Honda’ experience and perspective on CNG powered Vehicles

Ichiro Sakai American Motor December 13, 2012 MSTRS meeting Contents

• Overview

• Civic GX Technical Achievement

• Fleet Sale and Marketing

• Retail Consumer Market

• CNG Infrastructure and Fuel Quality

• Summary

Overview

Why Natural Gas is a great transportation fuel Circumstances

Number of CNG Stations vs. CNG Price As as of Mar. 7, ‘12 1500 9 1400 1300 Nationwide 8 1200

7 1100 1000 976 6 900 800 5 700 4 600 500 CNG Price 3

Number of Stations 400 2.3 300 2 228 200 1 100 CA 0 0 Wellhead Price in $ per 1000 cubic feet 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

CNG price has dropped sharply and stations have increased gradually U.S. CNG Station Infrastructure

Map Legend

Public and private CNG Station Retail Fuel Price Advantage

$5.00 U.S. Average Retail Fuel Prices

$4.50

$4.00

$3.50

$3.00

$2.50 Propane

E85 Cost per GGE

$2.00 B99/B100

B20

$1.50 Gasoline

Diesel

$1.00 CNG

$0.50 Need to Update

www.afdc.energy. $0.00 gov/afdc/data/

4/1/007/1/00 1/1/014/1/017/1/01 1/1/024/1/027/1/02 1/1/034/1/037/1/03 1/1/044/1/047/1/04 1/1/054/1/057/1/05 1/1/064/1/067/1/06 1/1/074/1/077/1/07 1/1/084/1/087/1/08 1/1/094/1/097/1/09 1/1/104/1/107/1/10 1/1/114/1/117/1/11 1/1/124/1/127/1/12 10/1/00 10/1/01 10/1/02 10/1/03 10/1/04 10/1/05 10/1/06 10/1/07 10/1/08 10/1/09 10/1/10 10/1/11 www.afdc.energy.gov/afdc/data/ Technology Pathway Comparisons – CO2

Technology Pathway Comparisons - CO2

TypicalTypical mid-size Mid-size Car Car 100% 90% Well to Tank 80% Tank to Wheels (1) 70% 60% 50% 40%

CO2 grams/mileCO2 30% 20% 10% 0% ICE HEV PHEV BEV CNG

(1) Bar for BEV reflects 600 grams CO2e/kWh, which is EPA’s “image” for 2016. Using the GREET model and today’s averages, BEVs exceed HEVs. Technology Pathway Comparisons – Petroleum Consumption

Technology Pathway Comparisons - Energy Security

100%

90% 80%

70%

60%

50%

40%

Relative Comparison Relative 30%

20% 10% ~0 ~0 0% ICE HEV PHEV BEV CNG Natural Gas is a Great Choice

• Low carbon fuel • North American fuel supply • Fuel distribution network established (pipelines) • Wide range of infrastructure possibilities • High well-to-wheel efficiency • Fuel cost < gasoline • Wide applicability (autos, trucks, buses, forklifts, etc.) • SULEV / ILEV / AT PZEV capable • Proven performance, known costs • Renewable fuel • Pathway to hydrogen Civic GX Technical Achievements 2006 -2012 Civic GX Technology: Fuel Supply System

Pressure Regulator Fuel Tank Single stage, • Composite with aluminum liner integral type with • Pressure relief device low pressure oil trap filter • In-tank solenoid valve @3000 psi: 7.2 GGE @3600 psi: 8.0 GGE (GGE = gasoline gallons equivalent)

Injectors Manual shut-off valve Dedicated gaseous fuel injectors Other Key Components • Tank pressure sensor • Tank temp sensor • Rail pressure sensor • Fuel temp sensor • Fuel shut-off solenoid valve • Fuel filters Engine Valve/Seat • Receptacle Changed materials, designed to reduce wear and be compatible Reference: with CNG, a non-lubricating fuel. 2006-2010 Service Manual, GX Supplement Dedicated components for a practical, safe, and durable system 2006 -2012 Civic GX Technology: Engine and Exhaust i-VTEC CNG High-output cam Delayed closure cam Inlet Valve Delay Closure Engine 1.8L • Reduced pumping loss • Reduced mechanical loss • Improved thermal efficiency

 Improved HWY FE 15%

CR 12.5:1 Variable-Length Air Intake Manifold Increase power by 7%. Combined with 8% Closed-Coupled Catalyst increased displacement  15% Quick light-off  Complies with AT-PZEV

