XXII Congreso de la Asociacion Iberoamericana de GLP

1. XXII Congreso de la Asociacion Iberoamericana de GLP Rio de Janeiro, Brazil June 28, 2007

2. Introduction Authorized by Congress in 1996, Propane Education and Research Act “to enhance consumer and employee safety and training, to provide for research and development of clean and efficient propane utilization equipment, and to inform and educate the public about safety and other issues associated with the use of propane.” Congress authorized the creation of the Propane Council in October 1996. The following summer, the overwhelming majority of propane producers and marketers approved the creation of the check-off program to enhance consumer and employee safety and training, to provide for research and development of clean and efficient propane utilization equipment, and to inform and educate the public about safety and other issues associated with the use of propane.” Although just 5% of the U.S. energy market, the propane industry took a bold step, in establishing the first nationwide energy check-off program.Congress authorized the creation of the Propane Council in October 1996. The following summer, the overwhelming majority of propane producers and marketers approved the creation of the check-off program to enhance consumer and employee safety and training, to provide for research and development of clean and efficient propane utilization equipment, and to inform and educate the public about safety and other issues associated with the use of propane.” Although just 5% of the U.S. energy market, the propane industry took a bold step, in establishing the first nationwide energy check-off program.

3. Propane Industry PERC Structure The Council 21 Board of Directors Advisory Committees Agriculture Consumer Education Engine Fuel Research & Development Safety & Training The Council is comprised of a 21-member board appointed by the Gas Processors Association and the National Propane Gas Association. The board oversees the industry volunteer led Advisory Committees in Agriculture, Consumer Education, Engine Fuel, Research & Development and Safety & Training.The Council is comprised of a 21-member board appointed by the Gas Processors Association and the National Propane Gas Association. The board oversees the industry volunteer led Advisory Committees in Agriculture, Consumer Education, Engine Fuel, Research & Development and Safety & Training.

4. Propane Industry PERC Funding The Council receives funding by an assessment or “check-off” on each gallon of odorized propane gas. The assessment will collect five-tenths of one cent per gallon in 2007. Expected ’08 revenues = $50M

5. The Council Dollar 20% of the funds are rebated back to the states, which use those funds for projects specific to the industry in each state. By law, 5% must be used for projects that benefit agriculture. the statute limits the amount of funds to promote propane as an over-the-road motor fuel. To about 5%, law caps what the Council can spend on administrative expenses at not more than 10%. So, at the outset, 40% of the Council dollar is allocated. The remaining 60%, is available for the three primary missions -- research and development, safety and training, and consumer education.20% of the funds are rebated back to the states, which use those funds for projects specific to the industry in each state. By law, 5% must be used for projects that benefit agriculture. the statute limits the amount of funds to promote propane as an over-the-road motor fuel. To about 5%, law caps what the Council can spend on administrative expenses at not more than 10%. So, at the outset, 40% of the Council dollar is allocated. The remaining 60%, is available for the three primary missions -- research and development, safety and training, and consumer education.

6. PROPANE Exceptional Energy PERC’s Consumer Education Campaign facilitates a dialog between builder and homeowner about propane through message integration – talking about the same themes with both groups. Media is targeted to builders with online advertising and product placement, trade advertising, tradeshow presence and media outreach And to homeowners with awareness building television, radio, online, outreach and print As well as to those media vehicles that are likely to cross the line between builders and homeowners such as This Old House and HGTVpro.com – hitting the two audiences with the same messages at the same time. PERC’s Consumer Education Campaign facilitates a dialog between builder and homeowner about propane through message integration – talking about the same themes with both groups. Media is targeted to builders with online advertising and product placement, trade advertising, tradeshow presence and media outreach And to homeowners with awareness building television, radio, online, outreach and print As well as to those media vehicles that are likely to cross the line between builders and homeowners such as This Old House and HGTVpro.com – hitting the two audiences with the same messages at the same time.

