China Utilizing More Natural Gas Vehicles
We were excited that another person lastly brought it up.
In a latest tv interview, Boone Pickens advised a reporter he was stunned to discover there have been 9,000 buses in China working on natural gas.
In an period of worrisome global warming occasions, it’s laborious to argue with a transportation system that has confirmed to reduce particulate emissions by ninety five p.c compared to diesel engines and which also reduces carbon monoxide and nitrogen oxides by seventy five percent and 49 p.c, respectively.
Those are the statistics UPS provides with reference to its 800 vehicles now working on compressed natural gas (CNG). UPS has the largest personal CNG fleet within the United States.
Many cities in China could use the identical clean air how much is a barrel of oil today 2015 remedy. And like anything Chinese language, natural gas consumption seems to be shifting forward at breakneck velocity.
Air pollution in Beijing and in many different quickly growing Chinese language cities has been a nagging ache within the side of China’s management. The current progress spurt of vehicle usage, changing decades of bicycling, have additional aggravated the untenable air local weather. Combine this issue with Beijing’s mandate to scrub up the air in time for subsequent summer’s Olympiad, and the primary appropriate target are the automobiles.
Although Beijing will not convert its transportation fleet that fast, every little bit helps within the scheme of issues.
According to the International Affiliation for Natural Gas Vehicles, the newest (and largely outdated) statistics present greater than 6.Three million natural gas vehicles (NGV) and over 10,000 NGV refueling stations. As of January 2005, China stood just behind the United States in global rankings for such vehicles, respectively eighth and ninth.
The variety of NGVs compared to conventional gasoline- and diesel-powered vehicles is a drop in the bucket. However some of the more bold trade groups hope to reach a goal of 50 million by 2020.
China offers the most immediate promise, which might be what drove Boone Pickens to this marketplace. His California-based Clear Energy Fuels Corp provides 200 fleet prospects, which have about 13,000 NGVs, with the refueling capabilities for those autos with the corporate’s 168 natural gas fueling stations.
By building distribution networks, corporate and authorities consumers can extra readily access the natural gas to energy their vehicles.
This fact is evidenced by the momentum of tiny China Natural Gas, which is servicing the city of Xi’an in China’s Shanxi province. Perhaps you’ve by no means heard of the city, however the city now boasts a population of about eight million. Compressed natural gas reportedly powers 20,000 taxis, three,000 buses and a couple of,000 special objective automobiles. Over the next three years, the town’s leaders hope to almost double those numbers.
China Natural Gas now has 23 CNG filling stations in the town and hopes to broaden outside Xi’an and into Henan province. Since late April, the corporate’s shares have greater than tripled in value.
Boone Pickens envisions a giant opportunity in China’s natural gas for transportation functions. Typically, gas is used to gasoline electrical energy plants or for cooking. We first introduced up the accelerating use of NGVs in our latest publication, “Investing in China’s Power Disaster,” because of China’s wrestle to rapidly and efficiently import enough oil to energy its financial system.
Face it, China has a large energy appetite. Pickens remarked during a current television interview, “The exercise is unbelievable.” In earlier articles, we in contrast China’s energy-consumption and expansion to the Anglo-American-European Industrial Revolution during the eighteenth century.
China’s Coalbed Methane Activity Intensifies
China has a huge appetite for overseas funding to develop all levels of the natural gas fuel cycle. We now have focused our protection on the front finish of the cycle, especially on coalbed methane fuel. This makes sense for China because the nation has one of the vital plentiful provides of undeveloped coalbed methane (CBM) gas on the planet. As well as, the nation has a long tradition of coal mining and expertise. CBM comes from coal mines and China has the most important variety of working coal mines on the planet.
Speaking with Phil Flynn of Alaron Buying and selling in Chicago, he told us about China’s drive to power their transportation system with natural gas, “We’re years behind China.” He identified that switching over within the United States would grow to be a nearly inconceivable enterprise. “We don’t have the provision,” he said. “We must drill below the Rockies and below the great Lakes, after which we might still grow to be dependent upon natural gas imports.”
China has already begun the country’s marketing campaign for an power crossover.
About twelve months after China’s National Improvement and Reform Fee (NDRC) announced it authorized the country’s coalbed methane development plan, new developments have been parading throughout our radar practically each week. The commission targeted manufacturing to achieve 10 billion cubic meters by 2010.
On June 27, Shanghai CIMIC Life invested $196 million to develop a coalbed methane project in Jiangxi province. Building is already underway.
On July 4, China National Petroleum Corp began exploring a brand new coalbed methane discovery within the Xinjiang Autonomous area.
On July 6, Shanxi Ganghua Coalbed Methane Corp began building of China’s first giant scale CBM challenge – a coalbed methane liquefaction project.
