Energy, Environment, & Economics

1. Energy, Environment, & Economics DFW Clean Cities Clean School Bus Workshop September 13, 2006

2. Energy • We import almost 60% of our crude oil from overseas • In the very words of our President we have become “addicted to oil” • There are domestically produced fuels that can be utilized to offset the current import levels • These fuels support local, state, and USA economy • These fuels are available today…

3. Headlines from the news • “Gasoline Prices Soar” • “Citing high earnings, Congress considers passing a tax on ‘windfall’ profits of oil companies” • “President calls for a ‘massive increase’ in domestic production of ethanol”

4. Déjà vu, all over again… These headlines are all from the 1970’s

5. Our Environment • While Air Quality in the USA is getting better, still has much room for improvement • Sources such as the American Lung Association, attribute many respiratory illnesses to mobile source pollution caused by vehicle exhaust emissions • Diesel emissions have been targeted by federal agencies. 2007 standards for these vehicles will be extremely tough and certainly more costly to achieve • Reducing Nitrogen Oxide, Carbon Monoxide and Total Hydrocarbon emissions would be a good thing for all of us

6. Economics • Gasoline and Diesel prices have risen steadily over the past two years and we recently reached “new heights” at the retail island • Supply and Demand continue to plague the industry • Demand for diesel in Europe based on their vehicle consumption will continue to keep USA prices near or above gasoline and at a premium for the foreseeable future • Domestically produced alternative fuels are good for the national, state and local economies

7. The Solution • Implement a fleet strategy to incorporate the usage of alternative fuels such as propane • These fuels: • Are primarily domestic products • Help reduce harmful emissions • Typically more economical • Have incentives supported by the recently passed Energy Bill

8. Propane 101 • USA Propane production totals about 1.1 million barrels daily • Propane is a by-product of petroleum refining and natural gas processing • 150 USA refineries account for about 45% of total USA Propane production • 500 USA natural gas processing plants account for the remaining 55% of USA Propane production • Propane pricing is influenced by the following factors: • Crude oil pricing to some degree • Natural gas pricing to some degree • Propane supply/demand fundamentals • Economy • Weather (particularly in winter) • Proximity to supply and related transportation costs

9. Propane Supply…Not A Problem! • USA Retail Industry • 8,000 Retail Propane Companies • 13,500 Retail Propane Outlets • 120,000 Propane Industry Employees • 16.7 Million Propane Customers • Transportation / Logistics • 70,000 Miles of Propane Pipeline • 16,000 Propane Railcars • 5,000 Propane Transports • 36,500 Propane Bobtail Delivery Trucks • 7,000 Propane Cylinder Delivery Vehicles

10. A Few Propane Motor Fuel Users • TXDoT has more than 4000 propane fueled vehicles statewide • City and County fleets, such as Ft. Worth, San Antonio, Bexar County • VIA Metropolitan Transit - San Antonio • Schwan’s Food Delivery Fleet • Sparkletts Water • Dallas County ISD • North Side ISD San Antonio

11. Costs of Implementation • Propane • Complete Skid Station 2,000 gallon tank - $35,000* • Vehicle Conversion – from $4,500 to $10,000 • Price per gallon – currently from $1.70 to $1.85 which includes state and federal tax *Cost are approximations only and can vary with location and options needed

12. Federal Support • Infrastructure Support - Jan. ‘06 thru Dec. ‘09 • 30% up to $30K tax credit for propane and E85 station equipment that will be publicly accessible • Provision for non-tax paying entities to pass credit back to taxable entity. • Fuel Use – Oct. ’06 thru Dec. ‘10 • Propane – VETC of .50 per gallon with a .06 increase in federal highway tax for a net of .44 per gallon tax credit

13. Federal Support • Alternative Motor Vehicle Credit • Provides a tax credit to the buyer for the purchase of a new dedicated alternative fuel vehicle such as propane • 50% of the incremental cost of the vehicle, plus an additional 30% if the vehicle meets certain tighter emission standards • Credits range from $2,500 to $32,000 depending on the size of the vehicle and for non-tax-paying entities, the seller of the vehicle can take the credit • The credit is effective on purchases made after December 31, 2005 and expires December 31, 2010

14. Our Stations and Equipment • We have been chosen by NASA, The US Army, many state & city fleets and foreign countries to provide support

