OREANDA-NEWS. September 21, 2010. Experts have long been aware of the advantages produced from natural gas utilization as vehicle fuel. It is a common knowledge that natural gas is more environmentally friendly than gasoline or diesel fuel. Low price is another great advantage of natural gas, in addition to its eco-friendly feature. Despite all these beneficial factors, natural gas utilization in vehicles is still rather limited in Russia. Participants of the 2nd International Conference “Gas into Engines-2010” held at the Gazprom VNIIGAZ premises on September 16, addressed the issues related to potential development of the global vehicle gas market and wider utilization of natural gas in vehicles in Russia.

Initial data

Pavel Tsybulsky, Director General of Gazprom VNIIGAZ emphasized in his speech the issue of natural gas endowment. Oil was the primary energy resource since the second half of the 20th century. However, over the last three decades natural gas has been conquering the global markets. At present, natural gas accounts for 50 per cent in Russia’s energy mix. Nearly 60 per cent of electric power stations in our country run on natural gas and only 20 per cent – on coal and fuel oil. At the same time, the segment of natural gas-based electric power generation is rather insignificant abroad. According to Tsybulsky, the efficiency increase in generating capacities will help to save considerable gas volumes that could be used, inter alia, as vehicle fuel.

Pavel Tsybulsky noted that renewable energy sources would undoubtedly become a crucial component of the energy industry in the future, but it is impossible to predict at the moment when it could happen. Therefore, natural gas will remain a top priority in the energy mix at least until the end of this century, and will play an increasingly important role being a clean-burning fuel as compared to oil and coal.

“Resources abundance makes natural gas a strong competitor with petroleum products on the motor fuel market,” summed up the Gazprom VNIIGAZ Head.

Vasily Zinoviev, Deputy Chairman of the Committee for Energy of the Russian Federation State Duma detailed the legislative aspects of natural gas utilization as vehicle fuel.

He recalled that the State Duma was addressing a legislative draft on utilizing vehicle fuel alternatives. The draft has been awaiting the Duma’s approval for more than five years, but failed to receive the support of the Russian Government in spite of the fact that it was three times amended. This year, the decision was taken to revise the draft concept due to the adoption of the Federal Law “On energy efficiency”. It was resolved to include some provisions from this law into the amended legislative draft.

At the same time, there is absolutely no reason to wait for the Federal Law adoption, as explained by Vasily Zinoviev. The Russian Federation constituents adopt local programs on vehicle conversion to natural gas. For instance, the Novgorod Oblast is going to convert around 3 thousand vehicles to compressed natural gas (CNG) by 2012 including 1.5 thousand trucks and 1 thousand buses. To encourage natural gas utilization by vehicle owners the transport tax rate was reduced in the region by 50 per cent. Similar programs are being executed in the Nizhny Novgorod, Penza, Tomsk and Kostroma Oblasts, the Stavropol Krai, Chuvashia, Tatarstan and other regions.
Foreign experience

The global experience of natural gas utilization as vehicle fuel was described in the speech by Gabriele Gozzi, Chairman of the International Association for Natural Gas Vehicles. He pointed out that over the last five years 4 thousand CNG-powered cars have been produced with 8 new filling stations commissioned every day globally. This production covers motorcycles, light vehicles, trucks and buses. They all find commercial application. In August, for instance, the Indian subdivision of Japanese Suzuki – Maruti Suzuki will start production of 5 new car models powered by natural gas.

It is forecasted that 65 million vehicles will run on natural gas by 2020. Pakistan is the country with the most widespread utilization of natural gas as vehicle fuel: 2.3 million vehicles run on natural gas there. Argentina is holding the second place – 1.8 natural gas vehicles. In Iran and Brazil natural gas is used by 1,665 and 1,632 million vehicles accordingly.

Manuel Lage, General Manager of the European Natural Gas Vehicles Association shared his opinion that the best example of natural gas utilization as vehicle fuel was the fleet of garbage collection vehicles in Madrid. It comprises 650 CNG trucks. According to estimates, the fleet helped to reduce the annual atmospheric emissions in Madrid by 132 tons of nitrogen oxide and by 2.069 tons of carbon dioxide.

Stephan Werman, Co-Chairman of Gazprom Germania emphasized that over the last decade Germany had been annually increasing the number of CNG-powered vehicles by 50 per cent. This country applies a reduced tax rate for natural gas vehicles. At the same time, natural gas utilized as vehicle fuel is twice cheaper than gasoline.

Natural gas utilization in vehicles is evolving in Eastern Europe as well. According to Peter Seidinger from OMV, 150 vehicles ran on natural gas and one filling station operated in Croatia in 2008. In 2009 Irisbus Iveco brought 60 gas-fueled buses to the market and another 40 buses are coming. Natural gas utilization as vehicle fuel is boosted in Bulgaria through the introduced zero tax for the gas-fueled vehicles.

