NGV Global

Part 2 – CHALLENGES

Edited Extract from the keynote address by President of ANGVA, YBhg.
Datuk Abdul Rahim Hj. Hashim at ANGVA 2005. Part Two (Challenges) of a
two part item. Part One (Status) was published last month.

Challenges for the NGV Industry in the Asia-Pacific can be grouped into 4 major categories:

(1) Government Support

(2) Gas Supply

(3) Technology & Know How, and

(4) Safety.

(1)    Government Support

There must be strong government support and a clear, consistent
government policy on NGV. There must also be a strong industry /
government partnership. A lack of communication and cooperation with
the Government can mean failure and disaster in implementing NGV program

Government support has to be translated into policies, legislation,
standards, and procedures that favour the development of NGV.  Policies
that have direct impact on the development of NGV are those related to
energy, environment and transportation. Governments also need to
participate in public relations activities involving NGV and make
public statements reaffirming the Government’s role and long term
commitment to NGV.

Worldwide, we can see that successful NGV programmes are results of
strong and clear government support for NGV. In Asia Pacific, we can
see strong government support in successful NGV programmes in countries
like Pakistan, India, Thailand, Malaysia and Korea.  India might be
unique in the sense that it started with the decision by the Supreme
Court in New Delhi.  However, the court decision had provided the
impetus for the government to come out strongly to support the NGV
programme in other Indian cities, which were actually not covered by
the Court’s decision.

The challenge for many of us in many other countries in Asia Pacific is
how to obtain strong and clear government support and commitment to
NGV. And once we have obtained this strong and clear support, how do we
ensure that such support continues until the NGV industry is
commercially self-sustainable?

(2)    Gas Supply

Gas supply is critical to the success of an NGV industry.  There must
be adequate and stable supply of good quality Natural Gas in areas
easily or conveniently accessible to vehicles. The gas supply must also
be competitively priced.  It must be clearly cheaper than gasoline and
diesel.  However, players in the whole supply chain of Natural Gas for
vehicles, including vehicle owners must see tangible economic benefits
to them.  Otherwise, they will not be willing players and this will
eventually lead to the failure of the NGV industry.

Studies of successfully NGV programmes worldwide have shown that a
price differential of at least 30 % cheaper than petrol and diesel is
needed to ensure customers’ acceptance of NGV. In most cases,
government controls and intervention are needed especially at the early
stage of the NGV programmes.

Another challenge under Gas Supply is getting Natural Gas to where
majority of vehicles is operating i.e. into the cities. This is a major
problem for NGV in Asia Pacific because many cities in this region do
not have local Natural Gas distribution pipeline networks. Some
countries have embarked in the construction of gas pipeline networks. 

To resolve the issue of the lack of local gas distribution pipelines,
some countries, like Malaysia and Thailand have invested in the
operation of Mother-Daughter system. Compressed Natural Gas from the
mother stations are sent by road trailers to the daughter stations.
This system incurs higher operating costs due to the need for double
compression, limited amounts of gas that can be transported per
trailer, and maintenance of trailers and drivers.  Extra efforts need
to take into account safety and unpredictable traffic congestion which
disrupt gas deliveries. These are the challenges that Thailand and
Malaysia are facing.  We have gained valuable insights and efforts are
now being taken to improve the mother-daughter system.

(3)    Technology

The 3rd challenge is Technology, particularly the cost and suitability
of the technologies procured and introduced.  It is crucial that the
technologies chosen are suitable to local conditions and affordable. 
Obsolete technologies are definitely not to be considered, as are
advanced but untested technologies.

The high costs of technology and equipment, including conversion kits,
can be a major issue, especially at the initial stage of the programme
as almost all the components have to be imported.

Now, with many manufacturers, suppliers and OEMs entering into the Asia
Pacific NGV markets, prices of NGV technologies and equipment are
coming down.  However, prices have not reached the level whereby it is
attractive for many people to invest in NGV refuelling stations and
Natural Gas vehicles, as is happening in Latin America. 

The technology challenge is one challenge that I think Asia Pacific can
meet quickly, either through homegrown research and development or
through joint ventures with overseas partners.  Already we see the
manufacturing of conversion kits, OEMs vehicles, and refuelling
equipment, in Asia Pacific countries like India, Korea and China.  
Hopefully this will bring prices down further thus creating a situation
similar to the Latin America NGV industry.

The technology challenge also includes the need to ensure that there
are enough skilled personnel to provide the necessary services and
support, from planning to construction, operation and maintenance phase.

Among the categories of people needed to be trained include:

(i)     Engineers and planners at supervisory levels.

(ii)    Technicians/mechanics carrying out vehicle installation, maintenance and servicing.

(iii)   Technicians/attendants operating and maintaining the refuelling stations.

(iv)   Relevant staff from the Government approving authorities.

(v)    Emergency service personnel e.g. Fire Services Department.

 As the majority of Natural Gas vehicles in the Asia Pacific region are
and will be aftermarket conversions, it is important to ensure that
converters and installers are adequately trained.  Thus, certification
and training programmes of these installers and converters must be
established. 

(4) Safety

The last, but not least of the challenges is ensuring that the industry is SAFE.  Safety is a paramount issue. 

It is crucial that safety of all areas of the NGV industry be
considered, especially safety of the refuelling stations and Natural
Gas vehicles, as both of these have direct contact with the general
public.  Safety at the NGV refuelling stations is easier to control,
monitor and enforce as the stations are static, and normally owned
& operated by experienced company or entrepreneur.  The vehicles,
on the other hand, are mostly owned by individual and running all over
the cities.   Furthermore, there are many more vehicles than refuelling
stations to monitor and to enforce the safety requirement.  Hence,
additional safety effort and programmes must be implemented for the
Natural Gas vehicles.

CNG cylinders on board the vehicles are the highest-pressure
containment vessels commonly used by the general public.  They have the
potential to cause extensive damage and injury and must therefore not
be allowed to fail under any circumstances.  As the population of the
Natural Gas vehicles grows, the potential for safety issues to occur
increases exponentially.  Already we have seen some serious safety
incidents and accidents happening worldwide, and sad to say, some of
them have caused fatality and were due mainly to ignorance of safety
requirements, and use of unauthorised cylinders.

Besides the usual ways of dealing with safety, i.e. the implementation,
monitoring and enforcement of regulations, codes & standards,
quality assurance system; a Safety Management System especially for the
Natural Gas vehicles must be part and parcel of the NGV programmes
being implemented.  Experiences of countries like Argentina, where
hundreds of thousands of Natural Gas vehicles have been in operation
more than 10 years without any serious accidents, must be studied and
emulated.  The challenge is the implementation, monitoring and
enforcement of these safety requirements. Infrastructures such as the
setting up of CNG cylinder retesting stations, the training and
certification of qualified cylinder inspectors, safety audit teams,
etc., must be put in place.

Besides preventive measures, the NGV Industry must also be ready to
face any safety incidents or accidents.  Hence, Emergency Response
Plans and training of personnel to response to any emergencies
especially for the NGV refuelling stations must be implemented and
sustained.

Copies of papers presented at ANGVA 2005 are available on CD from the conference secretariat for $US20.
 

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