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Pakistan’s government deflates dream of gas-powered cars | World news | theguardian.com

Pakistan’s government deflates dream of gas-powered cars | World news | theguardian.com.

CNG

Motorists in Pakistan are being forced to wait for hours to refuel their cars with compressed natural gas. Photograph: Farooq Naeem/AFP/Getty Images

When Pakistan first started promoting compressed natural gas to the nation’s motorists in the 1990s, the alternative to petrol seemed like a wonder fuel.

Getting motorists to convert their cars to run on cleaner, cheaper gas would cure urban pollution and lower demand for the imported oil that was gobbling the country’s foreign currency reserves.

Car owners loved it and today 80% of all cars in Pakistan run off compressed natural gas (CNG), according to the Natural and Bio Gas Vehicle Association (NGVA), a European lobby group. Only Iran has more gas cars running on the road.

But as the country struggles with a chronic gas shortage, Pakistan’s 20-year CNG experiment seems to have been thrown into reverse gear.

The government has introduced strict rationing. And there have even been discussions about shutting down thousands of gas stations for the whole of thewinter. “CNG is finished in Pakistan,” said Owais Qureshi, the owner of a handful of once lucrative gas stations in Rawalpindi. “I’m not going to invest any more money in it.”

It has been years since he has been legally allowed to sell and install CNG conversion “kits”: essentially large gas cylinders that are placed in the boot of a car to feed the engine. The system allows for cars to still be able to use petrol instead, if required.

Although CNG is popular with an estimated 2.8m motorists in Pakistan, according to the NGVA, the increasingly scarce resource is also in demand from other sectors – including the country’s factories and for domestic use.

“The government has been left with little choice but to put a lid on it because there simply isn’t much gas left,” said Farrukh Saleem, an economist. “It has been a massive policy failure because the government actively promoted CNG knowing full well that natural gas reserves would not last beyond 25 years.”

Successive governments heavily subsided CNG, ran schemes to encourage car conversions and dished out licences to political allies to build gas stations.

But abandoned stations are now a common sight around the country. So too are queues of hundreds of motorists waiting to fill their cars on Wednesdays – the last remaining day of the week in many places on which CNG is legally allowed to be sold.

This weekly ordeal for CNG users is compounded by a chronic lack of electricity, the other aspect of Pakistan’s energy crisis. And because electricity is needed to run the gas compressors used by CNG stations car re-filling grinds to a halt during the many power cuts.

But cash-strapped motorists are usually prepared to queue for many hours for the gas to be turned back on, with many saying they cannot afford the higher price of petrol.

“All over the world countries are promoting CNG but in Pakistan they are killing it off,” said Ghiyas Abdullah Paracha, chairman of All Pakistan CNG Association.

“If we don’t have enough gas we should import LNG [liquid natural gas].”

Pakistan, however, has failed to build the infrastructure needed to import large amounts of gas from overseas. A legal challenge by Pakistan’s activist supreme court killed off one scheme to build a massive LNG terminal in Karachi.

The other lifeline for Pakistan’s CNG supply is a controversial, multi-billion dollar pipeline to import natural gas from Iran. But Pakistan lacks the cash to build its half of the pipeline and the US has warned that completing the project would be in breach of US economic sanctions imposed on Iran.

Even as natural gas is being touted elsewhere in the world as a great alternative to petrol, soon it may be a mere memory in Pakistan.

Paracha fondly recalls the grand opening of the first CNG station in Karachi, which was built with foreign aid money. “It was the start of a revolution,” he said. “Before CNG came you could not see the sky in the cities because the air was so polluted.”

 

‘Watch what we do, not what we say’: Shell cancels U.S. gas-to-liquids plant

‘Watch what we do, not what we say’: Shell cancels U.S. gas-to-liquids plant.

When civil rights advocates grew restless because of President Richard Nixon’s right-wing rhetoric on the issue of desegregation, then-Attorney General John Mitchell told them, ”Watch what we do, not what we say.”