7. US Propane Market Distribution

8. The Perfect Storm? Substantial price increases. Propane prices have been increasing much faster than the most important competitive fuel, electricity in most regions of the Country. Underlying improvements in energy efficiency. Improvements in competitive technologies: Electric Heat Pumps Geothermal Heat Pumps Wood stoves/Pellet stoves Collapse of the new house construction and manufactured housing markets. Much warmer than normal weather. Or as our research partner, ICF International noted in a presentation to the Council earlier this year – in many respects, the industry is facing a perfect storm. Energy prices are on the rise. Homes continue to be made more energy efficient. Improvements in competing technologies – which also benefit from renewed consumer interest due to higher energy prices – are growing in awareness and popularity. The housing market has taken a severe downturn, with New England being hit especially hard. And finally, warmer winters continue to have a huge impact. As ICF noted, the silver lining in the current market environment, it is that market conditions probably can’t get any worse than they are right now. Substantial price increases. Propane prices have been increasing much faster than the most important competitive fuel, electricity in most regions of the Country. Underlying improvements in energy efficiency. Improvements in competitive technologies: Electric Heat Pumps Geothermal Heat Pumps Wood stoves/Pellet stoves Collapse of the new house construction and manufactured housing markets. Much warmer than normal weather. Or as our research partner, ICF International noted in a presentation to the Council earlier this year – in many respects, the industry is facing a perfect storm. Energy prices are on the rise. Homes continue to be made more energy efficient. Improvements in competing technologies – which also benefit from renewed consumer interest due to higher energy prices – are growing in awareness and popularity. The housing market has taken a severe downturn, with New England being hit especially hard. And finally, warmer winters continue to have a huge impact. As ICF noted, the silver lining in the current market environment, it is that market conditions probably can’t get any worse than they are right now.

9. Research and Development

10. Research and Development Operations Residential and Commercial Agriculture Engine Fuel

11. Small Propane & Diesel Gensets Efficiency and Costs Compared (1 – 10 kW)

12. Distributed GenerationPropane & Renewables Focus on Reliability Propane/Solar Hybrid Anaerobic digesters DOE & Government Agencies Forming Partnerships Renewable energy remains a hot topic, and PERC is currently investigating several ways in which propane can partner with renewable fuels such as solar, wind, and digester gas to produce clean energy. Solar panels obviously don’t work well at night or on cloudy days, so they need a partner and that partner is propane. We recently launched a program with the District of Columbia to install propane/solar hybrid gen-sets at key DC intersections to serve as back-up power in the event of a black-out. We have also used propane in an anaerobic digester at the University of California Davis. This digester uses waste from restaurants and other commercial facilities to produce hydrogen, which is then sold by UC Davis. Propane is used as a start-up fuel and to maintain the high temperature necessary for breakdown in the digester. The project has been highly publicized and is a great demonstration of propane’s role in the renewable sector. The Department of Energy and other government agencies remain extremely involved with these types of hybrid systems because they provide a reliable source of clean energy. PERC continues to work with the DOE to leverage PERC funding with government co-funding. Renewable energy remains a hot topic, and PERC is currently investigating several ways in which propane can partner with renewable fuels such as solar, wind, and digester gas to produce clean energy. Solar panels obviously don’t work well at night or on cloudy days, so they need a partner and that partner is propane. We recently launched a program with the District of Columbia to install propane/solar hybrid gen-sets at key DC intersections to serve as back-up power in the event of a black-out. We have also used propane in an anaerobic digester at the University of California Davis. This digester uses waste from restaurants and other commercial facilities to produce hydrogen, which is then sold by UC Davis. Propane is used as a start-up fuel and to maintain the high temperature necessary for breakdown in the digester. The project has been highly publicized and is a great demonstration of propane’s role in the renewable sector. The Department of Energy and other government agencies remain extremely involved with these types of hybrid systems because they provide a reliable source of clean energy. PERC continues to work with the DOE to leverage PERC funding with government co-funding.

13. Gas-Cooling Technology Study of Gas Cooling Technologies Engine driven heat pumps Desiccant dehumidification Gas cooling technology remains a very attractive goal for the propane industry. PERC recently completed a comprehensive study into the state-of-the art in gas cooling technologies to identify the areas of highest potential for the propane industry. The study identified several areas with the greatest potential for market growth, including engine drive heat pumps, and desiccant dehumidification. Desiccant dehumidifiers are already commercially available in Florida, and the manufacturer, Novel Aire is looking for partners to expand into the rest of the U.S. Gas cooling technology remains a very attractive goal for the propane industry. PERC recently completed a comprehensive study into the state-of-the art in gas cooling technologies to identify the areas of highest potential for the propane industry. The study identified several areas with the greatest potential for market growth, including engine drive heat pumps, and desiccant dehumidification. Desiccant dehumidifiers are already commercially available in Florida, and the manufacturer, Novel Aire is looking for partners to expand into the rest of the U.S.

14. Acumentrics Micro-CHP SOFC About the 5 kW System Fuel Cell system is a 5kW solid oxide fuel cell that provides heat and electricity. Starting in July 2006, the fuel cell system at Exit Glacier ran for more than 1,600 hours; a potential new field record of performance for solid oxide fuel cells. Advantages include: Reduced noise Reduced air emissions Reduced potentially hazardous spills, due to elimination of diesel generators at the site Looking Ahead The 5kW Acumentrics fuel cell system is tentatively scheduled to operate again in 2007 and perhaps 2008 depending on operating funds available and progress with the system. No additional funding from PERC will be solicited, but we will continue to be a project partner with full access to performance data as long as the system operates. About the 5 kW System Fuel Cell system is a 5kW solid oxide fuel cell that provides heat and electricity. Starting in July 2006, the fuel cell system at Exit Glacier ran for more than 1,600 hours; a potential new field record of performance for solid oxide fuel cells. Advantages include: Reduced noise Reduced air emissions Reduced potentially hazardous spills, due to elimination of diesel generators at the site Looking Ahead The 5kW Acumentrics fuel cell system is tentatively scheduled to operate again in 2007 and perhaps 2008 depending on operating funds available and progress with the system. No additional funding from PERC will be solicited, but we will continue to be a project partner with full access to performance data as long as the system operates.

