• 3 hours U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 5 hours Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 7 hours Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 9 hours Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 12 hours Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 14 hours TransCanada Boasts Long-Term Commitments For Keystone XL
  • 15 hours Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 22 hours Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 1 day Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 1 day Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 1 day Venezuelan Output Drops To 28-Year Low In 2017
  • 1 day OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 2 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 2 days Kinder Morgan Delays Trans Mountain Launch Again
  • 2 days Shell Inks Another Solar Deal
  • 2 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 2 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 2 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 2 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 3 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 3 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 3 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 3 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 3 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 3 days Norway Grants Record 75 New Offshore Exploration Leases
  • 3 days China’s Growing Appetite For Renewables
  • 3 days Chevron To Resume Drilling In Kurdistan
  • 4 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 4 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 4 days Nigeria Among Worst Performers In Electricity Supply
  • 4 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 4 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 4 days Saudis To Award Nuclear Power Contracts In December
  • 4 days Shell Approves Its First North Sea Oil Project In Six Years
  • 4 days China Unlikely To Maintain Record Oil Product Exports
  • 5 days Australia Solar Power Additions Hit Record In 2017
  • 5 days Morocco Prepares $4.6B Gas Project Tender
  • 5 days Iranian Oil Tanker Sinks After Second Explosion
  • 7 days Russia To Discuss Possible Exit From OPEC Deal
  • 7 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
Alt Text

Gas Wars: The First Energy Conflict In 2018

Territorial disputes over newly discovered…

Alt Text

Oil-Rich Venezuela Is Out Of Gasoline

Iván Freites, a secretary of…

Alt Text

Will 1 Billion EVs Crash Gasoline Demand?

Electric vehicle sales are picking…

Matt Slowikowski

Matt Slowikowski

Matt Slowikowski is the founder of the energy analytics blog enernomics.org. He specializes in economic analysis of the energy industry and energy projects.

More Info

China Cleaning Up Its Air With Natural Gas Vehicles

cHINA

On 13 May 2016, the 17th annual China Natural Gas Vehicle (NGV) and filling station equipment exhibition drew to a close. The 50,000 square meter exhibition brought in over 50,000 visitors on its opening day. The annual trade exhibition brings together experts from all over the country and industry to share experiences, best practices, and develop the country’s “Oil to Gas” policy.

With the balancing forces of natural gas infrastructure development in China and an insipidus drop in NGV sales last year, the air in the building was of cautious optimism that NGVs will soon come to have a second spring.

(Click to enlarge)

Sales of NGVs in China collapsed in 2015 along with the drop in the price of oil. The cost of oil to natural gas per BTU is a large driver for NGV adoption: at a ratio below 0.5:1, adoption is strong, while with a ratio of 0.75:1, relatively few choose to adopt NGVs, due to the higher costs of NGVs in China.

China has a tax-incentive program that was stopped and started in some cities during recent winters due to shortages of natural gas. However, as LNG import infrastructure, China’s shale gas reserves, and China’s coal-to-gas resources are developed, China will no longer have this challenge.

In China, CNG is preferred for smaller vehicles, while buses, trucks, and heavy equipment opt for LNG as an alternative fuel, as LNG is a 2.8 times denser fuel. In larger bus and industrial applications, electric vehicles still have range-related challenges. In larger cities such as Beijing, a 99.9 percent reduction in particulate matter and 97 percent reduction in CO is a welcome thought when switching trucks from diesel to LNG. However, LNG trucks are not without their difficulties. In practical applications, fuel economy is lowered as frost is formed around LNG valves during use, which can put strain on connections and cause leaks.

Traditionally, natural gas prices are have not been market-priced, but rather centrally priced in China. However, in some cities, price liberalization has been happening, and from December 2016 onwards, natural gas prices movements will be liberalized across the country, allowing for a 20 percent price movement and no lower limit, according to market demand. Related: Lunar Drilling: The Resource Race For The Moon Is On

In January 2016, China set a “floor price” for crude oil refined products. If international prices for oil fall below $40 a barrel, China will not decrease prices further on refined crude products. These two combined pricing dynamics will ensure a price ratio of 0.65:1, increasing the confidence that no one who switches to NGVs will switch back.

Mixed results for 2016 and an uncertain future

With the price setting developments still being ironed out, the drop in oil price and incentives for electric cars are having mixed results on NGV car sales and charging infrastructure buildup. From January to March 2016, 571 NGV refueling stations including 398 CNG stations were added, bringing the countries’ total to just under 8,000, with the country’s goal of reaching 12,500 charging stations by 2020.

From January to February of 2016, NGV passenger car production was 1,085 vehicles, down 75 percent from 2015, which was already down considerably from 2014. Truck production was 2,311 units, down 36 percent from the previous year. Related: Saudi Arabia Offers Hope For An Oil Price Rally

Only some of the causes of the drop in CNG passenger car sales are related to price points. As noted in some of the exhibitions’ presentations, although most safety issues have been addressed, China still uses 20 MPa as their standard filling pressure for CNG, in contrast with 25 MPa for the U.S. and 30 MPa for Germany.

At 20 MPa, CNG vehicle owners have some range anxiety, only being able to drive up to 200km (124miles) with standard tank sizes. By increasing the pressure to 25 MPa, ICE power is comparable to gasoline, and car range is extended to over 300km with standard tanks. The current decrease in NGV production will make it challenging to meet the country’s 2020 goals of over 11.5 percent market share of NGV sales.

With next years’ exhibition set at 60,000 square meters and set to draw proportionally more visitors, there is a sense that the market is bubbling under, and maturing enough to drive consumers back. With technology advancing to become competitive with gasoline, and prices set by officials to ensure NGVs will be price competitive after December, 2017 looks to be the year that NGVs return to the main stage in China.

By Matt Slowikowski for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Casey Mulder on July 21 2016 said:
    Hi Matt
    Good summary of the situation, but where did you get the information about fuel economy concerns due to frost build up on the valve. This is a normal occurance and has no impact on engine fueling or fuel economy.
    Thanks
    Casey

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News