WVORLD B3ANK TECHIICALPAPER NUMBE 98 WTr9 _

INDUSTFPY AND ENERG 'rSERiES

Alternative Transport Fuels from Natural Gas

Rene Moreno, Jr., and D. G. Fallen Bai1PlT

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Alternative Transport Fuels from Natural Gas

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WORLD BANK TECHNICAL PAPER NUMBER 98

INDUSTRY AND ENERGY SERIES

Alternative Transport Fuels from Natural Gas

Rene Moreno, Jr., and D. G. Fallen Bailey

The World BankWashington, D.C.

Copyright K 1989'Ihe International Bank for Reconstructionand Development/THE WORLD BANK

1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

All rights reservedManufactured in the United States of AmericaFirst printing June 1989

Technical Papers are not formal publications of the World Bank, and are circulated to encour-age discussion and comment and to communicate the results of the Bank's work quickly tothe development comrnmunity; citation and the use of these papers should take account oftheir provisional character. The findings, interpretations, and conclusions expressed in thispaper are entirely those of the author(s) and should not be attributed in any manner to theWorld Bank, to its affiliated organizations, or to members of its Board of Executive Directorsor the countries they represent. Any maps that accompany the text have been preparedsolely for the convenience of readers; the designations and presentation of material in themdo not imply the expression of any opinion whatsoever on the part of the World Bank, its af-filiates, or its Board or member countries concerning the legal status of any country, terri-tory, city, or area or of the authorities thereof or concerning the delimitation of itsboundaries or its national affiliation.

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The material in this publication is copyrighted. Requests for permission to reproduce por-tions of it should be sent to Director, Publications Department, at the address shown in thecopyright notice above. The World Bank encourages dissemination of its work and will nor-mally give permission promptly and, when the reproduction is for noncommercial pur-poses, without asking a fee. Permission to photocopy portions for classroom use is notrequired, though notification of such use having been made will be appreciated.

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Rene Moreno, Jr., is a senior economist in the Industry and Energy Department of the WorldBank. D. G. Fallen Bailey is a consultant to the same department.

Library of Congress Cataloging-in-Pulblication Data

Moreno, Rene, 1952-Alternative transport fuels from natural gas / Rene Moreno, Jr.

and D.G. Fallen Bailey.p. cm. -- (World Bank technical paper, ISSN 0253-7494 no.

98. Industry and energy series)ISBN 0-8213-1230-81. Synthetic fuels. 2. Gas as fuel. I. Fallen-Bailey, D. G.

II. Title. III. Series: World Bank technical paper ; no. 98.IV. Series: World Bank technical paper. Industry and energy series.TP36O.M67 1989333.79'68--dc2O 89-34117

CIF

ABSTRACT

This report examines the economics of using natural gas as an alternative fuel intransport vehicles including passenger cars, taxis, buses, and trucks. It compares the cost of usingconventional fuels (gasoline and diesel) in these vehicles with that of retrofitting the vehicles andusing natural gas-based fuels. These fuels include compressed natural gas (CNG), liquefiedpetroleum gas (LPG), methanol, and synthetic gasoline and diesel. The analysis includes variousscenarios to establish break-even points between these competing fuels under different assumptions.

The study concludes that slow-fill (also known as "trickle-fill") CNG is the mosteconomic of the natural gas based fuels. The vehicles most suited for the economic use of thesefuels are captive vehicle fleets with relatively high mileage and a restricted range of operation, suchas buses and taxis. However, to make the transition economically viable, oil prices would have toincrease significantly from their present level and remain there long enough to make theinvestment in the transition worth while. At present levels of crude oil prices (about US$18 perbarrel), little opportunity exists for the economic substitution of natural gas based fuels for gasolineand diesel. These conclusions are based on the economic factors considered. Environmentalfactors, which are both difficult to measure and of increasing importance, could, however, mitigatethese results.

v

TA

Table of Contents

ABSTRACT .................................................... v

Acknowledgement .................................................... viii

Table of Equivalents .................................................... ix

Calorific Content and Specific Gravity of Fuels ................................... ix

Chapter I: Summary and Conclusions ............. ............................ 1

Chapter II: Transport Fuels from Natural Gas .................................. 4Antecedents ................................................. 4Subject Matter and Perspective .................................. 4

Chapter III: Technical Options . ............................................. 6Natural Gas as Automotive Fuel ................................. 6CNG Vehicle Fueling ............... ........................... 9Liquefied Natural Gas (LNG) .................................. 11Liquefied Petroleum Gases (LPG) ............................... 11Methanol ................................................... 13Synthetic Gasoline and Diesel Fuels .............................. 16

Chapter IV: Economic Considerations ............ ........................... 17CNG .................................................... 21

Vehicle Conversion to CNG Fuel .......................... 24LPG .................................................... 24

Vehicle Conversion to LPG fuel ........................... 25Methanol .................................................. 25Synthetic Gasoline and Diesel Fuel from Natural Gas ................. 27Economic Comparison of Fuels ................................. 28

Annex 1: Model Based on Natural Gas Price of $1/Mcf .......................... 33

Annex 2: Model Based on Natural Gas Price of $2/Mcf .......................... 47

Annex 3: Model Based on Natural Gas Price Tracking Oil Prices ................... 61

Annex 4: Graphs Showing Break-Even Ranges ................................. 79

vii

Acknowledgement

An initial draft of this report was prepared in April of 1987 by D.G. Fallen Bailey.It was subsequently updated and revised by Rene Moreno, Jr. in early 1989 in view of newlyobtained information and the need to incorporate the results of further analyses as well as valuablesuggestions and comments from various reviewers. Special thanks go to Robert J. Saunders whooriginally outlined the paper and commented on subsequent drafts and to Anthony A. Churchill foradditional substantive comments. The World Bank/UNDP/Bilateral Aid Energy SectorManagement Assistance Program supported the updating, revision, and final analysis contained inthis report.

viii

Table of Equivalents

1 mile = 1.609 kilometers1 US gallon = 3.785 liters1 barrel = 42 US gallons1000 cubic feet (1 Mcf) (1000 cu. ft.) = 28.317 cubic meters1 atmosphere = 14.696 pounds per square inch (psi)1 bar = 14.504 pounds per square inch (psi)1 psi = 0.07031 kilogram per square centimeter1 British Thermal Unit (BTU) = 251.99 calories

= 1,055 Joules1 million BTU = 1.055 Giga Joules (GJ)

Caloriric Content and Speciric Gravity of Fuels

AverageSpecific

Fuel Calorific Value Gravity

Natural Gas 1000 BTU/cu. ft (9500 kcal/m3 )Gasoline 47.7 MJ/kg 20,500 BTU/lb 0.75Diesel Fuel (Gas Oil) 44.7 MJ/kg 19,200 BTU/lb 0.86Methanol 20.02 MJ/kg 8,600 BTU/lb 0.796LNG (liquid) 51.9 MJ/kg 22,300 BTU/lb 0.42LPG (Propane) 45.7 MJ/kg 0.51

ix

x

Chapter I: Summary and Conclusions

This report is based on studies carried out in the Industry and Energy Departmentof the World Bank over several years on the problems associated with the availability and use offuels for use in the transport sector, other than those conventionally derived from crude oil. Z" iconfined to those alternative fuels which can be derived from natural gas and which can be usedas road transport fuels. It does not deal with rail or waterborne transport, although there is apotential for use of alternative fuels in these transport modes.

The principal conclusion to be drawn from this study is that work carried on byresearch institutes, government departments motor vehicles manufacturers, and oil companiessince the oil price increases of 1973 has succeeded in overcoming the technical problems ofoperating modern internal combustion engines on a variety of fuels which can be derived frommaterials other than crude oil, such as natural gas and coal, and in the case of Brazil, eah"yalcohol from sugar cane. However, this study is confined to those automotive fuels which can bederived from natural gas and which have been sufficiently tested to provide an adequate base ;or

evaluating technical performance and economic criteria.

The fuels examined in this study are LPG (propane), compressed natural gas(CNG) methanol, and synthetic gasoline and diesel fuel. It is intended to be a review of workdone to date, and designed to give the non-specialist reader a basis for arriving at an informedjudgement of the potential for using alternative fuels in any given situation. In so doing, extensoiecomparative analyses are carried out to establish the relative economic advantages of the varibu -sfuels. The study is not specific to any one country, but an attempt has been made to use val.of the various parameters appropriate to developing country conditions.

The economics of using these alternative fuels is examined for a series of fivedifferent types of vehicles, comparing the cost of using alternative fuels with those of conventionalgasoline and diesel fuel derived from crude oil. Representative vehicle and alternative fuel costsas well as a range of crude oil prices from US$10 to US$70 per barrel have been used. Becausethe exact relationship between crude oil price movement and that of natural gas is not clearlyestablished, two basic models of analysis are employed. In the first one, the price of natural gasis kept constant -- at US$ 1 and US$ 2 per Mcf. respectively '/ -- within the crude oil price rangeof US$ 10 to US$ 70 per barrel. In the second model natural gas prices are assumed to "track"crude oil prices, as is commonly the case in natural gas supply contracts. In this model, natural uasprices change proportionately to those of crude oil prices.

The general economic conclusions to be drawn from this study are that at crude oilprices of $10 per barrel and lower, alternative fuels are generally uncompetitive. Between $10 5 0 J

l/ While oil prices were around US$ 15 per barrel, towards end 1988, natural gas spot pricesU.S. offshore were about US$ 1.50 per Mcf. In contrast, LNG export prices world widewere generally considerably higher. For example, Algerian LNG f.o.b. was at about $2.50while Alaskan LNG c.i.f Japan was $3.17/Mcf.; Indonesian LNG c.i.f Japan, $3.80/Mc£f ndBolivian gas at Argentinean border was $2.60/Mcf. (Reference: Refiner's Acquisition 2Costof Crude [RACC] and "Current International Gas Trades and Prices", Industry and E er;Department Working Paper, Energy Series Paper No. 9.

1

$20 per barrel custom built propane fueled high mileage vehicles and retrofitted vehicles usingCNG trickle-fill refueling, become competitive. Between $20 and $30 per barrel, CNG fast fill andpropane fueled low mileage vehicles could be competitive. Methanol becomes competitive above$50 per barrel, while synthetic gasoline and diesel fuel do not become competitive until the crudeoil price reaches levels above $70 per barrel. FEor CNG fueled vehicles, the high cost oftransporting this fuel in tube trailers means that CNG is competitive at the crude oil price levelsquoted above only when the filling station is located at or close to a high pressure pipeline or agas-field.

The most appropriate use for CNG is for captive vehicle fleets with a relatively highannual mileage but a restricted range, whose duty cycle is such that they can use the trickle-fillrecharge system. From this conclusion it might be deduced that large truck and bus fleets, as wellas taxis operating within limited range, would fall in this category. However, trickle-fill supplysystems generally require the vehicle to be inoperative over night (or, alternatively, in day time fora similar length of time). This, along with the fact that these vehicles tend to have very highutilization rates, especially in developing countries, implies that a higher level of capitalization (interms of vehicle numbers) would be required to maintain the same level of service. Alternatively,the vehicles would have to be converted into dual use (CNG as well as gasoline or diesel) systems.In both circumstances, the effective cost would be considerably more than might appear in theinitial analysis. From this perspective, trickle-fill may in fact not be appropriate for these vehicles.In addition, some research 2/ has suggested that average cost of operation of bus fleets indeveloping countries may in fact increase with size. Therefore, while larger size fleets may be moresuited for conversion to CNG in terms of the trickle-fill system characteristics, there are otherfactors intrinsic to large fleets which may work in the opposite direction. This underlines the factthat it is the overall cost which must be considered to correctly infer where CNG may in fact havea niche.

The worst case for conversion to any alternative fuel is the low mileage free-rangeprivate automobile, which explains why the New Zealand and Canadian Government (the twomost actively involved in promoting C:NG in recent years) have found it necessary to offersubstantial subsidies to private motorists, in order to persuade them to convert to CNG.

It is clear that at crude oil prices prevailing in 1987/88, there was little economicjustification in converting to alternative fuels. At the same time, the evolution of the crude oilprice cycle suggests that price levels in the early 1990's could climb back towards the range of $20to $30 per barrel 3/, at which point some degree of conversion will become economically attractive.However, the unpredictability of turning points in the world oil market and the possibility offurther downturns beyond the mid-1990's as well as the likely occurrence of future fluctuations,merit a prudent approach. In particular, conventional oil based transport fuel supply facilities canbe expanded rather quickly and conveniently, with relatively little investment. On the other hand,conversion to gas based fuels will require significant investments on both the supply and demandsides, as well as the problems of coping with a comparatively unfamiliar technology on a grandscale. Therefore, the economic justification of large investments in gas infrastructure in anuncertain climate, will probably require net conversion benefits that are significantly above themarginal gains which can be derived at $20 to $30 per barrel of crude oil and for oil prices to

2/ See for example "Bus Services", World Bank Technical Paper No. 68.

3/ See "World Petroleum Markets, A Framework for Reliable Projections", World BankTechnical Paper No. 92.

2

remain at these levels long enough to sufficiently reinforce expectations of continued high futureprices. This in itself appears unlikely since such high oil prices are likely to trigger responsiveactions in energy markets which would tend to bring prices back to longer term historical levels.

We may conclude unambiguously that at crude oil price levels of $60 per barrel andabove, massive substitution of conventional gasoline and diesel fuel by more abundant alternativefuels is likely to occur. Since the transport sector is the only one in which no viable alternative tooil based fuels existed in the 1970s, the existence of substitute fuels implies that crude oil pricelevels above $60 barrel (in 1986 dollars) are not sustainable in the long term, and improvementsin alternative fuel technology may even reduce this upper bound. Certainly, levels of $100 perbarrel, which were conjectured in the seventies, are no longer conceivable except in a short-termcrisis situation, since at this price even aircraft could be economically fueled with syntheticderivatives from natural gas.

Therefore, from a purely economic perspective, the present analysis emphasizes thatlittle development of alternative transport fuels from natural gas can be justified. However, thebenefit of natural gas based fuels goes beyond their potential as an economic substitute for oilbased fuels. It is well known that transport vehicle emissions resulting from the burning of oilbased fuels contain significant pollutants as well as elements which contribute to the now wenlpublicized "green house effect". Serious consequences have been forecast by meteorologists andecological experts, if the release of these emissions into the atmosphere are not contained rapidly.In this light, the value of natural gas based fuels becomes significantly more than simply theamount of conventional fuel displaced by their use. Consequently, the crude oil price levels atwhich natural gas based fuels would begin to be competitive, could be much lower than those citedhere. At the same time, the impact on the atmosphere stemming from vehicle emissions, ascompared to that from industrial and power generating plants, would be relatively small.Consequently, the potential overall beneficial impact resulting from using natural gas based fuelsin vehicles would be limited.

3

Chapter II: Transport Fuels from Natural Gas

Antecedents

Following the sharp increases in the price of oil which took place in the seventies,the World Bank embarked on an active program of lending and studies designed to assistdeveloping countries, which were net oil importers, in dealing with the after effects of the oil priceincreases. Based on the perception that substitutes for petroleum fuels were available for allenergy consuming sectors other than transport, the World Bank in 1981 commissioned a study onAlternative Fuels for Use in Internal Combustion Engines 4/. Subsequent to this, and stemmingfrom the peculiar problems of developing countries which had large natural gas resources but littleor no oil, a study group was set up to examine the potential for using natural gas in the transportsector. Studies were also made of the potential for using methanol derived from natural gas bothin the transport sector and in other energy consuming parts of the economy. In addition to studiesmade within the World Bank, the efforts of other organizations engaged in this field werereviewed and extensive discussions held with manufacturers and government representatives. Thepresent paper attempts to pull together the accumulated information and to present it in a formw.nich will enable non-specialists to form an opinion regarding the potential and cost of gas-basedtransport fuels as an alternative to the more conventional petroleum based fuels which have beenthe principal source of automotive power.