15. Nippon Oil Eneos ECO LP-1 PEFC Targets Japanese residential market Provides 750 W electricity and hot water 76% total efficiency (LHV) Potential 30-40% reduction CO2 About the system Nippon Oil Corporation (NOC) LPG fueled PEFC cogeneration system (also known as LPGFC) provides 750 W electric power and water storage temperature capacity of about 65?C (149?F). Water tank capacity 200 L (52 gallon) System consists of: main power generation unit (fuel processing system, fuel cell stack, heat exchanger, air pump, water purification, power conditioner, and system controller) hot water storage unit (water tank and back-up water heating equipment) Achieves 34% electrical efficiency and 42% heat recovery efficiency for a total 76% LHV efficiency About the system Nippon Oil Corporation (NOC) LPG fueled PEFC cogeneration system (also known as LPGFC) provides 750 W electric power and water storage temperature capacity of about 65?C (149?F). Water tank capacity 200 L (52 gallon) System consists of: main power generation unit (fuel processing system, fuel cell stack, heat exchanger, air pump, water purification, power conditioner, and system controller) hot water storage unit (water tank and back-up water heating equipment) Achieves 34% electrical efficiency and 42% heat recovery efficiency for a total 76% LHV efficiency

16. For residential use 700W Peak power Power efficiency 37%, CHP 87% (LHV) Cell voltage decay rate < 2mV/1000hr One full stack running for 9000 hours with voltage decay rates close to commercial target Toshiba Micro-CHP PEFC LPG is reformed to hydrogen rich gas 30 units currently in demonstration LPG is reformed to hydrogen rich gas 30 units currently in demonstration

17. Yanmar Micro-CHP Systems City or rural, home & commercial Generate electricity as prime power source or in parallel to grid 20% more compact 85% overall efficiency About the System Targets small rural facilities where power line extension and electric reliability come at a premium, such as residences, restaurants, health clubs, eldercare facilities, and truck stops. Consists of a 4-cycle propane-fueled engine, generator, and inverter. Can be used as a prime power source or in parallel to grid The 5k unit (shown in slide) is 20% more compact than a comparable conventional generator, allowing for application where space is at a premium and power demands are modest. Advantages include: Offers grid-independence 85% overall efficiency Low operating noise (51dB) Long maintenance intervals (10,000 hours) Considered optimal size for residential small commercial applications PERC testing of 5K unit confirms excellent performance: Net output: 4.64 kW Elec. Efficiency: 26.3% LHV,  highest system in US to date Tested on HD-5 and 29% propylene fuels with same performance Noise extremely low: 51 dB About the System Targets small rural facilities where power line extension and electric reliability come at a premium, such as residences, restaurants, health clubs, eldercare facilities, and truck stops. Consists of a 4-cycle propane-fueled engine, generator, and inverter. Can be used as a prime power source or in parallel to grid The 5k unit (shown in slide) is 20% more compact than a comparable conventional generator, allowing for application where space is at a premium and power demands are modest. Advantages include: Offers grid-independence 85% overall efficiency Low operating noise (51dB) Long maintenance intervals (10,000 hours) Considered optimal size for residential small commercial applications PERC testing of 5K unit confirms excellent performance: Net output: 4.64 kW Elec. Efficiency: 26.3% LHV, highest system in US to date Tested on HD-5 and 29% propylene fuels with same performance Noise extremely low: 51 dB

18. Yanmar Advanced 9.9kW System Technical Advances 10 kW system now with backup capability Key items are 31.5% NEE and 85% overall efficiency is outstanding. Plus 54 dB and 10,000 hour maintenance, unbelievable. Lean-burn system optimizes ignition timing and matches the excess intake air to reduce NOx production and fuel consumption Technical Advances 10 kW system now with backup capability Key items are 31.5% NEE and 85% overall efficiency is outstanding. Plus 54 dB and 10,000 hour maintenance, unbelievable. Lean-burn system optimizes ignition timing and matches the excess intake air to reduce NOx production and fuel consumption

