Methane and propane-butane keep leadership among alternative motor fuels

The world vehicle fleet grows. Today it is in that wonderful state when the place on it is enough for all: as to traditional cars with the internal combustion engines, as well as to electric cars and even very exotic hydrogen cars. If at the beginning of 2017 the number of gas cylinder cars in the world stepped over a mark of 50 million, to the middle of 2018 there were already 53 million of them. The Russian gas engine branch also successfully develops.

 According to The International Organization of Motor Vehicle Manufacturers, there were about 97 million vehicles in the world in 2017 — 3 million more, than it was sold in the previous year. Considering steady growth even under conditions of crisis in the market of hydrocarbons (and it is possible, partly and thanks to it), in the current year sales volumes can quite reach treasured 100 million. As it is accepted to speak in similar cases, the important psychological mark will be overcome.

China became the champion among car markets again. This country set the next quite expected record — more than 29.1 million bought cars. It is on 1.1 million more than in the previous year. Thus, China occupies nearly 30% of all world car market. And here sales in the USA taking the second place decreased a little — from 17.865 million to 17.583 million. By the way, production here decreased too — on 8%, to 11.19 million cars. And in China is opposite, grew on 3.2%, to 29 million.

The total of vehicles in the world (apart from two-wheeled) surely comes nearer to 1.5 billion. And, most likely, in the next ten years a number of cars in the world will exceed 2 billion. Indirectly it means that it will be necessary for the world more and more fuel.

The volume of consumption of oil in 2017, according to BP, reached 98.2 million barrels per day (4.62 billion tons a year) that is on 1.8% more than in 2017. Soon oil consumption will overcome too an important psychological mark of 100 million barrels per day.

But, maybe, the world will not need a lot of oil, after all the large countries declared refusal of gasoline and diesel fuel. And many respected experts thanks to these statements prophesied blossoming of electric cars.

 «Dieselgate» as zilch

Still a year ago in all seriousness the public and numerous experts discussed prospects of «Dizelgate» — a scandal connected with the Volkswagen concern underestimating indicators of emissions of harmful substances during tests of its cars. Struck up to the depth with this fact the leaders of France and Great Britain promised to forbid sale of cars with petrol and diesel engines beginning with 2040. Norway wants to implement these Napoleonic plans in 2025. Volkswagen volunteered to arrange quickly production of electric transport Chinese-Swedish Company Volvo declared that as of 2019 will pass to production of electric cars and hybrids only.

All these loud statements generated a mass of hasty forecasts according to which electric cars just about had to come to replacement to at the fault diesel. And after all even approximate dates when there had to come the unprecedented happiness were called: somewhere between 2025 and 2040.

Among rushes of a storm of «Dieselgate» in the spring of this year charges of roguish arrangement against the U.S. Government and violation of the law of the States «About clean air» were brought to the former Head of Volkswagen concern Martin Vinterkorn and five of his former colleagues. And the company Volkswagen undertook to pay a penalty of 4.3 billion dollars to the USA.

However, at the state level all fuel transformation which brought to life «Dieselgate», ended with nothing. After loud speeches and impressive promises of statesmen boring but competent officials got down to business. They counted, in what refusal of diesel fuel will manage to economy of the EU, in what idle time of already unloaded oil refineries, re-equipment and closing of automobile plants, modernization of filling infrastructure and other, other, other will manage. And, most likely, their conclusion was unfavorable: to refuse diesel fuel still extremely prematurely.

The ruling coalition of the German government at the beginning of October of the current year declared that developed the plan of reduction of harmful emissions of diesel transport. Thus refusal of it is not required. Owners of old diesel cars will be stimulated that those modernized the transport or sold it with benefit for themselves. So, the leadership of Germany agreed with distressful Volkswagen and also with BMW, Daimler and Renault about discounts in 10 thousand euros to buyers who want to get the new car on a trade-in.

We believe, after Germany the hard lines about inadmissibility of diesel fuel and gasoline in light 2040 will hand over also France with Great Britain. The prompt victory of electric cars over common sense is postponed so far.

Nevertheless oil transport really will not require so much as it seems at first sight. After all a number of the cars working at alternative motor fuel grows. And now their share makes about 9% of world vehicle fleet — to 130 million units. All question what to consider as alternative motor fuel and how to consider the transport going by it.

