To: Jim Bishop who wrote (4593 ) 6/6/2001 4:22:29 PM From: Jim Bishop Read Replies (1) | Respond to of 4605 AFS Announces Patent-Pending Hydrogen / Natural Gas System and Clarifies Dispute With Distributor CALGARY, June 6 /CNW/ - Alternative Fuel Systems Inc. (TSE:ATF) ("AFS" or the "Company") announces it has received "patent-pending" status in the U.S. on a software system and methodology for dynamically combining hydrogen and natural gas in internal combustion engines. This system is designed to enable natural gas and hydrogen to be combined at optimal ratios to maximize the benefits inherent in each fuel. The advantages of natural gas as a fuel have long been recognized. Natural gas is composed mostly of methane and is a relatively clean burning fuel that produces fewer harmful tailpipe emissions than gasoline or diesel fuel. It is also known for its high octane, anti-knock characteristics that allow it to operate effectively without the use of hazardous additives. Hydrogen, as a single fuel for spark ignition engines, generally burns cleaner than natural gas but results in a significantly lower power output because of its excessively lean burn characteristics. By dynamically combining the two fuels, AFS will take advantage of a wide and variable range of air/fuel ratio conditions within an engine's operating limits. This will lead to increased thermal efficiency and extremely low emissions, with nearly zero emissions at engine start-up and low power levels where the engine is operated on pure hydrogen. At high power levels, the engine will be fuelled primarily with natural gas, maintaining high power capabilities similar to gasoline engines. An overall CO(2) reduction of 70%, relative to a base gasoline engine is targeted. AFS' approach to combining hydrogen and natural gas is unique in that it dynamically modifies the hydrogen/natural gas ratios to meet changing operating conditions within the engine. AFS has achieved zero to extremely low levels of emissions from the successful operation of a 6-cylinder, 11-litre spark ignition engine on 100% hydrogen and on a combination of hydrogen and mixed with natural gas. The development of this proprietary technology is planned through AFS' wholly owned subsidiary, H(2) Fuel Inc. "As a hydrogen distribution infrastructure becomes a reality, this new technology will allow AFS to bridge the significant gap to fuel cells with a practical hydrogen solution that can operate using current engine platforms", said Walter Brooks, AFS' Chairman and Interim CEO. "Using our extensive experience in multi-fuel engine controls, AFS is able to combine the emissions benefits of hydrogen with the practicality of natural gas to create a 'near zero' emission engine management system." AFS also announces that it is currently involved in a dispute with its distributor based in the United Kingdom. An action has been initiated against the Company which alleges that AFS breached the terms of certain licensing and distribution agreements. The dispute is related to performance and territory issues and does not involve issues related to the Company's products or technology. AFS management has consulted legal counsel and has reviewed the written agreements and factual matters concerning the action. The Company and its legal counsel have concluded that the action is without merit and will be defended vigorously. Both parties are working towards a resolution in the various disputed items. Alternative Fuel Systems Inc. is an environmental technology company providing innovative solutions to the global engine exhaust emissions problem. AFS has developed and commercialized electronic engine management technologies that enable diesel and gasoline engines to operate using natural gas. AFS is also at the forefront of research into exhaust aftertreatment technologies and hydrogen-based engine systems. AFS is headquartered in Calgary, Canada and trades on the TSE as ATF. -30- For further information: Walter Brooks, Chairman and Interim CEO, Phone: (403) 262-1833, Fax: (403) 237-7441, Email: wbrooks@afsglobal.com, Visit our website @ www.afsglobal.com To request a free copy of this organization's annual report, please go to www.newswire.ca and click on reports@cnw.