ngvs and the life-cycle cost advantage the compelling case for natural gas vehicles in fleet...
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NGVs and the Life-Cycle Cost AdvantageNGVs and the Life-Cycle Cost Advantage The Compelling Case forThe Compelling Case for
Natural Gas Vehicles in Fleet ApplicationsNatural Gas Vehicles in Fleet Applications
SStephe Yborra – Directortephe Yborra – DirectorClean Vehicle Education Foundation / NGVAmericaClean Vehicle Education Foundation / NGVAmerica
Mobilizing North Carolina Conference & Expo Mobilizing North Carolina Conference & Expo Greensboro Coliseum – April 18, 2007Greensboro Coliseum – April 18, 2007
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Signs of the TimesSigns of the Times
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Market Drivers Spur Alternative Fuel VehiclesMarket Drivers Spur Alternative Fuel Vehicles(Especially Natural Gas Vehicles!)(Especially Natural Gas Vehicles!)
• Global energy supply-demand imbalance will only get worse– New discoveries lag add’l growth, let alone current consumption
• Air quality issues getting political traction as economy is impacted– Health: absenteeism, lost productivity, societal healthcare costs
– Cost of non-compliance is unacceptable
• Advances in transportation technologies to meet tougher emissions requirements create trade-offs in performance and O&O costs– Petroleum-based transportation is becoming more expensive
– Alt fuel technologies are gaining acceptance, attaining economies of scale
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EPA’s HD Engine EmissionsEPA’s HD Engine Emissionsand Fuel Requirementsand Fuel Requirements
1998 Stds1998 Stds2002/2004 Stds2002/2004 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 5.0NOx (g/bhp-hr)
PM
(g/
bh
p-h
r)
2010 Std (.20 g/hp-hr NOx)
2007 Std (1.2 g/hp-hr NOX +NMHC)
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The Price of Progress: OUCH!The Price of Progress: OUCH!Complexity, Confusion and CostComplexity, Confusion and Cost
Fuel Exhaust
EGR
NOxAfter-
Treatment
Urea
Water +Additives
or
ElectricPower
Reductant
Platinumand/ orCerium
Desul
furis
ation
Gas to Liquid
or
or
or
Fuel Processing Engine DesignModifications
Exhaust After-treatment
Alt. Fuels
or
HCCI
PMAfter-
Treatment
CombustionChamberDesign
Low Pressure
EGR
High Pressure
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• NGVs are proven and reliable– Nearly 5 million worldwide
• NGVs use an inherently clean fuel– Simple CH4 structure, few combustion byproducts– Less NOx, soot and greenhouse gases
• Natural gas is domestic fuel– 97% comes from North America
• NGVs are quiet– 80-90% lower db level than diesel
• NGV life-cycle costs are lower– Fuel costs are far lower!– Maintenance costs are =/< than gasoline or diesel vehicles– Life-cycle cost advantage improves with new federal tax credits
Benefits of NGVsBenefits of NGVs
Methane Molecule
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NGVs Are a “Good Fit” for Many NGVs Are a “Good Fit” for Many Different Fleet ApplicationsDifferent Fleet Applications
• Local/State Government
• Airports
• Refuse
• Transit
• School Districts
• Utilities
• Local-Service Businesses– Plumbers, HVAC, etc.
• “Short-Haul” Delivery Operations– Food/Beverage/Snack, Linens, Package
Delivery/Courier Services, Port/Rail, Newspapers, etc.
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Despite Some OEM Withdrawals, A Wide Despite Some OEM Withdrawals, A Wide Variety of Natural Gas Vehicles Are AvailableVariety of Natural Gas Vehicles Are Available
• Sedans, Pick-ups/SUVs, Vans/Wagons– American Honda– All GMC brands and
Ford/Mercury/Lincoln via SVMs
• Work/Vocational Trucks – Peterbilt, Freightliner, Freightliner CC,
Sterling, Crane Carrier, Condor, Autocar, Isuzu, GM, Workhorse, Ottawa….. Dozens of upfitters in all work sectors
• Bus and shuttle – NABI, Orion, New Flyer, Specialty
El Dorado-National, Champion, Supreme,Blue Bird, Thomas Built, Optima…
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2007 Certified Natural Gas Powered2007 Certified Natural Gas PoweredEngines and Vehicles for Fleet ApplicationsEngines and Vehicles for Fleet Applications
• American Honda– Civic GX
• BAF Technologies– 4.6L (Crown Vic/Grand Marquis, Town Car)
– 5.4L (E-350 cargo/passenger van – certifying F150/250 later in 2007)
– 6.8L (E-450 cutaway)
• Baytech Corporation– 6.0L L/M/HD (GM, Isuzu, Workhorse –
pick-ups, vans/stepvans, CFs, cutaways)
– 8.1L (Topkick/Kodiak, cutaways)
• EcoFuel– 6.0L HD (GM)
• Cummins Westport– 5.9L “B Gas Plus” – 195-230hp
– 8.9L “ISL-G” – 250-320hp (replaces 8.3L “C Gas Plus” and 8.9L “L Gas Plus”)
• Emission Solutions Inc.– 7.6L Phoenix NG – 175-265hp
(re-power for Int’l DT466 trucks)
• John Deere– 8.1L HN04 – 250-280hp (‘til 12/07)
• Westport Innovations Inc– 15L “ISX-Gas” – 450hp
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VVehicle Purchase Tax Incentiveehicle Purchase Tax Incentive
• A income tax credit to the buyer of a new, dedicated alternative fuel vehicle:
– 50 percent of the incremental cost of the vehicle; incremental cost cap based on four GVW ranges
– An additional 30 percent if the vehicle meets certain tighter emission standards.