 The Lazy Pakman

The most widespread motor fuel it would be possible to call mix of ethanol and gasoline. More than 55 million cars in the world now use it as fuel, more precisely, 55 million cars, small trucks and motorcycles. Unfortunately, existence of motorcycles in this row does not allow treating a number of these vehicles seriously.

The matter is that two-wheeled vehicles usually are not used in such a statistics. Otherwise it is necessary to recognize that all was won long ago by the Chinese electro scooters which are more than 200 million (!) and which, according to the International Power Agency, are the main consumers of electricity on transport — about 32 terawatt/hours in a year. On their background vanished 3.1 million electric cars and the loaded hybrids (including buses), besides automobile «electric trains» consumed in 2017, according to MEA, 7 terawatt/hours in a year. If to look at the chart of electricity consumption on transport depending on the country, it will resemble the Lazy Pakman by the name of China which eats a small slice of a pie consisting of the USA, France, Norway and others.

In general, when it comes to the world vehicle fleet, two-wheeled transport is put outside the brackets. And in this case it is necessary to put mix of gasoline and ethanol outside the brackets, besides this type of fuel gained rather wide circulation in only two countries — Brazil and the USA. Not every region of the world is able to afford spending farmlands for production of motor fuel. Besides this type of fuel suits only for those countries in which plus 11 degrees Celsius is considered low temperature.

Recently again an attempt to reanimate a hydrogen subject as motor fuel is made. According to MEA, a share of hydrogen fuel on transport by the end of the current century can reach 25%. As with any such forecasts, it is possible to add a phrase «and cannot reach».

The most popular serial hydrogen Toyota Mirai car for the end of last year was sold in number of 5.3 thousand pieces. Let’s remind that its production started at the end of 2014. It is quite good for a luxury segment. But it is poorly compatible to mass development of the hydrogen direction. By the way, in Germany today Toyota Mirai can be got at modest 78.6 thousand euros. For comparison, Toyota Land Cruiser is on sale in the German market from 41 thousand euros and a chargeable version of a hybrid of Prius — from 37.55 thousand euros.

However, hydrogen subject is actively studied by China now. But even it is not ready to rush in it like mad, though in the field of alternative motor fuels China is the undisputed leader today. It concerns electro transport. For the beginning of 2018 there were 1.23 million electric cars in the People’s Republic of China and the chargeable hybrids — 40% of all the world electric vehicle fleet (without scooters, of course). The same concerns also gas direction.

 Sic transit gloria mundi

To write about gas is not topical. The world expert community not less than mass audience is subject to influence of global information trends. Ten years ago talk on the gas engine direction was fashionable. Even the largest international organizations made reports and wrote forecasts about development of gas engine transport. Then they expressed admiration of that fact that from 1 million in 2000 the number of methane cars grew to 11 million in 2009.

Today we have other priorities. The wide audience waits for wonderful news about progress of electric cars. The international organizations throw a gas engine subject and throw all forces on the reports on electric cars which take one and a half hundred pages. As they say, so passes the word glory.

But glory is glory, and the vehicle fleet working on natural gas during the time which passed since 2009 grew in 2.5 times. It says that it is not necessary to confuse amount of attention which is paid to a certain subject in mass media, and its real weight in surrounding reality once again.

By the middle of this year a number of methane cars, according to NGV Global, reached a point of 26.16 million units. Average dynamics of a gain for the last 20 years makes a little more than 1 million methane cars a year. But the real volumes of a gain change constantly. In the market of hydrocarbons the methane vehicle fleet grew to the beginning of crisis on 2.4 million GBA a year. But then the prices of motor fuel in a number of the markets fell. And appeal of transition to gas also decreased with them. Rates of a gain were slowed down. Nevertheless during 2016-2018 an average value of a gain made about 1.4 million.

And here the absolute leader is also China.

 The king died long live the king!

At the beginning of a decade five of the leaders of the methane direction looked as follows: Pakistan, Argentina, Brazil, Iran and India. But since then the alignment of forces changed. Since 2009 China increased gas engine vehicle fleet more than ten times. At the beginning of 2016 there were about 4.6 million methane cars and at the beginning of 2018, according to NGV Global, their quantity exceeded 6 million. By the number of methane gas stations the People’s Republic of China is also the leader, occupying 27% of the world filling network.

