Compressed natural gas application in vehicles in Peru
The automotive gas market in Peru will begin to grow strongly in the 2005-2030 period, basically due to the following factors:
- The technological foundations were laid in the world to produce an automotive CNG fuel system, adjusted to industrial safety standards. There are positive experiences of development, commercialization and use of the system in other countries of South America. The State has authorized the private investment in the Camisea field, which is expected to enter service in 2002. This exploitation will be a relevant factor for this study, since it will allow obtaining a low-cost national input that will reduce variable costs. in this sector, with a strong increase in competition The automotive market can be considered as a market niche for these purposes The irrepressible rise in the price of a barrel of oil (US $ 36 as of September 2000),promotes the search for new energy alternatives that provide -at least- the same service at a lower cost. The United States has affirmed its position in the face of the impact of CNG in its domestic market, a fact that has motivated the world's leading automakers, Ford, GM, Chrysler, BMW, Volvo, Honda, Daewoo, Fiat, Renault, Peugeot, Mercedes Benz, Mitsubishi, Isuzu, Toyta, Nissan, Mazda, Suzuki and Daihatsu, are producing in series models with mixed propulsion traditional fuel / compressed natural gas.Mazda, Suzuki and Daihatsu are mass-producing models with a combined traditional fuel / compressed natural gas propulsion.Mazda, Suzuki and Daihatsu are mass-producing models with a combined traditional fuel / compressed natural gas propulsion.
The City of Lima will undoubtedly be the first point where to develop CNG, given the high rate of cars per inhabitants, the growth of ecological value of the products that enter the market and the atomizing phenomenon (multiplier) that the diversity of origin of people will produce.
Generalities of Natural Gas:
Characteristics:
Natural gas extracted from the fields is a colorless and odorless product, non-toxic and lighter than air. It comes from the decomposition of organic matter sediments trapped between rocky strata and is a mixture of light hydrocarbons in which methane (CH4) is found in large proportions, accompanied by other hydrocarbons and gases whose concentration depends on the location of the reservoir.
Natural gas is an efficient, profitable and clean energy, and due to its competitive prices and its fuel efficiency, it enables its users to achieve considerable savings. As it is the cleanest fuel of fossil origin, it contributes decisively to the fight against air pollution, and it is an energy alternative that will stand out in the 21st century due to its growing participation in world energy markets.
The large-scale exploitation of this natural energy source took on special relevance after the important discoveries recorded in different parts of the world from the 1950s. Thanks to the technological advances developed, its production, transport, distribution and use processes do not present risks or cause appreciable environmental impact.
The inhomogeneous distribution of oil reserves, conditions the economic growth of a country, depending on this resource.
"No country in the world that encourages growth expectations for its economy, that has natural gas reserves and that is not especially an oil country, cannot ignore the intensive use of 'CNG' as an alternative fuel."
In a short time, the strict emission standards developed by control authorities will be enforced even more severely in developing countries.
The emissions of gasoline and diesel are limited in "CNG" engines, which will allow progress in their development.
In the medium term, the emphasis will be on vehicles and engines specifically designed to use "CNG". This will allow the use of high-compression engines, taking advantage of the higher octane number of this fuel, which is 30% higher than higher-quality gasoline, thereby achieving greater power than the corresponding gasoline vehicle. These engines are and will be practically harmless to our environment, they reduce the emissions of the gases responsible for the so-called "greenhouse effect", up to 40%.
European terminals such as VOLVO, MERCEDES BENZ, BMW, ROVER, IVECO, FIAT, PEUGEOT, RENAULT join this project, as we have already indicated; American like FORD, CHRYSLER, MAN, CUMMINS, MACK, CATERPILLAR, CHEVROLET and Asian like HONDA, TOYOTA. NISSAN, MITSUBISHI, DAEWOO, ISUZU, DAIHATSU among others.
But it is evident that for manufacturing firms that have a strong weight in the market (in some cases a dominant position in certain countries), the development of specific manufacturing lines with engines for CNG does not represent a great economic attraction at the moment. The encouragement of the authorities is necessary to comply with the pollution regulations.
DISTRIBUTION OF “CNG” VEHICLES IN THE WORLD
| country | Conversions | Seasons |
| Argentina | 427,000 | 580 |
| Italy | 290,000 | 280 |
| Russia | 205,000 | 187 |
| USES | 40,000 | 1,102 |
| New Zealand | 25,000 | 245 |
| Canada | 17,200 | 120 |
| Brazil | 14,000 | 39 |
| Colombia | 4,600 | 22 |
| Indonesia | 3,000 | 12 |
| India | 2,500 | 6 |
| Pakistan | 2,500 | 12 |
| Germany | 2,415 | 55 |
| Chile | 2,200 | two |
| China | 2,000 | 10 |
| Venezuela | 1,500 | twenty |
| Australia | 1,000 | 35 |
| 27 other countries | 4,210 | 138 |
| TOTAL | 1,044,125 | 2,865 |
Source: 20 th. World Gas Conference Proceedings, Copenhagen 1997.
