COMPRESSED NATURAL GAS (CNG) SYSTEMS


Introduction

OES CNG (Australia) and OES CNG Smartgas (USA), divisions of OES and our associated company Oil & Gas Engineers Lincoln Consulting, have developed compressed natural gas vehicle systems throughout Australia and the USA. We design and offer for sale turn-key solutions and we install and service the following:

  • Compressors, Bowsers or Dispensers and Instrumentation for CNG Service Stations
  • Commercial/Fleet and Public Refueling CNG Stations.
  • Home Re-fueling Compressors. (made by OES CNG Smartgas in the USA)
  • CNG Vehicle Conversions.
  • Customer Finance Packages.

OES CNG are leaders in the CNG industry in Australia and OES CNG Smartgas is the most versatile provider of vehicle conversions, large compressor stations and home refuelers in the USA. CNG is the world’s future fuel! It is the safest, cleanest, most abundant and most economical fuel. There is over a 300 year supply available at home and by using it, we will no longer be so controlled by Middle East interests and our countries’ balance of payments will be drastically improved.


NGVT of Texas, one of the largest automobile and small truck CNG converters in the USA, has an MOU with OES and is the exclusive retailer for Smartgas home refuelers in the South Central USA and also for OES CNG Smartgas, to provide assistance for CNG conversions in Florida.


Also, most recently, OES CNG technicians successfully completed the world’s first CNG conversion of the Toyota Camry Hybrid that set new records for fuel economy. OES CNG also has the best and most reliable home or small fleet refueling units available on the market. These units will fill a car in 2.5 hours, at home, or in minutes if storage bottles are used and come with a 2 year warranty.


Lobbying by OES in Australia and in the USA has resulted in many “green lights” indicating deregulatory approvals by our governments. For example, in the USA, it is now legal to convert cars and light duty trucks to CNG that are 2 years old, or older. In addition, there are some CNG fuel, vehicle conversion and refueling station tax incentives or rebates offered by some state governments and the IRS. In Australia, the Alternate Energy excise tax for CNG was recently limited to one-half of the petrol/gasoline tax at public refueling stations and it was phased in over 5 years. Additionally, home/fleet refueling units were made tax exempt and this saves another 33 cents per litre!


OES CNG Smartgas has also just purchased acreage in Homestead, FL to set up its bio-gas research facility, so that rural families that don’t have piped in natural gas can make it at home with grass and manure, etc.

The following links to editorials, publications, brochures and informational websites will provide you with additional documentation and can best present our complete line products and services.


CNG Overview Brochure

American Home Compressor Brochure

Australian Home Compressor Brochure

"Saving America" publication

Vehicles Powered by Natural Gas in Austraia and the USA An Oil and Gas Australia 2013 Editorial

Editorial: Oil and Gas Australia 2011

Natural Gas Compressors-The Fill Up of the Future (Dated: Jul 2011)

Read our Submission to the Treasury regarding the excise tax for alternative fuels HERE.

Click here for Free Fuel Offer and Much Much More....

Locations and listings of CNG public refueling stations in the USA or in your home state (source: US Government  Alternative Fuel Data Center website)

CNG Definition

CNG or Compressed Natural Gas is the compressed form of the gas commonly used in homes throughout Australia for domestic cooking and heating appliances. It consists mainly of methane (80 - 95%), a colourless, odourless and tasteless gas. The distinctive smell associated with natural gas is in fact an additive which enables quick detection of leaking gas. Methane is the lightest hydrocarbon having a chemical composition of CH4 and occurs naturally throughout the solar system and universe. Natural gas is not the same as Liquid Petroleum Gas (LPG) which is made up of a variety of heavy petroleum derived gases, mainly Propane and Butane.

Historically natural gas was manufactured by collecting gas produced by burning coal ("Town gas"). Today natural gas is extracted from underground and subsea deposits often but not always associated with oil and coal deposits. Australia holds very large reserves of natural gas deposits which are expected to meet our energy requirements for hundreds of years to come. Australia exports thousands of tonnes of natural gas to Asia on a daily basis in the form of LNG (Liquid Natural Gas)

A major source of methane around the world is to date largely unharnessed. Instead it is allowed to leak in its raw form into the atmosphere. Methane is a by-product of decomposing organic matter including the rotting of dead plants, the rotting of garbage in tips and dumps, and also livestock manure and sewage treatment plants. This is known as biogas and is likely to be harnessed to a much greater extent in the future. Natural gas is consequently a renewable source of fuel.