– Tax credit goes to the seller if the buyer is a non-tax paying entity
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• Credits range from $2,500 to $32,000 depending on vehicle weight– $2,500-$4,000 for vehicles under 8,500 lbs. (incremental cost cap : $5K) – $5,000-$8,000 for vehicles between 8,500-14,000 lbs. (icc: $10K)– $12,500-$20,000 for vehicles between 14,000-26,000 lbs. (icc: $25K)– $20,000-$32,000 for vehicles over 26,000 lbs. (icc: $40K)
• Credit is effective for vehicles placed in service after December 31, 2005 and currently set to expire on 12-31-10. Extension to 2016 likely.
• “Conversions” qualify, if retrofit/re-power was done after 12/31/05
VVehicle Purchase Tax Incentiveehicle Purchase Tax Incentive
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Motor Fuels Excise Tax CreditMotor Fuels Excise Tax Credit• The Volumetric Excise Tax Credit for Alternative Fuels (VEETC)
– JOBS Act of 2004 created VEETC for ethanol and biodiesel– SAFETEA-LU (“Highway”) Act of 2005 made CNG, LNG, LPG, and
hydrogen eligible when those fuels are used in on-road vehicles(and some off-road vehicles, such as forklifts)
• A 50 cent motor fuels excise tax credit is paid to the seller:– Per GGE of CNG or per liquid gallon of LNG
• The credit is applied/paid to eligible recipients without regard to the amount of excise tax paid, if any (including tax exempts)
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Natural Gas Vehicle IncentivesNatural Gas Vehicle Incentives
Federal Tax Incentives (discussed already)
State Grants: Check with Clean Cities Representatives
Federal Grants:
• DOT Congestion Mitigation & Air Quality (CMAQ) grant– Up to 80 percent of cost of vehicle
• DOE State Energy Program (Clean Cities) grants– Covers incremental cost of vehicle and up to 10% of station
• EPA– SEP/(“penalty fund) project grants
– Diesel Emission Reduction Program grants
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Refuse Collection Truck Life-Cycle CostsRefuse Collection Truck Life-Cycle Costs(assumes private firm purchases from dealer, fuels at O&O station)(assumes private firm purchases from dealer, fuels at O&O station)
Natural Gas “Clean” Diesel
Cost of refuse collection vehicle $225,000 $173,000
Incremental Cost of CNG vehicle $52,000 -
Vehicle Tax Credit ($32,000) -
Net Incremental CNG Truck Cost $20,000 -
Fuel Use/yr (dge)* 9,350 8,500
Cost/dge** (before fuel tax credit) $1.90 $2.85
Fuel Cost/yr (before fuel tax credit) $17,765 $24,225
Fuel credit @ net $.317/gge ($.351/dge) ($3,282)
Fuel Savings/yr $9,742 -
Simple Payback 2.1 years -
8 Yr. Life-Cycle Advantage*** $57,478 -
* Assumes 2.5mpg (diesel) and 10% fuel consumption “penalty” for S.I.N.G. engine vs diesel-cycle, a differential that is diminishing as 2007 emissions strategies are employed in model year MY’07 engines and more in MY’10.
** Natural gas DGE cost based on $8/Mcf commodity + $.20/kW per DGE compression cost +$.20 M&O expense + $.33 capital/equipment cost + $.09 taxes. Diesel price is rack rate including federal motor fuels excise taxes. Estimate does not include any of $.556/dge CNG tax credit effective 10-01-06 (net credit of $.351/DGE after tax is applied
*** Assumes equal maintenance costs. Natural gas vehicles have documented lower maintenance costs than comparable diesel units. NGV’s maintenance cost advantage is projected to increase as MY 2007-2010 diesel engines and exhaust after-treatment technologies are introduced.