Among the most widely used primary energy sources, natural gas ranks third in the world and accounts for more than a fifth of energy consumption both globally and in Europe. Its reserves are similar to those of oil, its consumption rate being lower, so the expected life for this energy currently exceeds 65 years. These forecasts are corrected in more - periodically - due to the progressive discovery of new deposits and the application of new technologies that make it possible to extract them at greater depths.
The main natural gas reserves are located in the CIS (ex-USSR) and in the Middle East. There are also large reserves in Asia, Oceania, Africa, North America, South America, and Western Europe.
In Western Europe the main reserves are concentrated in Norway, the Netherlands and the United Kingdom, countries that have more than 85% of the total reserves. A quarter of the natural gas consumed in Western Europe is imported mainly from the EEC (European Economic Community) and also from Algeria and Libya.
The International Energy Agency estimates that in 2015 the demand for natural gas in the world will be more than 76% higher than in 1993. The largest increases will occur in Europe, Asia and Central and South America.
The European Gas Industry Association (Eurogas) has estimated a significant growth in the weight that natural gas will have in the primary energy balance. Thus, it considers that it will account for 24% of total demand in 2000, more than 25% in 2010 and around 26% in 2020.
The structural change of the strategic vision of the Gas business must be promoted with a clear mission: to ensure maximum corporate added value and the optimal development of all segments of the natural gas chain and its products, through a growing presence in the markets national and international, which sustains the energy requirements of the country and allows the diversification of the energy business, creating greater economic development for the country.
All of this must be combined with a domestic gas market that is growing at 75% year-on-year, which will translate into an increase in methane demand for 2009 of more than double, and with a liquid production almost entirely absorbed by a booming petrochemical industry. In the country, the growth of energy consumption in the primary transformation sector (steel, aluminum and petrochemicals), and in general, of its population (electricity and residential fuel), will be supported by natural gas, which forces us to seek effective solutions and long term. On the other hand, the technology points to physical and chemical transformation as the new way to expand the natural gas business in international markets.
In this way, the effort should be aimed at achieving the most efficient use of a resource with abundant reserves, low cost, compared to other alternatives, and with its own characteristics to preserve the environment to a greater degree, and which will be presented in the next years of high availability derived from the exploitation of non-associated gas reserves and that associated with crude oil production.
Project Object
The purpose of this work is to formulate a project for the construction, implementation and start-up of a CNG Power System Installation Service in vehicles.
Complementary to the project, the construction and operation of Service Stations that dispense CNG and the conversion of petroleum engines to CNG, in particular mass transport vehicles, can be conceived.
The CNG System Installation Service will be called "KARPIC DEL PERÚ", since it would operate under the technology of the aforementioned company, which currently carries out its operations in Argentina and Brazil.
Eventually, the Service Stations company, suppliers of CNG, will be called "GNCP" (GAS NATURAL COMPRIMIDO DEL PERÚ).
The intangible part of the product refers to the quality of the service, in which the personalization (achieved through a sufficient number of adequately qualified and presented employees) and the flexibility in the service will be highlighted in order to be able to fulfill the wishes the client's.
Political Framework
On September 16 of this year, President Alberto FUJIMORI, issued a message to the nation announcing the deactivation of the National Intelligence Service and the call for new elections in which he did not participate, due to the broadcast of a video in which shows how the advisor Vladimiro Montesinos gave money to Congressman Alberto Kouri so that he could join the ranks of the ruling alliance Peru 2000.
Currently the country is in a serious political crisis, where Alberto Fujimori remains as constitutional president and it has been announced that the date of elections to elect the new president would take place in March 2001, until that month, no he will hand over the government to any temporary president, as the opposition parties are requesting. Thus, although the situation is delicate, there is a certain positive expectation from the point of view of economic development, due to the strong external interests based in the country.
Economic Framework
According to the INEI, since 1993 Peru has been enjoying favorable economic conditions. The inflationary index, which reached a level 7481.7% in 1990, decreased to 6.46% in 1997, 3.5% projected for 2000.
For 2001, it is expected to be in a range between 2.5% and 3.5% and to reach 1.5% in 2003.
The GDP grew 7.4% in 1997 and is expected to do so by 4.6% for the year 2000 (which is similar to the average annual growth of the GDP in the last decade).
Between 2001 and 2003, when the GNC product was launched, annual GDP growth is expected to be 6%.
International reserves exceeded $ 10 billion and the trade deficit has been declining in the last three years. Employment is still a persistent problem.
The stabilization of the Peruvian economy was achieved after adopting liberal-type market-based economic policies, events that implied policies of strict fiscal and monetary discipline.
- Private investment was guaranteed. Restrictions were eliminated in the mining sector. There was a change of course è support for private investment. Peru honored the external debt. There was a change of criteria, from entrepreneurial state to promoter state.
All these measures contributed substantially to attracting foreign investment to Peru again.
A persistent problem is related to social and economic inequality.
