Mr A.T. Kabilan,Chief Engineer (Mech.) - Gas Marketing,Oil and Natural Gas Corporation Ltd.
CNG is presently the best option for urban transportation in India because of the following reasons:
Securing India's energy security
Historically India's Natural Gas Vehicle (NGV) programmes, mostly under judicial/regulatory mandates, have been primarily driven by environmental and public health imperatives. It targeted the most polluting segments of vehicles on the roads viz. diesel buses, three-wheelers, taxis and small commercial vehicles. Delhi and Mumbai started implementing natural gas vehicle programmes during the late 1990'swhen even Euro I emissions standards were not in place and Sulphur content of diesel was as high as 5,000-10,000 ppm. With fuel substitutions, these cities were able to leapfrog to much cleaner emission levels.
This first generation of CNG Programme was basically different from NGV programmes in other countries like Argentina, Pakistan and Bangladesh, where petrol-driven light duty cars were targeted largely for energy security reasons. Natural gas is abundantly available in these countries and fuel diversification bolstered their energy security, although these countries have begun to target diesel bus sector now as part of the second generation of CNG Programme for environmental reasons. India too should change tack and target energy security during the second generation rollout of CNG programme in the country. Diversified fuel basket is expected to strengthen our resilience and reduce our vulnerability to international crude oil prices. Currently, India's crude oil import dependence at about 80 percent is much higher than the nearly 20 percent import content in the total gas supplies in the country. Natural gas presently constitutes about 10 percent of the country's energy basket. India's Hydrocarbon Vision policy document envisages this share to be about 25 percent by 2025. Therefore, any effort made to enhance the usage of natural gas in meeting urban transportation needs from the present miniscule two percent of total gas supplies, should strengthen the resilience of Indian economy to cushion external shocks from runaway international prices of crude oil.
CNG panacea for fuel adulteration
A 2002 Supreme Court ruling observed that CNG is environmentally acceptable and non-adulterable. This is a unique but lesser known trait of CNG, which is important in our country, due to rampant adulteration of higher priced liquid fuels (read Diesel) with lower priced liquid fuels (read Kerosene). This menace would likely to continue even if diesel price is de-regulated down the line a la Petrol price, as differential between diesel and kerosene price could only widen in such a scenario.
CNG gateway to CNG hybrid and hydrogen (hythane) in future
India is uniquely placed to leapfrog other countries in adoption of hybrid and hydrogen technologies, which are touted as the fuel of the future, by graduating from its ongoing/planned CNG programme. Hythane (Hydrogen-Methane mix) is undergoing a pilot project phase and suitable selection of CNG-electrical hybrid technology that would come out as a gradual evolution of Euro V or Euro VI emission norms should enable India to step up to the next level of fuel/ engine technology/exhaust treatment technology.
Government policy fillip to building of gas pipeline infrastructure
Currently about 10,000 km of trunk pipeline infrastructure is in place in the country. Another more than 5,000 km of natural gas pipelines are under various stages of implementation having been authorized by the Government way back in 2007. Nearly 5,500 km of cross country pipelines are in advanced stages of bidding/ under bidding at the behest of India's midstream/downstream regulator, PNGRB. All these measures are likely to result in the development of a national gas grid with inter-connected pipelines with potential gas swapping and choice for gas consumers in terms of having to choose from amongst multiple gas transporters thus heralding gas-to-gas competition, a key characteristic of mature gas markets like the USA. With gas becoming available nationwide at city gate stations (CGS) of cities on the route of these natural gas pipelines or in close proximity to them, further logical extension of this in the form of development of city gas distribution networks (CGDN) is only a matter of time and CNG, an important segment making up the CGD, would stand to benefit from such a scenario actually waiting to be played out in our country.
CNG Vs Euro IV and higher fuels Presently, Euro IV fuels
Emission norms have been introduced in 13 big cities from April 2010, while the rest of the country is still fed with Euro III petrol/diesel. It is expected that introduction of Euro IV (and Euro V/VI in future) would significantly close the existing gap between Euro II/III diesel and CNG in terms of most important pollutants such as particulate matters and NOx and fuel efficiency. As India's emission norms evolve gradually to become fuel and technology neutral, as is the case already in developed countries like the USA, CNG would surely get to see close competition from `clean diesel'. But, as long as CNG is cheaper than corresponding liquid fuel (petrol/diesel), thanks to lighter tax mechanism of CNG as compared to that of petrol/diesel, CNG programme would continue to expand and flourish in the cities of India in the foreseeable future. In case, this fiscal advantage is taken away from CNG, still my bet would be that CNG would get to co-exist peacefully with `clean petrol/diesel' of the world.
Mr S.C. Tripathi,Former Secretary,Ministry of Petroleum and Natural Gas, Govt. of India
CNG was introduced to replace diesel and petrol run vehicles, which were held responsible for increasing pollution in the city. From that standpoint of view, CNG continues to be the cleaner fuel.
CNG emits lesser toxins and polluting fumes as compared to other liquid fuels. However, having said that, if we purely go by technology and processes involved in purification of all the three namely, diesel, petrol and CNG, we will realize that gas would turn out to be the costlier fuel in comparison to the other two fuels - diesel and petrol. The only reason why gas is cheaper than other competing fuels is due to disparity in our pricing policy. It is the favorable treatment given to gas in terms of taxation benefits that makes it cheaper fuel compared to other alternatives.