LAF sensor

Exhaust manifold integrated cylinder head O2 sensor Close-coupled two bed catalyst

Specific design improved fuel economy, increased power, and achieved AT-PZEV Emission Standards Comparison

0.4

0.35 NMOG CO (x.1) 0.3 NOX

0.25

0.2 Grams per mile per Grams 0.15 -90% 0.1

0.05

0 Light Duty LEV Light Duty LEV Med Duty SULEV Med Duty SULEV Light Duty ULEV Light Duty ULEV LEV II SULEV (All 1/10 ULEV (GX) (LEV I) (LEV II) (LEV I) (LEV II) (Lev I) (Lev II) New Std) Natural Gas Vehicles – GHG Reductions

Well-To-Wheel GHG Emissions Tank-To-Wheel (Tailpipe Emissions) 450 -27% Well-To-Tank (Upstream Emissions) 400 -44% 350

300 W WT

250

s 301 n o i s s

i 200

m 225 E 244 G

H 150

G 0 187 148 100 137 50 90 67 44 33 44 0 CAFE Vehicle CNG Vehicle Civic 38.4mpg Civic GX 37.5mpgge Civic Hybrid FCX Clarity 28.5mpg 28.5mpgge 58.8mpg 87.8mpgge

391 288 292 220 192 137

Using CA Greet Model: Civic GX is a 44% GHG Reduction from the Average US Gasoline Car Honda Civic Natural Gas - Range

Tank Capacity is 8 GGE Nominal Range is 8 x 38 = 304 miles (this would run the car out of fuel.) Real World Range is 7.8 x 30 = 234 miles

Overnight, home refueling (Phill) Fast refueling at public stations (3 to 5 minutes)

Comparisons: 3X “100 mile BEV” 1X Honda Fuel Cell “Clarity” 75% of Gasoline Car Fleet Sales & Marketing Advertising - Fleet Honda Civic GX Fleet Applications

World’s Cleanest Taxi Cab! Parking Enforcement

Private Business Community Patrol

Federal, State, County Governments Retail Consumer Market Examples Incentives

• Financial Incentives • State Incentives – Vary • Local municipal and/or air district Buy downs • Up to $3,000 rebate

• Incentives beyond money • Environmental stewardship • Reduce dependence on oil • Free/Preferred Parking • HOV lane access for single occupant Customer Benefit: Carpool Access

• Top benefit for CNG customers is carpool lane access. • Currently no limit for CNG vehicles in CA. Top Likes of Civic Natural Gas

Ability to Use 40% 50% Carpool Lane 31% Environmentally 8% 7% Friendly 9% 8% Low Emissions 16% 8% Clean Engine 13% 3% 5% Handling 3% 6% 5% Fuel Economy 3% 6% Smooth 3% 3% Transmission 3% Single-occupant use of HOV lanes by alternative fuel 3% Size 3% 3% vehicles that qualify as Inherently Low Emission Vehicles (ILEVs) and Super Ultra Low Emission Vehicles (SULEVs). Other Misc. 19% 17% Mentions EV and CNG vehicles qualify.

0% 10% 20% 30% 40% 50% 60% Retail AHM Total HOV access for CNG vehicles until January 1, 2015. Civic Natural Gas Sales Trend Expected to be recordhigh to be Expected

Civic Natural Gas $3,000 Free Fuel Card Sales Promotion

Promotion through: 1. Press Releases 2. Direct Mail 3. Auto Shows (Ride and Drive) 4. Social media 5. Outdoor billboards 6. Customer lead generation for dealers

$3000 Free Fuel Card Promotion utilizing multiple marketing channels ($1K Dealers, $1K Clean Energy, $1K AHM) $3,000 Free Fuel Card Promotion Calendar Cost Evaluation with assumption Customer of Benefit 15K mile/year usage

50000 Civic GX Payback Period for CA Customers

($)

40000 Cost

running

+

30000

Initial - Mileage : 15000mile/year - Usage : 240days/year - Gasoline price : $3.50/gal - CNG price : $2.52/gge - Home refueling CNG price : $1.20/gge - Home refueling device price : $2,700(Est.) 20000 0 Less than 5 10 15 3 years Years after purchase

Price increase of CNG vehicle could be recouped by less than 3 years. (not include home refueling equipment) CNG Price Gap (Public Station vs. Residential)

