ALTERNATIVE.EVERY

Philadelphia Diesel Difference Meeting Bill Boyce Cummins Westport Inc.

Cummins WestportA Cummins JV Company

• CWI is a 50:50 joint venture company based in Vancouver, BC Cummins Inc. - world’s largest builder of commercial

diesels, Westport Innovations Inc. - world leader in gaseous fuel

engine technology

• CWI offers 6 to 9 litre alternative fuel automotive engines. (CNG, LNG, LPG)

• Engines are manufactured by Cummins.• Local parts and service support through

Cummins Distributor network.

Cummins Inc.• More than 75 years –Leader in American diesel

manufacturing• World’s largest builder of commercial diesels• Designs, manufactures, distributes, and services

– electric power generation systems, engines, and related technologies, including fuel systems, controls, air handling, filtration, and emissions solutions.

• Headquartered in Columbus, Indiana (USA), – more than 550 company-owned and independent distributor

locations in 160 countries and territories. With 28,000 employees worldwide

– Cummins reported sales of $11 billion in 2006

• Cummins product development & manufacturing alliances include:

– Case, New Holland, IVECO, Komatsu, Westport, and Scania.

• Recognized as the world leader in gaseous fuel engine technology

• Originated from research at UBC in early 1990’s

• Public company on TSE, formed in 1995

• 170 people at Westport (including Cummins Westport, Westport Europe and Westport Germany)

• State-of-the-art facilities inVancouver, Canada:

7,400 m2 (78,000 ft2) of laboratory and office space

• Brought Gas expertise

Westport Innovations Inc.

Technology Innovation and Application Award

Why Natural Gas Engines for Buses & Trucks? Emissions Leadership

ISL G is the only Urban Bus and Truck engine that met 2010 EPA Emissions at launch in 2007

Greenhouse gas advantages

Energy SecurityReduced reliance on imported

oilLower fuel costsPathway to hydrogen

Emerging Economic BenefitsContinuous reliability improvementISL G Improved EfficiencyGreatest benefits in high fuel use

applications

U.S. Emissions Standards Continue to Change!

0.010.01 0.100.10

0.20.2

1.21.2

2.52.5

4.04.0

5.05.0

19941994

19981998

20022002

20072007

20102010

PARTICULATE [g/ HPPARTICULATE [g/ HP--hr]hr]0.00.0

0.00.0

NO

x /

NO

x+

NM

HC [

g/H

PN

Ox /

NO

x+

NM

HC [

g/H

P-- h

r]hr]

15 PPM15 PPM

500 PPM500 PPM

SULFURSULFUR

0.010.01 0.100.10

0.20.2

1.21.2

2.52.5

4.04.0

5.05.0

19941994

19981998

20022002

20072007

20102010

PARTICULATE [g/ HPPARTICULATE [g/ HP--hr]hr]0.00.0

0.00.0

NO

x /

NO

x+

NM

HC [

g/H

PN

Ox /

NO

x+

NM

HC [

g/H

P-- h

r]hr]

15 PPM15 PPM

500 PPM500 PPM

SULFURSULFUR

ALTERNATIVE.EVERY

Why Diesel?

Cummins original marketing plan…

C15 Rev 6/98

Simpler Cleaner Fuel

Complex Hydro Carbon

Simplest Hydro Carbon

Natural Gas (methane) has highest hydrogen-to-

carbon ratio of any hydrocarbon

What is changing?• Higher vehicle pricing to meet 2007 EPA

requirements

• Higher cost of Ultra Low Sulfur diesel fuel

• Additional costs to meet 2010 EPA requirements?