MACROECONOMIC RESULTS AND PROJECTIONS
| Main results and projections | ||||
| nineteen ninety six | 1997 | 1998 | 1999 | |
| GDP (Percentage change) | 2.4 | 6.9 | 0.3 | 2.4 |
| Inflation | 11.8 | 6.5 | 6.0 | 4.2 |
| Average exchange rate | 2.45 | 2.66 | 2.93 | 3.31 |
| End of period exchange rate | 2.60 | 2.72 | 3.15 | 3.46 |
| RIN (US $ MM) | 8,540 | 10,169 | 9,183 | 9,083 |
| Exports | 5,789 | 6,741 | 5,639 | 5,980 |
| Imports | 7,754 | 8,366 | 8,075 | 6,660 |
| Trade balance (US $ MM) | 1,965 | - 1625 | - 2,387 | - 680 |
| Current account balance (US $ MM) | - 3,263 | - 3,278 | - 3,791 | - 2,028 |
| As% of GDP | - 5.9 | - 5.0 | - 6.0 | -3.5 |
Main macroeconomic assumptions 2000-2003
| Macroeconomic assumptions | ||||
| 2000 | 2001 | 2002 | 2003 | |
| Actual product growth | 5.0% | 5.5% | 6.0% | 6.0% |
| Accumulated inflation | 4.0% | 3.0% | 2.0% | 1.5% |
| Average exchange rate | 3.55 | 3.68 | 3.72 | 3.72 |
| Exports (million US $) | 7035 | 7678 | 8900 | 9958 |
| Imports (million US $) | 7416 | 8404 | 9240 | 10049 |
The volumes of liquid hydrocarbons that are released as a result of their replacement by CNG, will allow their export and will eliminate eventual imports, which will favor the Trade Balance of our country, with the consequent benefits in foreign currency .
Legal framework
The government's intention to promote global economic activity and in particular that of Natural Gas in its different applications is clear, basically because there is a world culture oriented towards the search for alternative fuels and an undeniable acceptance of the use of CNG in all types of vehicles, in addition to their home and industrial employment.
The use of Natural Gas is promoted worldwide for the different fleets of public motor transport, trucks, waste collectors, taxis, remises, buses, etc., with social and public benefits that far exceed costs.
Market research
Demand study
The experience of the CNG in Argentina has served as a reference framework for calculating demand.
In order to validate the information, it has been considered that the vehicle fleet capable of implementing the modifications in the power system maintains a ratio of 0.44 to 1 (for every 10 CNG vehicles in Argentina, we will have 4 in Peru).
The calculation of the applied conversion index arises from the comparative study of the following macro indicators (and their forecasts):
Socioeconomic indicators considered to establish the conversion rate (relational weighting method)
| ARGENTINA | PERU | RELATIONSHIP | |
| POPULATION-1992 | 33100000 | 22500000 | 0.68 |
| POPULATION-1998 | 36123000 | 25232000 | 0.69 |
| POPULATION-2010 | 40200000 | 31000000 | 0.77 |
| POPULATION-2025 | 45500000 | 37400000 | 0.82 |
| ROADS | 208350 KM | 72800 KM | 0.349 |
| VEHICULAR PARK-1992 | 3857000 | 337400 | 0.08 |
| VEHICULAR PARK-1999 | 7582000 | 2687000 | 0.354 |
| GDP PER CAPITA-1995 | 8030 | 2310 | 0.2876 |
| INDEX TO APPLY-2010 ((P + C + PV + GDP) / 4) | 0.44 |
Demand estimate for years 2002 to 2015
References applicable to Table N ° 5:
Period = expresses successive years / Year Arg = Years considered in Argentina / E = number of CNG filling stations in Argentina / CArg = Number of vehicle units converted in Argentina / Year Peru = Equivalent years for Peru / CPerú = Estimated number of units of vehicles to be converted in Peru.
| Period | Year Arg | AND | Load | Year Peru | C Peru (index 0.44) |
| one | 1984 | one | 64 | 2002 | 28 |
| two | 1985 | 3 | 2065 | 2003 | 908 |
| 3 | 1986 | 8 | 5442 | 2004 | 2394 |
| 4 | 1987 | 26 | 13313 | 2005 | 5857 |
| 5 | 1988 | 49 | 20716 | 2006 | 9115 |
| 6 | 1989 | 70 | 35648 | 2007 | 15685 |
| 7 | 1990 | 93 | 67559 | 2008 | 29725 |
| 8 | 1991 | 165 | 108596 | 2009 | 47782 |
| 9 | 1992 | 341 | 149058 | 2010 | 65585 |
| 10 | 1993 | 423 | 201817 | 2011 | 88799 |
| eleven | 1994 | 463 | 269096 | 2012 | 118402 |
| 12 | nineteen ninety five | 485 | 317153 | 2013 | 139547 |
| 13 | nineteen ninety six | 528 | 376800 | 2014 | 165792 |
| 14 | 1997 | 580 | 427000 | 2015 | 187880 |
* Source: Vehicular Press May 1998
Study of the offer
The supply of CNG does not currently exist in Peru. Studies of different companies, including "MAPPLE CORPORATION", indicate that in the next two years (2002), the exploitation of CNG will be a reality.
At the moment only LPG is marketed in our country. This Liquefied Petroleum Gas is a mixture of gases, especially propane or butane. LPG is obtained from natural gas or oil, it is liquefied for transport and vaporized to be used as fuel for boilers and engines or as a raw material in the chemical industry. Its use has been extended to private cars.
