Garth Harris, Secretary-General of the IANGV considers the elements which define and contribute to a successful NGV program. (Part one of a two part item)

- 1%-2% of target vehicle class good indicator of successful program
- Range of natural gas supply options available, ensuring security and diversity of supply
- Fuel cost, critical factor
- Emissions reductions benefit community
- Range of options for Government support
- Wide variety of potential applications for NGVs

A CNG program could be regarded as successful where at least 1% to 2% of the target class of vehicle is running on natural gas.  Depending on the scope of the program, this might be the national population of light duty vehicles or the population of city buses in a particular city.  At this level of participation, the program is large enough to be more than an experiment or demonstration.  It has become a serious commercial issue with considerable funds invested in CNG vehicle and refuelling equipment.

Many countries and cities have small programs which can in effect be considered as being a demonstration.  The challenge is to build on the demonstration and turn it into a successful and meaningful CNG program.  The following issues define the challenge.

Natural Gas Availability & Energy Security

The prerequisite for a successful NGV program is that there is a sufficient supply of natural gas available.  There needs to be one or more gas fields plus a gas transmission and distribution system around a significant part of the country.  While a pipeline network is an ideal prerequisite, there is scope for a CNG program preceding the establishment of the network. The Philippines is currently in the process of establishing a mother/daughter distribution system for CNG for urban and interurban buses. Vehicles operating on this system will provide demand for a pipeline network to be established in Manila in the latter part of this decade.

While imported LNG may also be available as the gas resource, only in the case of Korea is imported LNG the foundation for a CNG vehicle program.  In many other countries, LNG imports are used to supplement existing local supplies of natural gas. India, China, and the United States are examples of countries which are making increasing use of imported LNG for transport applications. 

Biogas, methane produced from waste or agricultural products, is another possibility if available in sufficient quantity. Sweden already has significant biogas programs in operation and other countries have small programs in place which are likely to grow in time. Estimates by the NGV Coalition indicate that all urban buses in the US could operate on natural gas, using only 8% of the potential biogas that could be produced in the country on an annual basis.

If a country has its own oil fields, oil maybe cheap relative to the cost of gas.  While in some cases this may preclude an NGV program, in other cases the country may decide it wishes to export its oil to generate foreign exchange earnings and use its low opportunity cost gas for internal transport.  Iran is one example. Other Middle Eastern nations, (UAE, Egypt) are also adopting this strategy, though in many cases this is also driven by air quality issues.

Another driver for an NGV program is energy security. A country which is very dependent on imported oil for its transport sector can use existing gas resources in an NGV program.  The New Zealand program in the 1980s is an example.

Natural Gas Cost

At the other end of the chain is the potential user of NGVs.  While he may have other considerations,his principal criterion is likely to be based on relative fuel price (between gas and traditional fuels)and the capital cost of conversion to or purchase of an NGV.

Experience over the last 20 years says that the retail price of NG into the vehicle should ideally be no more than 50% of the price of gasoline or 70% of the price of diesel.  These figures are guidelines only and there is a variation between countries as a result of different economic and social conditions.  The challenge is to strike a price level for CNG or LNG that makes it sufficiently attractive to vehicle owners.  In the absence of a mandate requiring the use of natural gas, price differential has a direct impact on the success of a program.  Argentina, where the price of CNG is about 30% of the cost of gasoline,  has over 20 years built up the largest NGV fleet in the world, of almost 1.5 million vehicles.

In the case of diesel replacement, there are some programs where the price of CNG is quite close to the price of diesel.  This is where the program is driven by the need to reduce tailpipe emissions and is usually established and supported by government mandates.

Part two of this item will be published in August 05

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