The second place by quantity of methane GBA is taken by Iran – 4.5 million cars, besides this country is on the third place on a share of gas engine transport in vehicle fleet — about 32%. It concedes only to Uzbekistan (40.75%) and Armenia (69%). Such state of affairs is connected not only with rich reserves of gas in Iran but also with the sanctions mode which compelled Iranians to save oil products.

For the short period after removal of sanctions in 2016 a number of the world companies were interested in filling business in this country and also production and processing of black gold but it could not come to mutually advantageous agreements with the leaders of the republic. At present the USA imposed sanctions against Iran again and the European capital extremely watchfully belongs to risk to suffer because of cooperation with the Iranian companies. This story is far from end. But it should be noted especially that the capacity of the domestic fuel market of Iran is opened not up to the end. Besides it is not excluded that development of oil processing in this country can lead to reduction of a share of methane vehicle fleet.

The third place is taken by India — the country on which it is fashionable to lay hopes in the development plan of economy today. In 2015 its methane vehicle fleet totaled 1.8 million units and at the moment exceeded 3 million. Unfortunately, India yet lacks the clearness of the Chinese planning and ability to achieve goals.

More and more significant share in methane vehicle fleet is occupied by transport on the liquefied natural gas (liquefied natural gas). Today about 200 thousand units of transport in China work on liquefied natural gas. This is extremely important direction of development of gas engine branch.

 Prince and beggar

A number of cars working at the liquefied hydrocarbon gases (liquefied hydrocarbon gases, propane-butane) according to World Liquefied Natural Gas Association, exceeded 27 million pieces. An average annual gain averages 1.45 million gas cylinder cars. And here too there were motions in the first five.

Before the crisis a half of the world propane-butane vehicle fleet in the market of hydrocarbons accounted for Turkey, Russia, Poland, South Korea and Italy. In 2017 Ukraine rose on two positions at once. This country gives us a lot of useful lessons. And this case is not an exception.

There was an economy collapse, tariffs for utilities and the prices of motor fuel were raised, and the population became catastrophically impoverished in Ukraine after the known events at the beginning of 2014.

On this adverse background demand for propane-butane rose from 911 thousand tons in 2015 to 1.39 million tons in 2016 and to 1.6 million in 2017. During the crisis the quantity of propane-butane vehicles grew from 1.6 million to 2.25 million. A gasoline share in the structure of consumption decreased from 47% in 2013 to 28% in 2017. During the same period a diesel share — from 37% to 41% grew up a little. And a share of propane-butane jumped up almost twice — from 16% to 31%. According to other data, by 2018 propane-butane occupied 40% of the market of motor fuels of Ukraine.

Increase in demand, especially expressed in August-September, brought even to that the prices of autogas rose to the levels which were dangerously coming nearer to petrol prices. That, of course, frightened a part of potential consumers. Nevertheless, we believe that demand for autogas in the next years will continue growing in this country. After all there are no prerequisites to growth of welfare of citizens or reduction of prices of fuel.

 Liter inequality

Propane-butane is unconditionally fine fuel. Especially production of liquefied hydrocarbon gas grows in our country. According to the Ministry of Energy, it increased from 10.6 million tons in 2010 to 16.7 million tons in 2017. Russia exports considerable volumes of propane-butane in Poland, Turkey and Ukraine. We have a stock for growth of deliveries to domestic market. We have no need to import nearly three quarters of all liquefied hydrocarbon gas as it has to do the same Ukraine. But nevertheless Ukraine shows us what happens to the market of motor fuels at excessively sharp increase in prices for gasoline and diesel fuel. Certainly, here it is worth making the reservation that the prices at the Ukrainian gas stations were always higher than on the Russian. And welfare of population thus in our country is on average significantly higher than at neighbors. But in present conditions when in Russia further increase in prices for gasoline and diesel fuel is not excluded, it is worth studying negative experience of neighbors more attentively.