Price study
Study of the price of CNG in relation to fuel:
Taking into account that with «CNG» a 13% more yield is obtained due to its higher calorific value, (with 1 m 3 of «CNG» you can travel 13% more than with a liter of super gasoline), the savings that is obtained is great and allows, for light vehicles, a amortization of the «conversion kit» in a very limited number of months.
Since the most direct relationship is 1 m 3 with 1 liter of fuel, from this moment on, the same will be applied in all field work.
The savings expressed only consider the difference in fuel prices and yields, to which should be added the "extra savings" due to lower maintenance costs.
Various studies show that using CNG significantly increases the useful life of the engine and exhaust systems, in addition, its better combustion keeps oils and spark plugs clean, extending replacement periods. It facilitates fuel control, especially in captive fleets, since CNG does not evaporate nor can it be transferred.
Study of the price of the installation of the CNG system and Costs table
The installation price of the CNG system is $ 850.
| RAW MATERIAL COSTS | |
| TUBE | $ 285.00 |
| DISPENSER | $ 88.00 |
| PIPES | $ 19.00 |
| VALVES | $ 65.00 |
| INDICATORS | $ 55.00 |
| VARIOUS (MINORS) | $ 38.00 |
| TOTAL | $ 550.00 |
The calculation of the minimum commercialization price is US $ 600, considering RAW MATERIAL, MOD AND INDIRECT MANUFACTURING COSTS (see gnc.xls file).
Marketing Study
According to the information obtained from the INEI, vehicular circulation is located at 2,5000,000 vehicles, of which 45% are suitable to implement the new system. Of this total, only the "expected" conversions will be analyzed.
The "KARPIC DEL PERÚ" CNG System complies with all the necessary requirements established in the standards of road safety and of products that use gas as a fuel element.
Marketing Study
| Period | Year Peru | CPerú (index 0.44) | Price X Units |
| one | 2002 | 28 | $ 23,800.00 |
| two | 2003 | 908 | $ 771,800.00 |
| 3 | 2004 | 2394 | $ 2,034,900.00 |
| 4 | 2005 | 5857 | $ 4,978,450.00 |
| 5 | 2006 | 9115 | $ 7,747,750.00 |
| 6 | 2007 | 15685 | $ 13,332,250.00 |
| 7 | 2008 | 29725 | $ 25,266,250.00 |
| 8 | 2009 | 47782 | $ 40,614,700.00 |
| 9 | 2010 | 65585 | $ 55,747,250.00 |
| 10 | 2011 | 88799 | $ 75,479,150.00 |
| eleven | 2012 | 118402 | $ 100,641,700.00 |
| 12 | 2013 | 139547 | $ 118,614,950.00 |
| 13 | 2014 | 165792 | $ 140,923,200.00 |
| 14 | 2015 | 187880 | $ 159,698,000.00 |
Market Survey
It was investigated to know the current situation of the fuel market and trying to determine the considerations that would favor the adoption of the CNG system. In the November 1998 analysis of the "Conversion to CNG of the public transport of passengers and cargo", the working Commission made up of the Ministry of Natural Resources and Sustainable Development, the Ministry of Transportation, the Ministry of Energy and the Ministry of de Industria, (ARGENTINA, in its executive summary) says:
"In conclusion, it can be said that natural gas offers chemical and physical characteristics that allow its use in transport, with much lower emissions than any other known fuel that is on the world market."
It can thus be said that comparatively
«CNG versus diesel:
It is favorable in relation to air quality at the local level (dense traffic streets), neighborhood and urban area; but it would also have positive effects on a regional scale as it would significantly reduce the formation of acid rain, since it does not emit sulfur compounds. On a global scale, the impact from GHG (greenhouse gas) emissions would be slightly lower than for diesel and would significantly reduce the emission of atmospheric aerosols, which also alter the global climate. "
«CNG versus naphtha:
It would be favorable in relation to air quality on a local scale (heavy traffic streets), neighborhood and urban area. On a global scale, the GHG emission impact would be approximately 25% lower than for gasoline. "
“Although it is very difficult to determine the quantitative relationship between prolonged exposure to air pollution and its effects on health, the study used a methodological alternative that made it possible to economically evaluate the health damages caused by poor air quality based on to 4 factors: the amount of passenger and cargo transportation (CV), their emissions per tons per year (E), the emission reduction factor when moving from Diesel cycle engines to CNG (FR) and the health benefits and harm avoided per ton of reduced emission (BTE). »
«At a quantitative level, the total conversion of the cargo and passenger transport fleet would leave annual benefits for health costs avoided approximately $ 3,738 per vehicle. However, it must be borne in mind that the conversion of the fleet would not be carried out entirely but as the units to be renewed became obsolete. "
Project Size
Market
The potential market, although the maximum is determined by 45% of the 2,500,000 vehicles, that is, at most we are talking about converting 1,125,000 units (utopian extreme).