• The shifting economics of diesel operation

Diesel / NG Pathways 2007 to 2010Diesel

ULSDActive Diesel Particulate FiltersCEGR (ISC/ISL)NOx Adsorber or SCR

SCR more efficient but a liquid that will be regulated and taxed

Crank Case Ventilation (CV) ’07Lube Oil

Will require new, low ash oilNew Oil Filters

=Phase In

1.2 NOx + 0.01 PM (Avg.) in 20070.2 NOx + 0.01 PM in 2010

Natural Gas No change- CNG or LNG capable Replace Oxicat with Three Way Catalyst Add- CEGR (ISL G) No NOx adsorber required

No CV required–reduced maintenance vs. LBSI

No Change- Low Ash Oil in use today CES20074

Fleetguard Filter

=No Phase In

0.2 NOx + 0.01 PM in 2007

What are your alternatives?

• Get out your checkbook

• Manage better

• Keep increasing costs to a minimum

• Change vehicle specifications

• Maximize vehicle specs for fuel economy

• Consider other alternatives

Alternative Fuel Options

• Fuels– Biofuels (non-biodiesel ester)– Biodiesel– Di-Methyl Ether (DME)– Ethanol– Methanol– Gas to liquid– Coal to liquid– Water/diesel emulsions– Ethanol/diesel emulsions– Natural Gas (CNG / LNG)– Propane– Hydrogen– Hythane (NG + H)

• Criteria– Availability– Efficiency– Emissions– Infrastructure– Price– Safety

Alternative Fuel PropertiesCharacteristics Diesel Biodiesel MeOH EtOH NG LPG

Structure C18H36 C1 8H35O2 CH3OH C2H5OH CH4 C3H8

Cetane No. 40+ 40+ 10 10 -- 5

Octane No. -- -- 95 95 120 95

Energy (LHV) btu/gal(x1000) 128 119 57 76 85(LNG) 84 btu/cu. ft 1000(CNG)

Energy Storage 1 1.1 2.3 1.7 1.7 (LNG) 1.6 (relative vol.) 3.7 (CNG)

Volume and Range ComparisonTank Space

per 100 miRange Per 100

Gallons Tank Space

380 mi

170 mi

LNG

CNG26 Gal.

58 Gal.

Diesel

* Estimate based on 6.5 mpg diesel, and same efficiency for NG vehicle

15 Gal.650 mi

What About Natural Gas ?

• Cleaner burning than diesel• Abundant supply in North America• Engine efficiency improving over diesel• Renewable fuel – LFG to LNG• Can be less expensive to operate than diesel• Latest technology engines available

Comparison of Diesel to LNG• LNG

– 1 U.S. gallon weighs 3.4 lbs.– Heating value is 21,500 Btu

per lb, and 73,000 Btu per gallon.

– LNG is produced through a cryogenic process in which the gas is cooled to -258 degrees F. At that temperature point it becomes a liquid.

– In the liquid state, the vehicle can carry more fuel than CNG in a smaller area.

– Engine doesn’t know whether fuel is LNG or CNG, fuel enters engine as a gas.

• Diesel– 1 U.S. gallon weighs 7.1 lbs.– Heating value is 18,250 Btu per

lb and 129,575 Btu per gallon.

Natural Gas is a Safe Fuel

• Lighter than air• Rises• Doesn’t accumulate in low places• Rich mixture burns off slowly• Ignites at temperatures of approx.

600 C• Non toxic• Odorless-detection fragrance is

added• Evaporates quickly

• Heavier than air• Descends • Accumulates in low places• Rich mixture explodes• Gas and diesel vapors ignite at

approx. 200 C• Toxic, especially gasoline• Strong inherent odor

• Evaporates slowly at room

temperature

CNG Liquid fuels

CWI Natural Gas Engines Reduce Urban Noise

50.0

70.0

90.0

Peak Torque, F

ull Load

Low Idle, N

o Load

Engine Test Mode

Diesel bus engine C Gas Plus

Natural gas is 11.8 decibels quieter at idle

Natural gas is 6.1 decibels quieter at peak torque and load

50.0

70.0

90.0

Peak Torque, F

ull Load

Low Idle, N

o Load

Engine Test Mode

Dec

ibel

s d

B(A

)

Diesel bus engine C Gas Plus

Natural gas is 12.2decibels quieter at idle

Natural gas is 4.7decibels quieter at peak torque and load

Communities notice the natural gas noise

advantage.