On July 8, a PetroChina (NYSE: PTR) subsidiary signed an settlement with Shanxi Power Industries to develop a CBM site in northern China’s Shanxi province. The World Bank will finance US$80 million of the US$190 million challenge.
On July 20, town of Shenyang, and capital of Liaoning how much is a barrel of oil today 2015 province, announced it will start increasing its coalbed methane consumption in the area’s heavy industries to assist scale back the level of pollution in the area.
On July 24, China’s NDRC accepted a proposal from the first international company to develop a coalbed methane mine in China’s Shanxi province. Asian American Fuel is the first international company to acquire NDRC approval in 20 years, and the primary to do so in partnership with state-owned China United Coalbed Methane (CUCBM) since this corporation was formed. The plan’s initial capability was reported at 500 million cubic meters annually. We reported in late January that U.S. coal baron, E. Morgan Massey, had backed this firm.
China is optimistic concerning the country’s coalbed methane reserves. Two years in the past, Xu Dingming, a director of the NDRC’s energy bureau estimated that China’s CBM reserves have been roughly equal to the country’s natural gas reserves.
In December 2006, China’s Ministers of Finance, Customs and Taxation agreed to introduce tax breaks to corporations which imported gear for the development of coalbed methane resources.
This notice came after it was reported that China’s CBM-utilization had failed to satisfy the targeted 36 p.c – falling brief by nearly one-third. Since then, state-owned corporations and the government have been intensifying their efforts to accelerate CBM exploration and development in China’s coal fields.
Over the following twelve months, we count on these efforts to escalate CBM improvement to a more extremely visible international level.
Extra Players Coming into China’s CBM Sector
One in all the issues in the United States, in response to Phil Flynn, is complacency with storage numbers. “Natural gas storage is a buffer against supply,” Natural-Gas Processing Equipment he said. “But when now we have excessive weather this summer or a long, cold winter, production can’t keep up with demand.” He pointed to the spike following Hurricane Katrina within the summer of 2005.
The Chinese do not have this buffer. As an alternative, they are confronted with either additional straining the world’s power sources by importing natural gas (and crude) or by developing their domestic power fields.
The significant information from Asian American Gasoline, a privately held firm which we previously lined, is encouraging for others now growing their projects.
Companies we have featured previously – comparable to Far East Vitality, Green Dragon Gas and Pacific Asia China Energy – have moved their tasks ahead towards a really bearish tide. We believe they’re well-positioned to follow within the footsteps of Asian American Gasoline. Current output is modest at the company’s six test wells at 300 thousand cubic meters, but once more, this is a pleasant start.
Many North American traders have not but looked beyond their borders in developments for pure and coalbed methane gas tasks. The price of natural gas in North America is relatively meaningless in Beijing or Xi’an.
These companies ought to benefit from China’s latest acceleration to acquire more methane fuel, natural or CBM, to energy their vehicles. The typical bus consumes about 70 cubic meters of compressed natural gas per day (CNG). A typical taxicab makes use of an average of 30 cubic meters CNG day by day.
A strong promoting point for the elevated use of natural gas vehicles: the price of gasoline. A hybrid automobile, which additionally utilizes compressed methane gas, cuts the fueling cost by 60 %. How would the U.S. consumer really feel about paying $1.20 per gallon instead of $3/gallon on the gasoline pump In all probability the same method – one cubic meter of compressed CBM fuel is the equal of 1.13 liters of gasoline and retails for less than half.
As we pointed out in late June, establishments have begun investing in this sector. With the subsequent spherical of conferences in North America, throughout the fourth quarter and early subsequent year, we suspect extra institutions should take China’s coalbed methane initiatives more critically. ‘Movie star’ names equivalent to Boone Pickens, Morgan Massey and others present a comfort degree for many cautious traders. But then once more, it is the pioneers who make the most important cash, if the projects materialize.
In early July, W.R. Hambrecht rated Clear Energy Fuels a “purchase” with an $18 worth target. During his latest tv look, Pickens noted one other two analysts picked up on the corporate. And we could not agree more with Pickens, judging from emails readers have sent us. Pickens thought individuals did not really understand the story, at first. Now as more have digested what is going down, Pickens mentioned, ‘they like the story.’
And we completely agree with Pickens’ comments to reporters, saying, “We think that (natural gas refueling stations) can be very massive business in China.” This development is not in contrast to the growth of cellular phones in China. The nation skipped the big infrastructure implementation for conventional landlines and zoomed to mobile telecommunications. Judging from our communications, and from what others have instructed us, the readability of reception and reliability surpasses the standards in North America.
Building extra NGV refueling stations will assist drive the demand to convey more natural and CBM gasoline into China’s distribution network. It might be a major trigger to seize both international media and investor attention for this sector.
While we take natural gas for granted within the United States, the Chinese language have taken this gas source very critically and embraced it. By devoting their energies in creating their transportation systems with increased natural gas consumption, the country’s atrocious pollution history is perhaps reversed.