On a recent trip from Abu Dhabi to Dubai, I was very pleased to see two natural gas filling dispensers at a service station for vehicles using gas as an alternative to liquid fuels. But I was equally disappointed because the station was jammed with cars filling up petrol while there were none lining up for natural gas.
The programme to promote natural gas as a vehicle fuel in the UAE started in 2002 and was supposedly supported at the highest level of government. The pilot project involving a few vehicles were declared successful as long back as 2003 but statistics suggest that by June 2009 only 305 vehicles operating on compressed natural gas (CNG) were in the UAE as compared to a total vehicle population of just over 578,000.
In the meantime, according to the Natural Gas Vehicles Association Europe, the number of CNG vehicles have increased from three million a few years ago to more than 12 million in 2010 out of a total of almost 905 million vehicles. More than 60 per cent of CNG vehicles are in Pakistan, Iran, Argentina and Brazil. Among Arab countries, Egypt is leading with 128,000 CNG vehicles.
It is expected that the programme may gather speed as Adnoc Distribution announced recently that 20 filling stations in Abu Dhabi, Al Ain and Sharjah may become operational by the end of this year. Vehicle conversion centres have been in operation for a long time now and the government aims to have a minimum of 20 per cent of its vehicles running on natural gas by 2012.
Considering the economic and environmental advantages of natural gas vehicles over those of gasoline and diesel and the policy decisions made many years ago, it is surprising that progress was not made quicker.
Just to remind the readers, a few points are in order. First, CNG vehicles are probably 30 per cent cheaper to run than petrol or diesel and this could easily improve due to rising liquid fuels costs. At the same time due to cleanliness of natural gas, engines will run longer between maintenance periods and overall engine life will also improve.
Second, there are considerable environmental advantages where a reduction in emissions of harmful substances such as volatile hydrocarbons, nitrogen oxides, carbon monoxide and particulate matter when using CNG instead of petrol or diesel. This is well documented in research literature in many countries. Even with respect to carbon dioxide emission and the question of climate change, natural gas has a 15 per cent advantage over liquid fuels.
Third, CNG vehicle performance is superior to others due to the fact that natural gas octane number is 130 without the addition of any chemicals and processing. This allows vehicles to run smoother and quieter with the absence of engine knock. Gasoline and diesel are unlikely to reach such performance in spite of complex processing and additives.
For all these reasons, the International Association of Natural Gas Vehicles, known as NGV Global, estimates that CNG vehicles are forecast to reach 65 million by 2020, a very sharp rise that calls for the need for Adnoc to revise its plans to keep the original aims of the project and expand them further as soon as possible. I don't believe that the shortage of natural gas in the UAE is the reason for the delay as consumption for CNG will rise very slowly and even at the ultimate it will be little compared with consumption in industry or power generation.
Targeting individual consumers at this stage may be too early due to the fact that people are conservative and afraid of change in addition to the fact that the reported cost of conversion amounting to Dh10,000 per vehicle is high. Consideration for subsidy here is quite in order and the government can recover it through fuel pricing. But most importantly, fleet operators should be convinced to switch and vehicles of specialised services such as airports are ideal candidates.
It should be clear that saving liquid fuels domestically will enhance the UAE's export capability and this by itself is a great advantage and may pay handsomely for the whole programme.
The writer is former head of Energy Studies Department in Opec Secretariat in Vienna.