Subiect Matter and Perspective

This paper discusses the technical options available for running conventionalgasoline and diesel fueled vehicles on alternative fuels based on natural gas, among which arecompressed natural gas (CNG), liquefied petroleum gases, i.e. propane and butane (LPG),methanol which is an alcohol fuel derived principally from natural gas, and synthetic gasoline anddiesel fuels derived from natural gas. The paper also discusses the economic aspects of the useof these fuels and attempts to compare them with gasoline and diesel fuel at various crude oilprice levels. It does not discuss the use of ethanol as an automotive fuel because this is derivedprincipally from the fermentation of sugar and is used on a large scale only in Brazil; however,many of the features of methanol use apply equally to ethanol. Neither does this paper discussthe use of synthetic fuels derived from coal or oil shale because, although the end products aresimilar (gasoline, diesel fuel, methanol) the extraction, processing, and economics of theproduction of liquid fuels from solid raw materials differ widely from those derived from naturalgas.

The question may be raised as to why this paper should be produced at a timewhen oil prices have fallen to levels below those of 1974 in real terms. The answer is based on twoestablished facts about the petroleum industry: firstly an analysis of the location of known oilreserves and the relative costs of production of OPEC and non-OPEC crude oil supports theconclusion that the present low level of oil prices is a temporary phenomenon and represents part

4/ Energy Department Paper No. 4, World Bank.

4

of a long-term cyclical price variation which is characteristic of the oil industry. Thus it would notbe surprising if oil prices were again to rise in the not too distant future and reach relatively highlevels. In that context, it would be prudent to have studied the options and their economiccharacteristics in advance in to have a notion of the economic break-even points of the varioustechnologies. Secondly, overall known reserves of natural gas equal in energy terms those of crudeoil, but while the global reserves-to-production ratio for oil is 34 years, that for natural gas is 60years. This implies that oil is being depleted much more rapidly than natural gas, so thatultimately gas reserves will have to be mobilized and utilized on a larger scale than at present tosupplement oil reserves. The transport sector represents a high value end-use for natural gas andits derivatives, and it is reasonable to assume that serious efforts will ultimately be made to usethem as transport fuels. Thirdly, as mentioned above, there are environmental costs attached tothe use of oil based fuels, which may in the not too distant future reach levels high enough todictate the use of natural gas based fuels.

A further important consideration is that the technology described in this paper,which has been largely developed since 1973, in the long-term imposes an upper limit to the priceof crude oil. In the economics section of this paper (Chapter IV) it is shown that methanol atpresent day prices is competitive with gasoline and diesel fuel derived from crude oil at $55 perbarrel. However, as discussed in Chapter IV, the risks associated with committing largeinvestments for conversion to relatively unfamiliar alternative fuel technologies, in an uncertainworld oil market, suggest that the conversion will be unambiguously justified only at oil pricesaround $70 per barrel, i.e. well above the break-even point. This conclusion is significant becausemethanol is the one alternative to transport fuels derived from crude oil which can be producedin sufficient quantity, from natural gas and the much more abundant coal, to act as viablesubstitute transport fuel on a world scale.

In certain special cases, the use of natural gas and its derivatives as a transport fuelmay still be attractive even at a time of low oil prices. For example among the member countriesof the World Bank are a number which have large reserves of natural gas, but little or no oil (seeAnnex 1). Among these, for instance, are Bolivia, Bangladesh, Pakistan, and Tanzania. Providedthat the gas-derived substitute fuel costs less than existing oil imports, these countries are in aposition to benefit from any option which permits them to use indigenous natural gas or itsderivatives as automotive fuels, thus reducing hard currency imports of crude oil or refinedpetroleum products. In the case of a country like Bolivia, which has limited oil production, the useof a gas-derived automotive fuel would release conventional petroleum fuels for export toneighboring countries, with a corresponding benefit to the balance of payments.

5

Chapter III: Technical Options

Natural gas is primarily methane, composed of one carbon and four hydrogenatoms, having the chemical formula CH4. In its raw state, however, natural gas may containquantities of other substances such as water vapor, other hydrocarbon gases such as ethane (C2H6 ),propane (C3H8), butane (C4H,1 ), hydrogen sulfide (H2S), carbon dioxide (CO2), and nitrogen (N2).Most of these substances must be removed before the gas can be transported in a pipeline orutilized as a vehicle fuel. Methane can be reduced to a liquid by refrigerating it to a temperatureof -161'C whent it is referred to as LNG. The hydrocarbon gases ethane, propane, and butanehave an economic value. Ethane is used as a petrochemical feedstock but if present only in smallquantities is usually left in the natural gas; propane and butane are gases at ambient temperaturesbut can readily be reduced to liquids by compression or refrigeration and are used as fuels eitherseparately or, more commonly, as a mixture, being collectively known as liquefied petroleum gases(LPG). H2S is poisonous and highly corrosive and has no economic value other than as a sourceof sulfur. CO2 and N2 are known as "inerts" because they are non-combustible and reduce thecalorific value of natural gas in which they are present. CO2 can readily be removed by washingthe gas stream with solvents, but N2 can only be removed by liquefaction--an expensive process.

Derivatives of natural gas which can be used as automotive fuels are methanol 5/

(CH3OH), synthetic gasoline, and synthetic diesel fuel. Methanol is an alcohol which ismanufactured from natural gas in large capital-intensive continuous process plants similar to thoseused for fertilizer manufacture, and its principal use at the present time is in the chemical industry.Synthetic gasoline and diesel fuel are manufactured in a similar way but with additional processing;in fact methanol is an intermediate in the production of these latter in some processes.

Natural Gas as Automotive Fuel

Natural gas is an excellent fuel for internal combustion engines, but for vehicles ithas the disadvantage of low energy density. A tank full of gasoline contains 900 times the energycontent of the same volume of natural gas. For use as an automotive fuel natural gas is mixed withair and ignited in the engine cylinder by a spark or glow plug. Its physical characteristics are suchthat it cannot be ignited by compression alone in a conventional diesel engine, which therefore hasto be converted to spark ignition or uses diesel fuel to ignite the gas, the latter being used as anauxiliary fuel. While stationary internal combustion engines can be coupled directly to a gasdistribution system, the use of natural gas as a vehicle fuel requires that it must be carried in aclosed container on board the vehicle 6/. In order to obtain a reasonable quantity of fuel in asmall volume it is necessary to compress the gas to 160-180 bar (2,300-2,600 psi) when it is stored

5/ For convenience, methanol is often referred to in technical literature as MeOH, indicatingits chemical structure as methyl alcohol.

6/ Historically, this container has sometimes been a bag of rubberized fabric carried on theroof of the vehicle, or in a trailer. This system was used in Europe during the SecondWorld War, and is still in use in Sichuan Province, China.

6

in a heavy steel cylinder which substitutes for the fuel tank of a liquid fueled vehicle. This systemis referred to as Compressed Natural Gas (CNG).

CNG cylinders made to Italian specifications (which are widely used outside Italy)are available In a large range of sizes, of which three different ones are given in Table 111-1.

Table 111-1CNG Cylinders: Volume and Weight

Internal CNG Gasoline Diameter Length Weightvolume content equivalent(liters) (mi3 ) (liters) (cms) (cms) (kg)

24 6.0 7.5 20.18 92.5 20.250 12.5 15.6 31.4 83.5 45.070 17.5 21.8 31.4 111.5 59.1

Source: Faber Industrie SpA

From the foregoing it can be seen that a CNG fueled vehicle must carry a load of2.8 kg for every liter of gasoline equivalent, while a liter of gasoline weighs only about 0.75 kg.There is thus a substantial weight penalty involved in the use of CNG which, in the case of apassenger car with a 75 liter gasoline tank, would amount to about 150 kg. This is significant in thecase of small passenger cars or light delivery trucks. In fact, this weight penalty is reduced bycarrying less fuel in the CNG case, which results in a reduced range of operation. In the case ofa light vehicle carrying 90 kg of CNG cylinders, the distance traveled before refueling would be ofthe order of 120 km, whereas the same vehicle running on gasoline could travel some 300kilometers before refueling. In the case of heavy trucks and buses the weight and volume penaltyis not quite so serious because the CNG cylinders can be fixed along the chassis members belowthe load space; there is still a substantial reduction in the distance which can be traveled on CNGas compared with diesel fuel. A recent development is the use of composite cylinders, sometimesof aluminum strengthened by a sheath of high tensile material. These are lighter than solid steelcylinders, but are not accepted by all regulatory authorities.

CNG fuel cannot be used in a gasoline or diesel fueled vehicle without modificationsto the fuel supply system. In the case of a "retrofit" (i.e. installation of CNG fuel system aftermanufacture) to a gasoline engine this requires installation of the gas cylinders, high pressurepiping, pressure reducing valves, filling valve, and a connection to the carburetor. Such a retrofitfor a gasoline engine is usually made so as to provide a dual fuel system in which the gas is usedas an alternative fuel and the driver can select whichever fuel he requires. The vehicle can bemore extensively modified to take full advantage of the technical properties of CNG as a fuel inorder to obtain greater thermal efficiency from the engine. This requires increasing thecompression ratio of the engine from 8 in a gasoline powered vehicle to about 12 for CNG, inwhich case it is no longer capable of running on gasoline. The dual-fuel mode is generallypreferred by private motorists because there is less risk of running out of fuel on longer journeys,even though this results in a sub-optimal use of CNG fuel in a technical sense. Increasing thecompression ratio (the CNG-dedicated vehicle) in a car designed to run on gasoline can causeproblems because the engine was not designed to handle the strains imposed by the higher

7

compression ratio. The dedicated CNG option is therefore little used at the present time, althoughconversions of diesel engines equipped with spark ignition for CNG use are becoming availablefrom manufacturers.

Retrofitting a diesel-engined vehicle for CNG poses different problems. CNG willnot auto-ignite in a compression-ignition (diesel) engine as will diesel fuel, and it is thereforenecessary to provide some form of ignition system. This may be done either by retaining theoriginal diesel fuel injection system and using about 20%-30% of diesel fuel as an ignition chargefor the CNG, or replacing the cylinder head with one designed for spark ignition. CNG can beintroduced into the cylinder in two ways; either drawn in with air by the suction of the piston(aspirated system) or directly injected into the cylinder at high pressure in a similar manner todiesel fuel. The aspiration system is not usually regarded as practical with two-stroke dieselsbecause part of the aspirated air is used to scavenge exhaust gases from the cylinder, so if CNGis admixed with the air a good proportion of the gas (about 30%) may be lost before the exhaustport is closed.7/

With the diesel/CNG system it is very easy to over-fuel the engine throughoversupply of gas, giving a higher power output than that for which the engine was designed. Thisimposes undesirable strains on the engine and drive-train and seriously shortens the working lifeof the engine. One of the problems in conversion to the dual-fuel diesel/CNG system is arrangingthe gas supply so that the original designed power output of the engine is maintained at all speeds.While diesel conversion kits are available from Italian manufacturers, these have been optimizedfor specific Italian diesel engines and require substantial modification if they are to be fitted toother diesel engines. Generally speaking, any diesel engine can be modified to run mainly onCNG, but the modification is specific to that engine type and model; i.e. there is no universallyavailable diesel modification kit.

Some experiments have been performed with direct injection of high- pressure CNGinto the diesel engine cylinder, using a spark-plug for ignition and dispensing with diesel fuelaltogether. This results in a complicated cylinder-head configuration and loss of the dual-fueloption. Furthermore, ignition problems occur while idling and there is a power loss of 8% to 12%as compared with the same engine operated as a diesel. City buses in Hamilton, Ontario (Canada)have been modified to run on CNG by fitting a spark plug in place of the diesel fuel injector andproviding a carburetor and replacement pistons. The modifications cost about 10% of the cost ofa new engine, and operating results are reported to be satisfactory. Some European manufacturersof heavy vehicles are prepared to offer a spark ignition version of their standard diesel engines,suitable for running a CNG.

While a CNG retrofit to a vehicle originally designed to operate on a different fuelobviously involves additional capital expense and a number of technical compromises, the greatmajority of CNG fueled vehicles in use today are retrofits, and have been operating successfullywith sufficient savings on fuel costs to justify their owners in continuing to operate them, in spiteof the range and weight disabilities mentioned above. Further problems encountered with CNG

'/ A system has recently been developed in Vancouver (Canada) whereby a 6V-71 DetroitAllison two-stroke diesel bus engine belonging to the British Columbia Transit Authorityhas been converted to operate on 70% CNG, and it is claimed that there is only 1%methane in the exhaust. The system is proprietary and no further information on thetechnology is available.

8

retrofits to gasoline engines are cold starting problems, resulting from the greatly reduced rangeof combustible mixtures of methane and air, as compared with gasoline vapor and air, andsubstantial loss of acceleration, and reduced power output under heavy load, because methane isa much less dense fuel than gasoline or diesel fuel. While commercial fleet operators may bewilling to tolerate reduced acceleration and full-throttle performance in CNG-fueled automobiles,these factors are generally deterrents to private motorists. Most of these problems are eliminatedin the case of engines factory designed and built to operate on CNG, which are now beginning tobe available commercially. However, the combined range and weight penalty remains, although itis less severe for heavy trucks and buses than for light vehicles. It is also offset to some extent bythe greater efficiency of purpose-built CNG engines.

Several countries, among them New Zealand, Canada, and reportedly the USSR, areactively promoting the conversion of vehicles from gasoline and diesel fuels to CNG. Historically,Italy and France were most active in this field, and Italy is still one of the main sources forspecialized equipment for vehicle CNG conversions. Nevertheless, the total number of vehiclesrunning on CNG is estimated to be 400,000 worldwide, a minute proportion of the total worldvehicle population, estimated to be over 200 million.

Environmental and safety aspects of CNG are generally good although there is adefinite hazard in any operation involving high pressure gas. CNG fuel has negligible sulfurcontent (a small quantity of sulfur bearing compounds is added to the gas to give it a perceptibleodor), and the products of methane combustion are carbon dioxide and water. There are noparticulate emissions, and nitrogen oxides are only about 60% of a comparable gasoline enginedvehicle. Unburned hydrocarbons emissions are higher than with a gasoline engine, but most of thisis unburned methane. Non-methane hydrocarbon emissions are substantially lower than from agasoline engine. Results are more or less similar in the case of CNG fueled diesels, withelimination of particulates (smoke) in "dedicated" CNG vehicles. 8/ Most of the smoke from aCNG fueled diesel engine occurs when diesel fuel is used for an ignition charge. In the case ofspark ignited CNG diesel engine conversions, using only CNG as a fuel, nitrogen oxide emissionis higher than a diesel at full load, but less at three-quarters load or lower. Particulate emissionsare virtually eliminated in spark-ignition gas engines.

CNG Vehicle Fueling

CNG vehicles are refueled by means of a high-pressure flexible hose with a probeon one end which fits into a receptacle on the vehicle. The other end of the hose is connected toa rigid high pressure fuel line, which is fed by a compressor, or by high pressure cylinders holdingCNG at 200-245 bar (2,900-3,550 psi), or by a combination of both. Numerous safety devices areincorporated into the system. A system utilizing high pressure gas storage cylinders for "quick-fill"operation has a vehicle refill time of 2 to 4 minutes. An alternative system is used to recharge thegas cylinders of fleets of vehicles which return to a central depot and are not used at night, knownas "trickle-rill" or "slow-fill". In this case a much smaller compressor operating at the vehiclecylinder pressure of 165 bar (2,400 psi) with little or no storage capacity can be used, to which allthe vehicles are coupled simultaneously. It is therefore less costly than the quick-fill station, whichis a major expense item in the CNG system, but has the disadvantage that the vehicles areimmobilized for a considerable period of time while refueling.

8/ A "dedicated" vehicle is one which can run on only one specific fuel.

9

Obviously, the filling station needs a steady supply of natural gas and this is normallyprovided by a pipeline, and the higher the pressure in the pipeline the lower filling stationcompression costs will be. The preferred location for a CNG filling station is therefore at or neara trunk gas pipeline which has a pressure of about 5 bar (75 psi). A lower pressure gas distributionline (1.5 bar) (22 psi) is a feasible but less desirable location, while in certain cases it is possible toestablish satellite filling stations up to 300 kilometers from the pipeline by transporting CNGcylinders on semi-trailers by road. The limitations of this latter system are economic rather thantechnical and are dealt with in a later chapter. The demands of the transport sector alone,however, are not sufficient to justify extension of the gas pipeline system. For example, a fleet of5,000 trucks using 120 liters of diesel fuel each per day would use only 450,000 cubic meters of gasper day if converted to CNG. Therefore, in developing countries, vehicle conversion to CNG isonly economical in the vicinity of a gas pipeline. Furthermore, the reduced operating range of CNGfueled vehicles compared to those operating on gasoline or diesel fuel means that a high densityof filling stations is required for "free-range" vehicles. This tends to weight the economicparameters in favor of captive vehicle fleets which operate in a restricted area, and often return toa central location.

