NGV – a dependable solution for environment friendly...

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NGV – a dependable solution for environment friendly mobility

Ad Hoc Meeting of the Gas Centre with the United Nations Economic and Social Commission for Western Asia (ESCWA) - Beirut 5 - 6 July 2011 – Flavio Mariani – Eni Gas & Power

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Content

World natural gas resources and demand

Opportunities for the environment protection

NGV market/technology progress

Strategies for fuels in World’s regions

Examples of OEM models on the market

Predictions on future NGV market trend

What do Eni in Italy and in Europe

Relatore

Note di presentazione

NG worlds resources - conventional, unconventional, flared gas Opportunities for the environment protection - GHG NOx, PM, mutagenic HC NGV market progress - technology; norms; vehicle park; refuelling stations Strategies for fuels in Europe and North America (OEM); South America (retrofit and QVM); Asia (OEM, retrofit and QVM) Panoramic of OEM models on the market (Italy) Predictions on future NGV market trend (NGV Global)

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world natural gas resources and demand

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World’s proven conventional NG resources (2008) = 180,000 Bm3 , (~60 years production at current rates: 3.065 billion m3/year).

Recent estimate for virtually recoverable NG = 850,000 Bm3 , (virtually ~280 years production at current rates).

Unconventional resources, (e.g. coalbed methane, tight gas from low-permeability reservoirs, shale gas) = 45% of this amount. Increasingly affordable with rising crude price, and new technologies

To date, only 66,000 Bm3 of gas has been produced (or flared)[IEA Energy Outlook 2009].

World natural gas resources: increasing above expectations

Relatore


World’s proven NG resources in 2008 = 180,000 Bm3 , (~60 years production at current rates). Estimated recoverable NG resources long-term global recoverable NG resource base is etimated at more than 850,000 Bm3 , enough for ~280 years production at current rates. They are expensive, but become affordable with rising oil price. Unconventional gas resources, mainly coalbed methane, tight gas (from low-permeability reservoirs) and shale gas, make up about 45% of this amount. To date, only 66,000 Bm3 of gas has been produced (or flared) [IEA Energy Outlook 2009]. Flared gas: still > 100 billion (!) m3/year

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Flared gas

It is still there in different parts of the world (e.g. Nigeria, Russia, Asia etc)

It seems to be still > 100 billion (!) m3/year in ~ 60 countries and territories

Relatore


Collected data from satellites showed that over the last 12 years the amount of flared gas has increased in 22 countries: South Africa, Saudi Arabia, Azerbaigian, China, Ghana, Equatorial Guinea, Irak, Kazakistan, Kirghizistan, Mauritania, Myanmar, Oman, Uzbekistan, Philippines, Papua New Guinea, Qatar, Russia (except the region of Kanty Mansi), Sudan, Ciad, Thailand, Turkmenistan, Yemen. �In 16 countries the gas flaring has decreased: Algeria, Argentina, Bolivia, Camerun, Chile, Egypt, United Arab Émirates, India, Indonesia, Libia, North Sea (offshore), Nigeria, Norway, Perù, Siria, Usa (offshore). In 9 countries gas flaring has kept at the same level: Australia, Equador, Gabon, Iran, Kuwait, Malaysia, Romania, Khanty-Mansi (Russia), Trinidad and Tobago.

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Reference scenario of IEA Energy Outlook 2009 = global NG demand rise from 3,000 Bm3 in 2007 to 4,300 Bm3 in 2030

Average increase: 1.5% per year.

The share of NG in the global primary energy mix will increase marginally, from 20.9% in 2007 to 21.2% in 2030. over 80% of the increase in NG use between 2007 and 2030 will occur in non OECD countries, with the biggest rise occurring in the Middle East.

The rise of NG demand

Relatore


In the reference scenario of IEA Energy Outlook 2009, global NG demand will rise from 3.0 x 1012 m3 in 2007 to 4.3 x 1012 m3 in 2030 (average increase: 1.5% per year). The share of NG in the global primary energy mix will increase marginally, from 20.9% in 2007 to 21.2 in 2030. over 80% of the increase in NG use between 2007 and 2030 will occur in non OECD countries, with the biggest rise occurring in the Middle East.