ONE Diesel engine idling is louder than TEN natural gas engines

idling together

Alternative Fuel Challenges

• Costs – Infrastructure and equipment

• Performance

• Emission reduction trade-offs

• Infrastructure and fuel availability

• Impact on engine component reliability

ALTERNATIVE.EVERY

The Global Market for Energy

U.S. Transportation Petroleum Use

0

2

4

6

8

10

12

14

16

18

20

22

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Source: Transportation Energy Data Book: Edition 22, September 2002and EIA Annual Energy Outlook 2003, January 2003

Mil

lio

ns

of

Ba

rre

ls p

er

Da

y

Domestic ProductionDomestic

Production

Actual Projected

Light Trucks

Heavy Vehicles

Year

Air

MarineMarine

RailOff-roadOff-road

Cars

•Diesel and natural gas prices follow a fairly predictable pattern in relation to crude oil prices with natural gas being less expensive than diesel fuel•When crude oil prices rise, natural gas prices tend to rise less than diesel prices do, widening the price gap

•If anything, at today’s higher crude oil prices natural gas prices are less than this historical relationship

Natural Gas Fuel Costs Less

Price History for Crude Oil, Diesel Fuel, andPipeline Natural Gas for Commerical Customers

442.5¢

166.87¢

$125.40

0

50

100

150

200

250

300

350

400

450

Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Pric

e [U

S $

per

bar

rel o

r U

S c

ents

per

die

sel-e

quiv

ale

nt g

allo

n].

U.S. No 2 Diesel Retail Sales by All Sellers [Cents per Gallon]

Natural Gas for Commercial Consumers [Cents per Diesel-Equivalent Gallon]

Cushing, OK WTI Spot Price FOB [Dollars per Barrel]

Diesel Fuel

Natural Gas

Crude Oil

data source: US DOE Energy Information Administration

due to a lag in data reporting on the EIA website, NG prices are only to March 2008

(12.84 $/MMBTU)

$12.84 MMBTU = $77.04 Barrel$12.84 MMBTU = $1.83 DGE

US Price of Diesel and Natural Gas vs. Crude OilMonthly Prices, April 1994 to January 2008

y = 0.0166x + 0.525

R2 = 0.7764

y = 0.0319x + 0.5357

R2 = 0.9743

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

10 30 50 70 90 110

Crude Oil Spot Price (Cushing, OK WTI Spot Price FOB) [US Dollars per Barrel]

Fue

l Pric

e [U

S D

olla

rs p

er D

iese

l-Equ

ival

ent G

allo

n]

U.S. No 2 Diesel Retail Sales by All Sellers [Dollars per Gallon]

Price of Natural Gas Sold to Commercial Consumers in the U.S.[Dollars per Diesel-Equivalent Gallon (Westport unit conversion)]

data source: US DOE Energy Information AdministrationWestport analysis

Price Comparison PlotNatural Gas price advantage grows as crude prices riseNatural Gas price advantage grows as crude prices rise

Conclusions• Both diesel and natural gas prices have trended

upward with crude oil prices.

• The diesel to CNG price gap is widening.

AND• CNG to Diesel fuel economy gap is closing

• These factors can improve CNG Vehicle Life Cycle Costs.