The measurement of gas supplied to each vehicle at filling stations poses someproblems. The earlier method was to read the pressure in both the vehicle cylinder and the storagecylinder before and after filling, and to compute the amount of gas transferred to the vehicle byreference to a chart. This method is not very accurate because the pressure gauges themselves arenot particularly accurate, and the rapid flow-rates and pressure changes cause temperature changeswhich also affect the volume of gas transferred. A more modern method uses a computerized flowmeter which can be pre-programmed to take account of all significant variables when computingthe quantity of gas transferred from filling station storage to the vehicle.

Operating experience with cars using CNG is fairly extensive, going back to the1920's in Italy, but more recently the impetus for conversion to CNG has been mainly in NewZealand and Canada, and to some extent the US. No major vehicle manufacturer at presentproduces a standardized CNG fueled vehicle, so all vehicles now using CNG are retrofits ofvehicles originally designed to use gasoline or diesel fuel. Conversion kits for SI 9/ gasolineengined vehicles are fairly readily available from a number of manufacturers, the only partneeding to be specifically designed for each engine model being the gas mixing device attached tothe carburetor. In the case of diesel engines, while some manufactured kits are available fromItaly, these are designed for an Italian diesel engine and require substantial modification beforethey can be used successfully on other engine models.

As a result, most CNG diesel conversions are "one-off' prototypes and the totalnumber converted is much lower than in the case of SI gasoline engines. Almost all dieselconversions at present are of the aspirated gas type and use diesel fuel as the ignition charge, sothat CNG substitution is only 70% to 80% of total fuel consumption at full load, and negligiblewhile idling. However, at least three manufacturers in Europe offer SI conversions of dieselengines for operation on CNG. Since most of the CNG fueled vehicles operating at present aredual-fuel conversions, the difference in characteristics of the fuels requires that compromises bemade in terms of engine adjustment so that the engine can continue to operate reasonably wellon both fuels. Nevertheless it seems that the technical problems involved in both gasoline anddiesel conversions have been solved, and large-scale conversion programs could be undertaken withconfidence that they would be mechanically viable. However, the installation and operation of

9/ Spark ignition, sometimes known as "Otto cycle".

10

equipment for compressing and using gas at pressures above 2000 psi requires a certain degree ofmechanical sophistication, and may not be suitable for all developing countries.

Apart from road vehicles, conversions of boats and stationary engines to operate onCNG are also feasible. In most cases these are one-off conversions of diesel engines operating ina dual-fuel mode. In the case of boats, it is necessary that the range be limited and that the boatcan repeatedly return to the refueling point at frequent intervals. Short link ferry service is anideal application of CNG to boat propulsion provided that natural gas is readily available at oneend of the ferry run. Inshore fishing fleets are also suitable for CNG conversion.

Most pipeline systems control the calorific value of gas within strict limits, and theaverage is generally assumed to be 1000 BTU per cubic foot. However, "wet gas" having anappreciable content of ethane and propane may have a calorific value of 25% more than this, whilegas with an appreciable proportion of inert components, as in Holland and New Zealand, may havea calorific value appreciably below 1000 BTU per cubic foot. Wet gas is most likely to beencountered in the proximity of oil fields. At 2400 psi a cylinder of wet gas holds twice as muchenergy as the same cylinder full of dry gas. This permits the use of fewer storage cylinders in aCNG fueled vehicle for the same range, or a greater range using the same storage capacity. Inother respects operation of the CNG fueled vehicle is the same whether wet or dry gas is used asthe fuel. Additional advantages from the use of wet gas occur in the increased energy transportingcapability of tube trailers. The effect is reversed if the gas to be used has an appreciable contentof inert components.

Liquefied Natural Gas (LNG)

The principal use of LNG is as a method of transporting natural gas from areaswhere it is abundant and cheap, to industrialized countries. Japan is the largest importer at thepresent time, followed by Western Europe and the US. LNG is also used by gas utility companiesas a method of meeting peak demand by allowing storage of gas in liquid form near consumingareas. The use of LNG as a fuel is mainly confined to ships transporting it, which use boil-off gasfrom the LNG to fuel their engines. The use of LNG as a vehicle fuel is confined to a smallnumber of experimental vehicles at present, and the general consensus is that the practicalproblems involved in using a liquid fuel at a temperature of -1600 C in a road vehicle are such thatthey are unlikely to be in general use in the near future. LNG can readily be transported in bulkin road vehicles, and this is sometimes used as a gas distribution method for areas where demandis not sufficient to justify a pipeline connection. However, given the high cost of gas liquefactionfacilities and of cryogenic containers, the economics of this for vehicle fuel supply would requirecareful study. Experiments are being carried out using LNG as a fuel for railway locomotives, andas a fuel for marine diesel engines.

Liquefied Petroleum Gases (LPG)

LPG has been successfully used as a vehicle fuel for many years and there are morethan 1 million LPG fueled vehicles in operation world-wide. Because the exhaust gases of vehiclesburning LPG are very low in toxic components they find a special application in enclosed spacessuch as warehouses, and their environmental impact is much less than for gasoline and dieselfueled vehicles. The greatest problem with LPG is that the vapor is heavier than air and readilyforms explosive mixtures with air in poorly ventilated spaces if there are any leaks in the fuelsystem and may form pools in low-lying areas, or in drains or sewers. Nevertheless, it has been,

11

Figure III-1

THE PROPANE-RJELLED AUTOMOBILE

Vacuum Filter Fuel-l4ck

Un Fuel Line egulatE5

HighPrFeuur

Hydrostaticlel torAtor

hel Tank FUnitRl v Fuel L o

80% Flil Enin ColattWte

Conve rter-eulatr \

voowane Vapour

12uld Fllter [ - . _ Return to

- .-- -- 0-; \: ..... ;- i-00. fit-::040 tir.........Vopounzed Water Pump

_ .: ... _ _ g F~~~~ropane Gos

Propane nk Rot Gauge/

Remote Sende r Propane Llquid

El Engine Coolant Wcrter

on Converter-Regulator

a- Propane Vapour

12

and is, widely used as a vehicle fuel, for example in Japan and Thailand. Provided adequate safetyprecautions are taken in workshops and refueling stations, LPG is a relatively safe automobilefuel.

The equipment used for an LPG vehicle conversion is basically similar to that usedfor CNG conversions (see Figure III-1), but since LPG is readily reduced to a liquid by compressionto 8 bar (120 psi) at ambient temperatures it can be stored in a much lighter cylinder than CNG,and all the associated equipment can be of lighter gauge for the same reason. Because LPG is aliquid in the storage tank, a tank of any given size hold 5 times the energy of the same sized CNGcylinder, and the range and weight penalties with LPG are very much less than those encounteredwith CNG conversions as compared with a standard gasoline fueled vehicle. LPG is also readilytransported in the liquid form, both by land and sea.

The principal uses of LPG are as a petrochemical feedstock, and for household fuels.It is produced not only as an extract from some sources of natural gas, but also as a by-product ofpetroleum refining. Since it usually constitutes less than 10% of raw natural gas, supply is usuallyless than demand except in the vicinity of oil or gas fields. Large quantities of LPG are at presententering international trade from the oil fields of the Middle East, so it is readily available on theinternational market. Nevertheless, over the longer term, availability of LPG would tend to be alimiting factor in widespread conversion of vehicles to use this fuel.

LPG has a very high octane rating and can be used in high compression ratio engines(i.e. diesel engines) but will not ignite by compression alone. In this respect it is similar to CNG.The possible technical options for the use of LPG as a vehicle fuel are therefore similar to thoseef CNG, i.e. dual- fuel mode in modified gasoline engines, dual-fuel mode in diesel engines using15% to 20% diesel fuel as an igniter, and single-fuel mode in diesel engines modified for sparkignition. In practice, about 1.5 liters of propane (the principal constituent of LPG) replace 1 literof gasoline and about 1.7 liters of propane replace 1 liter of diesel fuel. As a result, the fuel tankvolume of an LPG fueled vehicle needs to be increased relative to a diesel or gasoline fueledvehicle to obtain the same operating range. Power loss resulting from conversion of a gasolineengine to LPG is negligible, about 5%.

Technical problems with LPG fuels in developing countries arise mostly from the useof substandard components in the conversion system. Not infrequently, LPG tanks are importedwhich have been rejected for use in a developed country, and local mechanics may use ordinaryrubber tubing for the fuel connections. This frequently leads to hazardous fuel leaks, and most ofthe accidents with LPG fuel are attributable to the use of substandard components and unskilledmechanics.

Methanol

Methanol is a clear, colorless, inflammable liquid having about half the energycontent of gasoline or diesel fuel for a given volume. It has a long, if sporadic, history of use asa vehicle fuel and was used as such in the earliest internal combustion engines, but was rapidlyreplaced by the much cheaper petroleum derivatives. It was used as a vehicle fuel in Germanyduring the Second World War, and is still used to fuel modern racing cars. It has a number ofdesirable characteristics as an automotive fuel, among which are its high octane rating, cool burningcharacteristics, and low levels of noxious exhaust emissions. In recent years there has been arevival of interest in the potential for using methanol as an automotive fuel for a number ofdifferent reasons, among which are the fact that it can be produced from a wide range of raw

13

materials including coal and natural gas, in large enough quantities to make it a viable alternativeto petroleum based fuels in physical terms. Its low level of noxious emissions makes its useattractive in places such as California, where atmospheric pollution is a serious problem, and itspotential for fueling iightweight high performance engines is of interest to automobilemanufacturers.

One problem associated with the use of methanol is its toxicity, which although itis in fact no greater than that of leaded gasoline, is somewhat more hazardous since it can be mixedwith water and sold as ethanol (potable alcohol) with harmful results. This can be overcome by theuse of additives, such as 5% to 10% of gasoline, or other substances which make it unpalatable butdo not affect its use as a fuel. Methanol is a colorless liquid with little perceptible odor, which ismiscible with water in any proportion. This requires that greater precautions be takeen in storageand handling of methanol, to avoid its contamination with water, than is the case with petroleumfuels which are immiscible with water. In actual practice water contamination up to 15% does notaffect the fuel properties of pure methanol, but in blends with other fuels, more than a smallpercentage of water contamination causes the two fuels to separate out unless an additionalco-solvent is used. Methanol has about half the energy content of an equivalent volume of gasolin:eor diesel fuel so that any vehicle designed to run on methanol requires twice as much fuel tankvolume to obtain the same range. Pure methanol burns with an almost invisible flame, whichcauses problems in the case of methanol fires in sunlight. This can be overcome by the use ofadditives, notably 5% to 10% gasoline, which render the flame luminous. Methanol fires, however,can be extinguished with water, which is not the case with petroleum products.

Because of its high octane number, methanol needs some form of ignition when usedin a vehicle engine. In the case of converted gasoline engines the original spark ignition system isused. In the case of diesel engines, since diesel fuel and methanol are immiscible it is not possibleto use the combination fuel system used with CNG and LPG, so the engine must be converted to100% methanol and fitted with either spark ignition or a glow-plug. In the case of methanol fueledengines the dual-fuel capability, which is a feature of CNG and LPG conversions, is not possible,although it is reported that one manufacturer is testing a system in which an optical sensor candetect the difference between methanol and gasoline, and adjust the engine to run on either fuel.This would permit the vehicle to be filled indiscriminately with gasoline or methanol and to run oneither. So far, this system has not got beyond the experimental stage.

In general, methanol fueled vehicles are not available directly from the manufactureron a regular basis. One German manufacturer is prepared to supply methanol fueled transit buseson special order, but most cars must be retrofitted with customized conversion kits. Most of therecent experimental work on methanol fueled vehicles has taken place in the US (California), WestGermany, and Sweden. The California program has involved several hundred vehicles, mostlypassenger cars but also including some light trucks and buses. Early problems have beeneliminated and the vehicles are now as reliable as their petroleum fueled counterparts and give acomparable, sometimes better, performance.

The problems encountered in converting existing vehicles to run on methanol stemmainly from its chemical reactivity. The parts of the existing fuel system, in the case of a gasolineengine, which may be affected are the lining of the fuel tank (in some cases only), certain types ofelastomer seals, washers, and tubing, and the metal composing the body of the carburetor.Conversion of the vehicle to run on methanol requires the replacement of these parts withmethanol resistant materials and electroplating the interior of the metal body of the carburetor withnickel. In general, methanol reacts chemically with aluminum, copper, zinc, and alloys such as brasscontaining these materials, which must therefore be eliminated from the fuel supply system, or

14

Figure 111-2

SYNTHETIC FUELS FROM NATURAL GAS

METHANOL - MOBIL SYNTHETICMETHANOL PROCESS GASOLINE

LA SYTESSFSCHER SYTET IC SYNTHETIC

GAS - T IROPSCH UGHT

G GAS PROCESS CRUDE OIL DIESEL

STEAM

protected from contact with methanol by electroplating with resistant metals. If methanol becomescontaminated with water it also becomes corrosive to steel. None of these problems is as seriousin practice as they sound, and technical solutions have been found to all of them.

The fuel distribution system for methanol is virtually identical with that for gasolineand diesel fuel, and in fact any filling station can add an extra tank to hold methanol, or clean outan existing tank before filling it with methanol. The only modifications to the fuel dispensingsystem are similar to those needed for the fuel system of the vehicle, i.e. replacement of somesealing materials and protection of sensitive metal parts by electroplating. Apart from the need forgreater care in avoiding water contamination, methanol can be handled by the same transport anddistribution system currently used for petroleum fuels.

Operating experience with modern methanol fueled vehicles is enough that mostmajor vehicle manufacturers would consider producing them if a market were to appear, sufficientto establish a production line. In the case of cars and light trucks this would be around 100,000vehicles per year, while for buses and heavy trucks the figure is in the range of 5,000-10,000 vehiclesper year.

Synthetic Gasoline and Diesel Fuels

These can be manufactured from natural gas by two production techniques; onerequires the production of methanol as an intermediate step, the other uses a Fischer-Tropschcatalytic reaction to produce hydrocarbons directly from a synthesis gas composed of a mixture ofcarbon monoxide and hydrogen (see Figure 111-2). The process can only be carried outeconomically in very large capital-intensive plants. At present one plant for production of syntheticgasoline from methanol has just been commissioned in New Zealand, and one synthetic diesel plantwas under consideration in 1985 by the Royal Dutch/Shell Oil Company in Malaysia.

The products from these plants can be mixed with those derived from petroleumfeedstocks and distributed in exactly the same way as conventional petroleum fuels. Nomodifications to the vehicles themselves are needed for them to run on synthetic fuels, which canbe blended in with similar fuels derived from crude oil.

16

Chapter IV: Economic Considerations

In Chapter III the various technical options for using automotive fuels derived fromnatural gas were described. In the present chapter the economic aspects of using these fuels willbe considered, in comparison with the fuel cost of operating the same type of vehicle onconventional gasoline or diesel fuel derived from crude oil. Since no vehicles are at presentmanufactured to use alternative fuels, the use of these latter requires some modification to thevehicles after manufacture except in the case of synthetic diesel fuel and gasoline. The cost of thesemodifications is an important factor in assessing the economic viability of vehicles using alternativefuels. Apart from modifications to the vehicles themselves, modifications are required to the existingfuel distribution system; in the case of CNG the cost of fuel distribution is a major component inthe overall cost of utilizing CNG as a vehicle fuel. Because vehicle operating costs and conditionsvary widely from one country to another, and even within a country, this section examines therelative economics of using alternative fuel compared to operating the original vehicles onconventional gasoline and diesel fuel at an unspecified hypothetical location, using typicaldeveloping country parameters `0/. Thus, the study is not specific to any one country but thecalculations could easily be modified to reflect specific country situations by inserting differentparameters in the calculations. A computer program has been developed for this purpose whichcould be made available to interested parties. This model has been used to study the relativeeconomic advantages of natural gas versus petroleum based fuels. This analysis has been carriedout in both a static scenario -- in which natural gas prices remain constant in the face of varyingoil price level assumptions -- as well as a dynamic scenario in which gas prices track petroleumprices.