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Opportunities for the environment protection

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Comparison of GHG emissions

Relatore


Mong fossil fuels, CNG is the best choice in terms of GHG emissions Its infrastructures are paving the way to renewable gaseous fuels such as bio-methane and hydrogen obtained from renewable energy sources

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A good example: the Iveco Heavy Duty engines

EEV = Enhanced enviromental friendly vehicles

Relatore


I motori pesanti a CNG sono in grado, (NB: senza richiespeciali tecnologie di trattamento fumi che servono invece ai mezzi a gasolio), di rispettare le norme più severe sulle emissioni, come l’Euro 5 e l’EEV, Enhanced Environment friendly Vehicle (norma volontaria, che contraddistingue i veicoli più ecologici, in vista di speciali strategie che li possano privilegiare)

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Polluting emissions: how far CNG can get

Euro 3

g/kW

h

Euro 4 Euro 5 EEV CNG

Particulate matter

Particulate matter

Euro 3

0

0,5

1,0

1,5

2,0

2,5

5,0

g/kW

h

Euro 4 Euro 5 EEV CNG

0,38

NOx

NOx

2,002,00

4,5

4,0

3,5

3,0

3,50

5,00

0,01

0,02

0,03

0,04

0,05

0,10

0,09

0,08

0,07

0,06

0

0,10

0,004

0,02 0,02 0,02

(EEV) = "Enhanced Environmentally-friendly vehicle“

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Polluting emission comparison

Source: M. FerreraFiat Powertrain TechnologiesNGV 2010 – Roma

Relatore


A NGV EEV is 3 times cleaner than a Diesel EEV, and without the need for complex exhaust aftertreatment systems

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Polluting emission comparison

Source: M. FerreraFiat Powertrain TechnologiesNGV 2010 – Roma

Relatore


NGV have a lower GWI, by 10-20% compared to Diesel vehicles, and by >20% compared to gasoline vehicles. The contribution of NGV to the total emissions of CH4 in the world is negligible: even if the share of NGV rise up to 10% in the world, their contribution to global CH4 emissions will only increase from 0.10 to 0.15%. NGV substantially curbe the emissions of the most dangerous pollutants, such as ozone promoters and aromatic copmpounds (mutagenic).

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Economy and safety of transport

C

• Continuity• Safety• Reduced environmental impact

Natural gas

Crude oil

ExceptLNG

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15

29.785 km

620,0 MW

Snam Rete Gas national network

OtherSnam Rete Gas regional network

Import of LNG

Import from Algeria

Import from North sea Import from Russia

Import from Libia

Domestic production

More than 30,000 Km pipelines

GN supply diversification - transport Infrastructures

Import of LNG

Plan for future import from Algeria

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NGV market/technology progress

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ARGENTINA

Total CNG vehicles : 1,900,000 i.e. ~ 23.0 % of the national fleet.

Refuelling stations: 1,880

PAKISTAN

Total CNG vehicles : 3,500,000 i.e. ~ 80 % of the national fleet.


BRAZIL



INDIA


Refuelling stations: 600

IRAN



ITALY

Total CNG vehicles: 740,000 i.e. ~ 2.0 % of the national fleet

Public refuelling stations: >850 (as of June 2011)

Source: The GVR – Gas Vehicles Report (February 2011)

The world NGV championsTotal NGV in the world: 13.8 millionTotal refuelling stations in the world: 18,700

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Source: ENI – NGVA Europe – G.V.R. (February 2011)

780 740

90092

13423.2

120 9.3

330.5

80.6

2205.3

672.8

301.6

125(priv)12.5(HD)