History and Global Use

The first natural gas engine was invented in the mid-1800's. Since the 1930's, Italy has been using natural gas as a vehicle fuel and developing its associated technologies. During World War II some cars in Australia were converted to run on "town gas".

The adoption of CNG as a vehicle fuel is now accelerating worldwide. In the last decade, the number of Compressed Natural Gas Vehicles (CNGV's) around the world has jumped by 500% from around 1 million vehicles in 1996 to in excess of 5 million vehicles in 2006.

Currently the leading nations adopting CNG around the world is as follows;

World Standing Country Vehicles Fuelling Stations
1 Argentina 1.5 million 1,400
2 Brazil 1.1 Million 1,200
3 Pakistan 1.0 Million 1,000
4 Italy 0.4 Million 500
5 India 0.25 Million 200
6 USA 130,000 1,300
7 Iran 115,000 140
8 China 97,000 360
9 Ukraine 67,000 150
10 Egypt 63,000 100
11 Colombia 60,000 90
12 Bangladesh 55,000 120
13 Bolivia 45,000 60
14 Venezuela 44,000 150
15 Russia 42,000 210
16 Armenia 38,000 60
17 Germany 33,000 650
18 Japan 25,000 300
19 Canada 20,000 220

The online Newspaper DNA (Daily News and Analysis) states that according to statistics available with the Bharat Petroleum Corporation Limited (BPCL), the consumption of natural gas in Mumbai, India has risen by a whopping 374% over the past 3 years.

To improve security of energy supply and reduce greenhouse gas emissions, the European Union has set itself an objective to have substituted 20% of all traditional fuels used in the road transport sector (petrol and diesel) with alternative fuels before the year 2020. Three alternative solutions are seen as promising: biofuels, natural gas and hydrogen. By 2020, at least 50% of alternative fuel substitution is expected to be natural gas

Environmental Effect

  • Natural Gas is the Cleanest readily available transport fuel.

The general rule for Hydrocarbons is the higher the ratio of Hydrogen atoms to Carbon atoms the cleaner the fuel. Natural gas has the highest ratio of hydrogen atoms to carbon atoms of all hydrocarbons. Natural gas combustion produces little more than water and CO2 when used as a vehicle fuel. CO2 emissions are around 20% less than for other petroleum products. Natural gas is distributed around Australian and in the US metropolitan and suburban areas via gas pipelines and therefore does not require road transport.

  • Natural gas vehicles do not cause respiratory illness and produce far less greenhouse gases.

The increasing incidence of asthmatic children and adults in Australian cities and suburbs in the US has been linked to higher levels of pollution and particularly particulate pollution much of which is attributed to vehicle emissions. Particulate emissions from natural gas vehicles are almost non-existent. Natural gas vehicles have far lower levels of Carbon Monoxide, Sulphur and Nitrous Oxides (associated with petroleum fuels and the cause of acid rain) and other Non-methane Organic gas emissions.

  • Electric Vehicles are not so green.

Electric vehicles are indirectly powered by coal as this is the main source of electricity. In Australia and in the US, this is predominantly the cheaper but dirtier "Brown Coal". In addition the batteries used in electric vehicles are also very expensive and need to be replaced and disposed of on a regular basis.

  • Ethanol production is not energy efficient and utilizes land that could produce food.

Although it compares favorably with natural gas in terms of emissions, Ethanol production requires very large amounts of energy, chemicals and agricultural land. Energy experts claim that ethanol produced from corn requires 70% more energy to produce than is contained in the ethanol and the acreage used to produce enough ethanol to run a vehicle for one year could produce enough food to feed seven people for a year.

  • Natural gas will not destroy surrounding ecosystems should an accident occur.

Spillages and leaking Oil and Petroleum products can severely impact on ecosystems, waterways, oceans and wildlife As they seep into and are absorbed by the environment. If a natural gas leak occurred as a result of an accident natural gas dissipates into the atmosphere and does not poison surrounding ecosystems and wildlife.

  • Volatile Organic Compounds (VOC's) in Petroleum products pose a risk to public health and the Ozone.

Petroleum products contain VOC's which are high in carcinogenic compounds such as benzene and present a risk to public health. VOC's are also harmful to the ozone layer. VOC's are released to the atmosphere during car refueling and when tankers refill storage tanks at fueling stations in the US and in Australia. VOC's are not present in natural gas as compared to comparable levels present in petroleum products. Natural gas systems, from the source right to the vehicle are designed to prevent loss of the gas to the atmosphere.

Safety

Natural gas as a fuel for vehicles is far less hazardous than conventional petroleum products such as gasoline/petrol, diesel and LPG.

  • Concentrated natural gas is not flammable.

