Natural Gas: Greener and Cheaper Transport for Europe

This is the second installment in our guest blog series: A Wider Lens.

This series features first-hand accounts from people driving natural gas vehicles, industry leaders and decision-makers in the natural gas transportation industry.

By Guest Contributor, Alexander I. Medvedev

Director General of OOO Gazprom Export and Deputy Chairman of OAO Gazprom’s Management Committee

Alexander I. Medvedev:
"I can't  ignore this significant market in the making."

Energy connects. It fuels cars, trucks and ships to travel thousands of kilometres, transporting goods and people via ever-evolving networks. Modes of transport have always been drivers of innovation. Over the past decades, there have been technological breakthroughs in the design, speed, or size of vehicles. Today, the most urgent challenges are environmental and economic, and natural gas is a perfect solution for greener and cheaper mobility.

The use of natural gas in transport already grew by 220 per cent between 2008 and 2012 worldwide, from 13.6bcm to 30.1bcm.[i] The International Energy Agency (IEA) recently predicted that by 2018 alone, gas use in transport could increase by nearly 10 per cent to 50bcm worldwide. Other forecasts say that in Europe this market segment could represent no less than 40bcm of additional gas by 2030, while reaching between 200 and 400bcm worldwide.[ii]

As the Director General of Gazprom Export, I can’t ignore this significant market in the making. We at Gazprom aim to take gas as fuel to a whole new level. We recently acquired 12 compressed natural gas (CNG) filling stations in South Germany, with a target of reaching 23 stations by the end of 2013. We plan to further expand the gas filling network in the coming years. Thanks to natural gas, low-emission transport is not a vision of the future. Natural gas is readily available today: reliable, safe, affordable, and environmentally friendly.

Gas allows emission reductions at a much lower cost to consumers, who can drive further for less. With €10 worth of fuel, a natural gas-powered car can go approximately 220km, compared to 164 km on diesel and just 103 km on petrol.[iii]

In Europe, €68 to €77 billion could be saved by 2050 when further developing the use of natural gas in transport compared to a business as usual scenario, according to the European Gas Forum. Trucks and ships have the greatest potential to generate cost savings.[iv]

Still, we believe much more can be done. Collectively, we must better familiarise ourselves with the benefits of natural gas. Policy makers may realise that investing in the expansion of natural gas distribution infrastructure is more economical than technologies dependent on subsidies. Also, what can be done on their side is ensure a predictable legal environment, balanced taxation and standards on fuels. This would help to find the right way for investments needed by the sector.

Since 2008, Gazprom, together with E.ON Ruhrgas and many local supporters, have organized the “Blue Corridor Rally.” This year, from October 3-18th, around 15 natural gas-fired cars, buses and trucks circled the Baltic Sea, travelling from Saint-Petersburg across Scandinavia, to Copenhagen, Hamburg, Gdansk and each of the Baltic countries, following the old Hansa League trade route. For the first time, the rally crossed from Finland to Sweden on a liquefied natural gas (LNG) ferry, a prime example of the environmental and economic benefits of using LNG in shipping, in a heavily polluted Baltic Sea. Through this initiative, we want to put the spotlight on workable solutions for cleaner and cheaper mobility in Europe.

The rally proves that gas-fuelled transport already works today, and demonstrates that thanks to NGVs, consumers can spend less while helping the environment. It also highlights the remaining challenges: creating a denser network of refuelling stations, the key to make the technology more accessible. And to avoid the chicken and egg problem, gas suppliers, vehicle manufacturers and national authorities must work hand in hand.

Against this background, we welcome the European Commission’s clean transport package issued earlier this year. This proposal sets ambitious European Union targets to promote more cars and fuelling stations using alternative fuels, such as gas. This is an important and necessary signal to the industry and a clear push to develop the right market conditions for CNG and LNG to take hold in European transport.

Currently, some 18 million NGVs are registered worldwide. There should be 50 million by 2020. However today, Europe only counts 1.5 million NGVs. The European Commission has fired the starting gun with its clean transport package. Governments must now follow suit. We at Gazprom are ready to engage in the race for greener and cheaper transports.

The views expressed in this post are those of the author as of the date of the post and do not necessarily reflect the views of Westport Innovations Inc. or its management. The views expressed may be subject to change without prior notice.

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[i] This is a Gazprom estimate. The figure was presented by Gazprom’s Eugene Pronin in February 2012 in a presentation titled, Participation of Gazprom in European NGV Infrastructure Development and Market Opportunities.
[ii] This is a Gazprom estimate. For Europe, Gazprom calculates that CNG/LNG demand in transport could reach 43bcm by 2030. The figures were presented by Gazprom’s Didier Lebout at the International Gas Summit in November 2013 in a presentation titled, Develop the Use of Natural Gas in Transport.
[iii] This is a European average (similar type of car, similar road, similar weather, etc.), which depends on the respective price of the fuels in EU countries. The latest cost figures for Germany only from Erdgas Mobil can be found here: http://www.erdgas-mobil.de/privatkunden/guenstig/
[iv] This is a general statement based on the European Gas Forum study on the economic benefits of gas in transport: This is a general statement based on the EGAF (European Gas Forum) study on the economic benefits of gas in transport: http://europeangasforum.eu/2012/09/26/reducing-co2-emissions-in-the-eu-an-alternative-pathway-to-reach-2050/