90.3

40.1

143.3

18 (priv)0.8

332.1

6 0.4

10.1

382.0

20.1

44 pr2.5

The NGV market – in Europe

Black: CNG refuelling stationsRed: Vehicles/000

3725.3

283200

255

249103

40.3

20.5

Relatore


Esiste un novero di nazioni (Club dei 100) che hanno sviluppato ormai una rete distributiva di un certo rilievo, con più di 100 stazioni: Italia, Germania, Austria, Svizzera, Svezia, Ucraina e Russia. Nella maggior parte degli altri casi, la rete è incipiente, e si tratta spesso di iniziative pilota, dimostrative e di flotte, come per esempio nel caso della Francia In Europa, l’Italia è tuttora al primo posto con oltre circa 700.000 veicoli a metano e altre nazioni europee stanno seguendo il nostro esempio. Molto attiva risulta ad esempio la Germania che con quasi 900 distributori sta facendo un grosso sforzo promozionale per l’autotrazione a metano. Il mercato del metano compresso in Italia è stato nel 2010 di circa 800 milioni di metri cubi/anno. In termini percentuali il metano rappresenta poco più dell’1% del totale carburanti usato nell’autotrazione.

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Gas cylinders integrated in the vehicle structure no on-board space limitations

Low fuel consumption and very low emission engines (downsize/turbocharge; multiair etc.)

Electronic management

dual fuel for virgin areas (“pathfinder/pioneer”)

Industry for Industry for NGVsNGVs: Innovation in vehicles: Innovation in vehicles

Relatore


Le bombole non sono più “aggiunte” o “applicate” ai veicoli, sono integrate nella struttura. I motori nascono di fabbrica a metano. Questo è lo schema del motore esposto nello stand. Mille motori sono stati forniti alla Cina per i bus per le olimpiadi di pechino 2008

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Technology progress – International norm framework

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Innovative systems for NG supply to NGV refuelling stations: L-CNG

L-CNG and LNG refuellingh station in Lleida, Spain – manufacturer: INDOX

CryoEnergy (ROS ROCA Group)

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Innovative systems for NG supply to NGV refuelling stations: L-CNG

L-CNG: liquefied natural gas at -160°C, pumped in liquid form at 200 bar, with cryogenic pumps, then vaporized by means of atmospheric heat exchanger to get gaseous CNG at 200 bar, without using a compressor, which saves >90% ofcompression energy

Cryogenic pump The first Italian L-CNG public refuelling station started operating in August 2010 in Cuneo, North Italy manufacturer: VANZETTI (It’s an all-made-in-Italy technology)

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Alternative systems for NG supply to NGV refuelling stations : mother/daughter station systemA long distance connection of the CNG refuelling station to the natural gas pipeline becomes unaffordable above 1-2 kilometres. Up to a certain range, the refuelling stations (daughter station), which are too far from the existing pipeline, may be served by means of cylinder truck, filled at a normal refuelling station (mother station). The cylinder trucks are serving daughter stations, and operate also for industrial and residential application natural gas supply in case of energency, such as pipeline service break- down. A similar solution is the “mobile refuelling station”: the cylinder truck includes also a compressor and a gas flow meter.

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Economic support from government: favorevourable taxation of cleaner fuels – the Italian example

EXCISES AND PRICES OF FUELS IN ITALYEXCISES IN APPLICATION SINCE 1° MAY 2008

excises enforced by the law

per commercial unitNet heating

value On energy basisgasoline 0,56400€/litre 32,00 MJ/litre 1,76250€cent/MJ

diesel 0,42300€/litre 35,00 MJ/litre 1,20857€cent/MJlpg 0,12500€/litre 0,22777€/kg 44,50 MJ/kg(*) 25MJ/litre(*) 0,51184€cent/MJ

CNG 0,00291€/m3 0,00409€/kg 36,00 MJ/m3 50MJ/kg 0,00808€cent/MJ

PUMP PRICES AS OF May 2011National average(**)per commercial unit On energy basisgasoline 1,567 €/litre 4,90 €cent/MJgasoline 98 RON 1,68 €/litre 5,25 €cent/MJdiesel 1,46 €/litre 4,17 €cent/MJecodiesel 1,54 €/litre 4,40 €cent/MJlpg 0,774 €/litre 3,10 €cent/MJCNG 0,896 €/kg 1,79 €cent/MJ(*) mixture of 50% propane 50% butane