Natural gas is only flammable at a very low and narrow range of concentrations (5 - 15%). The high concentration of natural gas within dispensing facilities, storage cylinders and vehicle fuel systems prevent ignition. Natural gas at the correct concentration for ignition requires a much higher temperature to ignite then petroleum products.

  • Natural gas dissipates rather than pooling around a leak.

Natural gas is lighter than air and therefore dissipates upwards and away from the an accident site should a leak occur. Liquid fuels and LPG are heavier than air and flow or sink downwards pooling around the vehicle and creating a highly hazardous environment where there are potential ignition sources. Should these fuels ignite a conflagration will result and will continue to burn in the immediate vicinity of the accident.

  • Compressed natural gas storage cylinders have a very high factor of safety.

Fuel tanks for liquid petroleum fuels are not highly engineered and are easily punctured during an accident. LPG cylinders are also easily punctured as they are only designed for low pressures. These tanks are low cost and are never required to be retested. Conversely, compressed natural gas cylinders are engineered, designed, manufactured and tested to very high safety standards. Our steel tanks can only be penetrated by a high powered rifle bullet, if they are hit in the middle of the tank and they will not explode or catch fire, but instead will only dissipate the gas into the air in non-flammable form, nor will they explode following being completely engulfed in a fire for an extended period. CNG cylinders are required to be retested every five years to ensure that they remain within safety limits.

  • Compressed Natural gas equipment and facilities must meet the highest safety standards.

CNG systems and facilities in vehicles and refueling stations are designed, built and tested in accordance with Australian and International Standards and in accordance with the relevant government authorities in each state. These standards and requirements are all geared specifically to prevent any hazardous situations eventuating.

Economics

Because of its abundance and reduced processing requirements, the price of natural gas is very low. Currently natural gas is supplied to many homes in many countries around the world at prices about 0.85 cents per Megajoule or about 33 cents per cubic meter. Compared to petrol, a vehicle running on CNG using a domestic compressor would be paying about 26 cents for the equivalent of 1 litre of gasoline/petrol or about $1 per gallon equivalent. Currently it costs about 19 cents for the equivalent of 1 litre of LPG, but LPG produces much less energy per litre than petrol.
LPG prices generally fluctuate in response to world crude oil prices. Presently much of the world relies largely on international supplies of crude oil. There is some indication that oil reserves can be expected to be severely depleted within the next decade. As a result, petrol prices will fluctuate in response to supply and demand, international political events, wars, natural disasters and financial market and commodities price fluctuations. Oil industry experts predict that in Australia, pump prices for petrol/gasoline will reach about $6/litre by year 2020. This would equate to a cost of $360 to fill a 60 litre tank. Currently in the US gasoline prices are running about $3.50/gallon, so it costs Americans about $56 to fill a 16 gallon tank. Imagine filling that same vehicle with CNG, at home, for about $16!

Worldwide natural gas reserves are abundant and increasing. By relying on natural gas resources, CNG consumers can expect consistent, low fuel prices which are not subject to international crude oil price fluctuations.

Inevitable

The Worldwide rise of natural gas as a vehicle fuel is not only inevitable, it is already underway. Natural gas offers a range of advantages to Australia over traditional petroleum fuels and alternative fuels.

  • Natural gas is cheap, abundant, high octane, easily combustible, and widely available throughout Australia and in the USA, through an extensive pipeline distribution infrastructure that reaches out right to our businesses and homes in our communities.
  • It is renewable in the form of biogas production. The harnessing of biogas production resulting from human dumping and waste will help reduce the emission of greenhouse gases into the atmosphere from such sources.
  • As a fuel, natural gas offers significant environmental and public health advantages through reduced vehicular greenhouse gases emissions including particulate emissions.
  • Use of natural gas as a vehicle fuel offers consumers independence from oil producing countries and oil market fluctuations resulting from international political and market influences.
  • Natural gas offers a cheaper alternative than any other available vehicle fuel. Most significantly, USA and Australian natural gas reserves are not subject to the influences that result in fluctuating oil prices.
  • Natural gas is produced by decomposing organic materials and is a by-product of human waste treatment and dumping. This effectively makes natural gas a renewable fuel and natural gas vehicles 'greenhouse neutral'.
  • Vehicle and Engine manufacturers are increasing production and marketing of new factory fitted natural gas vehicles. At the time of our latest survey, these include Honda, Toyota, Isuzu, Volvo, Ford, Chevrolet, Dodge, VW, Mitsubishi, Fiat, Cummins and Mercedes Benz. Consumers should pro-actively inquire with us about used vehicle CNG conversions, as well as with their preferred new vehicle dealer, about current new vehicle model offerings and also consult with their federal/state/local government agencies, regarding current tax incentives or rebates associated with NEW CNG vehicle purchases. We can assist you with used vehicle CNG conversions and also, regarding home CNG refueling stations, which we design, provide and install.