In order to focus on economic efficiency considerations, no account has been takenin this study of taxation on vehicle fuels, although in many countries this forms a substantial partof Government revenue. In several instances where Governments were actively promoting the useof alternative vehicle fuels such as CNG during the period of high oil prices, no tax was chargedon the alternative fuel although heavy taxes were levied on conventional vehicle fuels. Thisamounted to a hidden subsidy for the alternative fuel which had the effect of distorting theeconomics of substitution for the end-user. Large scale conversion of vehicles to alternative fuelsunder such a subsidized system could raise legitimate concern regarding the issue of road usercharges on transport fuels, since they would be borne out of proportion by users of conventionalfuels.

In computing the vehicle conversion costs to alternative fuels on a mileage basis,account has been taken only of incremental conversion costs, ignoring the first cost of the vehicleitself. To some extent this prejudices the case against the use of alternative fuels, because oncedemand for such vehicles reached levels which justified mass production at factory level, conversioncosts would become minimal in comparison with those used in this study. However, this lands onein the classic chicken-and-egg dilemma: mass production of vehicles using alternative fuels will notoccur until demand for new vehicles reaches an adequate level (10,000 to 100,000 vehicles per year,depending on type and other factors) while demand will not reach this level until consumers are

These parameters have been chosen on the basis of various sources of information onvehicle operating characteristics in developing countries including "Vehicle OPerating Costs",The World Bank, Johns Hopkins University Press.