15. The Bexar County Station Bexar County Multi Fleet Use Facility for Propane & E85

16. VIA Metro – San Antonio, Texas

17. LPI – Liquid Propane Injection

18. About LPI • The LPI system is a dedicated, liquid propane injection system that meets the most stringent emission standards, EPA and CARB • The 1st Engine Family is the GM 8.1 Medium Duty Truck Application done in conjunction with GM, Monroe, and GM Medium Duty Truck Centers in North America • The 8.1 became available in April 2006 and is 2008 EPA Compliant and will be 2010 EPA Compliant during 2007 • Platform is perfect for delivery vehicle, shuttle bus, school bus and other medium truck applications • School Bus OEM project underway with PERC, Blue Bird, GM and Powertrain Integration • More technical details available upon request

19. EPA Certification

20. LPI – Liquid Propane Injection Supply Line to Engine Fuel Rail Assembly Fuel Injector Fuel Injector Assembly Fuel Injector Harness Return Line

21. Who is Clean Fuel USA? • Clean Fuel USA has been providing proven and reliable alternative fuel fueling solutions for customers all over the world for more than 13 years. • Design, Engineer and Manufacture high quality, alternative fuel, fueling stations – we don’t simply package other peoples equipment • No middleman means better quality, better service and a better price • Provide Fuel Management Hardware & Software to control data and provide customized fleet reports. This allows managers to know: • Which vehicles did not fuel this morning or fuel irregularly • Which vehicles are burning inappropriate amounts of fuel • How to optimize vehicle routes and refueling times • When vehicles are traveling more distance than scheduled and more • We have offices in: Georgetown, TX Celaya, Mexico Detroit, MI Buenos Aires, Argentina Lake Charles, LA New Delhi, India

22. Some of Our World-Class Partners For more than 100 years, Wayne has been a leading supplier of integrated solutions to the global retail petroleum industry. Wayne has continually been on the forefront of innovative technology, and to this day Wayne fuel dispensers, point-of-sale systems, and after-sale support services continue to revolutionize the industry Gilbarco is a leading global supplier of fuel dispensing equipment, fully integrated point of sale systems for the global petroleum marketplace. Gilbarco is headquartered in Greensboro, North Carolina with sales, manufacturing, research, development, and service locations in North and South America, Europe, Asia, the Pacific Rim and Australia Since 1927 Blue Bird Corporation has been known for innovation and customer service. Blue Bird Corporation continues to set industry standards with its innovative design and manufacturing of school buses, commercial buses and motor coaches. More than seventy-five years later, Blue Bird has grown to nearly 3,000 employees and three facilities in two countries. General Motors Corp., the world’s largest automaker, has been the global industry sales leader since 1931. Founded in 1908, GM today employs about 325,000 people around the world. It has manufacturing operations in 32 countries and its vehicles are sold in 200 countries. In 2004, GM sold nearly 9 million cars and trucks globally, up 4 percent and the second-highest total in the company’s history. GM’s global headquarters are at the GM Renaissance Center in Detroit. IMPCO Technologies Inc. manufactures and markets products and systems that allow on-highway and off-highway engines to operate on clean burning, gaseous fuels such as propane and natural gas. Our products, and just as important, our integration expertise, enable Original Equipment Manufacturers (OEMs) to satisfy both customer specifications and government emissions regulations for application in the transportation, industrial and power generation markets.

23. This is how we can help you! • Clean Fuel USA can support your efforts by providing: • Station Design, Specifications and Project Management • Station Equipment for Fueling with Propane or E85 • Fleet Management Controls and Data Reporting by Vehicle • Annual Fuel Contracts for Propane or E85 • Fuel Pricing that includes Risk Management to ensure prices are based relative to gasoline • Leading Engine System technology for propane fueled vehicles and a Master Dealer network to ensure vehicles have field support that includes parts and service • Fleet Vehicle Purchase Planning based on desired goals to incorporate light and medium duty alt fuel vehicles in your fleet • Information and documentation to ensure you receive all available Tax Credits from the recently passed Energy Bill and ensuring the credit can be passed along to an acceptable entity if necessary

24. Where are we going?

25. Conclusion & Next Steps • What is your timeline? Is now the right time? • How can we help you achieve your goals? • Let us become your partner to help you take these critical first steps to save on fuel, acquire cleaner operating vehicles to support federal, state & local environmental goals and move toward increased usage of domestically-produced fuels

26. Contacts • Clean Fuel USA 116 Halmar Cove Georgetown TX 78658 512-942-8300 office / 512-942-8311 fax www.cleanfuelusa.com • Mike Merwarth 512-585-4501 cell michael@cleanfuelusa.com