in service
Navigant Research projects 35 million in service by 2020
Florida Seaports Natural Gas Workshop

4. Benefits of Natural Gas
Energy Security – 97% of the natural gas used in the U.S. is produced in North America
Lower Emissions % fewer greenhouse gas emissions and significantly reduced tailpipe emissions compared to petroleum
Reduced Maintenance Costs – Cleaner burning, quieter, longer engine life
Comparable Performance – Similar to conventionally fueled vehicles in terms of power, acceleration and cruising speed
Fuel Costs – Savings of 40% - 50% compared to gas/diesel
Florida Seaports Natural Gas Workshop

5. Florida Seaports Natural Gas Workshop
Natural Gas Vehicles
The number of OEM vehicles is growing
CNG vehicles are cost-effective for high-mileage, centrally-fueled fleets that operate within a limited area
The greater fuel capacity of LNG vehicles means they are often the preferred option for long distance travel
Most popular heavy-duty applications:
Transit/School Buses
Refuse Trucks
Shuttle Buses
Tractor Trailers
Step Vans
Florida Seaports Natural Gas Workshop

6. Total Annual LNG/CNG Heavy Duty Truck Sales North America 2013-2022
Florida Seaports Natural Gas Workshop

7. Natural Gas Fueling Infrastructure
DOE reports 160,000 gasoline fueling stations nationwide
In comparison - 1,069 CNG and 146 LNG fueling stations nationwide (2012)
CNG Stations: Fast-Fill vs. Time-Fill
Fast-Fill stations are ideal for retail situations serving light- and medium duty vehicles
Time-Fill stations are typically used by heavy-duty fleet operators who fuel at a central facility overnight
LNG Stations dispense a liquid fuel and are structurally similar to gasoline and diesel stations
Natural gas fueling facilities vary considerably based on size, capacity, and the type of fuel dispensed
Florida Seaports Natural Gas Workshop

8. July 2013 Average Fuel Prices on Energy Equivalent Basis
Florida Seaports Natural Gas Workshop

9. Costs of Natural Gas Vehicles/Infrastructure
Initial NGV investments are significant…
Representative heavy-duty CNG truck costs $63,600 more than diesel equivalent prior to incentives (2011 DOE Report)
CNG conversion cost for new light-duty vehicles generally ranges between $12,000 and $18,000
CNG fueling facility cost range from $10,000 to $2 million depending on the size and application
LNG fueling site can range from $1 to $4 million
The good news on costs…
Incentives are available to help off-set initial vehicle costs
Station builders/operators provide turn-key facilities
Florida Seaports Natural Gas Workshop

10. Natural Gas Vehicles/Stations in Florida
In 2011 DOE reported there were fewer that 3,000 NGVs in operation in Florida
Examples of businesses and agencies converting to NGV:
AT&T
Leon County Schools
Waste Management
Saddle Creek
J.J. Taylor Companies
Numerous transit agencies
60 natural gas stations in Florida
48 stations operational (18 public/30 private)
12 stations planned (10 public/2 private)
Florida Seaports Natural Gas Workshop

11. Natural Gas Fueling Facilities in Florida
Florida Seaports Natural Gas Workshop

12. Florida Natural Gas Fuel Fleet Vehicle Rebate
Provides eligible applicants a rebate for the cost of conversion or the incremental cost incurred in connection with conversion, purchase or lease of a natural gas fleet vehicle
Maximum rebate is $25,000 per purchased/leased or converted vehicle, not to exceed 50 percent of eligible costs
Each applicant may receive up to a total of $250,000 per fiscal year on a first come, first serve basis
To qualify, the vehicle must be part of a public or private fleet and must be placed into service on or after July 1, 2013
60% of funds allocated for commercial applicants and 40% allocated for governmental applicants
*See DACS Office of Energy for additional information
Florida Seaports Natural Gas Workshop

13. Other Modal Applications: Rail
Both GE and Caterpillar are developing natural gas-powered locomotives
Burlington Northern, Union Pacific, and Norfolk Southern are collaborating with locomotive manufacturers (CSX is reviewing the technology)
Stricter emissions standards and fuel cost savings are driving the interest in LNG
Beyond the technological challenge of developing LNG-fueled locomotives the industry must address logistical hurdle of getting LNG to distribution networks
Florida Seaports Natural Gas Workshop

14. Other Modal Applications: Seaports
Once again, stricter emissions requirements and fuel cost savings are driving the maritime interest in LNG
In October 2008 member states of IMO adopted new tiers of NOx and fuel sulfur controls for the newly established North American Emissions Control Area (ECA)
2015 fuel sulfur standard of 0.1 percent fuel sulfur expected to reduce PM and SOx emissions by more than 85 percent
Stringent ECA fuel standard is expected to be met through fuel switching
Conversion to more expensive distillate fuel or installation of emission control devices for ships operating on residual fuel
Florida Seaports Natural Gas Workshop

15. Current/Future Emission Control Areas
Florida Seaports Natural Gas Workshop

16. Key Considerations in Maritime Investments in LNG
Natural gas commodity prices are low relative to marine petroleum fuels
To be used as a marine fuel natural gas must be liquefied to increase its energy efficiency (limited liquefaction facilities)
Conversion of vessels to LNG is expensive (conversion of engines, installation of LNG storage tanks and related safety systems and ship modifications)
Fleet operators should focus on vessels with high utilization and fuel use relative to size and engine power (maximize fuel cost savings)
Economics of any specific project will hinge on: (1) vessel fuel use; (2) delivered LNG prices; and (3) vessel conversion costs
Florida Seaports Natural Gas Workshop

17. Intermodal Opportunities
Summary of CNG Port Drayage Truck Demonstration Program
Timeline: 2010 to 2014
Natural Gas trucks deployed: 219
Partners: South Coast Air Quality Management District, CA Energy Commission, CA Air Resources Board, Ports of Los Angeles and Long Beach, U.S. DOE, Clean Cities Coalitions
Objectives: increase use of alternative fuels; significant reductions in diesel air pollution; create/preserve jobs to stimulate the economy; increase end-user experience with alternative fuel vehicles
Results: Increased use of alternative fuels (reduced consumption of diesel fuel); significant reductions in NOx and diesel PM emissions; reduced air toxic emissions and associated public health risk; reduced GHG emissions; preserved/created jobs related to manufacturing, natural gas refueling, maintenance and operation of the natural gas vehicles
Florida Seaports Natural Gas Workshop

18. Potential Application: ILCs
Florida Seaports Natural Gas Workshop