ALTERNATIVE.EVERY

Natural Gas Engine Technology for 2007

• Cummins has been developing natural gas fueled engines for heavy duty vehicle applications since the 1980’s and marketing them since the early 1990’s

• Today over 17,000 engines have been produced powered by compressed and liquefied natural gas or propane (LPG)

Cummins Natural Gas History

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

1990 1992 1994 1996 1998 2000 2002 2004 2006

CumulativeAlt FuelSales

Introducing Next Generation 2007 Natural Gas Engine Technology• ISL G currently meets

2010 emissions standards ahead of schedule

• 85% lower NOx than previous engines

• 34% more torque at idle• Improved efficiency =

improved fuel economy• No exhaust related

maintenance costs

Four Generations of Natural Gas Engines

1998C8.3G Mechanical

2001C Gas Plus

2004 L Gas Plus

2007

ISL G

• Stoichiometric EGR combustion

• Three Way Catalyst

• First HD engine certified 2010 NOx and PM levels

ISL G – Next Generation Natural Gas Engine– Stoichiometric Engine

– Lowest emissions • 0.20 g/bhp-hr NOx

• 0.01 g/bhp-hr PM

– Higher efficiency• Target: 5% fuel economy

improvement vs. CWI’s current products

– Diesel-like reliability & durability

– Improved performance - Higher clutch engagement torque

ISL G 280 vs. C Gas Plus 280Torque (lb-ft)

550

600

650

700

750

800

850

900

950

1000 1200 1400 1600 1800 2000 2200 2400

Engine Speed (rpm)

Torq

ue (l

b-ft)

ISL G 280 C Gas Plus 280 ISL05 280

The Two Key Emission Technologies

for 2007 ISL G Natural Gas Engines

• Cooled Exhaust Gas Recirculation (CEGR)

• Three Way Catalyst (TWC)

Cummins

CumminsEmissions Solutions

Change to Stoichiometric Combustion Engine.

Meet 2010 emission standards in a one step change

No further aftertreatment is required

Customer Experience-Diesel vs. NG

Just Like Cell Phones, Natural Gas Engines have Continued to Improve

Better*WorseWorseWorseLCC

2007200119961989Timeline

SimilarSimilarWorseWorseDurability

Better*SimilarWorseWorseFuel Cost/Mile

SimilarSimilarWorseWorseReliability

BetterBetterBetterBetterEmissions

’07 ISL GC PlusC 8.3L 10 G

Better*WorseWorseWorseLCC

2007200119961989Timeline

SimilarSimilarWorseWorseDurability

Better*SimilarWorseWorseFuel Cost/Mile

SimilarSimilarWorseWorseReliability

BetterBetterBetterBetterEmissions

’07 ISL GC PlusC 8.3L 10 G

*Must Have Fuel Price Differential to be lower

Consider the Natural Gas Alternative

• Things have changed since 1989

• Meeting 2010 emissions in 2007

• Natural gas as a lower cost alternative

• Natural gas not for everyone

ALTERNATIVE.EVERY

Life Cycle Cost Drivers

Natural Gas: Key Economic Drivers1. Six fold increase in CWI reliability/durability since 2001

2. CNG is closing maintenance cost gap

– Basic service intervals same as diesel– Spark ignition will result in slightly higher scheduled maintenance

costs

3. Fuel cost savings can be significant

– CNG’s lower cost contributes to lower LCC– CWI Fuel economy gap closing

• 17% in 2005• 10% in 2007• 7% in 2010

Fuel Pricing Creates Economic AdvantageFuel price differential creates overwhelming benefit for NG

Natural Gas Breakeven Price: $0.73 Less/DGE $0.93 Less/DGE $0.62 Less/DGE

Transit Refuse Truck $1,500/bus/yr $1,200/truck/yr $1,200/truck/yr

200 buses 50 Trucks 50 Trucks

$7.2 M Capital $875K Capital $875K Capital45,000 miles-3.5 mpg 15,000 miles-1.5 mpg 65,000 miles-6.5 mpg

Every 10 cents Saved in Fuel price = thousands in savings

$100 USD Crude!

