Monday, July 14, 2008

Malaysia Government Pushing Natural Gas Vehicles for Buses

By Yamin Vong

FINALLY, we have some good news and some light at the end of the tunnel.

The government will be pushing for a transport fuel policy where natural gas for vehicles (NGV) will be used for buses.

This is one of the findings of the anti-inflation committee.

"We are looking at gas as a possibility to structure an energy policy. At the moment, we are swinging towards getting the public transport sector to use gas to reduce the use of diesel," said Domestic Trade and Industry Minister Datuk Shahrir Abdul Samad last Wednesday.

This is one of the best outcomes of the hike in fuel prices. It has made the government start to take the lead in how to diversify our addiction to petrol and diesel.

The next steps that the anti-inflation committee should do is to drive the public transportation agenda with an iron fist - the people who use buses should be treated with more care and respect by allocating special lanes for buses and taxis. Bus lanes should be re- implemented step by step so that the police can focus its resources and enforce strictly. And what are all the multi-million ringgit CCTVs being used for, if not to control traffic? Coming back to the point of gas playing a major role as a transport fuel, in a modern economy, the transport fuel policy is designed to diversify and minimise consumption. With this new direction, Malaysia can optimise its natural gas resources and substitute this for crude oil.

We'll have to wait for the full announcement of the transport fuel policy but as it is, the most important first step is the recognition of NGV as a public transport fuel.

This is one of the most natural things to do - using NGV for public transport. Firstly, it's logical for Malaysia to use this domestically rather than spend money liquefying it for export. Secondly, it's a clean fuel. Thirdly, it's a `sticky' fuel, i.e. it's not easy to smuggle or steal unlike diesel.

The issues that the government must address is the pricing and the availability of fuel. The technology of conversion has reached a stage where diesel buses can be retro-fitted to use diesel for starting and peak loads, and at cruising, NGV is injected into the combustion chamber.

Of course, there are also the diesel engines that are made for NGV.

The energy policy, which is expected to be announced in three months, will presumably also look at the transport fuel policy because transport fuel accounts for 40 per cent of total energy consumed.

With a clear transportation energy policy, Malaysians can pull together in one direction as a nation in solving the energy demand of the transportation sector.

Motor vehicles account for around 40 per cent of the nation's energy consumption, 99 per cent of which is petrol and diesel.

The transportation energy policy should include alternative fuel targets. For example, the European Union has established a target of replacing 20 per cent of petrol and diesel fuels with alternatives with the target of 10 per cent NGV and 5 per cent hydrogen by year 2020, and 5.75 per cent biofuels by 2010.

Targets are important because plans can be prepared, implemented and monitored.

If the decision is to substitute 10 per cent of the transportation fuel with NGV, then the authorities can calculate how much natural gas needs to be allocated to the transportation sector, how many and where NGV stations need to be built, how many and what types of vehicles should be converted, the skilled manpower that needs to be trained, etc.

We need the targets and specific numbers rather than just saying we need more NGV stations but later ending up with a natural gas supply problem.

NGV will not be able to fuel all 40 per cent of the energy demands of the transportation sector, hence we need to ensure that whatever percentage we target that there will be enough natural gas supply in the long term.

We can also determine whether other oil companies will be involved with Petronas to build NGV stations instead of Petronas doing it all by itself.

It seems that the other oil companies are not keen to build NGV stations as the rate of returns on the investment is not attractive.

The reaction of the managing director of one of Malaysia's biggest oil companies is that as a business entity, he's not keen to buy and be dependent on Petronas, its competitor.

"What happens if Petronas prioritises supplies to its own stations, and treats us like poor relatives?" he asked.

Clear policy is also needed in terms of the pricing mechanism for natural gas supply to NGV stations and retail price of NGV to consumers.

Worldwide, the retail price of NGV is much cheaper than petrol or diesel.

These lower price differentials are needed and must be maintained to ensure the long term viability and sustainability of the NGV programme.

How the price of NGV, compared with petrol and diesel, is determined depends on factors such as whether NGV is used to reduce dependence on imported oil, utilisation of local natural gas resources, reduction of air pollution and to enhance energy security.

Lee Giok Seng, executive director of the Asia Pacific Natural Gas Vehicles Association (ANGVA), is a champion for NGV in Malaysia.

He says that depending on how proactive the government wants to be, NGV in Malaysia can be as successful as in countries like Argentina (about 1.7 million natural gas vehicles), Brazil (1.4 million), Pakistan (1.7 million), India (500,000) and Thailand (75,000).

"In Europe, biogas produced from wastes and landfills are being upgraded as fuel for natural gas vehicles," said Lee.

"This upgraded biogas is known as biomethane, and is a renewable source of natural gas supply.

"In Sweden, around 20 per cent of the natural gas supply is from upgraded biogas production." Lee is, however, concerned that many people are jumping on the bandwagon of NGV without really understanding the whole structural requirement of providing NGV such as the availability of natural gas, the technical limitation of NGV, the safety issues, the operational cost, and the skilled manpower needed.

"It takes time to develop the infrastructure for NGV and the first basic requirement is that there must be adequate supply of natural gas, especially via pipelines," he said.

"Places like Kelantan, where currently there are no piped natural gas supply, will need considerable time, effort and funds to implement NGV projects."

There had been proposals recently that Kelantan converts to NGV.

ANGVA is a regional NGV industry association promoting the use of NGV in the Asia-Pacific region. It is now looking for drivers to participate in the Green Highway II, using NGV vehicles to drive from Kuala Lumpur to Donghae, South Korea.

The ANGVA secretariat is based in Bangi, Malaysia. Previously it was based in Chuncheon, South Korea.

More information on ANGVA can be viewed at

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