According to Pavel Novak, NGV Manager of the Czech Gas Association, in 2006 Czechia adopted the program aimed at stimulating vehicle conversion to natural gas. In January 2007 the zero tax rate was introduced in the country for CNG-fueled vehicles. The Government subsidizes the purchase of buses running on CNG. Thus, the subsidy for one bus acquisition amounts to EUR 8 thousand. A joint Russian-Polish project “CNG green line” has been launched recently. The project is targeted at arranging the communication of CNG-powered buses between the two countries. Since 2007 Czechia has established taxi fleets comprising natural gas vehicles only. Car rentals with natural gas vehicles show rapid development.

Utilization of gas fuel in Russia

According to Evgeny Pronin, Deputy Head of the Gasification and Gas Utilization Directorate, global gas consumption by motor vehicles varies between 30 and 40 billion cubic meters. At the same time, this parameter increased 12 times over the recent years. Russia features a significant growth rate as well – gas utilization in vehicles has increased 6 times. However, the share of gas used for this purpose is still relatively small – some 115 billion cubic meters. There are some 100 thousand natural gas vehicles and 220 gas filling stations in Russia with its population exceeding 140 million people. As it was noted by Georgy Mirzoyev, Advisor to the AvtoVAZ Vice-President, the amount of stations in our country was less than in Armenia.

Therefore, many Conference participants asked themselves the perennial question: “Which comes first, the chicken or the egg?” In other words, whether it is necessary to start with a large-scale production of vehicles or first of all, to consider the expansion of a filling stations network to promote gas utilization in vehicles.

According to Georgy Mirzoyev, the company together with Gazprom puzzled over the same question as far back as five years ago, but they never managed to find an answer to it. As a result, AvtoVAZ ventured upon designing a light vehicle powered by natural gas. But the main problem was to create a vehicle which, as he said: “Would be able to smoothly integrate with this gas problem.”

As a result, Lada Priora, a test model elaborated by AvtoVaz, can run on two types of fuel: traditional gasoline and natural gas. The main advantage is that this car can be produced on a simple conveyor line and the decision on whether to install the gas equipment is taken at the last stage. The vehicle still has the same fuel tank and can mount two additional compressed gas cylinders each with 48-litre capacity. The cylinders will be located in a spare wheel recess enabling to avoid the car body redesigning. In this regard, Georgy Mirzoyev offers several solutions for a spare wheel problem. If a car is oriented at the European market, its trunk can receive a space saver wheel. Domestic drivers will use a pump and special paste to fix a tire, which is quite enough for the Russian market.

Lada Priora can cross some 260–270 kilometers when running on gas and 600 kilometers in a combined cycle. Georgy Mirzoyev expressed hope that commercial production of this car would be lauched soon. “We hope that by late 2011–early 2012 this car will leave the conveyor line,” he said.

KamAZ has an impressive experience of natural gas vehicles production. According to Irek Gumerov, Deputy Director General of KamAZ, in 2003 this company in association with research organizations designed a natural gas engine, which allowed mastering production of a whole vehicle line.

Irek Gumerov drew the audience’s attention to the fact that KamAZ vehicles produced far less emissions than set by the Euro 4 standards. Running natural gas engine exhausts inappreciable smoking, while the noisiness is 3–4 decibels less comparing to the diesel analog. Methane utilization is not only environmentally friendly, but is economically viable as well. Thus, a dump truck running on gas pays back 2 months earlier versus its diesel analog even regardless of a higher acquisition price. The company estimated that exploitation of 1 thousand KamAZ vehicles powered by natural gas could save RUB 300 million of fuel costs a year.

Alexey Serezhenkin, Deputy Executive Officer of the Association of Russian Automakers complained that a variety of gas engines and vehicles had already been designed in Russia, but commercial production of these inventions was negligible. In 2009 on the back of the crisis the decision was taken to subsidize the purchase of motor and municipal vehicles. He believes that it would be rational to expand this practice to natural gas vehicles as well. It is also expedient to introduce a zero transport tax for natural gas vehicles, as well as to grant privileges to Russian manufacturers deploying commercial production of natural gas vehicles. Constituents of the Russian Federation must actively support this trend, in particular through the land lease rates reduction in case the companies use CNG equipment.

In his closing speech Evgeny Pronin noted that natural gas was a fuel of tomorrow available today. Gasoline and diesel fuel have no alternatives in terms of environmental friendliness and economical efficiency, but for methane. “There are a lot of challenges ahead and we are to meet them together,” noted Evgeny Pronin. Answering the question about the egg and chicken he said: “I think that it is the rooster who came first.”