17

Table IV-1

~~~~~~~~~~~~~~. ..,... .. .. ..... ,.. ...... ......

Conventional fuel type: gasoline gasoline diesel gasoline diesel

Miles per gallon 30.4 23.5 5.2 30.4 7.1Kms per liter 12.9 10.0 2.2 12.9 3.0Liters per Km 0.08 0.10 0.45 0.08 0.33BTU's per Km 2,624 3,394 16,482 2,624 12,071

Vehicle Life Years 14 12 10 14 12

Annual Mileage (Kms) 12,000 19,000 22,000 96,000 60,000

i.. -.. . .. . ...... . . . ..

CNG $1,000 $1,800 $4,500 $1,800 $4,500

LPG (Propane) $700 $900 $3,500 $900 $4,800

Methanol $350 $500 $3,200 $500 $4,300

Discount Rate on Conversion 10% 10% 10% 10% 10%

.,,,:. R.. ........R.:,...,,,,,R

CNG $136 $264 $732 $244 $660

Propane $95 $132 $570 $122 $704Methanol $48 $73 $521 $68 $631

s - s +e ....................... i:sS. ..................... ~~............................... i<=

: ,:. :'::R:::.:::::A::: RR:2Z: :.::.: ::::::' : : ................... ................. :.:'::':,:; *-:

Mega Joules per kg 47.70 44.70 45.70 20.02BTU per cubic foot 1000Specific Gravity (kg/liter) 0.75 0.86 0.51 0.80Mega Joules per liter 35.78 38.44 23.31 16.02

Assumed: Crude Oil $20.00 /barrelNatural gas $1.00 /Mcf.

Local 0-5 km ($/liter) $0.159 $0.166 $0.090 $0.1480-5 km ($/MMBTU) $4.69 $4.56 $4.95 $4.09 $9.72

Long 300km(S/liter) $0.182 $0.189 $0.115 $0.171Distance 300 km ($/MMBTU) $5.37 $5.19 $7.52 $5.22 $11.24

18

satisfied that alternative fuels are readily available and that their use is economically advantageousto the individual consumer.

Among the basic assumptions used in this study are the following: (i) natural gashas a calorific value of 1000 BTU per cubic foot and is available from a pipeline; (ii) gasolinemeans leaded regular grade automotive fuel and diesel fuel (gas oil) is a standard automotive grade.Both are assumed to be produced in a world-scale export refinery processing Middle East lightcrude oil, with refining margins of the order of $5.00 per barrel "/. These assumptions are usedin three scenarios: (a) natural gas is supplied from a pipeline at $1.00 per 1000 cubic feet (Mcf.);(b) natural gas is supplied at $2.00 per 1000 cubic feet; and (c) the price of natural gas changes inproportion to crude oil prices starting at $0.63 per Mcf. when oil prices are at $10 per barrel andrising to $4.40 per Mcf. when oil prices are at $70 per barrel. The final cost of gasoline and dieselfuel, used in establishing the baselines for comparative evaluations, includes a shipping charge,terminal and storage, charges, transport charges to supply filling stations, and filling station costs.These cost elements are calculated using representative developing country investment andoperating cost values. (iii) Vehicles - Five classes of vehicles have been selected for study, asfollows:

(a) Automobile, private use, gasoline fueled

(b) Automobile, fleet taxi use, gasoline fueled

(c) Light truck, commercial use, gasoline fueled

(d) Bus, public urban transport use, diesel fueled

(e) Heavy truck, urban/interurban use, diesel fueled

A summary of the technical specifications and cost parameters for each vehicle aregiven in Table IV-1 12/. A number of factors have been taken into account in calculating therelative economics of different gas-derived fuels, among which are:

(a) The cost of production of the resource

(b) The cost of converting the resource into a transport fuel

(c) The cost of transport and distribution of fuel to the ultimate consumer

(d) The efficiency of fuel utilization by the vehicles.

(e) The cost of converting a vehicle to use an alternative fuel.

This estimate is based on recent figures from the Refiner's Acquisition Cost of Crude(RACC) database.

12/ The table presented here is based on a natural gas price of $1.00 per Mcf. For a similartable based on gas prices following the other scenarios, see Annexes 1-3.

19

Figure [V-I

TRANSPORT FUELS IN A NATURAL GAS-RICH DEVELOPING COUNTRYSCHEMATIC OF PHYSICAL SYSTEM AND ANALYrICAL FRAMEWORK

Gasoline andDiesel (Gasoil)

L3 C i^-- ^CLanded Cost Vhicle_Oceon ReceMving Road RilingFreight Termnlnal Transpon Station

AutomobileCNG

Cost PerTrunk __ _ Vehicle

Compression Road Riling Taxi KibometreTransport Station

Methanol Methanol Urban BusR Plant UriDcn i3us | Cost PerE3 tb ck on KVehicle

EVoft ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~KilometreRoud Riling Light

L - - - ___ __ - - __ - __ __Transport Station Truck

PropaneNetback on Hleavy Cost Per

Exports Th~~~~~~~~~~~~~~~~~CI< ~D-~VehicleI] ~~~~~~~~~~~~NG KilomnetreTG== = Os Field Processing .Transport Statinon

20

To some extent the values attributed to these factors are the result of subjectivejudgement, although every attempt has been made to keep these values within the range of whatis usual in developing countries. In some cases, for instance annual vehicle mileage, data are scarceand detailed quantitative studies are for the most part lacking. As a result, it would be possible fora reader to choose different values for the various parameters, based on experience in oneparticular country, and arrive at substantially different conclusion. Nevertheless it is believed thatthe results presented in this paper give a generally correct picture. Figure IV-l shows a schematicdrawing of the supply line for the various fuels discussed.

CNGStorage and filling stations represents a major cost item in the CNG fuel system for

vehicles. The major components are compressors, storage cylinders, high pressure piping, andrefueling bays. "Fast-fill" stations are the most costly because they require multiple compressorsand banks of high pressure storage cylinders capable of handling pressures up to 126 bars (1800 psi)for first stage storage (used for preliminary fill of vehicle tanks) and 243 bars (3500 psi) for secondstage storage (final fill of vehicle tanks). Such a system is capable of refilling an automobile'sstorage tanks in about 10 minutes. A schematic outline of such a station is shown in Figure IV-2.

A typical CNG filling station having a throughput of 50 Mcf of gas (at normaltemperature and pressure) per day would provide fast fill refueling for about 200 to 250 vehiclesper day, comprising a mixture of automobiles and light trucks. 150 Mcf/day would provide for amix of 20 urban buses, 40 taxis, and 10 light trucks or vans. The 50 Mcf/day station would costabout $150,000 and the 150 Mcf/day station about $450,000. Based on a 60% load factor nominalcapacity of these stations would be 80 Mcf/day and 240 Mcf/day respectively. Delivered fuel costwould then be as follows:

80 Mcf/day Nominal CapacityCNG Fueling Station

Throughput (60% load factor) 15,500 Mcf(310 days/year operation)

Annuitized Capital Cost@ 10% p.a. over 5 years $39,570

Capital charges per Mcf $2.55Operating cost per Mcf $1.40Feedstock cost per Mcf $1.00 13/

Delivered cost of CNG per Mcf $4.95

It can be seen from these delivered fuel costs that capital and operating costs aremore significant than feedstock cost. With higher gas prices than $1.00 per Mcf the differentialwould be less, but capital and operating costs are always a substantial part of the delivered cost ofCNG where a fast-fill refueling system is employed. A fleet fast-fill refueling station would havesimilar capital charges but a lower operating cost, so that the delivered cost of CNG in this casewould be about $3.70 per Mcf. The lowest cost supply would be a captive vehicle fleet using a

13/ Natural gas price in this example and following tables is taken at $1.00 per Mcf. For theother two scenarios, see respective annexes at end of the report.

21

Figure IV-2

CNG RJELLING STATION

Compressors a MedlumGaS Une |i. Pressre

t) (;i) 1 _ , ~~~~~~~Storage CYL

Metering u_.

SyseW ()2 Pressuhre

Refueifingstalls

22

trickle-fill system (no high pressure gas storage) which would have a delivered cost of about $3.30per Mcf 14/.

The 80 Mcf/day nominal capacity refueling station cost is the one which has beenused for comparative purposes with other fuels, although it is clearly not the optimum case, whichwould be captive fleet refueling with trickle charging. The problem in attempting any comparisonbetween competing fuels is that there are so many variables in each case that it is difficult to ensurethat the comparisons are valid. In the case of this study, all comparisons have been made on thebasis of direct sales to individual vehicle owners.

In Chapter III it was mentioned that CNG can be transported in tube trailers to aconsiderable distance from the main gas pipeline, and that the limitations of this system wereeconomic rather than technical. The following table gives estimates of the cost of compressing,transporting, and refueling charges for such a system.

Table IV-2

Delivered Cost of CNG at Remote Satellite Stations$/Mcf

Feedstock cost $ 1.00Compression cost $ 1.53Transport cost

50 km distance to delivery point $ 0.525100 km distance to delivery point $ 0.93300 km distance to delivery point $ 2.57

Receiving and refueling station $ 2.42Delivered cost to consumer:

50 km $ 5.48100 km $ 5.88300 km $ 7.52

From the foregoing, the delivered cost of CNG to the consumer is as follows:

14/ see Annexes 1, 2, and 3.

23

Table IV-3

Delivered Cost of CNG $/McfComparative Cost of Gasoline and Diesel ¢/liter (calorific basis)

Operation CNG Cost Gasoline($/Mcf) (c/liter)

Trickle-fill fleet 3.31Fast-fill fleet 3.70Fast-fill public 4.95 15.89

Base Case50 km distant 5.48 16.27100 km distant 5.88 16.65300 km distant 7.52 18.20

Vehicle Conversion to CNG Fuel. The cost of vehicle conversion is a significantfactor in operating CNG fueled vehicles. Table IV-1 gives the basic parameters andconversion costs for the five types of vehicles studied. These cost figures are meantto be representative of the order of magnitude of the costs involved, but obviouslysuch costs will vary quite widely from country to country, and between differentmakes of vehicle.

LPG

As stated in Chapter III, LPG can be recovered from natural gas, or produced asa by-product of refining crude oil. For the purposes of this study it is assumed that LPG isextracted from a rich wet gas stream. In small to medium quantities LPG is transported by roador rail in pressurized tanks. In large quantities it is moved by pipeline or by tank barge or ship.For moderate quantities shipment up to 300 km is usually by road in tankers having a capacity ofabout 3400 US gallons (13,000 liters) which cost about $70,000 each. Transport costs using sucha tank-truck are as follows:

Distance from Freight chargessource of supply $/liters

(km)

0-5 (local delivery) 0.002450 0.0066100 0.0107300 0.0272

An LPG filling station handling 2000 liters/day would cost around $40,000 for tanks,flow lines, vehicle refueling equipment, and construction. Filling station costs are as follows:

24

CostItem ¢/liters

Capital charges 1.7Labor 1.2Miscellaneous 0.8

Total 3.7

The delivered cost of LPG to the automotive consumer is shown in Table IV-4.

Table IV-4

Delivered Cost of LPG to Automotive Customer 15/

Distancefrom source Fuel Transport Station Totalof supply Cost Cost Cost Cost

km o/liters e/liters e/liters ¢/liters

0-5 5.1 0.2 3.7 9.050 5.1 0.7 3.7 9.5100 5.1 1.1 3.7 9.9300 5.1 2.7 3.7 11.5

Vehicle Conversion to LPG fuel. As with CNG, no factory-built LPG fueled vehiclesare available, so the conversion cost must be added to the first cost of the vehicle.These costs vary from $700 for a private automobile to nearly $5000 for an urbanbus (see Table IV-1). This conversion becomes economically attractive when the costof a liter of LPG is not more than 60% of a liters of gasoline, representing adiscount of 25% in terms of contained energy. Because of the greater mileagetraveled by fleet vehicles the economics of conversion are more favorable than forprivate automobiles. When diesel fuel is subsidized relative to gasoline, as is thecase in many developing countries, conversion of diesel engines becomes lessattractive. Users of propane fueled vehicles often find that there are added benefitsdue to reduced engine wear, especially in comparison with gasoline engines. In somecases the environmental benefits from using LPG as an automotive fuel have led tolegislation mandating its use; for example the case of taxis in Japan.

Methanol

Almost all methanol is produced nowadays from natural gas. This is reacted withsteam to form a synthesis gas composed of carbon monoxide and hydrogen. The synthesis gas isthen passed over a catalyst to form methanol. The process is somewhat similar to the manufactureof nitrogenous fertilizer, and plants are on the same scale, with similar capital costs. A typicalworld-scale plant would be around 1200 tons per day capacity or larger and would require an

lS/ Based on Natural gas price of $1.00/Mcf. For other scenarios, see respective annexes.

25

investment of $200 to $250 million. At a 10% discount rate and natural gas cost of $1.00 per Mcf,such a plant would produce methanol at about $150 per ton (see Table IV-5). Since methanol hasonly half the calorific value of gasoline or diesel, this would correspond to conventional petroleumfuels at $340 per ton. The price of the product from such capital intensive plants is extremelysensitive to the rate of interest charged on capital. A paper submitted to the 3rd ASCOPEComprence in Kuala Lumpur in December 1985 by Shell Group personnel cited the case of a 2500ton per day plant costing $500 million and a feedstock cost of $1.00 per Mcf. At 20% capitalcharges the price of the product was $185/ton. There are also appreciable economies of scale, ascan be seen from Table IV-7. The sensitivity of product cost to feedstock prices is not as great asit is to interest charged on capital. Owing to a worldwide surplus of production capacity,international prices for bulk methanol are currently depressed. In early 1986 the price for fuelgrade methanol was around $140 per ton (11 cents per liters). It is highly unlikely that a newlyconstructed plant in a developing country could produce methanol at such a low price. However,for the purposes of this study methanol fuel was assumed to have a landed value of $140 per ton.

Table IV-5

Methanol "Green-Field" Plant Production CostDeveloping Country

AssumptionsCapacity tons/day 1,200 2,500Service factor % 81 81Production, tons/year 354,780 739,125Capital 16/ 1986 US$ million 207 349Natural gas feedstock and fuel use, MCF/ton 32 32Natural gas value $/MCF 1.00 1.00Operating, maintenance $ million/year 14.0 26.0

Cost Summary per Ton MethanolCapital 15% DCF, 15 year life $76.71 $62.08Natural gas feed and fuel $32.00 $32.00Operating, maintenance $39.46 $35.18Total, plant gate $148.17 $129.26

As mentioned in Chapter III, fuel methanol is generally blended with about 10% oflight gasoline for a number of reasons. This product is known as M90. Since M90 is not availablecommercially it would be necessary to mix it at the bulk storage plant. The cost of the blend wouldbe as follows:

Methanol 10.7 ¢/literGasoline 1.6 ¢/literBlending costs 1.1 e/liter

Total M90 cost 13.4 ¢/liter

16/ Assumes 1986 start on concept, planning, start-up 1990, and includes plant cost, Canada baseescalated to developing country plus royalty.

26

Table IV-6

Delivered Cost of Methanol M-90 Blend to Consumer¢/liters

Distancefrom Transport Station DeliveredSupply point Blend Cost Cost Cost Cost

0-5 km 13.4 0.164 2.576 16.1450 km 13.4 0.544 2.576 16.52100 km 13.4 0.924 2.576 16.90300 km 13.4 2.476 2.576 18.45

Since cars designed for methanol fuel are not manufactured, it is necessary to modifythe vehicle fuel supply system. The cost of these modifications ranges from about $350 for apersonal automobile to about $4300 for a bus (see Table IV-1). The M-90 methanol/gasoline blendis used for spark-ignition gasoline engine conversions. For buses and trucks where diesel enginesare converted, 100% methanol (M100) would be used as the fuel in order to take advantage of thehigher thermal efficiency offered by the greater compression ratio. Although blending costs areeliminated by the use of M100, it entails greater transport and handling charges because of the needto avoid the presence of an explosive air/vapor mixture above the liquid surface in tanks, and toinstall anti-combustion baffles to prevent accidental ignition. Thus the retail cost to the consumerof M90 and M100 would be approximately the same.