19. Marathon Ecopower Micro-CHP Ecopower: Private homes and industrial businesses Ecoisland: Remote locations Provides 4.7 kW electric and 12.5 kW heat > 90% overall efficiency Long-life and high run-time About the Systems: Ecopower - for use in small to medium scale buildings, such as single-family homes, hotels, gyms, nursing homes, schools, and other buildings with an all-year demand for heat and power; also good for peak-shaving applications Ecoisland – battery-powered inverter combined with the Ecopower for stand alone and emergency back-up applications Marathon 5K engine: Extremely reliable and durable engine Applied in long-life (40,000 hours) and high run-time applications (4,000 hour service intervals) Total efficiency greater than 90% (fuel to recovered energy; includes thermal and electrical) Low exhaust emissions Good materials, lg oil sump. ~23% efficient, good ~same-little better than small diesels About the Systems: Ecopower - for use in small to medium scale buildings, such as single-family homes, hotels, gyms, nursing homes, schools, and other buildings with an all-year demand for heat and power; also good for peak-shaving applications Ecoisland – battery-powered inverter combined with the Ecopower for stand alone and emergency back-up applications Marathon 5K engine: Extremely reliable and durable engine Applied in long-life (40,000 hours) and high run-time applications (4,000 hour service intervals) Total efficiency greater than 90% (fuel to recovered energy; includes thermal and electrical) Low exhaust emissions Good materials, lg oil sump. ~23% efficient, good ~same-little better than small diesels

20. Honda ECOWILL Micro-CHP System Targets single family homes in Japan Provides: 1 kW power > 11 kW heating capacity > 70C hot water storage temperature Reduces energy consumption and emissions About the System In 2003, HONDA developed 1kW micro-cogeneration unit named “ECOWILL” in collaboration with OSAKA GAS for single family use modifying one cylinder small gas engine originally developed for GHP. Operation based on hot water supply. ECOWILL has a concept regarded as “a boiler generating electricity”. Gas engine power generating unit provides: 1.0 kW power output 3.25 kw heat output 20% (LHV) electrical efficiency 65% (LHV) thermal efficiency 44 dB (A) noise level 20,000 hours or 10 years durability 6,000 hour operation or 3 year periodic inspection Compared to conventional hot water supply/central heating system plus thermal power generation Approx. 20% reduction in primary energy consumption (per generated kWh) Approx. 30% reduction in CO2 emission (per generated kWh) About the System In 2003, HONDA developed 1kW micro-cogeneration unit named “ECOWILL” in collaboration with OSAKA GAS for single family use modifying one cylinder small gas engine originally developed for GHP. Operation based on hot water supply. ECOWILL has a concept regarded as “a boiler generating electricity”. Gas engine power generating unit provides: 1.0 kW power output 3.25 kw heat output 20% (LHV) electrical efficiency 65% (LHV) thermal efficiency 44 dB (A) noise level 20,000 hours or 10 years durability 6,000 hour operation or 3 year periodic inspection Compared to conventional hot water supply/central heating system plus thermal power generation Approx. 20% reduction in primary energy consumption (per generated kWh) Approx. 30% reduction in CO2 emission (per generated kWh)

21. Honda Freewatt Micro-CHP System Targets U.S. residential heating market Replaces conventional furnaces Provides 1.2 kW electricity and > 11 kW heat 90% efficient Potential 30% reduction CO2 Ultra quiet <46 dB (A) About the System First micro-CHP units offered in the U.S. residential heating market. System consists of a propane-fueled internal combustion engine to generate 1.2 kW of electricity and produce 12,000 Btu/hr of heat to the home. One system can provide approximately 50% of a household’s annual electricity needs. The advantages over conventional warm air furnaces in homes include: Up to 90% efficiency with potential 30% reduction in CO2 emissions Ultra quiet (<46 dB(A) at 3 feet) Produces high-quality electrical output Constant low level heat at a low flow rate for enhanced indoor air quality Compact and lightweight with long maintenance intervalsAbout the System First micro-CHP units offered in the U.S. residential heating market. System consists of a propane-fueled internal combustion engine to generate 1.2 kW of electricity and produce 12,000 Btu/hr of heat to the home. One system can provide approximately 50% of a household’s annual electricity needs. The advantages over conventional warm air furnaces in homes include: Up to 90% efficiency with potential 30% reduction in CO2 emissions Ultra quiet (<46 dB(A) at 3 feet) Produces high-quality electrical output Constant low level heat at a low flow rate for enhanced indoor air quality Compact and lightweight with long maintenance intervals

22. UL Listing for propane system Jointly developing off-grid & back-up system (add storage) PERC field testing complete mid-2008 Commercially available in MA, USA Honda Freewatt Micro-CHP System Looking Ahead PERC and Climate Energy are conducting a 12-month demonstration to quantify performance, economic, and environmental benefits. Unit cost?Looking Ahead PERC and Climate Energy are conducting a 12-month demonstration to quantify performance, economic, and environmental benefits. Unit cost?

