Clean Energy Update to the California Air Resources Board

1. Clean Energy Update to theCalifornia Air Resources Board Todd R. Campbell Director of Public Policy September 2, 2009

2. Agenda Company Vision Low Carbon Fuel Standard Consideration

3. Policy National policies are key drivers worldwide Energy Security and Greenhouse Gas reductions “National Program” and “RFS Phase 2” Economics – Create green US jobs Regional policies are key in U.S. California fleet rules California petroleum reduction goals for state (AB 1007) California GHG legislation (AB 32 and Low Carbon Fuel Standard or “LCFS”) Northeast/Mid-Atlantic consideration of LCFS Individual business strategies Refuse companies promoting green image Airport taxi/shuttles to reduce emissions at airports AT&T U.S. finally realizing it needs An Energy policy Petroleum reduction strategy GHG strategy

4. How Policies Shaping International NGV Growth • 1,450,000 vehicles/1,800 stations in last 9 months! • World average of 675 vehicles/station (LD)

5. Notable NGV Growth Worldwide: 95% NGVs are Light-duty vehicle, 2% are Trucks, 3% are Buses 76% of New CNG Stations are Public

6. World NGV Products – Consumer Oriented World NGVs (millions) Note: Austria 2008 - 69 makes & models in NG

7. Leadership in Advancing NGV Technologies Acquisition of BAF Technologies and Vehicle Production Group (VPG) Financed the first 100 Kenworth LNG trucks at the Ports of LA and LB Successfully advocated to broaden the CPUC’s Order Instituting Rulemaking to include NGVs and encourage NGV and EV Industry co-op Supporting AT&T’s 8,000 AFV purchase announcement with fueling infrastructure (decision changed thinking at Ford) VW Passat Fiat Multipla VPG MV1 Toyota Camry CNG HEV Opel Zafira • Support Mercedes, Fiat, and other OEM interests in bringing over NGVs • Support OEM advancement like the Toyota Camry NGV HEV

8. Expanding Products and Markets NGV technology exists worldwide Capable of expanding the number of engines & OEM products Adapt technology to new engines and vehicle platforms Adapt NGV technology to include hybrid technologies

9. Leadership in supporting Heavy Duty Class 5-8 Trucks 2007 saw Sterling, Kenworth, Peterbilt, Freightliner offer HD trucks Volvo/Mack will bring NG refuse product to market in 2009/2010 Volvo/Mack developing 13L engine for Class 8 trucks Discussions with International on natural gas product All refuse truck manufacturers offer natural gas All transit bus manufacturers offer natural gas

10. US possesses an Ocean of Natural Gas • 22 major gas shale basins in U.S. • Only a few have been significantly explored • Have developed the technology to extract gas from these shale deposits • 6% of U.S. gas produced from Barnett Shale • Production surplus could grow to 27 BCF/day by 2015 • Current reserve estimates 2240 TCF = 118 years

11. Landfill Gas Landscape 578 landfills that EPA monitors in Landfill Methane Outreach Program 422 landfill projects producing electricity Difficulty in emission permits for electricity generation projects making electricity generation less attractive Restrictions on power generation can’t maximize biomethane use Considering shifting to gas cleanup as more viable market 24 pipeline quality gas projects in U.S. Using a variety of cleanup technologies Multiple projects under construction New technologies emerging every day Technology is becoming cost effective for smaller landfills

12. What Value Carbon? WTW Greenhouse Gas Emissions (in grams CO2eq/MJ) * CARB October 2009 Update on the CARB LCFS Program, WTW data on p. 22-23.

13. Leadership in Hydrogen Development:LAX, Translink, and CA Fuel Cell Partnership • Partnership with GM to support Equinox • Support Translink HCNG fleet • Believe in strong bridging connection between CNG and H2

14. Regional Cluster Example – Los Angeles • 65 Stations in greater Los Angeles area • Plus over 200 additional private stations • Great market opportunity for OEMs to introduce NGV product • Existing infrastructure can accommodate more than 100,000 additional NGVs • California Infrastructure 450+ stations is the largest in the U.S.

15. Heavy-duty Trucking Regional Cluster • Regional trucking out of ports of California can be accommodated with minimum LNG infrastructure • Can be expanded to intrastate • Eventual expansion to major N-S and E-W routes out of California • Ultimately throughout the U.S.

16. Agenda Company Vision Low Carbon Fuel Standard Consideration

17. Energy Economy Ration for HDV NGVs • Proposed LCFS unfairly penalizes natural gas vehicles by applying an EER value that includes aging fleet population • EER for diesel fails to assume same principles (value only reflects current engines) • Current NGV technology for HDVs more efficient than 0.90 value • Proposed LCFS also fails to account for past GHG benefits that aging NGV population over diesel counterparts • Recommend that CARB average current NGV HDV technology without the inclusion of what’s left of the aging NGV population and to allow site specific EERs when specific fleets can be identified

18. Conclusion/Recommendation Summary • Worldwide NGV market mature and can provide immediate reductions in fuel carbon intensity • North American natural gas is abundant, affordable, and the lowest carbon intense fossil fuel • Natural gas performance can improve with hybrid- and plug-in hybrid drive platforms, and biomethane or hydrogen blending. • NGV Industry focused to deploy NGVs in key markets to maximize volume. • Suggest more accurate EER application for HHDV NGVs • EER for spark-ignited technology and HPDI (pilot-ignited) technology • Clean Energy and NGVAmerica support the Northeast/Mid-Atlantic adoption of a LCFS • RFS Phase 2 and National Program will not solve the need for low carbon fuels.

19. Thank you Todd R. Campbell 562-493-2804 cleanenergyfuels.com