CNG & LNG PROMISING NEW GROWTH OPPORTUNITIES FOR THE NATURAL GAS MARKET Sarah Van Der Paelt, Director, Sales Business Markets
Natural Gas Supply Changes The Picture Projected U.S. Pump Fuel Price ($/diesel gallon equivalent) Diesel Natural gas Increased shale gas production has reduced natural gas shortterm/long-term pricing and volatility Liquid fuels subject to world wide competitive pricing of oil Crude to Gas ratio growth 6:1 Historical 25:1 Today Report #:DOE/EIA-0383(2012)
Two Distinct Market Opportunities CNG LNG Properties Natural gas compressed on site to 3000 3600 psig 300x the energy density of natural gas Either fast fill (similar to gasoline dispenser) or time fill (overnight filling) Applications Ideal for Return to Base fleet applications with typical daily runs less than 500 km Bulk transport (by trailer) to remote industrial site or community Properties Natural gas cooled to 160 o C at dedicated LNG facility then transported to dedicated Refuelling Stations 600x the energy density of natural gas Either fast fill (similar to gasoline dispenser) or time fill (overnight filling) Applications Suited to Long Haul and Return to Base transport fleet applications with typical daily runs over 500 km/day Bulk transport (by trailer) to remote industrial/power generation site or community
Myth Busters Myth #1 A vehicle s performance is negatively impacted when using natural gas!
Myth Busters 4 th Generation dedicated natural gas engine with comparable performance to diesel (power & efficiency) and superior environmental performance EPA certified conversions for LDV/MDV market (dedicated and bifuel) assures on-going performance Advances in automotive engine technology (fuel injection, electronic ignition control, turbo-charging) have benefited natural gas European Performance race class dedicated to CNG with comparable times to high octane gasoline
Myth Busters 6 Myth #2 Natural Gas options are not available direct from the manufacturer (OEM)
Myth Busters
Myth Busters Myth #3 Government incentives are required to make CNG/LNG a viable business segment
Myth Busters Vehicle Class Vehicle Type Annual Mileage (km) Fuel Efficiency (L/100 km) NGV Conversion Cost Fleet Size to recover refuelling capital (10 years) Simple Payback on Conversion Costs Payback Sensitivity to Diesel Price Change (+25%) LDV Courier/Work Van 36,000 16.75 $15,000 57 3.2 2.0 5.0 MDV Step Van/Delivery Van 50,000 42.0 $29,000 25 1.8 1.5 4.0 MDV Refuse Truck 30,000 88.0 $40,000 39 2.0 1.3 3.2 HDV HDV Day Cab/Straight/Dump CNG Long Haul/RTB LNG 120,000 45.0 $75,000 39 1.9 1.4-3.2 150,000 50.0 $85,000 14 2.1 1.3 4.2
Natural Gas Vehicle Acceptance Grows Outside North America The number of natural gas vehicles in the world has grown to over 12 million in 2010 with a projected annual growth rate of 3.7% to 2030 Drivers for natural gas transportation fuel include: CNG/LNG Growth 2000-2010 Asia-Pacific 45% Latin/S.A. 22% Europe 15% Offset liquid fuels enabling higher exports Improved air quality in congested cities Support expansion of public transportation and improve citizens quality of life Develop export potential for domestic technologies
Environmental Impacts Improvements in CNG/LNG technology Natural Gas Emission Reductions versus Gasoline (EIA, 2010) have resulted in improved environmental performance across all vehicle segments GHG emissions from Heavy Duty Trucks (Roundtable, 2010) HDV natural gas engines met stringent 2010 emissions standards in 2007 (with little exhaust clean up)
The Size of Ontario s Transportation Fuels Market and Growth Projections In Ontario, 3% of the vehicles (MDV & HDV) account for: 21% of all transportation fuels consumed! 23% of all CO 2 emissions! Total transportation fuel consumed in Ontario in 2009 was equivalent to 15.3 billion m 3 of natural gas (539 bcf) For adoption rate projections, let s assume that beginning in 2012, 5% of the new MDV and HDV trucks purchased annually are natural gas fuelled Further, the adoption rate increases by an additional 5% every two years By 2020, approximately 5.5% of the MDV and HDV vehicles are running on natural gas with annual gas demand of 624 million m 3
Growth Projections for Number of Natural Gas Vehicles (MDV & HDV) and Total Fuel Use Total # of medium & heavy duty vehicles (MDV & HDV) in Ontario Ontario Demand for Natural Gas Transportation Fuel # of Ontario MDV & HDV on natural gas
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