Financing
The financial evaluation of the project yields for this scenario (310,873 units converted in 23 years), an Expected Financial NPV by 2025 of US $ 43,351,957 and an IRR of 229%, exceeding with these figures the possible expectations of investors, the which recover the investment in a period of 24 months (in the most unfavorable scenario).
If we consider another scenario, where there would be an increase in sales above the reference values, we would obtain for the year 2025 US $ 135,367,680 and an IRR of 912%. On this occasion we have estimated that we will convert some 621,746 units in 23 years (this figure is half of the potential market of 45%).
The total cost of the project will be US $ 665,325, with the following distribution (idem table 10):
| Heading | Units | Unit cost | Total |
| (m 2) | (US $) | (US $) | |
| 1. Land (m 2) | 900 | $ 450.00 | $ 405,000.00 |
| 2. Building | 400 | $ 650.00 | $ 260,000.00 |
| 3. Teams | $ 200.00 | ||
| 4. Furniture and fixtures | $ 125.00 | ||
| TOTAL | $ 665,325.00 |
The main promoter of this project is its shareholders, who will contribute 61% of the total investment, this sum amounts to US $ 405,848 of which US $ 405,000 correspond to the value of the land. The remaining 39% (US $ 259,477) will be financed through the credit line for SMEs of Banco de Credito del Perú over a 15-year horizon, paying the first two years only the interest generated by the debt (grace years) to an annual cost of Libor plus 2%. This grace period stands out, since it is the most unfavorable period of time (see excell file "gnc.xls")
Technology
The technology developed by «KARPIC SA»
is used. Details of components are indicated:
Equipment and containers for CNG:
| ELEMENTS THAT ARE CERTIFIED IN EQUIPMENT AND CONTAINERS FOR CNG | APPLICATION RULES |
| Steel cylinders for CNG storage for vehicular use, and for CNG service stations. | GE-N1-115 / IRAM 2526 / NGV2
ISO 4705 / CAN / CSA B339. |
| Composite cylinders for CNG storage for vehicular use. | NGV2 / NZS-5454
CAN / CSA B339 / DOT FRP 2 |
| CNG storage steel tubes for use in CNG filling stations and bulk CNG transportation | - ASME SECTION VIII, DIV. 1 or 2
- DOT 3AAX-2400/3855. |
| Cylinder Revision Centers for CNG. | - GE-N1-144 |
| CNG supply equipment for individual use | - GE-N1-141
- NFPA 52 |
Constituent Elements Of The Conversion Equipment (Kit) For CNG
| ELEMENTS THAT ARE CERTIFIED IN CONVERSION EQUIPMENT (KIT) FOR CNG | APPLICATION RULES |
| Parts of equipment for vehicular CNG: Regulators; manual valves; dispenser; solenoid valves; fittings and pipes. | - GE-N1-115; 116 and 117. |
CNG equipment is made up of: Charging valve, pressure reducer or regulator, injector or mixer, gasoline solenoid valve, selector switch with indicator lights, pressure gauge, high pressure gas pipe, storage cylinder of CNG, support or cradle of the Cylinder with fastening strips, cylinder valve and watertight venting system. The diversity of cylinders offered in capacity, weight and dimensions allows the user, according to the vehicle he owns, to obtain the necessary autonomy, taking into account the trunk that he has.
The Cylinders are made of Manganese Steel, Chromium Steel - Molybdenum and Chromium Steel - Molybdenum coated in Fiber. In Pick Up type vehicles and when the height allows it, the cylinders can be placed on the chassis of the same.
Resource availability
The minimum space to develop the installation plant of the system in cars will occupy a land of 900 m 2, with a built area of 400 m 2.
TANGIBLE INVESTMENT
| Heading | Units (m 2) | Unit cost (US $) | Total (US $) |
| 1. Land (m 2) | 900 | $ 450.00 | $ 405,000.00 |
| 2. Building | 400 | $ 650.00 | $ 260,000.00 |
| 3. Teams | $ 200.00 | ||
| 4. Furniture and fixtures | $ 125.00 | ||
| TOTAL (initial investment) | $ 665,325.00 |
Project location:
The "KARPIC DEL PERÚ" establishment will be located in the San Borja district at the intersection of Avenida Javier Prado and Aviación.
Close to markets
The indicated location has great potential, given the high circulation of vehicles that allows a fixed low-cost advertisement (on the facilities).
Closeness to input suppliers
The supplies arrived by ships to the port and from there to the establishment. Javier Prado Avenue is an expedited access road.
Accessibility
It is inherent to the chosen location.
Workforce
The installation of the system is very simple, therefore the training of personnel can be carried out in the short term, with insignificant costs.
| Denomination | Quantity | Salary | Total Salaries |
| General Manager | one | $ 1,200 | $ 1,200.00 |
| Accountant | one | $ 800 | $ 800.00 |
| Accounting assistant | one | $ 400 | $ 400.00 |
| Secretary | two | $ 400 | $ 800.00 |
| Supervisor | one | $ 700 | $ 700.00 |
| Foreman | two | $ 600 | $ 1,200.00 |
| Workers | 6 | $ 250 | $ 1,500.00 |
| $ 6,600.00 | |||
| SECURITY | $ 200 | ||
| SERENE | $ 100 |
Disbursements produced by insurance, FONAVI, participations, etc. are also included (see gnc.xls file)
State incentives:
The public sector must carry out a strict control policy in the equipment producers, the periodic review centers of the cylinders, the manufacturers and importers of equipment and parts, the assembly workshops, the certification bodies, the distributors, stationers and automotive companies that are part of the value chain, where the quality and safety of the system demands joint efforts from public and private interaction.