(**) no control over pump prices

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Strategies for fuels in World’s regions

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Strategies for fuels in the world’s regions

Promotion of CNG as the better combination of assets (every country):

Care for environment

Availability

Technological maturity

Commercial maturity

Cost of development and R/D

To take profit of a domestic NG resources (e.g. Middle East, South America)

Reduce dependence on foreign oil (e.g. Europe, South America, North America, Asia)

Diversification of energy sources, in terms of supply and origin (e.g. Europe)

Use of NG which would otherwise be flared, or injected back into NG gisement (e.g. Africa, Asia, East Europe)

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Report of the European Expert Group on Future Transport Fuels –December 2010

Alternative fuel options for substituting oil as energy source for propulsion in transport are:Electricity/hydrogen, and biofuels as the main optionsSynthetic fuels as a technology bridge from fossil to biomass based fuelsMethane (natural gas and biomethane) as complementary fuelsLPG as supplement

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Examples of OEM models on the market

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Increasing availability of OEM NGV on the market in Italy

Number of OEM NGV models* on the market (at end of year) Main CNG LD vehicles available on the

market

2220

1412

8

20072006 20092008 2010

* Considering the different versions of the various models produced by car OEM, the total number is higher

Relatore


Negli anni scorsi si è mantenuto in costante aumento il numero di modelli di veicoli progettati e costruiti direttamente dalla casa in versione a CNG, con indubbi vantaggi in termini di qualità, affidabilità, garanzie, prestazioni, e gradimento del cliente (privato o gestore di flotta). OEM = Original Equipment Manufacturer veicolo prodotto dalla fabbrica direttamente a metano

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International NGV availability - some from the bunch…….

GM - Opel

Ford

Mercedes

Vokswagen

Fiat

Citroen

Renault

Peugeot

Tata (HD)

Toyota

Honda

Nissan (HD)

Isuzu (HD)

MAN (HD)

Iveco (HD)

Cummins (HD)

Volvo (HD)

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Available NGV models on the market HD

Mercedes EconicMercedes Citaro

Stralis IVECOGarbage collecor IVECO

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Urban buses

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Bus and truck

Mercedes EconicMercedes Citaro

Stralis IVECOCompattatore IVECO

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Available NGV models on the market

New Opel Zafira

Volkswagen TouranVolkswagen Caddy

Fiat Grande Punto

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FIAT MultiplaFIAT Nuova Panda

CITROËN C3 Bi Energy MMercedes B 170 NGT

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FIAT Nuovo Doblò

OPEL Combo

Citroen C4 G.Picasso Bi energy

VW Passat TSI Ecofuel

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Available NGV models on the market - commercial vehicles

Mercedes Sprinter

IVECO Daily metano

Fiat Ducato

Van of the year 2009

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CITROËN Berlingo OPEL Combo

RENAULT Kangoo Mercedes Sprinter NGT

Available NGV models on the market - commercial vehicles

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Predictions on future NGV market trend

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Landscape in the near future As reported by the main investors and market analysts, the worldwide landscape is moving towards a diversification in all geographic areas with a constant decreasing of conventional fuel demand and simultaneously increasing of hybrid propulsion and NGV.

Several market analysts predict, since 2009 till at least 2015, a constant increasing of NG urban buses both in Europe and U.S. thanks to a policy of grants and de-taxation

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Trend of the NGV global population

Relatore


If this trend keeps this pace, or even smaller, like for example a less optimistic 16%, by 2020 the world population might get up to 60 million vehicles. 12 Mvehicles X 1.1611 = 61.4 Mvehicles

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Source: John Lyon past Pres. IANGV - at NGV 2008 Rio De Janeiro

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NGV world population growth expectation to 2020 (increase by 18% annually)= 1.18%11years x 11Mvehicles = ~60 Mvehicles

0

10

20

30

40

50

60

70

2011 2013 2015 2017 2019 2021

M vehicles

Prediction by IANGV (now NGV Global): CNG sale to NGV = 400 Bm3/year in 2020 (9% market

share ?)