Those following the hype over America’s supposed newfound abundance of oil and natural gas would do well to follow that advice when evaluating what oil and gas company executives and their surrogates say.

When Royal Dutch Shell pulled the plug on its U.S. gas-to-liquids project recently, the company offered the same explanation it used when it shut down its oil shale project earlier this year: Shell sees better opportunities elsewhere. This explanation–much like the I’m-resigning-to-spend-more-time-with-my-family explanation–tends to deflect questions about why things aren’t working out.

What’s not working out for Shell is a planned $20 billion plant in Louisiana designed to turn natural gas into diesel, jet fuel, lubricants and chemical feedstocks, products typically produced by oil refineries. The plug was pulled, however, while the project was still in the planning stage.

Shell did actually say a little more about why it is abandoning the project in this almost inscrutable piece of corporate prose:

 Despite the ample supplies of natural gas in the area, the company has taken the decision that GTL is not a viable option for Shell in North America, at this time, due to the likely development cost of such a project, uncertainties on long-term oil and gas prices and differentials, and Shell’s strict capital discipline.

Now, here’s the same paragraph translated into simple English:

 The plant is going to cost a lot more to build than we thought it would. Natural gas prices are going up and could easily make it uneconomical to produce diesel and jet fuel from natural gas when compared to making them from oil. And, we don’t have unlimited funds to spend on everything we think of just to see if it works.

Shell CEO Peter Voser has voiced doubts about the so-called “shale revolution” in the United States (which refers to advances in drilling technology that have opened previously inaccessible shale deposits of natural gas and oil to exploitation). In fact, Shell took a $2.1 billion write-down on its shale assets in the United States. In lay terms, the company had to reduce the value of those assets on its balance sheet to reflect reality. The company also sold small tight oil fields related to shale deposits, fields that it no longer wishes to develop.

Voser said he still believes Shell’s remaining $24 billion investment in U.S. shale gas and tight oil will “be a success story for Shell.” Three-quarters of that investment is devoted to natural gas from shale. But, Voser added that the potential for natural gas and oil from shale elsewhere in the world has been “a little bit overhyped” citing concerns specifically about Europe.

Now, because this rhetoric is coming from an oil industry CEO, we can assume that he is walking the line between saying things which will get him removed from the invitation lists of his fellow oil executives’ cocktail parties–things otherwise known as the awful truth–and misrepresenting the facts to shareholders, which would get him into trouble in other ways.

But abandoning the gas-to-liquids plant speaks much more loudly than Voser’s actual remarks. It means Voser expects that natural gas prices simply won’t stay low long enough to make such a huge investment pay off. And, that means that he doesn’t believe the hype about an ongoing glut of U.S. natural gas.

So, Voser directs Shell to abandon a gas-to-liquids plant, the profitability of which would be destroyed by high prices for the natural gas which the plant must purchase. At the same time, he has Shell retain most of its shale gas wells, a move which only makes sense if he expects U.S. natural gas prices to go higher. And, those prices will only go higher if there is increased demand or reduced supply, or a combination of both.

It’s not hard to figure out the meaning of what Peter Voser is doing. But it is understandably difficult to shut out the constant din of abundance stories sponsored by the industry and its well-financed public relations machine–that is, until you understand that it’s not what the industry says that’s important, but what it actually does.

 

Jim Prentice sees urgency in grabbing LNG markets – Business – CBC News

Jim Prentice sees urgency in grabbing LNG markets – Business – CBC News.

There is a currently a window of opportunity open for Canada to set up shipping of natural gas to Asia, says former federal industry minister Jim Prentice, but it will have to move quickly to stay abreast of U.S. competition.

Prentice, now a vice-president at CIBC, says there is some urgency for Canada to adjust to the new reality of the North American energy market, in which the U.S. is a major producer.

“We’ve gone from being a comfortable natural gas producer to the U.S., to now competing with the U.S.,” he in an interview with CBC’s Lang & O’Leary Exchange.

“The changes that have driven all this, the technological changes have taken place so quickly, I think it caught people off guard,” he said.

