Transcript Natural Gas Vehicles A Feasibility Study

Natural Gas Vehicles:
A Feasibility Study
Steven C. Agee, Ph.D.
Shouro Dasgupta, B.S.B.
Alexis Caron, B.S.B.
Introduction: Natural Gas Vehicles
•
Dedicated natural gas vehicles are designed to run on natural gas
only, while dual-fuel or bi-fuel vehicles can also run on gasoline
or diesel.
•
Dual-fuel vehicles allow users to take advantage of the widespread availability of gasoline or diesel but also uses a cleaner,
more economical alternative when natural gas is available.
•
Natural gas used as a transportation fuel is called compressed
natural gas because the gas is compressed to a pressure of about
3,600 pounds per square inch (psi) and stored in a fuel cylinder
aboard the vehicle. CNG flows into the engine's combustion
chamber and is ignited to create power to drive the vehicle.
•
It is estimated that there are 9.6 million natural gas operated
vehicles in the world (December 2009)
Advantages and Disadvantages of Natural Gas Vehicles
Advantages
•Nearly 87% of U.S. natural gas used is
domestically produced, while in 2008
53% of the petroleum/crude oil
consumed in US was imported
•60-90% less smog-producing
pollutants*
•30-40% less greenhouse gas emissions
•Less expensive than gasoline
• Using CNG is also considered to be
better for engines, as cylinder wear and
oil contamination is reduced. Also,
spark plugs stay cleaner for longer.
* Depending on the type of vehicle
Disadvantage
•Limited vehicle availability
•Filling stations are less readily available
than gasoline and diesel
•Fewer miles on a tank of fuel
•Less trunk space for dual-fuel autos.
Worldwide Natural Gas Vehicle Statistics
Table 1: Number of Natural Gas Vehicles by Country
Rank
Country
Natural Gas Vehicles
Refueling Stations
1
Pakistan
2,000,000
2,941
2
Argentina
1,745,677
1,801
3
Brazil
1,588,331
1,688
4
Iran
1,000,000
500
5
India
650,000
463
6
Italy
580,000
700
7
China
400,000
1,000
8
Colombia
280,340
401
9
Bangladesh
190,381
502
10
Thailand
127,735
303
11
Ukraine
120,000
224
12
USA
110,000
224
Source: International Association of Natural Gas Vehicles, 2009
The Technology
Typical CNG Components in a Natural Gas Vehicle
The Technology (cont.)
4th Generation CNG System
Conversion Costs (Gasoline to Natural Gas)
•
A specially designed Conversion Kit is required consisting of cylinders
to be fixed in the trunk of the car with associated equipment to allow
the natural gas to flow into the engine and all cars can be converted
irrespective of make or model.
Table 2: Conversion Cost Comparison by Country
Country
Conversion Cost (50 liter tank)
Conversion Cost (90 liter tank)
Bangladesh
$750 - $800
$850 - $ 900
Pakistan
$ 200 - $230
$ 245 - $285
Argentina
$ 200 - $400*
$420 - $515*
Brazil
$100- $175
$ 200 - $400
Iran
$50*
$80*
India
$700 - $800
$950 - $1,000
Thailand
$1170 - $1400
-
Malaysia
$875 - $1100
-
USA
*Government subsidized
$1450-$3000
Fuel Price Comparison
Table 3: Fuel Price Comparison
Average Price in
Average Price in
Average price in
Gasoline Gallon
Diesel Gallon
Dollars per Million Btu
Equivalents ($)
Equivalents ($)
($)
Gasoline
2.65
2.96
22.99
Diesel
2.57
2.87
22.26
CNG
1.85
2.07
16.07
Ethanol (E85)
3.36
3.75
29.13
Propane
4.13
4.61
35.81
Biodiesel (B20)
2.70
3.02
23.44
Biodiesel (B99-B100)
3.54
3.95
30.67
Source: US Department of Energy (January 2010)
• CNG is about 80 cents less than gasoline on an energy-equivalent basis,
while E85 is about 28 cents less per gallon than gasoline.
Emission Standards
Light-Duty Vehicle Emissions: CNG vs. Gasoline
• Reduces carbon monoxide emissions 90%-97%
• Reduces carbon dioxide emissions 25%
• Reduces nitrogen oxide emissions 35%-60%
• Potentially reduces non-methane hydrocarbon emissions 50%75%
• Emits fewer toxic and carcinogenic pollutants
• Emits little or no particulate matter
• Eliminates evaporative emissions
Source: U.S. Environmental Protection Agency
Savings from CNG Vehicles
•
As a vehicle fuel it is about 30-50% cheaper than gasoline. This is due to
a combination of:
– The cost of natural gas on an energy equivalent basis relative to
petroleum fuels and
– fuel taxes, the current pre-tax price of Russian H-gas (the assumed
marginal source for NG used in Europe) delivered in the form of CNG
is, per lower heating value energy unit, only 63 % of the current price
of petrol.
