The report posted below describing the unfortunate scene in Bangladesh after  conversion of many vehicles from gasoline to natural gas is notable on a number of levels.  First, it’s a good example how demand for oil is being destroyed by high oil prices in poor countries.  No doubt similar changes are happening in many countries and to millions of people around the world as they adjust to use less oil.  The oil that was formerly used in Bangladesh is now being used in China or some other growing economy, probably one that subsidize the price of oil so their populations do not feel the full affects of the rising free market price of oil. 

A second point is that natural gas is a realistic substitute for gasoline, at least in the short run as the energy equivalent natural gas price remains about half that of oil.  People in many countries have been converting their cars for the last few years since the oil price began rising sharply.  Many Australians have converted already.  In the U.S. Boone Pickens is an advocate of using NG in transportation, especially for fleet vehicles like busses for which a central re-fueling station makes sense.  His company, Clean Energy Fuels (CLNE), is serving this market.

Thirdly, it suggests a question:  should the U.S. use conversion of vehicles to natural gas as one approach to solving our energy dependency?  After all, natural gas is fairly abundant in the North America.  Our imports of LNG are a very small part of the total NG used locally and new unconventional gas fields are being discovered and proved out rapidly. 

My view is that moving toward natural gas for either vehicles or electrical generation (which is also happening) make no sense longer term.  Natural gas production has already peaked in Canada and may be close to peaking in the U.S.  Recent reports from Europe indicate potential shortages on the horizon.  The price of natural gas outside North America is already significantly greater than inside - nearly double, in fact, in some places like Japan - and shows indications of rising further.  

Published On: 2008-05-03

Front Page

CNG Conversion Rate Picks Up

High demand, fewer stations cause chaos

Wasim Bin Habib

The CNG refuelling stations in the capital are struggling to cope with the ever-increasing demand for the fuel as conversion of petroleum-run vehicles continues at a very high pace.
On average, about 2,000 vehicles are being converted into CNG-run ones every month, and about 92,135 vehicles were converted in 116 conversion workshops across the country until March this year.
The insufficient CNG stations, which face frequent disruption due to persisting power outage, result in long queues of vehicles, often impeding traffic flow on the surrounding roads.
As the potential entrepreneurs keep seeking permission to set up new CNG stations to avoid such gridlocks, the authorities concerned blame it on lack of land.
The sufferings of both passengers and drivers intensify when they have to remain stuck in long queues for hours amid scorching heat. A large part of their time is being eaten up while waiting for refuelling.
Sometimes the long line of vehicles is seen stretching up to even one kilometre.
According to Rupantarita Prakritik Gas Company Limited (RPGCL), there are about 1.32 lakh CNG-run vehicles in the country.
The RPGCL however does not know how many of these vehicles run in the capital.
The converted vehicles put tremendous pressure mostly on the 99 refuelling stations in the city in addition to 130 stations elsewhere in the country.
With the existing refuelling stations already being inadequate, power outage adds to further misery.
The storage of a CNG station becomes empty while giving fuel to the vehicles and if the power goes off at that time, it takes at least half an hour to fill it up again. In the meantime, the queue stretches further, say some refuelling station employees.
They warn the situation would get worse in the coming days if new stations are not set up in time.
According to RPGCL, 19 more stations will be launched by June this year, including three in Dhaka.
Drivers of CNG-run three-wheelers and taxicabs say they often need several hours for refuelling.
Abdul Hamid, driver of a three-wheeler, was in the queue at Mohakhali. He told The Daily Star he was waiting for about two hours but yet to get fuel as power went off suddenly.
“It was 7:00pm when I joined the queue and now it’s 8:30 and I don’t know when I will get fuel. I could have earned over Tk 100 in the meantime,” said the frustrated driver.
“People often scold us if we ask for extra fare … tell me what should I do when I have to waste so much time for fuel,” said taxi driver Rahim Mia.
“I have to pay Tk 700 to the taxi owner and run my four-member family with the remaining money. Moreover, the prices of essentials have gone beyond our reach.”
Earlier, it took at best 45 minutes to refuel, but now it takes at least three to four hours, he said.
Some CNG-run three-wheelers drivers allege most of the refuelling stations give privilege to the larger and expensive vehicles, which consume more gas.
Entrepreneurs say if the government gives easy loan to add CNG refuelling facilities to the existing petrol pumps, the problem will reduce significantly.
Nazmul Haque, president of Bangladesh Petrol Pump Owners’ Association, said they would soon submit a proposal to the ministry concerned in this regard.
As there is shortage of land, the government may allow setting up CNG stations in the limited space with a condition of two nozzles only for light vehicles, he added.
The government should find out ways for leasing out more land or allow the private entrepreneurs to set up stations in the existing pumps to ease the pressure, the entrepreneurs add.
According to RPGCL, around 47.86 million million cubic feet (mmcf) gas is currently being used in the 229 stations across the country and around Tk 390 crore is being saved every month for using CNG.

Tags: peak oil energy investments

This entry was posted on Wednesday, May 21st, 2008 at 9:23 am and is filed under Poverty and Oil (demand destruction), demand for gas, vehicles powered by NG. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.