Synthetic Gasoline and Diesel Fuel from Natural Gas

The technical feasibility of manufacturing synthetic gasoline and diesel fuel fromnatural gas is well established, however, economic factors rule out any application of thesetechnologies at present-day prices for crude oil. Table IV-7 gives a summary of capital andoperating costs for plants to produce these fuels from natural gas. As in the case of methanol,these plants are highly capital intensive and the price of the end product is very sensitive to interestrates charged on capital. The capital costs shown in Table IV-7 are much higher than these givenin much of the published literature, on the basis of the very high level of cost overrun experienced,for example, in construction of the New Zealand synthetic gasoline plant, which uses the Mobilprocess with methanol as an intermediate product. This is at present the only large scale plantmanufacturing gasoline from natural gas. Because of the very high cost of synthetic gasoline, theNew Zealand government is still encouraging conversion of automobiles to CNG and LPG fuels inorder to limit overall consumption of gasoline in the country. Despite the high cost of thesesynthetic fuels, the existence of these technologies imposes an upper limit to the price which crudeoil can command as a source of transport fuels. Furthermore, advances in catalytic conversiontechnology may, in the next decade or so, substantially reduce the cost of the necessary plant belowwhat is required using present day technology.

27

Table IV-7

Synthetic Gasoline and Diesel "Green-Field"Plant Production CostDeveloping Country

Gasoline Diesel(Mobil Process) (Fischer Tropsch)

AssumptionsCapacity tons/day 1,775 1,775Service factor % 81 81Production, tons/year 524,779 524,779Capital 17/ 1986 US$ million 1,460 1,550Natural gas feedstock and fuel use, MCF/ton 18/ 85.2 71.6Natural gas value $/MCF 1.00 1.00Operating, maintenance $ million/year 90.0 95.0

Cost Summary per Ton Synthetic Fuel -------------$ per ton---------Capital 10% DCF, 15 year life 366 388Natural gas feed and fuel 85 72Operating, maintenance 172 181Total, plant gate 622 641

Economic Comparison of Fuels

Based on the assumptions outlined earlier in this chapter, Annexes 1,2, and 3 showthe costs of conventional fuels as well as natural gas based fuels at different values of crude oilranging from US$10 per barrel to US$70 per barrel and under various assumptions about naturalgas prices. The comparative cost per kilometer of alternative fuels at the point of bulk supply (0km) and at refueling points 300 kms distant from the point of bulk supply compared to that ofconventional fuels derived from crude oil are also shown in the three annexes. In annexes 1 and2, the prices of alternative fuels are assumed not to be affected by changes in crude oil price, whilein annex 3, natural gas prices are assumed to "track" crude oil prices proportionately. The deliveredcost of the fuel is combined with an annuitized conversion cost per kilometer, to give a fuel costper kilometer for operating each type of vehicle on different fuels.

The relationship between crude oil price level and corresponding per kilometer costof conventional fuels (gasoline and diesel) for the various vehicles are shown graphically in Annex 4.These graphs also show the relationship between per kilometer costs of natural gas based fuels andcrude oil prices for the scenario where gas prices "track" crude oil prices (as in Annex 3). The slopeof the various vehicle-fuel lines indicate their sensitivity to oil price changes. The break-even points

"/ Assumes 1986 start on concept, planning, start-up 1990; plant cost New Zealand base forgasoline, Canada base for diesel both escalated to developing country levels.

18/ Credits taken for plant co-products, by-products.

28

for crude oil prices, at which the conventional fuel would be as costly as the natural gas based one,are also shown. These are summarized in tables IV-8 through IV-10.

Table IV-8Break-even crude oil price levels US$/bbl.Natural gas price constant at $1.00/Mcf.

Local Delivery CNG CNG(O - 5 km) Fast- Trickle- Methanol

Fill Fill LPG (M90)Cars 45 36 33 65Taxis 27 18 19 57Light Trucks 44 35 28 63Heavy Trucks 33 24 26 68Buses 27 18 23 63

Distant Delivery CNG CNG(300 km) Fast- Trickle- Methanol

Fill Fill LPG aM90Cars 55 46 35 71Taxis 37 28 22 63Light Trucks 54 45 30 69Heavy Trucks 44 35 29 74Buses 38 29 26 70

Table IV-9Break-even crude oil prices levels

Natural gas price constant at $2.00/Mcf.

Local Delivery CNG CNG(O - 5 km) Fast- Trickle- Methanol

Fill Fill LPG (M90Cars 50 41 46 76Taxis 32 23 32 67Light Trucks 49 40 40 73Heavy Trucks 39 30 39 78Buses 33 24 36 74

Distant Delivery CNG CNG(300 km) Fast- Trickle- Methanol

Fill Fill LPG (M90)Cars 60 51 48 82Taxis 42 33 34 73Light Trucks 59 50 43 79Heavy Trucks 50 41 42 85Buses 44 34 38 81

29

Table IV-10Break-even crude oil prices levels

Natural gas price "tracks" crude oil price

Local Delivery CNG CNG(O - 5 km) Fast- Trickle- Methanol

Fill Fill LPG (M90)

Cars 59 46 93 161Taxis 32 19 31 136Light Trucks 57 44 69 153Heavy Trucks 43 29 67 178Buses 33 19 50 165

Distant Delivery CNG CNG(300 km) Fast- Trickle- Methanol

Fill Fill LPG (M90)

Cars 75 61 104 178Taxis 47 34 42 153Light Trucks 73 60 80 170Heavy Trucks 59 45 80 198Buses 50 36 64 186

The results in Tables IV-8 through IV-10 are summarized graphically in Figure IV-3.A line has been drawn at the $18 per barrel level, to facilitate the interpretation of the results. Ascan be seen, crude oil prices would have to be above this level, before economic break-even pointsare achieved for all the alternative gas based fuels in every one of the vehicle types here considered.

Conclusions

Tables IV-8 through IV-10 and Figure IV-3 indicate the borders of competitivenessbetween the various fuels under the three scenarios used in this study. They indicate that CNGFast-Fill requires oil prices to rise to $27 per barrel before it becomes competitive with gasolinefor taxis and buses, even if gas prices were assumed to remain constant at the low level of $ 1.00per Mcf. In contrast, for these vehicles, CNG Trickle-Fill would become competitive at $18 perbarrel. Even when natural gas prices are allowed to track oil prices, CNG Trickle-Fill would becompetitive at oil prices of $19 per barrel or higher.

Both when natural gas prices are kept constant at $1.00 per Mcf. or are allowed totrack oil prices, LPG becomes competitive already at $19 per barrel, when used in taxis. However,if gas prices are kept fixed at $2.00 per Mcf., crude oil prices would have to reach a considerablyhigher level, $32 per barrel, before LPG competes economically.

30

Figure IV-3

Uneconomic Ranges for Gas Derived FuelsLocal Delivery (0-5 km)

Crude Oil Prices (US$/barrel)70

60-

50

40

30

20 _$18

1 0

0C T L H B C T L H B C T L H B C T L H

CNG Fast-Fill CNG Trickle-Fill LPG Methanol (M90)

_ Gas @ $1/Mcf. M Gas * $2/Mci. = Gas P Tracks Oil P

C * Cars T - Taxis LT - Light Trucks HT * Heavy Trucks B - Buses

Within $0-$70/barrel Oil Price Range

Uneconomic Ranges for Gas Derived FuelsLong Distance Delivery (300 km)

Crude Oil Prices (US$/barrel)70

60

50

40

30

20- $18

10

0C T L CTL H B C T L H B C T L H B

CNG Fast-Fill CNG Trickle-Fill LPG MT eethanol (M90)

M Gas e $1/Mcf. M Gas * $2/Mcf. = Gas P Tracks Oll P

C - Cars T * Taxis LT - Light Trucks HT * Heavy Trucks B * Buses

Within $0-$70/barrel Oil Price Range

Finally, methanol is seen to be the least attractive natural gas based option. 19/ Evenin the most favorable circumstances, oil prices would have to reach $57 per barrel before methanolis considered as attractive as gasoline.

It is clear from these results that taxis and buses are the most suited to theeconomic introduction of natural gas based fuels as an alternative to gasoline or diesel. However,it is important to recognize the limitations of these conclusions. As mentioned earlier, there areother factors which limit the extent to which such a substitution is possible without requiringincreased capital expenditures. Until these costs can be properly established, the relative rankingsof the suitability of various vehicles to conversion to gas based fuels as here reported, remaintentative.

Using the model, a sensitivity analysis with respect to the basic parameters wascarried out. The results indicate that for the annual distance traveled, costs increase rapidly as thedistance traveled falls below the base case used in the study, but decreases much less for distancesabove the base case. For other parameters such as conversion cost and interest rates the rate ofchange is linear and directly proportional to the amount of change above or below the base case.This analysis explains the difference, for instance, in the operating economics of taxis relative toprivate cars. Although these are basically the same vehicle, the much higher annual mileagetraveled by the taxi makes the use of alternative fuels economically attractive at crude prices wellbelow those needed to justify their use in private cars.

The conclusions to be drawn from this analysis are that the most attractivealternative fuel options are propane and CNG trickle-fill systems, which become economicallycompetitive with conventional fuels at crude oil prices of $20 per barrel. CNG fast-fill systems areless attractive, becoming competitive at crude oil prices in the range of $25 to $30 per barrel.Methanol, because of the high price of the basic fuel, does not become competitive until crude oilprices reach the $57 per barrel market, while synthetic gasoline and diesel fuels, even in the bestof circumstances, only become competitive if crude oil sells at prices considerably above $70 perbarrel. Two observations are relevant at this stage. First, the oil price ranges given above basicallyidentify break-even points for the respective substitute fuels. The conversion to alternative fuelsrequires large investments and may entail problems associated with applying unfamiliar technologieson a large scale (relative to conventional gasoline and diesel-based fuels), in an uncertain climate.Therefore, the oil price may have to rise significantly above the break-even value, to justify sucha major commitment of resources. On the other hand, it must be emphasized that the aboveconclusions are based on existing technology. The development of low pressure absorption systemsfor CNG, as used for example with industrial acetylene gas, could lower the cost of using CNG,while improved chemical processes, particularly the development of new catalysts, coulddramatically lower the cost of producing methanol, synthetic gasoline, and diesel fuel.

19/ Excluding synthetic gasoline and diesel, which were found to be uneconomic at crude oilprices below $70 per barrel

32

Annex 1:

Model Based on Natural Gas Price

of $1.00 per Mcf.

33

;}W";;~~~~~~~~.....; .. . i

Conventional fuel type: gasoline gasoline diesel gasoline diesel

Miles per gallon 30.4 23.5 5.2 30.4 7.1Kms per liter 12.9 10.0 2.2 12.9 3.0Liters per Km 0.08 0.10 0.45 0.08 0.33BTU's per Km 2,624 3,394 16,482 2,624 12,071Vehicle Life Years 14 12 10 14 12Annual Mileage (Kms) 12,000 19,000 22,000 96,000 60,000

CNG $1,000 $1,800 $4,500 $1,800 $4,500LPG (Propane) $700 $900 $3,500 $900 $4,800Methanol $350 $500 $3,200 $500 $4,300

Discount Rate on Conversion 10% 10% 10% 10% 10%

CNG $136 $264 $732 $244 $660Propane $95 $132 $570 $122 .$704

Methanol $48 $73 $521 $68 $631

FU.EL a . 2I N .. ..:R....as.l....Die .o n ..... thanolFUE ~ ~~~~~~~ ~~~~~~~~~R sm D R R R:R-. . .... ... ........... ...... ar ............ e

Mega Joules per kg 47.70 44.70 45.70 20.02BTU per cubic foot 1000Specific Gravity (kg/liter) 0.75 0.86 0.51 0.80Mega Joules per liter 35.78 38.44 23.31 16.02

Delivered fuel pricesCrude Oil $20.00 /barrelNatural gas $1.00 /Mcf.

0-5 km ($I1iter) $0.159 $0.166 $0.090 $0.1480-5 km ($/MMBTU) $4.69 $4.56 $4.95 $4.09 $9.72

300 km ($/liter) $0.182 $0.189 $0.115 $0.171300 km ($/MMBTU) $5.37 $5.19 $7.52 $5.22 $11.24

34

Oil Price: $20.00 /barrelGasoline Refining Cost $5.00 /barrel

1 barrel = 42 US gallonsI US gallon = 3.785 liters

LPG price at source: $100 per MT1 BTU = 1055 Joules = 251.99 calories

Discount Factor: 10%

Calorific SpecificFuel Content GravityNatural Gas 1000 BTU/cf.Gasoline 47.7 MJ/kg 0.75 kg/literDiesel (Gas Oil) 44.7 MJ/kg 0.86 kg/literMethanol 20.02 MJ/kg 0.80 kg/literLPG (Propane) 45.7 MJ/kg 0.51 kg/liter

Passenger Light HeavyCars Trucks Trucks Taxis Buses

Vehicle Life 14 12 10 14 12Annual kms/year 12000 19000 22000 96000 60000Mileage(mi/gallon) 30.4 23.5 5.2 30.4 7.1Mileage (km/liter) 12.9 10.0 2.2 12.9 3.0

Gas Feedstock at Source ................ $1.00 /Mcf.

Calorific Content = 1000 BTU/cf.= I MBTU/cf

35

FUEL COST (Cents per hn)

FUEL COST

Distance Crudo (cents per liter) 2 - M I

fromn Oil M k Tuks 1ae

Supply Price gasoline diesel gasolie gasole diesel diesel

($/barrel)0-5 km $20 15.89 16.61 1.23 1.59 7.51 5.50

50 km $20 16.27 16.99 1.26 1.63 7.68 5.63

100 km $20 16.65 17.37 1.29 1.67 7.85 5.75

300 km $20 18.20 18.92 1.41 1.82 8.56 6.27

gasoline diesel--- cents/liter- ---- cents/km -----

$10 9.60 10.03 0.74 0.96 4.54 3.32

20 15.89 16.61 1.23 1.59 7.51 5.50

30 22.18 23.18 1.72 2.22 10.48 7.68

40 28.47 29.75 2.20 2.85 13.46 9.86

50 34.76 36.33 2.69 3.48 16.43 12.03

60 41.05 42.90 3.18 4.11 19.40 14.21

70 47.34 49.47 3.66 4.74 22.38 16.39

80 53.63 56.05 4.15 5.37 25.35 18.57

90 59.92 62.62 4.64 6.00 28.33 20.75

100 66.21 69.19 5.12 6.63 31.30 22.92

300 km: $10 11.91 12.34 0.92 1.19 5.58 4.09

20 18.20 18.92 1.41 1.82 8.56 6.27

30 24.49 25.49 1.90 2.45 11.53 8.44

40 30.78 32.06 2.38 3.08 14.50 10.62

50 37.07 38.64 2.87 3.71 17.48 12.80

60 43.36 45.21 3.36 4.34 20.45 14.98

70 49.65 51.79 3.84 4.97 23.42 17.16

80 55.95 58.36 4.33 5.60 26.40 19.33

90 62.24 64.93 4.82 6.23 29.37 21.51

100 68.53 71.51 5.30 6.86 32.34 23.69

36

.:. . . .. GA. .. LN

Calorific Contene. 47.7 MI/kgSpecific Gravity: 0.75 kg/liter

Delivered C t:: -----

.... .. ...... .... .......... ....... .... . . . ....

Feedstoclc Transport TotalUSc/liter

0-5 .km 15.73 0.16 15.8950 km 15.73 0.54 16.27

100 km 15.73 0.92 16.65300 km 15.73 2.48 18.20

37

:~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

:E... CN: G

Calorific \ 1 liter gasoline= 33.9 cf Natural GasEquivalence / I liter diesel = 36.4 cf Natural Gas

,FAST' F C … (-------- cents per km )------- ----------- ---------

0-5 km Delivered Fuel 1.299 1.681 8.163 1.299 5.979Conversion Cost 1.131 1.390 3.329 0.255 1.101

Total Cost 2.431 3.071 11.492 1.554 7.080

t~~~~~~~assegr Ught H eav @ .FAST. F.L......ks Trck .~s Du

-------- (cents per km ------- ----------- ---------300 km Delivered Fuel 1.974 2.553 12.399 1.974 9.081

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 3.105 3.944 15.728 2.228 10.182

--------- ( cents per km ------- ----------- ---------0-5 km Delivered Fuel 0.869 1.124 5.460 0.869 3.999

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 2.000 2.515 8.789 1.124 5.100

m ~~~~~~~~~~~~~~~~~~~..... . ....---------- ( cents per km )------- ----------- ---------

300 km Delivered Fuel 1.544 1.997 9.696 1.544 7.101Conversion Cost 1.131 1.390 3.329 0.255 1.101

Total Cost 2.675 3.387 13.025 1.798 8.202

38

Calorific Content: 1000 BTU/cf.

Filling Station: 5 year LifeOperating days: 310 per year Annuitized

Capital

Station Capacity Cost Cost50 Mcf/day .......... $150,000 $39,570

150 Mcf/day .......... $450,000 $118,709

Delivered CNG Cost for 50 Mcf Capacity Station (Fast-Fill)

COSTS PER McfCapital $2.55Feedstock $1.00Operating $1.40

Transport Cost Trickle Fill0 km (at gate) $4.95 $3.31

$0.53 50 km $5.48 $3.84$0.93 100 km $5.88 $4.24$2.57 300 km $7.52 $5.88