Table 4: Saving Chart between CNG and Gasoline (Asia)
CNG
Gasoline
Rate
1.91/kg
$2.67/liter
Average
16.80 km/kg
12 km/liter
Running cost/km
$ 0.114
$0.225
Save/100km
$ 7.82 ($12.59/100 miles)
Nil
Source: International Association of Natural Gas Vehicles, 2009
Savings (cont.)
Table 5: Saving Chart between CNG and Gasoline (Europe)
Natural Gas
Rate
Price per kg
Consumption/100 km
Cost per 100 km
0.79 € ($1.02 USD)
7 kg (15.4 pounds)
5.53 € ($7.17 USD)
Regular Gasoline
Price per liter
Consumption/100 km
Cost per 100 km
Rate
1.23 € ($1.59 USD)
10 liters (2.6 gallons)
12.30 € ($15.95 USD)
Savings
6.77 € /100 km ($14.13/100 miles)
or 55 percent
Source: International Association of Natural Gas Vehicles, 2009
Predicted Savings in USA
Table 6: Savings in USA
Gasoline
CNG
MPG (City)
32
30
MPG (Highway)
38
34
Requirement for 100 miles (City)
3.12 gallons
3.33 gallons
Requirement for 100 miles (Highway)
2.63 gallons
2.94 gallons
Cost per 100 miles (City)
$8.12
$4.41
Cost per 100 miles (Highway)
$6.84
$4.70
Savings from using CNG (City)
$3.71
Savings from using CNG (Highway)
$2.14
Source: US Department of Energy (April 2010)
• Based on the mileage information from a 2005 Honda Civic and gasoline and CNG prices data from
the Midwest region (CNG-$1.41* & Gasoline $2.73), it is projected that for a 100 miles trip a CNG run
vehicle will save;
• $3.71 in the city area and
• $2.14 in the highway
• Estimates do not include additional savings from lower maintenance costs from reduced wear and
tear of the engine, less frequent oil changes and tune-ups.
* Average price as of 3rd May 2010 in OKC
Savings from Maintenance and Performance
•
•
•
•
•
Some fleet operators have reduced maintenance costs by as much as
40 percent by converting their vehicles to CNG.
Intervals between tune-ups for natural gas vehicles are extended
30,000 to 50,000 miles.
Intervals between oil changes for natural gas vehicles are
dramatically extended--anywhere from 10,000 to 25,000 additional
miles depending on how the vehicle is used.
CNG has an octane rating of 130 and has a slight efficiency
advantage over gasoline.
Because CNG is already in a gaseous state, NGVs have superior
starting and drivability, even under severe hot and cold weather
conditions
Tax Rate Comparison
*
Tax on Gasoline
Tax on CNG
Germany
68.7 % + 19.0 % VAT
0.0%
India
52.0%
8.0%*
Pakistan
38.57%
0.0%
Italy
63.1%
0 – 5%**
Oklahoma
12.93% †
11.48%‡
Currently only in the states of Maharashtra and Uttar Pradesh
**
†
Country
Depending on the size of the vehicle
Federal tax of 18.4 cents/gallon plus state tax of 17 cents/gallon as a percentage of average gasoline price in
OKC of $2.737 (04/29/2010)
‡
Federal tax of 18.3 cents/gallon plus state tax of 16 cents as a percentage of average CNG prices in OKC of
$1.41 (05/03/2010). However, a state tax waiver permit for CNG can be purchased from Oklahoma Tax
Commission at a cost of $ 100 per year.
• In order to recover the $100, a person would have to purchase ($100/0.16) 625 gallons of
CNG.
• At an average tank size of 23 gallons, a person would have to fill up their car
approximately 27 times a year or drive approximately 17,500 miles a year.
• Otherwise it is better off to pay taxes during CNG purchase.
Incentives for Natural Gas Vehicles
For Consumers: Oklahoma
• The state of Oklahoma offers the following
incentives
– a one-time income tax credit for 50% of the cost of
converting a vehicle to operate on an alternative fuel or
– for 50% of the incremental cost of purchasing a new
Original Equipment Manufacturer AFV
– The state also provides a tax credit for 10% of the total
vehicle cost, up to $1,500
Federal
• Qualifying vehicles are also eligible for a federal income tax
credit of up to $4,000.
Incentives for Natural Gas Vehicles
For Fuel Retailers : Oklahoma
•
Oklahoma provides a tax credit for up to 75% of the cost of installing
alternative fueling infrastructure.
•
Beginning January 1, 2010, a tax credit is also available for up to 50%
of the cost of installing a residential CNG fueling system (not to
exceed $2,500).
Federal
•
A 30% tax credit (not to exceed $30,000) is available for equipment
placed into service before January 1, 2009.
•
For equipment placed into service after January 1, 2009, the credit
amount is up to 50% (not to exceed $50,000).
Contact Information
Steven C. Agee, Ph.D.
Professor of Economics and Director
Economic Research & Policy Institute
Meinders School of Business
Oklahoma City University
2501 N. Blackwelder
Oklahoma City, Oklahoma 73106 USA
[email protected]
(405) 208-6111