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Municipal Dump/Plow Truck Life-Cycle CostsMunicipal Dump/Plow Truck Life-Cycle Costs
Natural Gas “Clean” Diesel
Quoted cost of dump-plow truck* $168,000 $128,000
Incremental cost of CNG vehicle $40,000 -
Vehicle tax credit (net dealer’s 5% “cut”) $30,400 -
Net Incremental Cost $9,600 -
Fuel Use/yr (dge)** @ 15K miles 3,300 3,000
Cost/dge*** $1.81 $2.62
Fuel Cost/yr $5973 $7860
Fuel credit @ $.50/gge ($.556/dge) $1835
Fuel Savings/yr $3722 -
Simple Payback 2.6 years -
10 Yr. Life-Cycle Advantage**** $27,543 -
* Based on Freightliner M2 with dump-plow package; CNG unit with 3 CNG tank vertical package
** Assumes mixed city/suburban duty cycles, 8mpg (diesel) and 10% fuel consumption “penalty” for S.I.N.G. engine vs diesel-cycle.
*** Natural gas DGE cost based on $8/Mcf commodity + $.20/kW per DGE compression cost +$.20 M&O expense + $.33 capital/equipment cost . Diesel price is rack rate excluding federal motor fuels excise taxes. Estimate does not include any of $.556/dge CNG tax credit effective 10-01-06 (net credit of $.351/DGE after tax is applied.
**** Assumes equal maintenance costs. NGV costs are generally lower.
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Cargo Van/Passenger VanCargo Van/Passenger Van• Sample Applications
– Newspaper, Pkg/Courier Svc, Airport Shuttle
• GVW-9600+ lbs. – Ford E-350, Chevy 3500 Series
• MPG: 10/18 City/Hwy
• Miles /day: 75-175
• Fuel Use: 10-15 gge/day; 2600-3000gge/yr • CNG Premium: $14-16,000 (before fed tax credit)
• Fed Tax Credit: $8000
• Simple Payback: 1.7 – 3.3 years
• Life-cycle cost advantage: $3,570 - $13,750
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Step VanStep Van• Sample Applications
– Pkg Srvc, Bakery/Snack Food, Linen
• GVW-14,000+ lbs.– Workhorse P, Freightliner Custom
• MPG: 4.0 – 6.5
• Mileage: 50-80/day; 325-450/wk; 20K/yr
• Fuel Use: 15-20 gge/day; 4800 gge/yr • CNG Premium: $23-26,000 (before fed tax credit)
• Fed Tax Credit: $20,000
• Simple Payback: 1 - 1.5 years
• Life-cycle cost savings: $30,600 - $63,000
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Urban Class 5-7 TruckUrban Class 5-7 Truck• Sample Applications
– Beverage (beer/soda/water, dairy), Rest. Supply
• GVW - 26,000+ lbs.– Int’l 4000 Series, Freightliner M2
• MPG: 3.25 – 4.75• Mileage: 45-80/day; 250-455/wk; 13-22K/yr• Fuel Use: 14-25 gge/day; 5000-6800 gge/yr • CNG Premium: $48-52,000 (before fed tax credit)
• Fed Tax Credit: $32,000• Simple Payback: 2.75 – 4.2 years • Life-cycle cost savings: $34,800 - $50,000
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Questions?Questions?
Thanks for your attentiveness!
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For more information please contact:
Stephe Yborra
Director of Marketing & Communications
NGVAmerica
400 N. Capitol Street, NW - Suite 450Washington, DC 20001
Director of Market Analysis, Education and Communications
Clean Vehicle Education Foundation
6011 Fords Lake Court
Acworth, GA 30101
[email protected] / [email protected]
(301) 829-2520
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How to Apply For Motor Fuels Excise Tax CreditHow to Apply For Motor Fuels Excise Tax Credit
• Register: Use IRS Form 637, “Application for Registration” (mark “AL” for alternative fueler)
• File Quarterly (if there’s a tax liability): IRS Form 720, “Quarterly Federal Excise Tax Return). Apply credit toward excise tax owed (if any). How you recover “overage/rebate” depends on tax status:
– A. Taxable Entities: File IRS Form 4136 at end of year to recover credits over and above those applied against quarterly tax liability.
– B. Tax-Exempt Entities: File IRS Form 8849 and addendum form Schedule 6 as often during year as desired as long as there is at least one transaction
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Case Study: Linen ServiceCase Study: Linen Service• 14 CNG stepvans @ 18gge/day;
– Uses 255gge/day or 66,300gge/year
• Has four I-R 25hp compressor station– Redundancy + 75% add’l capacity to grow
• Cost per CNG gge: $1.484 (saves $1.50/gge)– Gas Bill: $1.036/gge
• Commodity (cost of the gas): $0.737/therm = $.9213/gge (124,800Btu/therm)• Local gas company service (fee to transport gas to his meter): $.08/gge• State special assessments and local municipal use taxes: $.035
– Electric compression costs (estimated @ 1Kw/gge): $.18/gge– “Sinking fund” to cover station maintenance & operations: $.17/gge– Capital amortization of station equipment: $.33/gge (based on $220K over 10 yrs)– State motor fuel excise tax: $.085/gge– Net $.317/gge federal tax credit ($.183/gge excise tax less $.50/gge credit)