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The NGV market growth trend

The development of the worldwide running park of NG and biomethane vehicles has been growing at an annual pace of 15% in the last decade of the 20th century,

but since 2001 the annual growth rate has been 26%,

having reached about 13 million vehicles in the world in 2010. This is all due to the clear advantages in terms of economy, emissions and reduced dependence on crude oil.

Out of this important global figure EU countries represent 1 million vehicles.

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Predicted development of NGV fleet in Europe

Source: Universitat Duisburg Essen – CAR, Center utomotive Research

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NGV market – In Italy

Estimate of CNG sale to NGV Italy Mm3

830670587534473

2006 2007

740

2008

~10%

20092005

develpment factors

Economy vs. other fuels

356

National NGV fleet (OEM+retrofit) 1,000 unitsAverage yerly increase of national NGV fleet: ~15%

New OEM 1,000 units

8587652923

2007

2006

~40%

2009

140

2008

2005

391 445 536 640

Incentives (2008- 2009) and norms

Availability of new OEM models

2010

740

2010

Stability of the fiscal policies favourable to clean fuels

Relatore


The CNG consumption of NGV has been constantly growing so far, initially driven by aftermarket vehicles, now mostly driven by OEM. The decreasing of new OEM occurred in 2010 was due to the fact that most of the financial incentives for new NGV purchase have been withdrawn.

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NGV predictable trend in the long term

further growth in Italy

National NGV fleet – Italy Million cars

Trend “max”

Trend “as is”

0,97 1,29

0,11 2,982,25

1,7

0,70

0,26

0,08

0,20

0,15

2010

2012

2014

2016

0,80 1,06

2018

+25%

+15%

1

2

• Position of government

A. Keep incentives for NGV purchase

B. Suitable norms/regul.

C. Keep favourable taxation of clean fuels

D. Incentives for ref. stations

• Position of automotive OEM

A. Wide NGV model range offer

B. Investments in R&D

C. Suitable price politicy

D. After sale assistance

Rivedere stime

2020

0,06

1,40

1,85

2,45

3,24

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What do Eni in Italy and Europe to develop NGV market, and face the challenges: •Direct involvement (dedicated NGV promotion department)•Government relations (national/international)•Associations (Italy: NGV System Italia; Europe: NGV A Europe; internationally: NGV Global)•Information dissemination

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Some examples of the Challenges to CNG development as NGV fuel

Amendments proposed to EU Directive on fuel taxation (Directive 2003/96/EC)

Cost and boureaucratic process of building the refuelling infrastructure

OEM vehicle offer

Public administration support (even if CNG is a fossil and non renewable fuel)

Suitable information

Electric and hybrid vehicle competition (are EV ready, or just another illusion?)

Biomethane: synergy but also competition (do we renounce to gold, waiting for platinum?)

Norms and harmonisation

Collaboration of the different stakeholders (gas industry/oil companies; manufacturers; public administration; associations; customer unions; press)

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Taxation directive

An amendment has been proposed to the Energy taxation Directive 2003/96/CE of the Council, which suggests to increase the minimum tax (excise) for CNG as a vehicle fuel, from 2.6 €/MJ in force today, to 9.6 €/MJ by 2018 (i.e. 370% increase).

By 2018 all fuels, gasoline, diesel, LPG, CNG would be subject to the same minimum tax of 9.6 €/MJ.

This would for sure destroy the NGV market in Europe.

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The threat of the EU Directive 2003/96/EC on minimum taxation of energy and electricity (excise duties)

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Recommendations

Set a target within reach; which fits the country characteristics

Make gas/oil/energy companies well aware of the potential of NGV.

Keep OEM and retrofit operators active in the NGV field

Keep constant relations with the PA; make them well acquainted with the value of the NGV option, compared to the other energy source alternatives for the transport system

Never relent fostering a favourable fiscal strategy

Provide for a comprehensive and fair set of standards, to ensure safety with reasonable development costs

Be a partner, and encourage patnership, in the combined promotion effort, even with your competitors on the energy market (e.g. by joining the associations)

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