Vehic i Light HeavyCars Trucks Trucks Taxis Buses

Cost $1,000 $1,800 $4,500 $1,800 $4,500Km/Year 12,000 19,000 22,000 96,000 60,000

Annuitized Costlyr $136 $264 $732 $244 $660per km $0.011 $0.014 $0.033 $0.003 $0.011

39

*. s m.*.... ... ~ 1 liter Gasoline = 1.535 liter Propane

.. i X ts S .gg ............... l 1 liter Propane = 0.651 liter Gasoline1 liter Diesel = 1.649 liter Propane

J ~~~~~1 liter Propane = 0.606 liter Diesel

- ---- ( cents per km )------ ----------- -------0-5 km Delivered Fuel 1.074 1.389 6.746 1.074 4.941

Conversion Cost 0.792 0.695 2.589 0.127 1.174Total Cost 1.866 2.084 9.335 1.201 6.115

---------- ( cents per km )------- ----------- ---------300 km Delivered Fuel 1.368 1.770 8.596 1.368 6.296

Conversion Cost 0.792 0.695 2.589 0.127 1.174Total Cost 2.160 2.465 11.185 1.496 7.470

40

Spec. Gravity: 0.51 kg/liter ag

- 1.96 liter/kgCalorific Content: 45.7 MI/kg

43318 BTU/kg Cs ~$0O

Delivered Cost: ($/liter)

0-5 km 50 km 100 km 300 km

Feedstock $0.051 $0.051 $0.051 $0.051

Transport 0.002 0.007 0.011 0.027

Station Costs:Capital $0.017 $0.017 $0.017 $0.017

Labor 0.012 $0.012 $0.012 $0.012Miscel. 0.008 $0.008 $0.008 $0.008

Total $0.090 $0.095 $0.099 $0.115

Vebi:le Cckxvcrsjom, Light Heavy

Cars Trucks rucks Taxis Buses

Conversion Cost $700 $900 $3,500 $900 $4,800

Km/year 12,000 19,000 22,000 96,000 60,000

Annuitized Conv: $95 $132 $570 $122 $704

per km: $0.008 $0.007 $0.026 $0.001 $0.012

41

Specific Gravity: 0.8 kg/liter

Calorific Content: 20.02 MJ/kg

Capacity (tons/day) 1200 2500

Service Factor 81% 81%

Production (Tons/year) 354,780 739,125

Capital (1986 US$ million) 207 349

Gas Feedstock Mcf/ton meth. 32 32

O & M ($ million/year) 14 26

Capital Cost $76.71 $62.08

Gas Feedstock 32.00 32.00

O&M $39.46 $35.18

Total plant gate: $148.17 /ton $129.26 /ton

$0.148 /kg $0.129 /kg

$0.119 /liter $0.103 /liter

Methanol Plant Capacity: 1200 2500

Methanol 90% $0.107 $0.093

Gasoline 10% 0.016 0.016

Blending Cost 0.011 0.011

M90- Blend Cost $0.134 $0.120

'Deierl CstfMeIan1.l BE d

US cents per liter

Blend 13.381 12.019

Filling Station Cost 2.576 2.576

TOTAL 15.957 14.595

Transport Cost Cost at Delivery PointDistance c/liter (US cents per liter)

0-5 kn 0.164 16.121 14.759

50 kin 0.544 16.501 15.139100 km 0.924 16.881 15.519

300 km 2.476 18.433 17.071

Ve66M Light HeavyCars Trucks rucks Taxis Buses

Conversion Cost $350 $500 $3,200 $500 $4,300

Km/year 12000 19000 22000 96000 60000

Annuitized Conv: $48 $73 $521 $68 $631

per kin: $0.004 $0.004 $0.024 $0.001 $0.011

1 liter Gasoline = 2.234 liter Methanol1 liter Methanol = 0.448 liter Gasoline

Equiv,Iew¢e ( 1 liter Diesel = 2.400 liter Methanol- 1- = I liter Methanol 0.417 liter Diesel

---------- ( cents per km ) ----- - - …---------

0-5 km Delivered Fuel 2.551 3.300 16.024 2.551 11.736Conversion Cost 0.396 0.386 2.367 0.071 1.052

Total Cost 2.947 3.686 18.391 2.621 12.788

---------- ( cents per km )------- ----------- ---------300 km Delivered Fuel 2.950 3.817 18.534 2.950 13.574

Conversion Cost 0.396 0.386 2.367 0.071 1.052Total Cost 3.346 4.203 20.901 3.021 14.626

43

SYNThETIC GASOLINE AND DIESE..

Specific Gravity (gasoline): 0.75 kg/literCalorific Content (gasoline): 47.7 MJ/kgSpecific Gravity (diesel fuel): 0.86 kglliterCalorific Content (diesel fuel): 44.7 MJ/kg

b Xi --. i:,..K'- ,.:

Life: 15 yearsCapacity (Tons/day) 1,775 1,775Service factor 0.81 0.81Production (Tlyear) 524,779 524,779Capital (1986 US$ million) $1,460 $1,550Nat. Gas Feedstock Mcf/ton 85.2 71.6Nat. Gas Feedst. Cost $1Mcf $1.00 $1.00O & M (US$ millionlyear) $90 $95

Cost: $per ton

Capital $366 $388Feedstock 85 72O&M 172 181

Total @ Gate $622 $641

$0.467 /liter $0.535 /liter46.686 c/liter 53.533 c/liter

Transprt y CoI . -(same as M90) Cost at Delivery Point

Distance c/liter (US cents per liter)0-5 km 0.164 46.850 53.69750 km 0.544 47.230 54.077100 km 0.924 47.610 54.457300 km 2.476 49.162 56.009

44

GAS FEEDSTOCK PRICE: $1.00 /Mc£

----- ---------- ( cents per km ------- -----------Gasoline 1.23 1.59 1.23Diesel 7.51 5.50CNG 2.43 3.07 11.49 1.55 7.08LPG (Propane) 1.87 2.08 9.34 1.20 6.11Methanol (M90) 2.95 3.69 18.39 2.62 12.79

GASOLINE AND DIESEL COSTS

For variousCrude Oil Prices ---------- ---------- (cents per km )---LocalDelivery 10 0.74 0.96 4.54 0.74 3.32(0-5 km) 20 1.23 1.59 7.51 1.23 5.50

30 1.72 2.22 10.48 1.72 7.6840 2.20 2.85 13.46 2.20 9.8650 2.69 3.48 16.43 2.69 12.0360 3.18 4.11 19.40 3.18 14.2170 3.66 4.74 22.38 3.66 16.39

Cost Sensitivityto Oil Price 0.66% 0.66% 0.66% 0.66% 0.66%(gasolineldiesel)

45

'0: .. ::Qj~~~~~~~~~~~~~~~~~~~~~~~~~~~~:Xs:. .. ......

GAS FEEDSTOCK PRICE: $1.00 IMcf

----- ---------- ( cents per kn)------- -----------Gasoline 1.41 1.82 1.41Diesel 8.56 6.27CNG 3.11 3.94 15.73 2.23 10.18LPG (Propane) 2.16 2.47 11.19 1.50 7.47Methanol (M90) 3.35 4.20 20.90 3.02 14.63

GASOLINE AND DIESEL COSTS

For variousCrude Oil Prices ----------- (cents per km )-- ---------- -----------

Long DistanceDelivery 10 0.92 1.19 5.58 0.92 4.09(300 kn) 20 1.41 1.82 8.56 1.41 6.27

30 1.90 2.45 11.53 1.90 8.4440 2.38 3.08 14.50 2.38 10.6250 2.87 3.71 17.48 2.87 12.8060 3.36 4.34 20.45 3.36 14.9870 3.84 4.97 23.42 3.84 17.16

Cost Sensitivityto Oil Price 0.53 % 0.53% 0.53% 0.53% 0.53%(gasoline/diesel)

46

Annex 2:

Model Based on Natural Gas Price

of $2.00 per Mcf.

47

Conventional fuel type: gasoline gasoline diesel gasoline diesel

Miles per gallon 30.4 23.5 5.2 30.4 7.1Kms per liter 12.9 10.0 2.2 12.9 3.0Liters per Km 0.08 0.10 0.45 0.08 0.33BTU's per Km 2,624 3,394 16,482 2,624 12,071Vehicle Life Years 14 12 10 14 12Annual Mileage (Kms) 12,000 19,000 22,000 96,000 60,000

CNG $1,000 $1,800 $4,500 $1,800 $4,500LPG (Propane) $700 $900 $3,500 $900 S4,800Methanol $350 $500 $3,200 $500 $4,300

Discount Rate on Conversion 10% 10% 10% 10% 10%

A0nuiizd&wia Qiosa

CNG $136 $264 $732 $244 $660Propane $95 $132 $570 $122 $704Methanol $48 $73 $521 $68 $631

Mega Joules per kg 47.70 44.70 45.70 20.02BTU per cubic foot 1000Specific Gravity (kg/liter) 0.75 0.86 0.51 0.80Mega Joules per liter 35.78 38.44 23.31 16.02

Delivered fuel pricesCrude Oil $20.00 /barrelNatural gas $2.00 /Mcf.

0-5 km ($/liter) $0.159 $0.166 $0.141 $0.1710-5 km ($IMMBTU) $4.69 $4.56 $5.95 $6.40 $11.24

300 km (S/liter) $0.182 $0.189 $0.166 $0.194300 km ($/MMBTU) $5.37 $5.19 $8.52 $7.52 $12.76

48

Oil Price: $20.00 /barrelGasoline Refining Cost: $5.00 /barrel

I barrel = 42 US gallons1 US gallon 3.785 liters

LPG price at source: $200 per MT1 BTU = 1055 Joules = 251.99 calories

Discount Factor: 10%

Calorific SpecificFuel Content GravityNatural Gas 1000 BTU/cf.Gasoline 47.7 MJ/kg 0.75 kg/literDiesel (Gas Oil) 44.7 MJ/kg 0.86 kg/literMethanol 20.02 MJ/kg 0.80 kg/literLPG (Propane) 45.7 MI/kg 0.51 kg/liter

Passenger Light HeavyCars Trucks Trucks Taxis Buses

Vehicle Life 14 12 10 14 12Annual kIns/year 12000 19000 22000 96000 60000Mileage(mi/gallon) 30.4 23.5 5.2 30.4 7.1Mileage (km/liter) 12.9 10.0 2.2 12.9 3.0

Gas Feedstock at Source ................ $2.00 /Mcf.

Calorific Content = 1000 BTU/cf.= i MBTU/cf

49

FUEL COST (Cents per kn)

FUEL COSTDistance Crude (cents per liter)

from Oil Txs tuk hs 'ueSupply Price gasoline diesel gasoline gasoline diesel diesel

($1barrel)0-5 km $20 15.89 16.61 1.23 1.59 7.51 5.5050 km $20 16.27 16.99 1.26 1.63 7.68 5.63100 kn $20 16.65 17.37 1.29 1.67 7.85 5.75300 km $20 18.20 18.92 1.41 1.82 8.56 6.27

oasi tc~gasoline dieseli---cents/tiler- - …----------cents/km--------------

0-5hnkm$10 9.60 10.03 0.74 0.96 4.54 3.32

20 15.89 16.61 1.23 1.59 7.51 5.5030 22.18 23.18 1.72 2.22 10.48 7.6840 28.47 29.75 2.20 2.85 13.46 9.8650 34.76 36.33 2.69 3.48 16.43 12.0360 41.05 42.90 3.18 4.11 19.40 14.2170 47.34 49.47 3.66 4.74 22.38 16.3980 53.63 56.05 4.15 5.37 25.35 18.5790 59.92 62.62 4.64 6.00 28.33 20.75

100 66.21 69.19 5.12 6.63 31.30 22.92

300 km: $10 11.91 12.34 0.92 1.19 5.58 4.0920 18.20 18.92 1.41 1.82 8.56 6.2730 24.49 25.49 1.90 2.45 11.53 8.4440 30.78 32.06 2.38 3.08 14.50 10.6250 37.07 38.64 2.87 3.71 17.48 12.8060 43.36 45.21 3.36 4.34 20.45 14.9870 49.65 51.79 3.84 4.97 23.42 17.1680 55.95 58.36 4.33 5.60 26.40 19.3390 62.24 64.93 4.82 6.23 29.37 21.51

100 68.53 71.51 5.30 6.86 32.34 23.69

50

Calorific Content: 47.7 MI/kgSpecific Gravity: 0.75 kg/liter

Delivered C-sts

Feedstock Transport TotalUSc/liter

0-5 km 15.73 0.16 15.8950 km 15.73 0.54 16.27

100 km 15.73 0.92 16.65300 km 15.73 2.48 18.20

51

Calorific I I liter gasoline =33.9 cf Natural Gas

4k

Equivalence 44.44. I itrdesl=364cfNtra)a

K: . .. ... 4.. . ... - .. 4 M4. T

(----- cents per km )------- ----------- ---- ----0-S km Delivered Fuel 1.562 2.020 9.812 1.562 7.186

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 2.693 3.411 13.140 1.816 8.287

.. 4.. , 4, .............. . g ... a -- . ................ . . . . .. ..-.. .......- ..

----------- (cents per km )------- ----------- ---------300 km Delivered Fuel 2.236 2.893 14.048 2.236 10.2S8

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 3.367 4.283 17.376 2.491 11.389

. i = ......... ............

---------- ( cents per km )------- ----------- ---------0-5 km Delivered Fuel 1.132 1.464 7.109 1.132 5.206

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 2.263 2.854 10.437 1.386 6.307

.......... WX X----------- (cents per km )------- ----------- ---------

300 km Delivered Fuel 1.806 2.336 1.1344 1.856 8.309Conversion Cost 1.131 1.390 3.329 0.255 1.101

Total Cost 2.937 3.726 14.673 2.060 98.28

52

.. <. '..... ~~~~~~~~~~~~~~~~~~~~~~~~~~~ ... . .... .

Calorific Content: 1000 BTU/cf.Filling Station: 5 year LifeOperating days: 310 per year Annuitized

Capital

Station Capacity Cost Cost

50 Mcflday .......... $150,000 $39,570150 Mcf/day .......... $450,000 $118,709

Delivered CNG Cost for 50 Mcf Capacity Station (Fast-Fill)

COSTS PER McfCapital $2.55Feedstock $2.00Operating $1.40

Transport Cost Trickle Fill0 km (at gate) $5.95 $4.31

$0.53 50 km $6.48 $4.84$0.93 100 km $6.88 $5.24$2.57 300 km $8.52 $6.88

Vehicle Conveta~ou~ Light HeavyCars Trucks Trucks Taxis Buses

Cost $1,000 $1,800 $4,500 $1,800 $4,500Km/Year 12,000 19,000 22,000 96,000 60,000

Annuitized Cost/yr $136 $264 $732 $244 $660per km $0.011 $0.014 $0.033 $0.003 $0.011

53

I liter Gasoline = 1.535 liter Propane/LPGI liter Propane = 0.651 liter GasolineI liter Diesel = 1.649 liter Propane/LPG

| m~. I liter Propane = 0.606 liter Diesel

---------- ( cents per km )------- ----------- ---------

0-5 km Delivered Fuel 1.680 2.173 10.551 1.680 7.727Conversion Cost 0.792 0.695 2.589 0.127 1.174

Total Cost 2.471 2.868 13.140 1.807 8.901

---------- ( cents per km )------- ----------- ---------300 km Delivered Fuel 1.974 2.554 12.401 1.974 9.083

Conversion Cost 0.792 0.695 2.589 0.127 1.174Total Cost 2.766 3.249 14.990 2.101 10.257

54

Spec. Gravity: 0.51 kgfliter

Calorific Content: 45.7 MJ/kg

Delivered Cost: (SAiter)

0-5 Ian 50 km lOO km 300 km

Feedstock SO. 102 $0.102 S0. 102 $0.102

Transport 0.002 0.007 0.011 0.027

Station Costs:Capital $0.017 S0.017 S0.017 $0.017

Labor 0.012 S0.012 $0.012 $0.012

Miscel. 0.008 S0.008 S0.008 $0.008

Total $0.141 $0.146 $0.150 $0.166

a Light HeavyCars Trucks rucks Taxis Buses

Conversion Cost $700 S900 S3,500 $900 $4,800

Km/year 12,000 19,000 22,000 96,000 60,000

Annuitized Conv: .S95 $132 $570 $122 $704

per km: $0.008 $0.007 $0.026 $0.001 $0.012

55

Specific Gravity: 0.8 kg/literCalorific Content 20.02 MJlkg

Capacity (tons/day) 1200 2500

Service Factor 81% 81%Production (Tons/year) 354,780 739,125Capital (1986 US$ million) 207 349Gas Feedstock Mcf/ton meth. 32 .32O & M ($ million/year) 14 26

Capital Cost $76.71 $62.08Gas Feedstock 64.00 64.00O&M $39.46 $35.18

Total plant gate: $180.17 /ton $161.26 /ton$0.180 /kg $0.161 /kg$0.144 /iiter $0.129 /liter

Methanol Plant Capacity: 1200 2500

Methanol 90% $0.130 $0.116Gasoline 10% 0.016 0.016Blending Cost 0.011 0.011

M90- Blend Cost $0.157 $0.143

Delivr- Ca ietao 9 ln

US cents per literBlend 15.685 14.323Filling Station Cost 2.576 2.576

TOTAL 18.261 16.899TwpprtCe}t. Cost at Delivery PointDistance c/liter (US cents per liter)0-5 km 0.164 18.425 17.06350 km 0.544 18.805 17.443100 km 0.924 19.185 17.823300 km 2.476 20.737 19.375

Light HeavyCars Trucks rucks Taxis Buses

Conversion Cost $350 $500 $3,200 $500 $4,300Km/year 12000 19000 22000 96000 60000Annuitized Conv: $48 $73 $521 $68 $631

per kn: $0.004 $0.004 $0.024 $0.001 $0.011

I liter Gasoline = 2.234 liter MethanolI liter Methanol= 0.448 liter GasolineI liter Diesel = 2.400 liter Methanol

*| 4X I liter Methanol = 0.417 liter Diesel

---------- ( cents per km )------- ---- …----- -…------0-5 km Delivered Fuel 2.949 3.815 18.525 2.949 13.568

Conversion Cost 0.396 0.386 2.367 0.071 1.052Total Cost 3.345 4.201 20.893 3.020 14.620

---------- ( cents per km )------- ----------- ---------300 km Delivered Fuel 3.349 4.332 21.036 3.349 15.406

Conversion Cost 0.396 0.386 2.367 0.071 1.052Total Cost 3.744 4.718 23.403 3.419 16.458

57

Specific Gravity (gasoline): 0.75 kg/literCalorific Content (gasoline): 47.7 MJ/kgSpecific Gravity (diesel fuel): 0.86 kg/literCalorific Content (diesel fuel): 44.7 MJ/kg

Life: 15 yearsCapacity (Tons/day) 1,775 1,775Service factor 0.81 0.81Production (Tlyear) 524,779 524,779Capital (1986 USS million) $1,460 $1,550Nat. Gas Feedstock Mcf/ton 85.2 71.6Nat. Gas Feedst. Cost $/Mcf $2.00 $2.000 & M (US$ million/year) $90 $95

Cost: S per ton

Capital $366 $388Feedstock 170 143O&M 172 181

Total @ Gate $708 $713

$0.531 /liter $0.609 /liter53.076 c/liter 60.860 c/liter

Transport E Cost a (same as M90) Cost at Delivery Point

Distance c/liter (US cents per liter)0-5 km 0.164 53.240 61.02450 km 0.544 53.620 61.404100 km 0.924 54.000 61.784300 km 2.476 55.552 63.336

58

GAS FEEDSTOCK PRICE: $2.00 /Mcf.

…--------- ---------- ( cents per km )------- -----------Gasoline 1.23 1.59 1.23Diesel 7.51 5.50CNG 2.69 3.41 13.14 1.82 8.29LPG (Propane) 2.47 2.87 13.14 1.81 8.90Methanol (M90) 3.34 4.20 20.89 3.02 14.62

GASOLINE AND DIESEL COSTS

For variousCrude Oil Prices ---------- ---------- (cents per km )------- -----------LocalDelivery 10 0.74 0.96 4.54 0.74 3.32(0-5 kn) 20 1.23 1.59 7.51 1.23 5.50

30 1.72 2.22 10.48 1.72 7.6840 2.20 2.85 13.46 2.20 9.8650 2.69 3.48 16.43 2.69 12.0360 3.18 4.11 19.40 3.18 14.2170 3.66 4.74 22.38 3.66 16.39

Cost Sensitivityto Oil Price 0.66% 0.66% 0.66% 0.66% 0.66%(gasoline/diesel)

59

GAS FEEDSTOCK PRICE: $2.00 /Mcf

---------- ---------- (cents per km )------- ---------Gasoline 1.41 1.82 1.41Diesel 8.56 6.27CNG 3.37 4.28 17.38 2.49 11.39LPG (Propane) 2.77 3.25 14.99 2.10 10.26Methanol (M90) 3.74 4.72 23.40 3.42 16.46

GASOLINE AND DIESEL COSTS

For various 7Crude Oil Prices ---------- (cents per km )-- ---------- -----------Long DistanceDelivery 10 0.92 1.19 5.58 0.92 4.09(300 km) 20 1.41 1.82 8.56 1.41 6.27

30 1.90 2.45 11.53 1.90 8.4440 2.38 3.08 14.50 2.38 10.62s0 2.87 3.71 17.48 2.87 12.8060 3.36 4.34 20.45 3.36 14.9870 3.84 4.97 23.42 3.84 17.16

Cost Sensitivityto Oil Price 0.53% 0.53% 0.53% 0.53% 0.53%(gasoline/diesel)

60

Annex 3:

Model Based on Natural Gas Price

Tracking Oil Prices

61

Conventional fuel type: gasoline gasoline diesel gasoline diesel

Miles per gallon 30.4 23.5 5.2 30.4 7.1Kms per liter 12.9 10.0 2.2 12.9 3.0Liters per Km 0.08 0.10 0.45 0.08 0.33BTU's per Km 2,624 3,394 16,482 2,624 12,071Vehicle Life Years 14 12 10 14 12Annual Mileage (Kms) 12,000 19,000 22,000 96,000 60,000

CNG $1,000 $1,800 $4,500 $1,800 $4,500LPG (Propane) $700 $900 $3,500 $900 $4,800Methanol $350 $500 $3,200 $500 $4,300

Discount Rate on Conversion 10% 10% 10% 10% 10%

CNG $136 $264 $732 $244 $660Propane $95 $132 $570 $122 $704Methanol $48 $73 $521 $68 $631

FUEL $PCFIA

Mega Joules per kg 47.70 44.70 45.70 20.02BTU per cubic foot 1000Specific Gravity (kg/liter) 0.75 0.86 0.51 0.80Mega Joules per liter 35.78 38.44 23.31 16.02

Delivered fuel pricesCrude Oil $20.00 /barrelNatural gas $1.25 /Mcf.

0-5 km ($/liter) $0.159 $0.166 $0.103 $0.1530-5 km ($/MMBTU) $4.69 $4.56 $5.20 $4.67 $10.10

