It would appear that the price of oil is going to be $100 per barrel or more for the foreseeable future.  As it's recent meeting, OPEC decided that while it is not going to cut production, it will not increase it.  It would also appear that there is likely to be a downturn in the economies all the developed countries which will naturally lead to reduced demand for oil.  However the demand for oil is increasing in Asia which at least to some extent will counteract the reduced demand for oil in other parts of the world.  In addition there is some doubt of the ability of OPEC to increase production. 

The other part of the equation is the amount of oil which is available.  The BP Statistical Review of World Energy June 2007 www.bp.com gives world oil reserves as 1371 trillion tonnes.  This is the amount of oil in known fields which it is estimated can be recovered under existing economic and production conditions.  The reserves to production ratio is 41 years.  Back in 1980, reserves were 667 trillion tonnes and have risen fairly steadily since then.

Natural gas on the other hand has known reserves of 1629 trillion tons of oil equivalent, that is slightly more than oil reserves.  However the reserves to production ratio is significantly higher at 63 years.  Natural gas reserves have more than doubled since 1980.

Another issue of rising importance is the increase in price of commodities, particularly food.  This has been brought about by the drive to convert food crops into energy products such as ethanol and at least in part promoted by subsidies.

In many countries where there are natural gas reserves, natural gas supply is likely to be little impediment to the establishment of a NGV industry.  The amount of natural gas which is likely to be used over say the first 5 years would be very small compared with other uses of natural gas.

Secondly, the vehicles that would be using natural gas will vary from country to country.  Most large NGV countries have fleets dominated by light duty vehicles.  However heavy duty vehicles are likely to be of interest in some countries.  For instance, heavy duty trucks and city buses are popular in NGV fleets in countries such as US, UK.  The Port of Long Beach, California is requiring all vehicles operating in the port to operate on clean fuels by 2012.  Heavy vehicles use large quantities of gas and vehicle manufacturers can supply new, reliable vehicles.  Readers of NGV Global will have seen articles concerning availability and fleet conversion.

I recently visited Iran to find that with all its oil resources it has a program to convert all its vehicles, light duty and heavy duty, to natural gas.  Very shortly, only NGVs will be manufactured in Iran .

Thirdly, natural gas and biomethane are the same fuel.  One is fossil, the other is renewable.  Thus establishment of a CNG industry based on natural gas can lead directly to use of biomethane in transport without the difficult fuel related problems that face some other biofuels.  This can be regarded as part of the pathway to hydrogen which is a gaseous fuel using much of the same technology as CNG both for refueling and in vehicles.

Biomethane is of much interest worldwide at present.  The most popular sources are municipal waste treatment including sewage and landfills.  Sweden is a prominent country with several municipal bus fleets.

Given the problems with some “renewable” transport fuels such as ethanol, biomethane probably has a higher prospect for success than other biofuels.  While most biomethane at present is derived from waste, it could be made at a large scale using feedstock which is not competing with food production as in the case of ethanol and using technologies which are largely already developed.  It can be distributed using the existing natural gas pipe network.

In conclusion, the existing NGV industry should regard the high price of oil as an opportunity to grow.  In some countries the pump price of CNG is likely to be lower than gasoline or diesel.  Natural gas is widely available in many countries.  Different types of vehicles may be more attractive in some countries than others because of the local conditions.  Natural gas can logically lead to renewable biomethane and even to hydrogen.