Highway/Energy Bill Private Fleets Currently Using Diesel Fuel

$0.60

LNG $/ DGE

CNG$ / DGE

CNG$ / DGE

To Fleet

To Fuel Provider

To Fuel Provider or

Fleet

Net Benefit

$32,000 Vehicle Credit To Fleet

$0.68

$30,000 Infrastructure Credit To Fleet

Energy Bill*

Highway Bill*

All Infrastructure

Don’t Own Infrastructure

Own Infrastructure

* CWI’s Interpretation Subject to IRS Rule Making

$0.60

Oct 1, 2006

Natural Gas Vehicles Ease Squeeze on City Budget

• Source - KFSN Fresno, CA Friday, 21 March 2008 USA, Fresno

The Californian city of Fresno is celebrating it's investment decision of five years ago, when it switched some of it's fleet to natural gas. KFSN reports with the price of diesel fuel skyrocketing so far this year the city has been forced to pay out $400,000 dollars more to fuel its fleet than budgeted but, "we would have been $1.2 million over had we not switched to liquid natural gas (LNG)," said Joseph Oldham, Fresno Fleet Supervisor.

"Now we've seen not only emissions benefits but cost savings by running alternative fuels." Compared to the typical diesel garbage truck the city's 80 natural gas powered ones are not only cheaper to run they're quieter and don't pollute the air as much. By the Year 2010 Fresno plans to replace its' entire fleet of garbage trucks by ones that run on natural gas, on the way to even bigger savings down the road.

ALTERNATIVE.EVERY

Where are we now?

ISL G ApplicationsREFUSESpecialty BusTruck

OEM Availability North America

OEM Model Segment B Gas Plus B LPG Plus ISL G Comments

Sterling Truck Setback 113 (Class7/8) MD/HD Truck X LNG May '08 -CNG option in '09

American LaFrance Condor Refuse XAutoCar WX / WXLL Refuse XCrane Carrier LCF Refuse XPeterbilt 320 Refuse X

Mack TerraPro Series Refuse X New '08Blue Bird Ultra LF Shuttle XEl Dorado National Axess/E-Z Rider II/Transmark RE/XHF Shuttle X XFreightliner Custom Chassis MB-55 Shuttle X XOptima Bus AH-28 (CNG + Propane) Shuttle X XBlue Bird All American School Bus X Available July '08

Thomas Bus Saf-T Liner School Bus X Available July '08Elgin Eagle/Broom Bear/Crosswind Sweeper X XAllianz Sweeper 4000 Sweeper X XSchwarze A7000 Sweeper X X

Tymco Model 600 Sweeper X XNABI 35 LFW/40 LFW/60 BRT Urban Bus XNew Flyer 30 LF/35 LF/40 LF Urban Bus X

Orion Orion V HF/Orion VII LF Urban Bus XCapacity TJ9000 (LNG), TJ5000 Yard Spotter X X X ISL G now availableOttawa Yard Spotter X X

Re-PowerComplete Coach Works Freightliner M2 Business Class MD/HD Truck X ISL G Re-Power

Fontaine Modification Company Freightliner M2 Business Class MD/HD Truck X

August 2008

Similar Maintenance ScheduleEvery 12,000 km Every 24,000 km Every 36,000 km Every 48,000 km

(7,500 Mi), 500 Hrs (15,000 Mi), 1000 Hrs (22,500 Mi), 1500 Hrs (30,000 Mi), 2000 Hrs

or 6 Months (1)(3) or 12 Months (1)(3) or 18 Months (1)(3) or 2 Years (1)(3)

Whichever Comes First Whichever Comes First Whichever Comes First Whichever Comes First

Operator's Report - Check Catalyst Housing - Check Exterior Drive Belt - Check Spark Plugs and Boots- Replace (6) Vibration Damper - CheckEngine Oil - Check, add if required Air Cleaner - Check Automatic Belt Tensioner - Check Ignition Coils - Check Turbocharger - CheckEngine Coolant - Check, add if required Charge Air Cooler - Check Fan Hub, Belt Driven - Check Engine Coolant - Flush and ReplaceCooling Fan - Check Charge Air Piping - Check Water Pump - Check Air Compressor - Check