23. Distributed Generation Combined Heat & Power (CHP) Commercially Available Marathon Engine Systems 2kW, 5kW Low maintenance, long life, prime power Climate Energy Residential Demo in MA 12,000 BTU 1.2 kW our focus is the commercialization of products. And in DG, we have several exciting projects on which we are working, two of which I’ll mention today. prime power gensets – these aren’t backup systems – they are heavy duty engines engineered to provide power 24/7. The generators are 2.5 kW and 5 kW in size, and they are low maintenance (4,000 hrs) long life (10 yrs) prime power systems. They are available for purchase today. Fifty propane long-life , low-maintenance engine generators sold since developed by PERC These engines are so robust, when used as the prime power source, running nearly all of the time, they need oil changes only once per year, and need a major overhaul every 10 years. This particular product is being installed to power railroad switches. 50 have been sold since PERC developed the product, this product, one of PERC’s first developments in distributed generation has brought attention to the U.S. where established Japanese manufacturers such as Yanmar want to bring their combined heat and power systems and gas heat pumps to the U.S. launched a project with Climate Energy to conduct a field test on a propane combined heat and power system. The system provides 12,000 bTU of heat and 1.2 kW of power to a residence in Massachusetts and will be tested over the coming year to determine overall performance and efficiency. The system provides much of the base load, while the grid provides the additional electricity and auxiliary propane burners provide the additional heat. Up to 90 percent of the fuel energy is used. our focus is the commercialization of products. And in DG, we have several exciting projects on which we are working, two of which I’ll mention today. prime power gensets – these aren’t backup systems – they are heavy duty engines engineered to provide power 24/7. The generators are 2.5 kW and 5 kW in size, and they are low maintenance (4,000 hrs) long life (10 yrs) prime power systems. They are available for purchase today. Fifty propane long-life , low-maintenance engine generators sold since developed by PERC These engines are so robust, when used as the prime power source, running nearly all of the time, they need oil changes only once per year, and need a major overhaul every 10 years. This particular product is being installed to power railroad switches. 50 have been sold since PERC developed the product, this product, one of PERC’s first developments in distributed generation has brought attention to the U.S. where established Japanese manufacturers such as Yanmar want to bring their combined heat and power systems and gas heat pumps to the U.S. launched a project with Climate Energy to conduct a field test on a propane combined heat and power system. The system provides 12,000 bTU of heat and 1.2 kW of power to a residence in Massachusetts and will be tested over the coming year to determine overall performance and efficiency. The system provides much of the base load, while the grid provides the additional electricity and auxiliary propane burners provide the additional heat. Up to 90 percent of the fuel energy is used.

24. Stand-by Generators 83% Propane Generator market growth in 2004 These units range from 5 kW to 15 kW capacity. Units are attractive, quiet and can be equipped with automatic switchgear to engage when grid power drops.These units range from 5 kW to 15 kW capacity. Units are attractive, quiet and can be equipped with automatic switchgear to engage when grid power drops.

25. Composites 2nd phase of research project Design of 2000 liter size tank Cost effective Eliminates cathodic protection issues Another focus for R&D in 2007 is in composite materials for tanks You can already purchase composite grill cylinders and you heard earlier in the video about the NPGA/PERC partnership in trying to open up a new market in cabinet heaters. PERC recently initiated a second phase research project into composite materials for underground tanks This project has already resulted in a tank mock-up, which was displayed at the PERC booth during the first ever Global Technology Conference, held in conjunction with the World LP Gas Forum last October in Chicago, IL. The mock-up was one of the most popular and innovate pieces of technology at the exhibition, and can be found in the PERC booth during this show. The study will now seek to design a 500 gallon tank made out of composite materials. The initial study showed that while composite tanks would probably cost about $200 more than conventional steel, the maintenance cost savings should outweigh the higher initial cost. Another focus for R&D in 2007 is in composite materials for tanks You can already purchase composite grill cylinders and you heard earlier in the video about the NPGA/PERC partnership in trying to open up a new market in cabinet heaters. PERC recently initiated a second phase research project into composite materials for underground tanks This project has already resulted in a tank mock-up, which was displayed at the PERC booth during the first ever Global Technology Conference, held in conjunction with the World LP Gas Forum last October in Chicago, IL. The mock-up was one of the most popular and innovate pieces of technology at the exhibition, and can be found in the PERC booth during this show. The study will now seek to design a 500 gallon tank made out of composite materials. The initial study showed that while composite tanks would probably cost about $200 more than conventional steel, the maintenance cost savings should outweigh the higher initial cost.

