This is a brief summary of the CNG and LNG fueling industry development. This is a introductory presentation for anyone interested in learning more about the natural gas fueling market.

1. Natural Gas Vehicles Industry Development September 2011

2. Current Market Conditions The United States consumed 6.971 BILLION barrels of petroleum products in 2010 19.1 million barrels per day Imports accounted for 49% of our total consumption in 2010 which equates to 9.4 million barrels per day or 3.431 BILLION barrels per year At the current average market price of $85 per barrel, the US imported approximately $291,635,000,000 of petroleum products in 2010 18% of our imports came from the Persian Gulf; $524 Million *Data obtained from Energy information Administration website for calendar year 2010 For the first time geo-politics, emerging market oil demand and the discovery of new domestic gas supplies has resulted in a massive BTU price spread between oil & gas

3. Why Natural Gas? Supply: Domestic gas supplies are substantial and currently at an estimated 100 year supply level from known reservoirs with more exploration to come Distribution: An established nationwide pipeline system currently in place Cost: Natural gas is currently the only economically feasible alternative fuel Reliability: In 2010 approximately 12.6 MM natural gas vehicles in use around the world, however only an estimated 100,000 were in the U.S. Economy: Will reduce the amount of foreign petroleum imports and keep more money in our domestic economy

4. Why Natural Gas? Emissions: Natural gas vehicles reduce emissions of CO2 by 20-30%, CO by 70-90%, NOx by 75-95%, particulate matter by up to 90% and volatile organic compounds by up to 89% Safety: Natural gas vehicles are as safe as or safer than competing gasoline or diesel powered vehicles Ease of use: Natural gas vehicles are similar in operation to their gasoline and diesel counterparts. The main difference is fueling procedure which most fleets find more efficient and cost effective Stability: With the price of natural gas disconnected from the price of oil, the market is stable and allows for better budgeting of fuel costs

5. The Math Works The driving force behind the expansion of the natural gas fueling market is cost 1 barrel of oil = 5.8 Mcf of natural gas $85 per barrel oil compared to $4.00 per Mcf natural gas equates to $23.20 barrel of oil equivalent; A 73% reduction in feedstock for fueling use For every new BOE of natural gas consumed, we remove a nearly 4x more expensive barrel of imported oil off the market

6. The Math Works 1 gallon of gasoline priced at $3.30 = 114,00 BTU 1 gallon of diesel priced at $3.65 = 129,500 BTU 1 Mcf of natural gas at $6.50 (delivered) = 912,024 BTU 1 Mcf = 8 gallons of gasoline = $26.40 1 Mcf = 7 gallons of diesel = $27.01 Diesel Gallon Equivalent for natural gas = $.93* ($6.50 Mcf/7) Gasoline Gallon Equivalent for natural gas = $.82* ($6.50 Mcf/8) * Does not include any cost associated with infrastructure development or operation

7. Vehicles Natural gas fueled light duty vehicles cost an average $5000 - $7500 more than conventional gasoline or diesel models Natural gas fueled heavy duty vehicles cost up to $30,000 more than conventional gasoline or diesel models Fuel savings average 50-75% for natural gas reducing the ROI on the additional cost significantly Reduction of fuel costs are dependant on use of privately owned fueling facilities or public fueling stations Natural gas vehicles require less maintenance which reduces operating costs Typical fleet configurations consist of CNG in light duty and return to base applications, while LNG is common in OTR applications

8. Vehicles Natural gas vehicles utilize high pressure storage tanks mounted in the vehicle to store compressed natural gas for fuel The common tank size available on the market today is a 24 gasoline gallon equivalent tank Vehicles can be configured as dual fuel to use gasoline/diesel and natural gas combined or dedicated natural gas The range of vehicles with the ability to run on natural gas includes pick up trucks, cars, buses, heavy duty vehicles and industrial equipment

9. Vehicles Light Duty Example: 30,000 MPY @ 15 MPG = 2000 gal/gasoline @ $3.30 = $6600 per year; 50% reduction in fuel cost equates to ROI in approx 2.25 years = Life fuel savings of $9000 5 year replacement cycle using public fueling station Heavy Duty Example: 12,000 MPY @ 7 MPG = 1714 gal/diesel @ $3.65 = $6256 per year; 50% reduction in fuel cost equates to ROI in approximately 9.5 years = Life fuel savings of $16,920 15 year replacement cycle using public fueling station Light Duty Example: 30,000 MPY @ 15 MPG = 2000 gal/gasoline @ $3.30 = $6600 per year; 75% reduction in fuel cost equates to ROI in approx 1.5 years = Life fuel savings of $17,250 5 year replacement cycle using fleet owned fueling station (Fuel cost only) Heavy Duty Example: 12,000 MPY @ 7 MPG = 1714 gal/diesel @ $3.65 = $6256 per year; 75% reduction in fuel cost equates to ROI in approximately 6.4 years = Life fuel savings of $40,380 15 year replacement cycle using fleet owned fueling station (Fuel cost only)