Interestingly, kerosene, turbine fuel and petrol are essentially the same thing. But we still have turbine fuel selling at a higher price than petrol. And this is a result of our distorted fuel policy. In almost all the other countries there are crystal clear policies laying down particulate and emission levels for all the available fuels. Additionally, the quality of a given fuel is also dependent on host of other parameters such as quality of automobile engine and so on. The point that I'm making is that let us test all the fuels scientifically in the lab to determine their advantages and disadvantages. And then instead of favouring one over the other, let all those fuels which are found equal in all respects compete in free market.
With talks of more environment friendly fuels such as EURO IV or any other alternative fuel there should be no hesitation in verifying the claims being made. We have competent, independent facilities to scientifically determine emission levels of different kinds of fuels. The decision to switch-over to a new alternative should not be based on policy preferences in form of any kind of subsidy or taxation benefit extended to a particular fuel. Let all the fuels compete in the market
The authorities should lay out uniform policy for all the existing alternatives. It should stop itself at prescribing and formulating emission norms. We should have uniform basis for emission levels, taxation and kind of engine used in vehicles. There should be no undue advantage extended to any particular fuel. Let pure economics guide people to choose a fuel. It's a free market that will alone help us choose the right fuel for the city transport.
Mr B.S. Negi,Member (Infrastructure), ,Petroleum and Natural Gas Regulatory Board
The application of fuel for transport sector needs to be considered in its totality. We as a regulator do not support any particular fuel for the sector. But if we go by the exhaust parameters of various fuels in totality, CNG is the best among all the available fuels except hydrogen (Hythane) and electricity. The recent confusion in a section of media was due to partial reporting on the fuel characteristics. While analyzing liquid hydrocarbon as a fuel, the analysis of HC particulate and other elements like cycling components needs to be kept in mind.
Also, we can have an open debate over which is the most suited fuel for city transport. The best way to go forward on the issue is to have independent scientific studies to test and compare fuels be it CNG, diesel or petrol.
Mr Deepak Mahurkar,Associate Director - Energy, Utilities & Mining: Oil & Gas,PwC
The natural gas sector in India is one of the fastest growing sectors in the country. The natural gas is rapidly gaining its appropriate place in India's huge energy basket that incorporates both renewable and non-renewable energy sources to meet soaring domestic energy demand.
The use of CNG is not only more environmentally friendly compared to liquid fuels such as petrol and diesel but is also economically more attractive. It has been established that emissions in the case of diesel engines such as Particulate Matter (PM) and Nitrous Oxide (NOx) are significantly higher compared to that of vehicles running on CNG. And even with the introduction of Euro IV Ultra Low Sulphur Diesel (ULSD) and the installation of additional equipments such as Diesel Particulate Filter (DPF), CNG still stands as the preferred environmentally friendly fuel.
Even though the real reason for introducing CNG fuel was to curb environmental pollution, CNG also provides several economic benefits over liquid fuels. Gas continues to be a cheaper source of energy when compared to other liquid fuels. As we move towards a liberalized economy with the deregulation in prices of petrol and diesel, gas will continue to remain cheaper than liquid fuel for the foreseeable future.
Natural gas for a very long time had been perceived as a regional commodity for the local markets because it's a high volume low value commodity, it is expensive to transport. But with the emergence of the LNG market and with the construction of several major pipeline networks in India for gas supply, the gas availability scenario in India has indeed changed. The logistics of gas supply in India is much simpler when compared to that for oil which involves complex routing of oil from refineries to retail outlets via tankers, pipelines, storage depots, thus building up on the transportation and logistics cost. Due to this saving in transportation and logistics cost, the landed cost of gas to the end consumer continues to be available at a discounted rate to that of liquid fuels.
But perhaps one of the factors which could hinder the expansion of CNG vehicle market is the lack of availability of CNG stations for refueling even in the metros. If CNG is to truly become the future of transportation in India, investments will need to be made to build up infrastructure dedicated to supplying CNG to the customers. The upcoming large scale City Gas Distribution (CGD) projects and the move towards establishing a natural gas grid in India is indeed a step towards this direction.
Apart from issues with logistics, usage of liquid fuels continues to be plagued by problems such as pilferage and adulteration. As opposed to liquid fuels, there is less scope for adulteration and pilferage in case of gas supply.
India's crude oil import bill is expected to cross US$100 billion if the global price stays firm at US$100 - US$120 a barrel. With the rising trade deficit and import bill, and with a view to save on the excise duty and transportation charges, there is an incentive to push for the utilization of domestic natural gas produced in India over the liquid fuels being widely used today.
CNG market in India today is primarily focused on light-duty vehicles. So, there is a significant opportunity with the companies to bring their cost-effective solutions to the medium and heavy-duty truck and transit bus market. Apart from CNG, LNG and LPG are also showing promising future prospects. LNG and LPG segments have shown a tremendous growth in the past and is anticipated that these segments will grow significantly in the coming years.
Despite intense pressure on oil and marketing companies, LPG and CNG are positioning themselves as a future fuel option. The country has the fifth largest fleet of natural gas vehicles (NGV) in the world and holds the highest NGV growth potential with over 200 cities planned for CNG developments. It is projected that CNG consumption in India will grow at a CAGR of around 22 percent during FY 2011-FY 2013. The economics of using natural gas as a fuel, the environmental benefits and a better supply of natural gas in the future is likely to contribute towards establishing CNG as the preferred fuel of the future.