Sponsor of 2007 Advancing The Choice Conference. PuriNOx Technology Low-Emission Diesel Fuel System

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1 Sponsor of 2007 Advancing The Choice Conference PuriNOx Technology Low-Emission Diesel Fuel System

2 About Silver Eagle Worlds largest A-B wholesaler Annual statistical case volume 43 mil. Houston, Cypress, Conroe, Rosenberg, San Antonio, Carrizo Springs and Del Rio. Total fleet consists of 1,255 vehicles. Avg. of 12 mil. miles annually.

3 PuriNOx Prior to 1998 Silver Eagle was heavily involved in a number of Alt. fuel projects. 5.9L B-series Cummins diesel- propane conversion Ford Aerostar vans Dual- Fuel propane - gasoline by

4 Water emulsion fuel to lower NOx and PM 10% Used in our inbound freight operations, 10 class 8 tractors pulling 200 loads per week Testing at Southwest Research in San Antonio assured us we would not risk damage to our fueling systems or engines. (Engines) Detroit Series 60 and Cummins 400 hp Conclusions Expensive Lower fuel economy 20% Power loss 20%

5 Green Diesel Technology 2002 going forward As we were testing PuriNox in our heavy duty fleet, we were simultaneously watching very closely, the development of International s GREEN DIESEL TECHNOLOGY

6 We have an air quality problem in Houston We live in a severe non-attainment area As a corporate citizen we needed to get involved We feel this is a responsibility that cannot be ignored But at the same time! Power durability and cost effectiveness are the three Power, durability, and cost effectiveness are the three performance factors that drive our business. Our emissions strategy must coincide. At the end of the day, our survival depends on making a profit.

7 By mid-2000, we had not yet identified a long-term/relevant technology to reduce our exhaust emissions. We were, however, aware of the debate surrounding diesel and school buses. We stayed abreast of International's efforts in California under their "Green Diesel Technology" program, a NOx lowering engine calibration combined with a Catalyzed Diesel Particulate t Filter. It occurred to us that adapting this common sense technology to our delivery equipment might be a solution to our problem.

8 without compromising the ability to do our job, or adding a single moving part to our equipment, and within a cost structure that no other technology could match We planned to.. demonstrate 2007 emission requirements on total hydrocarbon and PM, at the same time dramatically reduce NOx emissions. very significantly, every step that we took was relevant to 2007.

9 When CARB and EPA certified GREEN DIESEL technology as a viable option, at least in a school bus, we decided to seek certification for our delivery application. a Several steps needed to be taken simultaneously: 1. First we amended our truck specification to include the proper engine. (DT hp to DT hp) 2. Secondly we began testing our duty cycle to see if our load would generate the necessary heat in the exhaust stream for Green Diesel to work. 3. Next we began to pursue an economic supply of Ultra Low Sulfur diesel fuel. 4. Finally, we wanted our program to be acknowledged by qualifying as a Clean Cities Project.

10 In the spring of 2001, our collaborators included our local International dealer along with key International corporate supporters - including then CEO John Horne, and Houston based Chevron-Phillips specialty fuels group. We installed a data-logger on a test truck and up linked it by satellite to Fleetguard-Nelson's laboratory in Tennessee for analysis. Exhaust Temperatures of DT530: * As a percentage of time run Above 300C need 10% have 11.7% Above 225C need 50% have 51.8% above 300C 47C 160C above 225C 161C 224C

11 In October 2002, the Valero Refinery announced that they were preparing their Three Rivers refinery to come on line with ULSD. This Texas based Company invested over 20 million of its dollars to begin early production of ULSD. They were the first refiner to voluntarily mass produce ULSD, a formula that lowers NOx and PM with a maximum sulfur content of 15 ppm. and it has fueled the delivery of Anheuser-Busch products in Houston since January 03!

12 Our initial project to convert 42 city tractors to Green Diesel Technology cost $288,000, 75% of which h was funded d by CMAQ funds that t are administered by the Houston-Galveston Area Council through DOE/Clean Cities Program.

13 Phase I of our GREEN DIESEL project eliminates 8.9 tons of NOx emissions per year from Houston s air. Over the ten-year life of the project, we will eliminate 89 tons of NOx with an overall cost effectiveness of $686 per unit per year. Greenhouse gases and soot (PM) are effectively taken off the table.

14 We chose our direction very carefully Green Diesel technology is invisible to operations. There are no infrastructure requirements and there are no changes necessary in our maintenance protocol. (Clean DPF when instructed by back pressure monitor) We load our trucks inside and we no longer expose our employees to noxious tailpipe emissions, and we no longer have soot build up on our product packages.

15 As a result of our Green Diesel demonstration project there are now upwards of 250 school buses in the Houston-Galveston area using the same technology to lower diesel emissions.

16 Particulate Filter after a turbo seal failure Cost to clean $250

17 Compressed Natural Gas 2006 going forward

18 Energy Independence 85% of all Natural Gas consumed is produced domestically, the other 15% comes from Canada. By contrast, we import almost two-thirds of the crude oil that we consume was impossible to predict. Crude surpassing $60 a barrel sent our operating expenses spiraling out of control. We needed to look at a fuel alternative with a less volatile price basis. CNG providers offer the opportunity to hedge pricing for up to five (5) years at a time.

19 Leadership Comes ataprice a We decided to seek out an innovative CNG technology provider that had an advanced product. We wanted a CNG technology that was certified by EPA or CARB. We wanted a CNG technology that t was deemed d cost effective in terms of cost per ton of N0x reduction. We wanted a CNG technology that would provide the necessary power and torque to effectively pull our loads for driver satisfaction and on-route efficiency. We wanted a technology that was simple to maintain and repair as miles accumulate.

20 Economies of CNG In June of 2006, we converted (2) 1999 International 8100 s/a tractors from Diesel to CNG. We installed the ESI Phoenix NG 7.6L engine which is built from the platform of an International DT466. Crankshafts and connecting rods are cryogenically treated for added durability. ESI provides custom wiring harness and ECM to integrate seamlessly into the factory gauges and controls. The conversions were done in our shop, by our technicians. The project was supervised by principals from ESI. The conversion process took 1-week per unit.

21 Operational Impact of CNG Fueling is provided by Centerpoint energy 150 yards from our facility. CNG trucks have a 240 mile range with a 35 dge (diesel gallon equivalent) of capacity. Fuel tanks are extremely durable and safe, multi-layered in kevlar and carbon fiber. Must be re-certified every 3- years. (fuel pressurized at 3600 psi) Stainless steel aircraft quality fuel lines make fuel leaks virtually it trouble free. Unlike older CNG technology, ESI s technology is very simple and therefore dependable.

22 Domiciled Fleets Trucks return to the same terminal after every delivery cycle. Delivers 2010 Emission standard today NOx+NMHC=0.8 g/bhp-hr PM= g/bhp-hr h Limited vehicle range is manageable with proper dispatching. Close in routes fuel once a week.

23 CNG in Conclusion We are still in the testing phase of CNG. Conversion process was remarkably easy. Power and torque curves are comparable to the diesel engines that they replaced. CNG has a place in any domiciled fleet that is dedicated to Clean Air and Energy Independence Strategies.

24 Silver Eagle s Commitment to Clean Air We will only consider EPA or CARB certified technologies. Currently, we are making plans to expand CNG in Houston, and simultaneously, introduce this technology to the San Antonio market. The Particulate Filter as seen on the Green Diesel trucks is now standard equipment for We are excited about the future of our CNG project and plan to announce expansion of this project in early We are currently researching future projects based on hybrid - electric and hybrid hydraulic - launch technologies for some of our applications. Thank You!