An energy-exergy heat release model is used with in-cylinder pressure measurements to analyze dual-fuel combustion in a high compression ratio diesel engine. Compressed natural gas (CNG) addition does not exceed 40% of total fuel energy, in order to avoid significant changes to liquid fuel injection timing needed to maintain efficient engine operation. Increasing CNG usage is observed to enhance exergetic efficiency, as premixed combustion is promoted over diffusion burn. In addition, CNG usage is associated with higher exergy retention by the exhaust gases. However, this comes with decreased combustion efficiency as CNG survives combustion and is lost to the exhaust. Overall, the analysis shows that CNG usage may result in lower absolute exergy consumption by the engine, even alongside the lost exergy from unburned fuel, as the wasted CNG is simultaneously less exergetically useful, and thermal efficiency rises due to increased premixed combustion.