10. Vehicles Examples of Natural Gas Vehicles: Chevrolet Tahoe-Chesapeake Energy Chevrolet C-2500 School Bus-Tulsa, OK

11. Infrastructure-CNG & LNG Can be fully integrated, mobile, skid mounted units for ease of relocation, deployment and installation Can be permanent “Gas Station” style installations CNG systems can be fast fill or slow fill; LNG systems are fast fill CNG uses compression to deliver high pressure gas for use as fuel; LNG is delivered by tanker truck and stored in a cryogenic tank Systems consist of similar components regardless of design; Variances in size of equipment occur based on total fueling needs All CNG/LNG infrastructure in Texas is regulated by the Railroad Commission of Texas and the NFPA

12. Fast Fill Design-CNG The three main components in any fast fill application are compression, storage and dispensers Typical compression inlet pressure is 10-25 psig Necessary compression discharge pressure is 4000-4500 psig Typical compressor horsepower ratings range from 50-250+ HP Typical compressor flow rates are 75 Standard cubic feet per minute to 500+ Standard cubic feet per minute (SCFM) * 125 SCF = 1 Gasoline Gallon Equivalent

13. Fast Fill Design-CNG Typical storage cascade designs used for fast fill systems are three high pressure vessels with a usable storage capacity of approximately 100 Gasoline Gallon Equivalent (GGE) Storage pressures range from 4000 to 4500 psig depending on design and operation; Texas codes limit storage to 1.25x vehicle operating pressure (3600 psig * 1.25=4500 psig) All storage vessels must be ASME coded and be installed above ground

15. Dispensers use a valve sequencing function to fill the vehicle's tank to the maximum pressure as quickly as possible

17. Dispensing system consists of fuel hose and vent hose

18. Compact installation footprint make skid mounted systems desirable

20. Slow Fill Design-CNG The two main components in any slow fill application are compression and dispensing points Typical compression inlet pressure is 10-25 psig Necessary compression discharge is 3800-4000 psig Typical compressor HP ratings range from 25-250+ hp Typical compressor flow rates are 25 SCFM to 500+ SCFM

21. Slow Fill Design-CNG Dispensing systems in slow fill applications consist of multiple individual fueling connections; This allows the system to fill all vehicles at one time as a whole No storage used in slow fill applications Equipment costs can be lower depending on system design and size No cost effective individual vehicle fuel measurement is readily available at this time

22. Slow Fill Design-CNG Example 1: 20 vehicles with 75 SCFM compressor; 3.75 SCFM per vehicle at 3600 psig; Refueling rate is 1.8 gallons per hour Example 2: 50 vehicles with 250 SCFM compressor; 5 SCFM per vehicle at 3600 psig; Refueling rate is 2.4 gallons per hour Slow fill applications for vehicles that return to base on a regular schedule can increase the efficiency of vehicle re-fueling in that the operator does not have to be present while vehicles are re-fueled Additional components necessary in the total system design include inlet gas dryer system, gas cooler and high pressure gas filtration system

23. Slow Fill Design Examples of slow fill station design and layout: Heavy Duty Trucking Fleet-Slow Fill Heavy Duty Trucking Fleet-Slow Fill

24. Summary Natural gas vehicles and the infrastructure to fuel them are set to play a vital role in improving our current economy as well as reform the way our nation thinks about fueling Natural gas can be a highly effective way for companies, municipalities and other organizations to reduce fleet operation costs, thus providing additional capital to be used in other budgetary areas With an abundant supply of natural gas keeping prices and supply stable, shortages and price gouging are virtually eliminated

25. Thigpen Energy Services, LLC Thigpen Energy Services, LLC is a Texas Railroad Commission licensed Compressed Natural Gas (CNG) and Liquefied Natural Gas (LNG) infrastructure service contractor based in Cut & Shoot, TX Highly experienced in natural gas project management and construction, as well as long term operations and service As a member of the Greater Houston NGV Alliance, we are dedicated to the constant improvement and growth of the natural gas vehicle infrastructure in Texas and around the country. Go Green…Safely!

26. For More Information Thigpen Energy Services, LLC PO Box 7157 Cut and Shoot, TX 77306 (936) 264-2166 www.thigpenes.com www.twitter.com/thigpenes www.facebook.com/tesllc Railroad Commission of Texas P.O. Box 12967 Austin, TX 78711 (877) 228-5740 www.rrc.state.tx.us National Fire Protection Association 134 Kirk Lane Gallatin, TN 37066 www.nfpa.org www.twitter.com/nfpa www.facebook.com/thenfpa Greater Houston NGV Alliance www.houstonngvalliance.org Go Green…Safely!