Radiator Hose - Check Lubricating Oil - Change(4) Catalyst - Check

Air Intake Piping - Check Lubricating Oil Filter - Change(4) Engine Fuel Filter - Replace

Fuel Filter - Drain(2)

Supplemental Coolant Additives

(SCA) and Antifreeze - Check(5) Overhead Valve Lash- Adjust (7)

Throttle Response - Check Coolant Filter - Change(5)

Crankcase Breather Tube - Check

7. Initial valve lash adjustment only - therafter regular adjustment interval is 2000 hours

6. Use only Cummins authorized spark plugs for scheduled maintenance or repairs. The use of unauthorized parts can affect performance and emission control system. The recommended 36,000 km [22,500 mile] interval is based on an average vehicle speed of 24 kph [15 mph] and must be derated accordingly for slower speed applications (i.e. 1500 hr times average kph [mph] = distance maintenance interval).

Daily or Refueling

ISL G Maintenance Schedule(1)

1. Follow the manufacturer's recommended maintenance procedures for the starter, alternator, generator, batteries, electrical components, air compressor, refrigerant compressor, fan clutch, and OEM fuel filter.

2. Interval period for draining the fuel filter is dependent on the fueling station and varies for each location. The drain interval should be adjusted to the time required to accumulate no more than one ounce of oil in the fuel filter.

Note: Refer to the appropriate manual for complete inspection and maintenance procedures.

3. At each scheduled maintenance interval, perform all previous checks in addition to the ones specified.

4. Refer to Table 1, Oil Drain Intervals for oil and filter change intervals based on average speed.

5. Do not change the coolant filter if the SCA is over 3 units. Refer to Section V.

Same Schedule as Diesel – Some

Different Maintenance

Items

Warranty - Every Coverage

•Base Warranty for Bus/Shuttle, School Bus and Truck are the same as dieselBase Warranty for Bus/Shuttle, School Bus and Truck are the same as diesel

•Extended Coverage options are available for Truck and Bus CustomersExtended Coverage options are available for Truck and Bus Customers•5 yr 200,000 mile or 300,000 mile - Transit5 yr 200,000 mile or 300,000 mile - Transit•4 yr / 5 yr 150,000 mile Vocational -Truck4 yr / 5 yr 150,000 mile Vocational -Truck•4yr / 5 yr 150,000 mile Turbocharger -Truck4yr / 5 yr 150,000 mile Turbocharger -Truck•6 yr, 300,000 mile Major Component – All applications6 yr, 300,000 mile Major Component – All applications

•All warranty programs administered per Cummins Standard PoliciesAll warranty programs administered per Cummins Standard Policies

What is Next?• Think about what happens next with fleet fuels?

• Think about using Natural Gas for the right applications?

• Find the best alternative for your duty cycle?

Biomethane• Using biomethane as a renewable fuel has significant

greenhouse benefits:• During combustion, biomethane is converted to carbon

dioxide (a 21 times greenhouse gas savings)• Biomethane is a renewable resource that displaces fossil

fuel 100%.• The biomethane that is burned as fuel in place of fossil

fuels produces less greenhouse gas than the fuel it replaced.

• Cummins Westport approves the use of up to 100% biomethane that meets published natural gas fuel specifications per Cummins Application Engineering Bulletins

Summary

• Proven technology – Cummins support• Commercially available from OEM’s

– Listing at www.cumminswestport.com

• Lower emissions- tailpipe and community noise.• Lower total costs with natural gas• Lower Well to Wheel Greenhouse Gas• Biomethane low carbon option

Thank You

Bill Boyce

East Coast Regional Sales and Marketing Manager

Tel: 330-534-8352

Mobile: 330-720-9785

Email: bill.boyce@cummins.com

www.cumminswestport.com