Possible policies to induce the adoption of CNG:
«Regulatory measures of« order and control »
- Ordinances that prohibit the circulation of non-CNG vehicles in certain areas or that make the use of CNG in public sector vehicles or privatized companies mandatory. Modify the emission standards to more explicitly consider the advantages of CNG.
“Market-based measures”
Correct the price distortion that affects diesel consumption to the detriment of CNG (and gasoline). At the same time, compensate rural use of diesel (whose impact on the environment is low) with credits against income taxes to make this measure politically acceptable.
Tradable permit system. An example of this system is the one in its introduction phase in California. Each transport company is granted a certain number of emission permits (each right allows to emit 0.454 kg / year of nitrogen oxides and volatile organic compounds). If your fleet emits less than that total, you can sell the surplus to other companies, but if it emits more, you must buy permits to emit from others. Therefore, the incentives for the adoption of CNG arise from comparing the decrease in the use of emission rights (and the sales income that this generates) with the costs of converting to CNG. The downside to this system is that it requires strict monitoring.
Differential subsidy to the sale price of CNG for use of public transport. Its disadvantages are the strategic behaviors of individuals who will want to buy at a lower price without qualifying to benefit from that discount and the tax cost that could be generated.
Give preferential treatment in granting routes to CNG vehicles.
Favor in the bids those companies that propose the use of CNG vehicles for their activities (especially in cases such as garbage collection).
Encourage companies in the sector to reduce the costs of converting to CNG and the costs of CNG vehicles, and even encourage the production of "factory" CNG vehicles.
Environmental impact
Since CNG naturally collaborates with "Clean Air", incentives should be studied to promote its use in different media. These promotion measures could be financed by reducing these «social costs». Provisionally, the incentives should proceed via a higher price of diesel: the consumption of diesel would be discouraged and that of CNG would be incentivized. Since CNG naturally collaborates with "Clean Air", incentives should be studied to promote its use in different media. These promotion measures could be financed by reducing these «social costs». Provisionally, the incentives should proceed via a higher price of diesel: the consumption of diesel would be discouraged and that of CNG would be incentivized.
Different calculations lead to establish the social cost of environmental pollution (whose main culprit is "particulate matter"). The figures range between $ 0.10 (naphtha) and $ 0.16 (gas-oil) per liter of fuel. There are studies that speak of even higher costs, for example some in England, where this value amounts to $ 0.35 per liter of diesel compared to $ 0.03 per m3 attributed to CNG. (International Conference NGV'98 Cologne, Germany).
Recently, in the industry, there have been problems in the storage tubes of "CNG" fiber, which have had to be replaced by steel tubes. But we cannot give up in the future a "safe" solution with lightweight and extra-light tubes, which today appear as the most desirable trend worldwide.
It should be noted that the competitive advantage of this combustion system lies in the fact that it offers a service:
- Highly reliable.Your investment is paid for with fuel savings.There are reductions in the patents of those vehicles with CNG in other countries.The octane of CNG is higher than that of traditional fuels (125 octane).The implementation of the system does NOT eliminate the carriage standard, but complements it. The vehicle becomes dual (CNG + Fuel). The passage from one system to another is semi-automatic during the march. It is not necessary to stop the vehicle Studies carried out in California, determined that the CNG used as fuel does not produce smog (improves the environment) It produces a real saving of 70% in the cost of fuel It improves and extends the useful life of the oil lubricant and spark plugs.Reduces exhaust wear as it contains fewer corrosive substances.
The rational use of energy is based on establishing criteria to achieve maximum performance with the least environmental impact and each generation must guarantee the availability of energy resources for future generations, for the benefit of the environment and the well-being and safety of its inhabitants.
Among the energy alternatives, natural gas is recognized as a noble energy for its efficiency, cleanliness and competitive prices. It is the fuel that pollutes the least, heats up quickly and does not need prior storage, so it provides a high degree of comfort in homes.
The Social Cost
There are two ways to calculate the "Social Cost" of pollution:
Damage Assessment: assessment based on the effects on health and property, which includes different clinical and epidemiological studies. It is logical to think that the social value of reducing pollution should be equivalent to that of the damages avoided.
Control Cost for Monitoring: it is somewhat simpler and consists of establishing what is the cost of enforcing emission standards. Revealing in this way the value that society assigns to the control of emissions.
For the calculation, the unit values for different units in the United States were taken into account, based on which maximum and minimum values were determined.