CNG Price Gap between Station and Residential 4.00

3.50

3.00

2.50

2.00 CNG Price ($/gge)Price CNG 1.50

1.00

0.50

0.00 IL RI IN ID NJ LA MI KS PA AZ KY TX VT CT AK CA NE DE UT NY TN NV WI CO MS NH ND MT MA OH NM MN MD WY WA

CNG price gap between station and residential varies among states CNG Infrastructure / Fuel Quality Partnership Experience with Home Refueling equipment company

• NGV buyers ….. • are more receptive if they understand fueling options • want convenient and cost-effective refueling • synchronized vehicle & refueling unit delivery

• Fuel Quality (delivered to home) is critical • It is necessary to develop fuel quality standard (moisture). Natural Gas Fuel Production Vs. Processing Capacity

Natural Gas Processing Plant Concentration (2004)

Concern Point for Highlighted Area: • Large amount of Natural Gas production and low amount of processing capability. • Fuel can be distributed to LDC (local distribution companies) as unprocessed (Wet) fuel. • Increased Shale Gas production (Wet Fuel) Sampled were taken in above points of public injection stations. (to check for moisture content) Phill’s maximum dryer capability : 855 ppmV

Concern with gas in Ohio & NY is high moisture content. (Gas in Ohio contains moisture that exceed the Phil Dry Layer capability) Some areas has Shale gas with low moisture content. Moisture problem

Dew point line (each moisture level) Methane hydrate Generation CNG operation zone

30 25 With fuel containing MMscf MMscf MMscf MMscf Methane＋water 20 10lb/MMscf moisture, 1.0lb/ 0.5lb/ methane and water co- 15 Methane hydrate Point1 Point2 exist at point 2 and 10 Pressure [M Pa] Pressure 300lb/MMscf methane hydrate is Methane＋Ice 5 generated at point 1. 0 -30 -20 -10 0 10 20 30 40 Tem perature [℃]

Solenoid get stuck due to methane hydrate generation.

Water in a fuel tank suggests that fuel with excess amount of moisture, above CNG fuel standard or dryer capacity of home refueling equipment, is delivered 300～450lb (Estimated) ＞ 40.0lb ＞ 7.0lb/MMscf （Delivered gas） （Home refueling （CNG fuel standard） Equipment dryer capacity） 2012 Civic CNG Owner’s Manual

• Fuel Quality and Honda Refueling • In order to insure that your Civic receives CNG fuel with quality equal to or above the NFPA-52 and SAE J1616 fuel standards, Honda only recommends that your vehicle be refueled at public commercial-grade CNG refueling station. Public stations offer an approximately five minutes refueling time, and the assurance of natural gas quality meeting NFPA and SAE standards. • Public refueling stations use commercial quality filtering and drying equipment that helps to assure your vehicle will only be refueled with automotive grade CNG, meeting the NFPA and SAE standards. Due to the nature of home natural gas supplies from gas companies, even with filtering and drying equipment, it is possible to introduce moisture into your vehicle’s CNG tank and fueling system, possibly resulting in damage to the system Moisture damage can require inconvenient and costly repairs. • Due to the wide variation of natural gas quality for home use, Honda does not recommend the use of home refueling at this time. If you choose to sue a home refueling device, you should consult with the equipment manufacturer and the local natural gas quality of the natural gas at the location the refueling equipment with be installed. They may recommend additional filtering and drying equipment, and a schedule for maintaining this equipment to insure delivery of natural gas that meets the NFPA and SAE standards of fuel quality. It is important to understand the quality of fuel not just when it is evaluated, but the range of quality, particularly moisture content, from the natural gas provider. Conclusion

• Natural Gas is very good transportation fuel from energy security (energy diversity).

• Due to limited refueling infrastructure, Civic Natural Gas ’s sales are limited. But sales have increased in the past a couple of years because of low fuel cost, incentives (both monetary and non- monetary) • HOV lane access is regarded as the most attractive. This incentive should be maintained unless it hurts the value of HOV lane.

• Infrastructure availability is critical for further expansion of this kind of alternative fuel vehicle. Government leadership to develop its network is desired.

• Honda’s effort to address the limited fueling infrastructure; home refueling equipment, is hindered by the fuel quality. Maintaining fuel quality at delivered site (equivalent to or above NFPA-52 or SAE J1616) is desired. • It would be possible that moisture in delivered natural gas is higher than before due to fracking activity. Contact

Ichiro Sakai [email protected] 202-661-4400 (Tel)