26. Equipment Testing Program Consumer Reports Style Testing Test performance of equipment Provide industry with independent test performance data for various components and systems Valves, tank coatings, remote monitoring systems . . . RDAC will also begin a new and exciting project in 2007 with its equipment testing program. Styled after the popular “consumer reports” magazine, these reports will seek to provide the industry with independent test performance data for various propane components and systems used throughout the industry Some possible items to be investigated are bulk tank pressure relief valves, tank coatings, and remote monitoring systems. PERC already has a contractor in place to manage the project, and will begin with testing early this year – we’ll continue to keep you posted on the progress. RDAC will also begin a new and exciting project in 2007 with its equipment testing program. Styled after the popular “consumer reports” magazine, these reports will seek to provide the industry with independent test performance data for various propane components and systems used throughout the industry Some possible items to be investigated are bulk tank pressure relief valves, tank coatings, and remote monitoring systems. PERC already has a contractor in place to manage the project, and will begin with testing early this year – we’ll continue to keep you posted on the progress.

27. Agriculture The agriculture mission at PERC spends a considerable amout of resources to conduct outreach to the propane industry in addition to the agriculture industry.The agriculture mission at PERC spends a considerable amout of resources to conduct outreach to the propane industry in addition to the agriculture industry.

28. Grain Bin Sanitation With corn ethanol demand and strong prices anticipated for 2007, corn producers will be doing everything in their power this spring to ramp up production, primarily this means planting more acres in corn. This is good news for the propane industry since 3 out of 4 grain producers who dry their grain use propane. Now, a new PERC research project holds promise to give the propane industry a NEW reason to be excited about grain production and storage. (Go to next Slide) With corn ethanol demand and strong prices anticipated for 2007, corn producers will be doing everything in their power this spring to ramp up production, primarily this means planting more acres in corn. This is good news for the propane industry since 3 out of 4 grain producers who dry their grain use propane. Now, a new PERC research project holds promise to give the propane industry a NEW reason to be excited about grain production and storage. (Go to next Slide)

29. Grain Bin Sanitation (cont’d) Producing and drying a bumper corn crop is only half the battle. Insects, such as the Maize Weevil, pictured above, can wreak havoc, on stored grain when left unchecked. To investigate this problem, PERC launched a project to study propane’s role in mobile insect control for such farm applications. TEMP-air mobile thermal remediation pest management system, seen here, is a device that can deliver precision heat treatments that can eradicate insect infestations from farm bins or buildings. This mobile unit can be taken from site to site, as needed to treat grain bins, or other buildings. Purdue University has teamed with PERC and TEMP-Air to test the efficiency of the unit, and determine optimal exposure temperatures and time, to control key pests. Producing and drying a bumper corn crop is only half the battle. Insects, such as the Maize Weevil, pictured above, can wreak havoc, on stored grain when left unchecked. To investigate this problem, PERC launched a project to study propane’s role in mobile insect control for such farm applications. TEMP-air mobile thermal remediation pest management system, seen here, is a device that can deliver precision heat treatments that can eradicate insect infestations from farm bins or buildings. This mobile unit can be taken from site to site, as needed to treat grain bins, or other buildings. Purdue University has teamed with PERC and TEMP-Air to test the efficiency of the unit, and determine optimal exposure temperatures and time, to control key pests.

30. Propane Irrigation Engines Irrigation in Agriculture 55 million irrigated acres Propane is an ideal fuel University of Nebraska conducting research Farmers spent $1.55 billion on energy to power irrigation pumps in 2003 Propane engines can burn cleaner, have fewer concerns with spills or contamination, and tank placement is usually not an issue. Overcoming economic hurdle was considered a major challenge for propane irrigation across the country. PERC launched a project with the University of Nebraska, with co-funding from Nebraska PERC, to test some current propane engines at the Nebraska Tractor Testing laboratory. This facility is well known among agriculture producers for documenting the fuel consumption and power output for most new tractors sold in the U.S. The propane engines tested thus-far included the Ford 6.8 liter, v-10, and the GM 8.1 liter v-8. Results on the 6.8 liter Ford have already impressed the researchers. “It produces 115 continuous horsepower, on as little as 6 gallons of propane per hour.” Further analysis will compare this to baseline diesel engine fuel consumption, but is expected to show that this fuel economy will allow a propane engine to compete with diesel on fuel costs, when operating in the summer irrigation season. We hope to place these engines in the field, operating live irrigation wells, in a second phase to document on-going maintenance costs for propane, which are also expected to be less than comparable diesel engines. Farmers spent $1.55 billion on energy to power irrigation pumps in 2003 Propane engines can burn cleaner, have fewer concerns with spills or contamination, and tank placement is usually not an issue. Overcoming economic hurdle was considered a major challenge for propane irrigation across the country. PERC launched a project with the University of Nebraska, with co-funding from Nebraska PERC, to test some current propane engines at the Nebraska Tractor Testing laboratory. This facility is well known among agriculture producers for documenting the fuel consumption and power output for most new tractors sold in the U.S. The propane engines tested thus-far included the Ford 6.8 liter, v-10, and the GM 8.1 liter v-8. Results on the 6.8 liter Ford have already impressed the researchers. “It produces 115 continuous horsepower, on as little as 6 gallons of propane per hour.” Further analysis will compare this to baseline diesel engine fuel consumption, but is expected to show that this fuel economy will allow a propane engine to compete with diesel on fuel costs, when operating in the summer irrigation season. We hope to place these engines in the field, operating live irrigation wells, in a second phase to document on-going maintenance costs for propane, which are also expected to be less than comparable diesel engines.