The May jump in prices of gasoline and diesel in many respects can be considered as a large-scale advertising campaign of gas motor fuel. If before crisis in the market of hydrocarbons the price of propane-butane in our country fluctuated within 16-18 rubles for liter, now it makes about 26 rubles. A liter of liquefied hydrocarbon gas is not equal to gasoline liter by efficiency, therefore for calculation of real economy it is worth increasing the price of propane-butane on 25%. Thus we will see that the pure economy upon transition to autogas before crisis made about 9 rubles on liter, and now — 11-12 rubles. Whether the Russian automobilists will look narrowly even more fixedly at gas motor fuel in present conditions? It is certainly.

Let’s risk assuming that an increase in prices for traditional types of motor fuel will be a major factor for development of propane-butane segment of gas engine branch in Russia in the second half of 2018. It in itself it is quite good, but pay attention here to a fact, that according to «Avtostat», a number of cars in our country for 2010-2017 grew on 9.3 million units — on 28%. And demand for gasoline for the same period, according to the Ministry of Energy, increased from 33.6 million tons to 35.1 million tons and to diesel fuel fell at all — from 389 million tons to 331 million tons. An average check at gas station decreased, intensity of a cargo transportation decreased. That is population was rather sensitive to fluctuation in prices of gas station for lack of welfare growth. And the main problem which, perhaps, again the branch should face in the current year is a decrease in demand for motor fuel.

By the way, methane on transport though is less widespread in our country, than propane-butane, but is more favorable. In spite of the fact that during the reform realized now state regulation of the prices of the compressed natural gas was cancelled, today the price of compressed natural gas fluctuates within 13-18 rubles for 1 CBM. By efficiency of 1 CBM of methane is approximately equal to gasoline liter. It means that at present price level benefit from use of the compressed methane makes about 30 rubles on liter.

Here it should be noted that since 2016 new norms of registration of the transport working at gas became a barrier on the way of development of the Russian gas engine branch. They were made in such a way that not only did not promote transition to methane and propane-butane, but on the contrary — compelled consumers to remove the gas cylinder equipment. Fortunately, these norms were again reconsidered and brought into a certain accord with national goals. And the state fairly continues to insist on transfer of equipment to gas.

 100 gas stations more

Today more than 350 automobile gas-filling compressor stations in our country are methane gas stations. Their most part belongs to Gazprom. Besides, according to the Ministry of Energy, at the beginning of 2017 there were 149 thousand gas cylinder cars on natural gas from which 69 thousand are buses and trucks. There are also more modest estimates of the Russian methane vehicle fleet. Anyway its size is quite modest in comparison with Iran and China.

But nevertheless the vehicle fleet grows and consumption of gas as motor fuel with it — from 540 million cubic meters in 2016 to 600 million cubic meters in 2017. From this volume the Gazprom Group realized 525 million cubic meters. And in the current year it can bring this indicator to 580-590 million cubic meters.

Gazprom does not also avoid the liquefied natural gas direction. In many respects this work is connected with cooperation of Russia and China. Our countries in common build routes within «A new silk way» for which more economic fuel is big plus. And liquefied natural gas possesses also bigger density. It means that it is possible to take a bigger reserve of fuel than in case with compressed natural gas.

Also China gradually masters liquefied natural gas as fuel for sea vessels. This fact forces to look in a new way at prospects of projects in the field of liquefied natural gas production at east boundaries of our country.

In this regard it is interesting to remember recent motor rally «Gas in motors». 15 trucks, cars and buses working mainly at liquefied natural gas took part in it. It became the most extended motor rally of natural gas vehicles in the world on the liquefied natural gas. Total length of a route reached 9.88 thousand km. Besides it lay generally along the created new international transport corridor Europe-China.

The global purpose of motor rally was «to show the scale of use acting and to define locations of perspective gas-filling infrastructure on a transcontinental transport corridor». Also within action the Russian factory equipment working at natural gas was tested.

By present moment Gazprom started building the Russia’s first cryogas stations — on the route M-11. On the only one route Moscow — St. Petersburg will be constructed six cryogas stations by 2022.

In spite of the fact that gas engine subject causes smaller interest in wide audience today than the same electric cars, quantity of methane and propane-butane cars grows every year rates of which cannot brag any of «alternative» competitors. Perhaps, in the future there will be a worthy competitor to gas — whether hydrogen, electricity or something other. But it will take place not so soon. Methane and propane-butane remain leaders of alternative motor fuels.