There is now considered to be a glut of natural gas production in North America because of new technology that allows the capture of shale gas.

‘We are going from being a continental energy producer to being a global energy player. And in order to do that we have to secure market access’– Jim Prentice

Canada US Business 20121119Former Conservative federal cabinet minister Jim Prentice says Canada has a ‘window of opportunity’ on shipping natural gas to Asia. (Fred Chartrand/Canadian Press)

There are severalproposals for liquefied natural gas terminals to export from British Columbia to markets in China, Japan and India, but nothing is near being realized.

Prentice acknowledged that the projects require multi-billion-dollar financial commitments, but says Canada risks losing out to the U.S., which has moved faster on buiiding natural gas shipping terminals.

“People are only going to launch those kinds of projects if they have the certainty they require and that relates to the royalty regime, that relates to the fiscal regime, that relates to their capacity to export. These are all things we’re good at as Canadians, but we need to make sure we’re focused on it,” he said.

His comments came the same day that  Exxon Mobile Corp is predicting worldwide demand  for natural gas will jump 65 per cent over the next 25 years.

Exxon issued its annual review of energy supply and demand, a closely watched report that sets the course for production and alerts policymakers to the changes they might have to prepare for.

Exxon, the U.S. largest gas producer, is preparing for surging demand from developing countries, even as developed countries embrace emissions controls and greater energy efficiency.

Natural gas prices fall

Natural gas prices have been falling as the U.S. production of shale gas surges. That has prompted some Canadian energy firms to reduce their exposure to natural gas.

Prentice said Canada has to be prepared to invest in the opportunities for Canadian energy opening up overseas.

“The world is awash in natural gas, what it doesn’t have is an ample supply of stable nation states that can fulfill contracts over a 50 year period – that’s what’s needed,” he said.

“We are going from being a continental energy producer to being a global energy player. And in order to do that we have to secure market access,” he added.

Prentice said he is optimistic that the correct groundwork is being laid to complete projects such as LNG terminals on the West Coast and the Northern Gateway pipeline. He has urged the federal government to continue to engage with First Nations in communities that will be affected by the projects.

Exxon’s predictions

The long-term outlook by Exxon predicts that world energy demand will grow 35 per cent by 2040.

“People want a warm home, a refrigerator, a TV, someday a car, and a cellphone,” said William Colton, Exxon’s vice-president for corporate strategic planning.

Among its predictions:

  • Oil demand will rise 25 per cent by 2040 as it will remain “the fuel of choice for transportation.”
  • Deepwater, oilsands and shale oil production will be necessary to meet demand.
  • Demand for coal will rise until 2015, but fall by 2040 as countries abandon coal-fired power.
  • Nuclear power will see “solid growth.”
  • Supplies of renewable energy will increase nearly 60 per cent by 2040, led by increases in hydro, wind and solar.

Exxon prefaced its long-term outlook report with a call to lift the U.S. ban on exporting domestic crude oil, which dates back to the 1973 oil crisis.

Ken Cohen, Exxon’s vice president of public and government affairs, told the Wall Street Journal the ban no longer makes sense because the U.S. is “dealing with a situation of abundance.”

 

Obama Green Lights More Fracking to Increase Natural Gas Exporting – Susanne Posel | Susanne Posel

Obama Green Lights More Fracking to Increase Natural Gas Exporting – Susanne Posel | Susanne Posel.

 

Oil and Gas Limits Underlie Syria’s Conflict | Our Finite World

Oil and Gas Limits Underlie Syria’s Conflict | Our Finite World.

 

Testosterone Pit – Home – The Quiet Triumph Of Oil And Gas In Obama’s Policies

Testosterone Pit – Home – The Quiet Triumph Of Oil And Gas In Obama’s Policies.

 

The Obama Administration’s Policy on LNG Makes No Energy Sense | Peak Prosperity

The Obama Administration’s Policy on LNG Makes No Energy Sense | Peak Prosperity.

 

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