31. Poultry House Sanitation Flame Treatment Effective, Affordable, Environmentally Friendly University of Missouri Partnership with Flame Engineering – La Crosse, KS PERC has been very excited about this technology for quite some time. We recently funded an effort to test longer term effects and various treatment levels inside poultry houses. We hope it will lead to more valuable conclusions about ideal propane dosages, and cumulative effects of heat treatments on flock performance, and microbiology inside poultry houses. The cooperating grower produces birds for Tyson foods, the largest broiler producer in the world. PERC has been very excited about this technology for quite some time. We recently funded an effort to test longer term effects and various treatment levels inside poultry houses. We hope it will lead to more valuable conclusions about ideal propane dosages, and cumulative effects of heat treatments on flock performance, and microbiology inside poultry houses. The cooperating grower produces birds for Tyson foods, the largest broiler producer in the world.

32. Dairy Bed Sterilization Propane Solution to Fight Mastitis Propane burner on current grooming system Project to test efficacy of bacteria reduction Another exciting new project that deals with heat treatments, and again partners PERC with Flame Engineering is this one on Dairy Bed Sterilization. This project will investigate whether or not propane can help producers fight mastitis, a disease that is very harmful to dairy producers. A propane flame burner will be installed on a dairy bed grooming rake, and the project investigators will test the efficacy of the grooming system to reduce bacteria levels in the bed. Another exciting new project that deals with heat treatments, and again partners PERC with Flame Engineering is this one on Dairy Bed Sterilization. This project will investigate whether or not propane can help producers fight mastitis, a disease that is very harmful to dairy producers. A propane flame burner will be installed on a dairy bed grooming rake, and the project investigators will test the efficacy of the grooming system to reduce bacteria levels in the bed.

33. Steam Weed Control Increased thermal efficiency over flame Increased effectiveness in killing weeds Reduced risk of damage to groundwater and drip irrigation systems No harvest delays. No smoke from burning Two forms of thermal weed control that are available to U.S. growers include heat generated from a propane flame to kill weeds and heat produced by steam. The US Propane industry research has helped generate a new, cost-effective technology using steam heat to aid conventional and organic farmers in controlling weeds. When the heat is applied to the weed, the temperature of the moisture in the plant’s cells quickly rises. This causes the plant’s cell structure to rupture, preventing nutrients and water from entering the weed’s stalks and leaves.Two forms of thermal weed control that are available to U.S. growers include heat generated from a propane flame to kill weeds and heat produced by steam. The US Propane industry research has helped generate a new, cost-effective technology using steam heat to aid conventional and organic farmers in controlling weeds. When the heat is applied to the weed, the temperature of the moisture in the plant’s cells quickly rises. This causes the plant’s cell structure to rupture, preventing nutrients and water from entering the weed’s stalks and leaves.

34. Cotton Defoliation Propane-Powered Cotton defoliator Developing larger 6-row machine Lastly, PERC continues work on a propane-powered cotton defoliation machine. In the picture here, you can see the original 2 row prototype, but PERC is currently building a larger 6 row machine, that will be completed soon. Once completed, we will continue to field test the machine in New Mexico and California. The testing will be led by our project partner at the USDA, Dr. Paul Funk. Lastly, PERC continues work on a propane-powered cotton defoliation machine. In the picture here, you can see the original 2 row prototype, but PERC is currently building a larger 6 row machine, that will be completed soon. Once completed, we will continue to field test the machine in New Mexico and California. The testing will be led by our project partner at the USDA, Dr. Paul Funk.

35. Engine Fuel (Autogas) In the US we have the potential to displace nearly one billion gallons of gasoline annually. With right outreach and technology, we can build the fleet market to that level in the next 10 years, if not sooner. Using a very conservative 10% market penetration on only private fleets. Potential is much larger, if we have the right technology.In the US we have the potential to displace nearly one billion gallons of gasoline annually. With right outreach and technology, we can build the fleet market to that level in the next 10 years, if not sooner. Using a very conservative 10% market penetration on only private fleets. Potential is much larger, if we have the right technology.