Costs per Ton of Pollutants (u $ s / Ton)
| Nox | HC | CO | PM10 | |
| Based on Costs | ||||
| The Angels | 27,600 | 24,400 | 6,100 | 7,700 |
| New York | 15,600 | 24,800 | 4,900 | 6,800 |
| Chicago | 10,100 | 10,300 | 3,100 | 5,900 |
| San Francisco | 6,600 | 7,300 | 3,100 | 4,000 |
| Based on Damages | ||||
| The Angels | 12,400 | 6,500 | N / A | 21,800 |
| New York | 9,000 | 4,600 | N / A | 19,100 |
| Chicago | 6,800 | 3,400 | N / A | 13,700 |
| San Francisco | 4,700 | 2,300 | N / A | 7,600 |
Note: Nox = Carbon monoxide; HC = Hydrogen; CO = Carbon dioxide
PM10 = Particles per million. Source: Center for Transportation Research, Argone National Laboratories
Ecological Benefit
In North America, more precisely in the state of California, it was conclusively determined that diesel engine exhaust is highly polluting. It is not necessary to be very knowledgeable to realize or experience the unpleasantness and inconvenience to health, inhaling near a diesel leak.
For ten years, the California Environmental Protection Board, composed of eleven scientists, analyzed the health effects of exposure to small particles and other pollutants, coming from diesel engines, especially from passenger transport; clearly concluding that compressed natural gas did not produce smog, which improved the environment in urban centers.
Since CNG contains 95% methane - which is not reactive - it does not cause the formation of particles; instead, diesel exhaust releases more than forty substances that have been listed as dangerous pollutants and human carcinogens.
Epidemiological studies determined that diesel exhaust is strongly linked to lung cancer, concluding that the potential pollutant would be ranked 6, with dioxins and asbestos (produced by brake tapes, among others) occupying first place.
An easily achievable experiment to place a white cloth at the outlet of a diesel exhaust and a similar one in a CNG exhaust. The exposed fabric on the diesel exhaust is completely black, which is not the case with the CNG exhaust.
Automotive companies have long delivered vehicles with CNG equipment, notably accentuating this trend in 1999.
When analyzing natural gas as an energy resource, we must not neglect the ecological aspect due to its low environmental impact. It is interesting to define some concepts:
Clean air: it is that which is breathed in an area not contaminated by human activity;
Breathable air: it is the one that does not present concentrations of harmful components for the human being.
As a summary, we indicate in a table, the pollution caused by motorized transport.
Pollution Caused By Motorized Transport
| SUBSTANCE | SOURCE | LIMIT «WHO» |
| Carbon Monoxide (CO) | 90% issued by the transport sector; 65% motorized vehicles | 100 mg / m 3 for 15 minutes - 10 mg / m 3 for 8 hours. |
| Nitrogen Oxides (NOx) | 47% emitted by motorized vehicles | 400 ug / m 3 NO2 for 1 hour
150 ug / m 3 NO2 for 24 hours |
| Ozone (O3) | Caused by the interaction of HC and Nox | 150-200 ug / m 3 for 1 hour |
| Lead (Pb) | It comes from the oil additive | 0.5-1.0 ug / m 3 for 1 year |
| Hydrocarbons (HC) | 50% issued by automobiles | There is no specified limit |
| Benzene (C6H6) | Vehicles and oil evaporation | The WHO does not accept any safe level. |
| Particulate Material (Soot) | Vehicles, Industries and Household Sources | The WHO does not accept any safe level. |
Source: World Health Organization and 20th. World Gas Conference Proceedings, Copenhagen 1997.
The particles generated by human activities come mainly from combustion processes, where the most important sources are diesel engines, which contribute 39% of the total.
According to the "Second Report of Quality of Urban Air Review Group, 1993", cars with diesel engines emit about 0.4 g / km of particulate matter, reaching values of 1.2 g / km during cold driving.
Within Diesel engines, the main source of particulate matter is heavy transport vehicles, whose emissions constitute 72% of all diesel particulate matter.
The emission of particles depends on the characteristics of the engine, and is independent of the running speed.
This material, which has no defined chemical composition, enters the body mainly through the respiratory tract. The smallest particles, less than 10 microns, penetrate deep into the respiratory system.
These particles diminish the defense capacity and bring along, among other harmful effects, chronic cough, hoarseness, nocturnal respiratory syndromes, lung diseases, bronchitis, bronchial asthma, and lung cancer.
Project engineering
Technology selection
The technology chosen is the one provided by KARPIC SA, given that it is a company already underway
Plant design
The plant must have the following characteristics:
Natural Gas Project Engineering
Type of resources (inputs and human)
Analyzed in the administration paragraph.
Production costs
To determine this, the following have been considered:
MOD; MOI; RAW MATERIALS
VARIOUS EXPENSES (LIGHT, TELEPHONE, WATER, INSURANCE, ETC)
For more details see gnc.xls
Organization and Administration
Organization:
The most convenient organization for this company is the SOCIEDAD ANÓNIMA.