300 km ($/liter) $0.182 $0.189 $0.128 $0.176300 km($/MMBTU) $5.37 $5.19 $7.77 $5.79 $11.62

62

Oil Price: $20.00 /barrelGasoline Refining Cost: $5.00 /barrel

1 barrel = 42 US gallonsI US gallon 3.785 liters

LPG price at source: $125 per MTI BTU = 1055 Joules = 251.99 calories

Discount Factor: 10%

Calorific SpecificFuel Content GravityNatural Gas 1000 BTU/cf.Gasoline 47.7 MJ/kg 0.75 kg/literDiesel (Gas Oil) 44.7 MJ/kg 0.86 kg/literMethanol 20.02 MJ/kg 0.80 kg/literLPG (Propane) 45.7 MJ/kg 0.51 kg/liter

Passenger Light HeavyCars Trucks Trucks Taxis Buses

Vehicle Life 14 12 10 14 12Annual kmsiyear 12000 19000 22000 96000 60000Mileage(mi/gallon) 30.4 23.5 5.2 30.4 7.1Mileage (km/liter) 12.9 10.0 2.2 12.9 3.0

Gas Feedstock at Source ................ $1.25 /Mcf.

(.0625 times Crude Oil Price (Ibarrel))Calorific Content = 1000 BTU/cf.

= 1 MBTU/cf

63

FUEL COST (Cents per kn)

FUEL COSTDistance Crude (cents per liter)

from Oillah TCk ah hmeSupply Price gasoline diesel gasoline gasoline diesel diesel

($/barrel)0-5 km $20 15.89 16.61 1.23 1.59 7.51 5.5050 km $20 16.27 16.99 1.26 1.63 7.68 5.63100 km $20 16.65 17.37 1.29 1.67 7.85 5.75300 km $20 18.20 18.92 1.41 1.82 8.56 6.27

gasoline diesel T- cents/liter--- -----------ents/km--------------

$10 9.60 10.03 0.74 0.96 4.54 3.3220 15.89 16.61 1.23 1.59 7.51 5.5030 22.18 23.18 1.72 2.22 10.48 7.6840 28.47 29.75 2.20 2.85 13.46 9.8650 34.76 36.33 2.69 3.48 16.43 12.0360 41.05 42.90 3.18 4.11 19.40 14.2170 47.34 49.47 3.66 4.74 22.38 16.3980 53.63 56.05 4.15 5.37 25.35 18.5790 59.92 62.62 4.64 6.00 28.33 20.75

100 66.21 69.19 5.12 6.63 31.30 22.92

300 km: $10 11.91 12.34 0.92 1.19 5.58 4.0920 18.20 18.92 1.41 1.82 8.56 6.2730 24.49 25.49 1.90 2.45 11.53 8.4440 30.78 32.06 2.38 3.08 14.50 10.62S0 37.07 38.64 2.87 3.71 17.48 12.8060 43.36 45.21 3.36 4.34 20.45 14.9870 49.65 51.79 3.84 4.97 23.42 17.1680 55.95 58.36 4.33 5.60 26.40 19.3390 62.24 64.93 4.82 6.23 29.37 21.51

100 68.53 71.51 5.30 6.86 32.34 23.69

64

Calorific Content: 47.7 MJ/kgSpecific Gravity: 0.75 kg/liter

Delivered Co :s

Feedstock Transport TotalUSc/liter

0-5 km 15.73 0.16 15.8950 bn 15.73 0.54 16.27

100 km 15.73 0.92 16.65300 km 15.73 2.48 18.20

65

Calorific \ I liter gasoline = 33.9 cf Natural GasEquivalence I I liter diesel = 36.4 cf Natural Gas

X~~~~~~~~~~~~~~~~~~~~~. .i .....

-(------ cents per km ------- ----------- ---------0-5 km Delivered Fuel 1.365 1.766 8.575 1.365 6.281

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 2.496 3.156 11.904 1.620 7.381

Paseger ligki Havy >-< X-FAT FIL ar ruk ruk Txs ue

---------- (cents per km )------- ----------- --------300 km Delivered Fuel 2.039 2.638 12.811 2.039 9.383

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 3.171 4.029 16.140 2.294 10.484

.w.~~~~~~~~~X,..... ...----------- (cents per km )------- ----------- ---------

0-5 klm Delivered Fuel 0.935 1.209 5.872 0.935 4.301Conversion Cost 1.131 1.390 3.329 0.255 1.101

Total Cost 2.066 2.600 9.201 1.189 5.402

ThXC~~~~~~~~~~~~~~1~~~~~~___ . Cam Truck~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. ..

---------- (cents per kn )------- ----------- ---------300 km Delivered Fuel 1.609 2.082 10.108 1.609 7.403

Conversion Cost 1.131 1.390 3.329 0.255 1.101Total Cost 2.740 3.472 13.437 1.864 8.504

66

Calorific Content: 1000 BTU/cf.Filling Station: 5 year LifeOperating days: 310 pet year Annuitized

Capital

Station Capacity Cost Cost50 Mcf/day $150.......... ,000 $39,570

150 Mcf/day .......... $450,000 $118,709

Delivered CNG Cost for 50 Mcf Capacity Station (Fast-Fill)

COSTS PER McfCapital $2155Feedstock $1.25Operating $1.40

Transport Cost Trickle Fill0 km (at gate) $5.20 $3.56

$0.53 50 km $5.73 $4.09$0.93 100 km $6.13 $4.49$2.57 300 km $7.77 $6.13

Vugice Light HeavyCars Trucks Trucks Taxis Buses

Cost $1,000 $1,800 $4,500 $1,800 $4,500Km/Year 12,000 19,000 22,000 96,000 60,000

Annuitized Cost/yr $136 $264 $732 $244 $660per km $0.011 $0.014 $0.033 $0.003 $0.011

67

- Fast Fill- -Gas Price Paossger Ligbt Heavy

$/Mcf. Cars Trucks Trucks Taxis Buses( cents per m )----- --------r-----------

1.00 2.43 3.07 11.49 1.55 7.081.50 2.56 3.24 12.32 1.69 7.682.00 2.69 3.41 13.14 1.82 8.292.50 2.82 3.58 13.96 1.95 8.893.00 2.96 3.75 14.79 2.08 9.493.50 3.09 3.92 15.61 2.21 10.10

Sensitivity of Cost toGas Price Changes: 0.11% 0.11% 0.14% 0.17% 0.17%

--a Fast Fill----Gas Price Passenger Light Heavy

$IMcE Cars Trucks Trucks Taxis Buses( cents per cm )-------- -------- ---------

1.00 3.11 3.94 15.73 2.23 10.181.50 3.24 4.11 16.55 2.36 10.792.00 3.37 4.28 17.38 2.49 11.392.50 3.50 4.45 18.20 2.62 11.993.00 3.63 4.62 19.02 2.75 12.603.50 3.76 4.79 19.85 2.88 13.20

Sensitivity of Cost toGas Price Changes: 0.08% 0.09% 0.10% 0.12% 0.12%

68

- - Trickle Fill-Gas Price Passenger Light Heavy

$/Mcf. Cars Trucks Trucks Taxis Buses------------ ( cents per km )-------- ---------- ----

1.00 2.00 2.51 8.79 1.12 5.101.50 2.13 2.68 9.61 1.25 5.702.00 2.26 2.85 10.44 1.39 6.312.50 2.39 3.02 11.26 1.52 6.91,3.00 2.53 3.19 12.09 1.65 7.513.50 2.66 3.36 12.91 1.78 8.12

Sensitivity of Cost toGas Price Changes: 0.13% 0.13% 0.19% 0.23% 0.24%

-- i------Trickle Fill- ---------- --------- ------Gas Price Passenger Light Heavy

$1Mcf. Cars Trucks Trucks Taxis Buses----------- (cents per km )-------- ---------- ---------

1.00 2.67 3.39 13.03 1.80 8.201.50 2.81 3.56 13.85 1.93 8.812.00 2.94 3.73 14.67 2.06 9.412.50 3.07 3.90 15.50 2.19 10.013.00 3.20 4.07 16.32 2.32 10.623.50 3.33 4.24 17.15 2.45 11.22

Sensitivity of Cost toGas Price Changes: 0.10% 0.10% 0.13% 0.15% 0.15%

69

... ....... .

I liter Gasoline 1.535 liter PropanelLPGI liter Propane = 0.651 liter Gasoline

1 liter Diesel = 1.649 liter Propane(LPGI liter Propane = 0.606 liter Diesel

…------ ( cents per km )------- ----------- ---------0-5 kn Delivered Fuel 1.225 1.585 7.697 1.225 5.637

Conversion Cost 0.792 0.695 2.589 0.127 1.174Total Cost 2.017 2.280 10.286 1.353 6.811

---------- ( cents per Ian )------- ----------- ---------300 km Delivered Fuel 1.520 1.966 9.547 1.520 6.992

Conversion Cost 0.792 0.695 2.589 0.127 1.174Total Cost 2.312 2.661 12.137 1.647 8.167

70

Spec. Gravity: 0.51 kg/liter l

- 1.96 liter/kg

Calorific Content: 45.7 MJ/kg43318 BTU/kg Cs 4.0 ....

Delivered Cost ($/liter)

0-5 km 50 km 100 km 300 km

Feedstock $0.064 $0.064 $0.064 $0.064

Transport 0.002 0.007 0.011 0.027

Station Costs:Capital $0.017 $0.017 $0.017 $0.017

Labor 0.012 $0.012 $0.012 $0.012

Miscel. 0.008 $0.008 $0.008 $0.008

Total 50.103 $0.107 $0.111 $0.128

ebceCmvik Light Heavy

Cars Trucks rucks Taxis Buses

Conversion Cost $700 $900 $3,500 $900 $4,800

Km/year 12,000 19,000 22,000 96,000 60,000

Annuitized Conv: $95 $132 $570 $122 $704

per km: $0.008 $0.007 $0.026 $0.00] $0.012

71

Gas Price Passenger Light Heavy$/Mcf. Cars Trucks Trucks Taxis Buses

----- ( cents per km -------- ---------- ---------

1.00 1.87 2.08 9.34 1.20 6.111.50 2.17 2.48 11.24 1.50 7.512.00 2.47 2.87 13.14 1.81 8.902.50 2.77 3.26 15.04 2.11 10.293.00 3.08 3.65 16.94 2.41 11.693.50 3.38 4.04 18.85 2.72 13.08

Sensitivity of Cost toGas Price Changes: 0.32% 0.38% 0.41% 0.50% 0.46%

Gas Price Passenger Light Heavy$/Mcf. Cars Trucks Trucks Taxis Buses

…(---------- cents per km )-------- ---------- --------

1.00 2.16 2.47 11.19 1.50 7.471.50 2.46 2.86 13.09 1.80 8.862.00 2.77 3.25 14.99 2.10 10.262.50 3.07 3.64 16.89 2.40 11.653.00 3.37 4.03 18.80 2.71 13.043.50 3.67 4.42 20.70 3.01 14.44

Se.nsitivity of Cost toGas Price Changes: 0.28% 0.32% 0.34% 0.40% 0.37%

72

Specific Gravity: 0.8 kg/liter

Calorific Content 20.02 Ml/kg

Capacity (tons/day) 1200 2500

Service Factor 81% 81%

Production (Tons/year) 354,780 739,125

Capital (1986 US$ million) 207 349

Gas Feedstock Mcf/ton meth. 32 32

O & M ($ million/year) 14 26

Capital Cost $76.71 $62.08

Gas Feedstock 40.00 40.00

O&M $39.46 $35.18

Total plant gate: $156.17 /ton $137.26 Iton

$0.156 /kg $0.137 /kg$0.125 /liter $0.110 /liter

Methanol Plant Capacity: 1200 2500

Methanol 90% $0.112 $0.099

Gasoline 10% 0.016 0.016

Blending Cost 0.011 0.011

M90- Blend Cost $0.140 $0.126

Deive Me,talMBnd

US cents per literBlend 13.957 12.595

Filling Station Cost 2.576 2.576

TOTAL 16.533 15.171

-ranspr~rt- Cost at Delivery Point

Distance c/liter (US cents per liter)

0-5 km 0.164 16.697 15.335

50 km 0.544 17.077 15.715

100 km 0.924 17.457 16.095

300 km 2.476 19.009 17.647

VebcIC6iw.r iot~: Light HeavyCars Trucks rucks Taxis Buses

Conversion Cost $350 $500 $3,200 $500 $4,300

Km/year 12000 19000 22000 96000 60000

Annuitized Conv: $48 $73 $521 $68 $631

per kin: $0.004 $0.004 $0.024 $0.001 $0.011

I liter Gasoline = 2.234 liter Methanol

Calonf 1 I liter Methanol = 0.448 liter GasolineI liter Diesel = 2.400 liter MethanolI liter Methanol = 0.417 liter Diesel

-(-------- cents per km )------- ----------- ---------0-5 km Delivered Fuel 2.650 3.429 16.649 2.650 12.194

Conversion Cost 0.396 0.386 2.367 0.071 1.052Total Cost 3.046 3.815 19.017 2.721 13.246

---------- (cents per km )------- ----------- ---------300 km Delivered Fuel 3.050 3.945 19.159 3.050 14.032

Conversion Cost 0.396 0.386 2.367 0.071 1.052Total Cost 3.446 4.332 21.527 3.121 15.084

74

Gas Price Passenger Light Heavy$/Mcf. Cars Trucks Trucks Taxis Buses

---- ( cents per khn)-------- ---------- -------

1.00 2.95 3.69 18.39 2.62 12.791.50 3.15 3.94 19.64 2.82 13.702.00 3.34 4.20 20.89 3.02 14.62

2.50 3.54 4.46 22.14 3.22 15.543.00 3.74 4.72 23.39 3.42 16.453.50 3.94 4.97 24.64 3.62 17.37

Sensitivity of Cost toGas Price Changes: 0.14% 0.14% 0.14% 0.15% 0.14%

Gas Price Passenger Light HeavySlMcf. Cars Trucks Trucks Taxis Buses

---------- (cents per km --------- ---------- ---------

1.00 3.35 4.20 20.90 3.02 14.631.50 3.55 4.46 22.15 3.22 15.542.00 3.74 4.72 23.40 3.42 16.462.50 3.94 4.98 24.65 3.62 17.37

3.00 4.14 5.23 25.90 3.82 18.293.50 4.34 5.49 27.15 4.02 19.21

Sensitivity of Cost toGas Price Changes: 0.12% 0.12% 0.12% 0.13% 0.13%

75

Specific Gravity (gasoline): 0.75 kg/literCalorific Content (gasoline): 47.7 MJ/kgSpecific Gravity (diesel fuel): 0.86 kg/literCalorific Content (diesel fuel): 44.7 MJ/kg

Life: 15 yearsCapacity (Tons/day) 1,775 1,775Service factor 0.81 0.81Production (T/year) 524,779 524,779Capital (1986 US$ million) $1,460 $1,550Nat. Gas Feedstock Mcf/ton 85.2 71.6Nat. Gas Feedst. Cost $1Mcf $1.25 $1.250 & M (US$ million/year) $90 $95

.os....................

Cost: .:per ton

Capital $366 $388Feedstock 107 90O&M 172 181

Total @ Gate $644 $659

$0.483 /liter $0.554 /liter48.283 c/liter 55.365 c/liter

(same as M90) Cost at Delivery PointDistance clliter (US cents per liter)

0-5 kin 0.164 48.447 55.52950 km 0.544 48.827 55.909100 km 0.924 49.207 56.289300 km 2.476 50.759 57.841

76

GAS FEEDSTOCK PRICE: $1.25 /Mcf.

-- ---------- (cents per km ------- -----------Gasoline 1.23 1.59 1.23Diesel 7.51 5.50CNG 2.50 3.16 11.90 1.62 7.38LPG (Propane) 2.02 2.28 10.29 1.35 6.81Methanol (M90) 3.05 3.81 19.02 2.72 13.25

GASOLINE AND DIESEL COSTS

For variousCrude Oil Prices ---------- ---------- (cents per kn )------- -----------LocalDelivery 10 0.74 0.96 4.54 0.74 3.32(0-5 km) 20 1.23 1.59 7.51 1.23 5.50

30 1.72 2.22 10.48 1.72 7.6840 2.20 2.85 13.46 2.20 9.8650 2.69 3.48 16.43 2.69 12.0360 3.18 4.11 19.40 3.18 14.2170 3.66 4.74 22.38 3.66 16.39

Cost Sensitivityto Oil Price 0.66% 0.66% 0.66% 0.66% 0.66%(gasoline/diesel)

Cost Sent '~tc~ CrudeOj"Ptc fa

CNG Fast Fill 0.07% 0.07% 0.09% 0.11% 0.11%CNG Trickle Fill 0.09% 0.09% 0.13% 0.16% 0.16%LPG 0.23% 0.27% 0.30% 0.39% 0.34%M90 0.13% 0.14% 0.13% 0.15% 0.14%

77

Long Distancc Delivery (300 kI. )

GAS FEEDSTOCK PRICE: $1.25 /Mcf.

---------- ---------- ( cents per nm)------- -----------Gasoline 1.41 1.82 1.41Diesel 8.56 6.27CNG 3.17 4.03 16.14 2.29 10.48LPG (Propane) 2.31 2.66 12.14 1.65 8.17Methanol (M90) 3.45 4.33 21.53 3.12 15.08

GASOLINE AND DIESEL COSTS

For various ............X

Crude Oil Prices -- (cents per km ---------- -----------Long DistanceDelivery 10 0.92 1.19 5.58 0.92 4.09(300 km) 20 1.41 1.82 8.56 1.41 6.27

30 1.90 2.45 11.53 1.90 8.4440 2.38 3.08 14.50 2.38 10.6250 2.87 3.71 17.48 2.87 12.8060 3.36 4.34 20.45 3.36 14.9870 3.84 4.97 23.42 3.84 17.16

Cost Sensitivityto Oil Price 0.53% 0.53% 0.53% 0.53% 0.53%(gasoline/diesel)

Cost SensitiVity to Crude Oil Price .. .u.....

CNG Fast Fill 0.05% 0.06% 0.07% 0.08% 0.08%CNG Trickle Fill 0.06% 0.07% 0.08% 0.10% 0.10%LPG 0.20% 0.23 % 0.24% 0.30% 0.27%M90 0.12% 0.12% 0.12% 0.13% 0.12%

78

Annex 4:

Graphs Showing Break-Even Ranges

79

Comparative Cost Local (0-5 km)Gasoline vs. CNG Fast-Fill

Fuel Cost (US cents/km)

5

4 ~~~~~~~~~Light Trucks (gasolinl -~4-

3

2

Sas &Taxis(gasoline) :

10 20 3 0 T 40 50 L 6 0 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Gasoline vs. CNG Fast-Fill

Fuel Cost (US cents/km)

5 _ ih rcs(a

4 /

3

2

1~ ~~~~r _ a x Eiis (gasoline)

10 20 30 40 T 50 60 70

Crude Oil Price ($/barrel)

80

Comparative Cost Local (0-5 km)Gasoline vs. CNG Trickle-Fill

Fuel Cost (US cents/km)

4 ~~~~~~~Light Trucks (gasol inee

2 :/a

1 ~~~~~~~~~~~T-axis (CNG)

Cars & Taxis (gasoline)

0 I , 10 T20 30 40 L C 5 0 60 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Gasoline vs. CNG Trickle-Fill

Fuel Cost (US cents/km)

5 Light Trucks (gasolne

4

3

2

1 Cars & Taxis (gasoline)

O , I I I .10 20 30 T 40 50 60 C 70

Crude Oil Price ($/barrel)

81

Comparative Cost Local (0-5 km)Gasoline vs. LPG

Fuel Cost (US cents/km)5

Light Trucks (gasol ne)

4-

3 ~~~Light Trucks -L Car 3

2 _ , 5 ¢ = ~~~~~~ taxixs (LPG2

1 -~ ~ ~~~ C~~ars Taxis (gasoline) 1

10 20 30T 40 50 60 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Gasoline vs. LPG

Fuel Cost (US cents/km)6

5 ~~~~~~~~~~Light Trucks (gasoie5

4-

3- Light Trucksj( ~===3 - / __ Tax~~~~~~~~~~~xis (LPG)

2

1 Cars & Taxis (gasoline)

010 20 30 40T 50 60 70

Crude Oil Price ($/barrel)

82

Comparative Cost Local (0-5 km)Gasoline vs. Methanol

Fuel Cost (US cents/kmn)7

6

5 Light T

4

3 -

2 -

1 Cars & Taxis (gasoline)

0 , I , , i10 20 30 40 50 60 70

Crude Oil Price ($Ibarrel)

Comparative Cost Long Distance (300 km)Gasoline vs. Methanol

Fuel Cost (US cents/km)7

6

=

Light True5 a

4

3

2 -

1 Cars & Taxis (gasoline)

0 I I ,I L10 20 30 40 50 60 70

Crude Oil Price ($/barrel)

83

Comparative Cost Local (0-5 km)Diesel vs. CNG Fast-Fill

Fuel Cost (US cents/km)

25

20 Heavy Trucks (diesel)

15 X==

10 -

Buses (diesel)

010 20 30 B 40 H 50 60 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Diesel vs. CNG Fast-Fill

Fuel Cost (US cents/km)

25

20 -

5Buses (diese)10

5

10 20 30 40 E5o H6 0 70Crude Oil Price ($/barrel)

84

Comparative Cost Local (0-5 km)Diesel vs. CNG Trickle-Fill

Fuel Cost (US cents/km)25

20 - Heavy Trucks (diesel)

15-

10 < ~~~~~~~~~Heavy Trucks (CNG)10 -

5 S~~~~~~~~(isl \uses (CNG)

5

0

10 B20 30 40 50 60 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Diesel vs. CNG Trickle-Fill

Fuel Cost (US cents/km)25

20 - Heavy Trucks (diesel

15 Heavy Trucks< (NG

10 L

5 Buses (diesel)

10 20 30 B 40 H 5 0 60 70

Crude Oil Price ($/barrel)

85

Comparative Cost Local (0-5 km)Diesel vs. LPG

Fuel Cost (US cents/km)

25

20 Heavy Trucks (diese

15 Heavy Trucks (LPG

10 < X s e s ~~~~~~~~~(LPG)10

5 u Bes (diesel)

10 20 30 40 50 60 H 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Diesel vs. LNG

Fuel Cost (US cents/km)25

20 ~~~~~~ ~~Heavy Trukr(ie20-

10

6 Buses (diesel)

010 20 30 40 50 60 B 70

Crude Oil Price ($/barrel)

86

Comparative Cost Local (0-5 km)Diesel vs. Methanol(M90)

Fuel Cost (US cents/km)35

30

25 - Heavy Trucks (M9

20 -~~~~Buses (M90

15 =

10 Heavy Trucks (dees (elB~~~~~~~~uses (diesel)

5

0 l10 20 30 40 50 60 70

Crude Oil Price ($/barrel)

Comparative Cost Long Distance (300 km)Diesel vs. Methanol(M90)

Fuel Cost (US cents/km)35

30 - Heavy Trucks

25-

20

ieavy Trucks (die

10 - Buses (diesel)15

10

10 20 30 40 50 60 70

Crude Oil Price ($Ibarrel)

87

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