36. Engine Fuel Program Propane is the number 1 alternative fuel Off-road engines Forklifts Generators CommercialMowers On-road engines Ford F-150 Vision school bus

37. Propane Forklifts Forklift Market Focus (always the top priority): OEMs Without propane powered products we wouldn’t be anywhere. We now have a solid relationship and contacts with all of the major OEMs that produce propane powered forklifts. They have participated in some of our research efforts, supported our training program and collaborated on marketing & outreach. This slide demonstrates just one example of how we have collaborated on some marketing efforts with Toyota. Industry Organizations Building and maintaining relations with the trade organizations that represent the forklift industry is paramount to our continued success. Think about our own trade organizations and who they attract – the leaders from all facets of the industry. The same applies to the forklift industry and our relationship with their organizations has helped enable us to work with the forklift industry on a variety of issues.Forklift Market Focus (always the top priority): OEMs Without propane powered products we wouldn’t be anywhere. We now have a solid relationship and contacts with all of the major OEMs that produce propane powered forklifts. They have participated in some of our research efforts, supported our training program and collaborated on marketing & outreach. This slide demonstrates just one example of how we have collaborated on some marketing efforts with Toyota. Industry Organizations Building and maintaining relations with the trade organizations that represent the forklift industry is paramount to our continued success. Think about our own trade organizations and who they attract – the leaders from all facets of the industry. The same applies to the forklift industry and our relationship with their organizations has helped enable us to work with the forklift industry on a variety of issues.

38. Forklift Growth Trends 6% increase in total propane forklifts 2006 Customers We have been focusing on customers (existing & potential) to make sure they know the benefits of propane and reinforce to them why propane forklifts are the better option. This slide shows the continued growth of propane powered forklifts in the US. Customers We have been focusing on customers (existing & potential) to make sure they know the benefits of propane and reinforce to them why propane forklifts are the better option. This slide shows the continued growth of propane powered forklifts in the US.

39. Commercial Mowers 750 mowers expected to be sold by Dixie Chopper in its first year of production Each unit uses 4000 liters/year Dixie Chopper expects to sell about 750 mowers in its first year of production of the propane mowers. Each mower consumes 1000 gallons of propane which would then use about 750,000 gallons of propane a year. Dixie Chopper expects to sell about 750 mowers in its first year of production of the propane mowers. Each mower consumes 1000 gallons of propane which would then use about 750,000 gallons of propane a year.

40. Propane-Powered Commercial Mowers Initial target markets include: municipalities park operators landscapers state highway departments universities and schools Advantages include: low emissions large on-board fuel storage anti-theft of fuel Commercial Mowing Environmental regulations and conventional fuel costs continue to be the drivers for market development in the propane commercial mowing segment. Propane powered commercial lawn mowing equipment will deliver significantly reduced emissions without sacrificing performance over a wide range of operating conditions. PERC’s market development program includes: participation in lawn & garden industry trade shows establishing partnerships with manufacturers and supporting their growth strategy compilation and distribution of materials to support market development identification of market drivers, (i.e. emissions reductions, conventional fuel prices, fuel storage capabilities and operational benefits) establish partnerships with industry organizations representing lawn & garden industry as well as commercial mowing manufacturers. Commercial Mowing Environmental regulations and conventional fuel costs continue to be the drivers for market development in the propane commercial mowing segment. Propane powered commercial lawn mowing equipment will deliver significantly reduced emissions without sacrificing performance over a wide range of operating conditions. PERC’s market development program includes: participation in lawn & garden industry trade shows establishing partnerships with manufacturers and supporting their growth strategy compilation and distribution of materials to support market development identification of market drivers, (i.e. emissions reductions, conventional fuel prices, fuel storage capabilities and operational benefits) establish partnerships with industry organizations representing lawn & garden industry as well as commercial mowing manufacturers.

41. Blue Bird Propane Vision Our focus is squarely on fleet customers. We have been speaking at fleet events and targeted marketing materials to fleets. OEMs However, like forklifts, without propane powered products we can’t sell one gallon of fuel. In the fleet market segment – product availability has been our challenge. Thanks to the industry, we are meeting that challenge with several new products like the Blue Bird school bus and the Roush F-150 both fleet based applications. Blue BirdOur focus is squarely on fleet customers. We have been speaking at fleet events and targeted marketing materials to fleets. OEMs However, like forklifts, without propane powered products we can’t sell one gallon of fuel. In the fleet market segment – product availability has been our challenge. Thanks to the industry, we are meeting that challenge with several new products like the Blue Bird school bus and the Roush F-150 both fleet based applications. Blue Bird

43. For More Information Contact Bob Myers Strategic Consultant remyers38@aol.com Greg Kerr Director of Research and Developmentgreg.kerr@propanecouncil.org www.propanecouncil.org/rd