Organization chart
Organization Chart of the Gas Company
Administrative staff requirement and remuneration and table:
| Denomination | Quantity | Salary | Total Salaries |
| General Manager | one | $ 1200 | $ 1,200.00 |
| Accountant | one | $ 800 | $ 800.00 |
| Accounting assistant | one | $ 400 | $ 400.00 |
| Secretary | two | $ 400 | $ 800.00 |
| Supervisor | one | $ 700 | $ 700.00 |
| Foreman | two | $ 600 | $ 1,200.00 |
| Workers | 6 | $ 250 | $ 1,500.00 |
| TOTAL | $ 6,600.00 |
Contributions and social benefits / table:
| Position | C | Salary | IPSS | FONAVI | SCR | SV | G | P | V | CTS |
| General Manager | one | $ 1200 | 108 | 60 | 36 | 36 | 199.2 | 50.4 | 99.6 | 99.6 |
| Accountant | one | $ 800 | 72 | 40 | 24 | 24 | 132.8 | 33.6 | 66.4 | 66.4 |
| Accounting assistant | one | $ 400 | 36 | twenty | 12 | 12 | 66.4 | 16.8 | 33.2 | 33.2 |
| Secretary | two | $ 400 | 72 | 40 | 24 | 24 | 132.8 | 33.6 | 66.4 | 66.4 |
| Supervisor | one | $ 700 | 63 | 35 | twenty-one | twenty-one | 116.2 | 29.4 | 58.1 | 58.1 |
| Foreman | two | $ 600 | 108 | 60 | 36 | 36 | 199.2 | 50.4 | 99.6 | 99.6 |
| Workers | 6 | $ 250 | 135 | 75 | Four. Five | Four. Five | 249 | 63 | 124.5 | 124.5 |
| 594 | 330 | 198 | 198 | 1095.6 | 277.2 | 547.8 | 547.8 |
References:
IPSS = Social Security
FONAVI = National Fund for Housing
SCR = COMPLEMENTARY RISK
INSURANCE SV = LIFE INSURANCE
G = GRATIFICATIONS
P = PARTICIPATION
V = VACATION
CTS = Service Time Certificate
Conclusions
The demand for an alternative power system for motor vehicles is a reality, which will increase in the short term.
We consider that:
The awareness of the need to address the problem of growing environmental pollution and reduce the social cost produced by harmful emissions, has caused a shift in the world towards the development of a suitable alternative fuel. In this search, "natural gas" emerges as the best option.
Peru has all the conditions in place to make "CNG" a massive fuel and that to the environmental advantages and lower social cost that this implies, are added the economic and trade balance advantages that we have already mentioned.
The pending subject is the conversion of heavy transport and passengers in general. Efforts must be concentrated on this objective, which if it is achieved, will be of great benefit to all.
From the sector :
The World Trend indicates that CNG will be the alternative option for non-oil exporting countries. It will be a containment measure for the price increases set by OPEC.
From the competition:
The LPG currently under development in the country will not be an obstacle, since it is a lower quality product, higher price, causes greater wear on the engine and its safety index is lower than that of CNG.
Comparison:
a) Result of the DIESEL Vs GAS Comparison
| Unit Price Difference | Loss due to purchase of diesel vehicle | $ (3,545.00.-) |
| Difference Fuel Expense | Annual loss in fuel | $ (244.61.-) |
| Investment Recovery Years | The difference paid for the diesel unit is not recovered |
As we can see in the Diesel Vs CNG evaluation, it is not possible to recover the higher initial value of the diesel unit.
b) Result of Comparison NAFTA Vs GAS
| Unit Price Difference | $ 1,400.00.- |
| Difference Fuel Expense | $ (1,849.61.-) |
| Recovery Conversion Years | 0.76 |
In this case, we see that the economy given by the fuel difference makes it possible to recover the cost of the conversion in a short time. Ç
Both light and heavy «CNG» vehicles require less maintenance than those with diesel engines, mainly derived from a triple useful life of lubricating oils.
According to the experience obtained in other countries, with a mixed fleet (diesel and CNG), the maintenance cost of gas vehicles is proven to be lower.
In numbers:
We now compare the characteristics of CNG with 97 fuel:
CNG air / fuel ratio 17.4 / 1 - (by weight), Naphtha 15.5 / 1 - (by weight).
Thermal capacity at 0 ° C CNG 0.82 calories per liter of mixture, Naphtha 0.89 calories per liter of mixture.
The comparison carried out allows us to verify that, using both fuels in ideal conditions, there is a difference in caloric power per liter of mixture with CNG, just 8.35%, less compared to the mixture with naphtha.
Security:
CNG is inherently safe, since strict safety standards are used to approve each of the constituent elements of the conversion "Kits" and compliance with the rigid regulations that regulate the construction and operation of filling stations is verified.
Much of the safety is linked to the intrinsic characteristics of Natural Gas:
a- CNG is lighter than air, therefore, in case of leakage it rises and dissipates, not forming flammable spills like liquid fuels, whose gases are heavier than air, making their dispersion more difficult.
b- The proportions of gas that are required in the air to form an explosive mixture are higher than those of other fuels.
c- As we can see in the following table, CNG is the safest of the fuels used today:
| Fuel | «Relative» Safety Factor |
| CNG Methane Gas
Butane gas Propane gas Naphtha Kerosene |
100
83 80 78 77 |
Source: 20 th. World Gas Conference Proceedings, Copenhagen 1997
Final:
The economic-financial analysis shows us that the PROJECT «GNCP» will be highly profitable.
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