US Government Policy Initiatives being proposed by President Obama


Below is a summary of the President’s comments/proposals relative to CNG/Alternative Fuel initiatives from his State of the Union address in January 2014 that he is presently working on with the House/Congress to implement.
(Note: all relevant statements below copied from Opportunity for All: Key Executive Actions the President Will Take in 2014. Please click on this link www.whitehouse.gov  or visit this website periodically for updated US Government policy initiatives.

  • Increasing Fuel Efficiency for Trucks and Saving Families Money. The President will propose new incentives for medium- and heavy-duty trucks to run on natural gas or other alternative fuels and the infrastructure needed to run them. This builds on efforts at the Environmental Protection Agency (EPA) and Department of Transportation (DOT), as part of the Climate Action Plan, to develop additional fuel economy standards for heavy-duty vehicles, which will drive sustained fuel economy improvements for trucks and buses and adoption of alternative fuels. Already, private sector investments are building natural gas, biofuel, and other advanced fueling infrastructure across the United States just as research is making these technologies more economically and environmentally effective. The President is committed to accelerating adoption of these advanced homegrown, alternative fuels that benefit our planet, our economy, and our energy security.
  • Opening New Markets for American Clean Energy Manufacturers. Under the Climate Action Plan, the President directed his Administration to negotiate an agreement that would eliminate tariffs on environmental goods, including clean and renewable energy technologies.  Such an agreement would accelerate growth in the $955 billion market in annual global trade in environmental goods, which currently face tariffs as high as 35% in some countries.
  • Expanding Fuel Choices for American Drivers.  While the United States will continue to rely on responsibly produced oil and natural gas, President Obama is committed to a long-term policy that allows us to transition to cleaner energy sources.
    • Establishing an Energy Security Trust Fund to Fund R&D for Advanced Vehicle Technologies. In addition to urging Congress to repeal the $4 billion in subsidies that taxpayers provide the oil industry each year, the President has called on Congress to establish an Energy Security Trust and enact reforms to promote diligent oil and gas development on federal lands.  The Energy Security Trust proposal has broad bipartisan support, including retired admirals, generals and leading CEOs, and focuses on shifting our cars and trucks off oil. This $2 billion investment in a range of cost-effective technologies – like advanced vehicles that run on electricity, homegrown biofuels, hydrogen, and domestically produced natural gas – will be drawn from revenues generated from federal oil and gas development. Establishing a dedicated source of funding will allow the Energy Department to maintain targeted and sustained investments that are catalytic and directly advance U.S. energy security.
    • Supporting Investment in Advanced Vehicles and Infrastructure through a New Tax Credit and an Extension of Tax Credits to Support Cellulosic Biofuels. The President is announcing a new tax credit to catalyze investment in the necessary infrastructure to support deployment of advanced vehicles at critical mass.  This proposal would be fuel neutral, allowing the private sector to determine if biofuels, electrification, natural gas, hydrogen, or other alternative fuels would be the best fit in different communities.    In addition, the President proposed to extend the cellulosic biofuel producer credit that expired on December 31, 2013.  Cellulosic biofuels have the potential to reduce petroleum consumption and carbon pollution while boosting rural economic development. Extending the existing tax credit would accelerate development of this transformative transportation fuel.

Tax Incentives


Given the information above regarding President Obama’s newly announced support and initiatives, but considering that the most recent IRS Alternative Fuel Motor Vehicle Credit for CNG vehicles expired on 12.31.13, we recommend that consumers consult with their tax specialist for updated information, or that they visit the IRS website (below) for the updated credits that may become available for the credit above pertaining to vehicles (under Internal Revenue Code Section 30B)…AND for the Alternative Fuel Vehicle Refueling Property Credit (see form#8911 which includes qualifying guidelines and instructions)
IRS website link www.irs.gov


State tax incentives and rebates vary widely from state-to-state in the USA, but as an example…in Florida, there are currently no incentives or rebates for individuals converting their vehicles to CNG, however state funded Grants for commercial/government fleets (3 vehicles or more) provide a rebate of up to 50% of the cost of the vehicles conversion, up to a maximum of $25,000.00. The FL Grant amounted to about $6 million of available funds at the time they were introduced. Consumers and business owners are encouraged to inquire with the appropriate agencies or legislators in their particular state or municipality, to determine what tax credits or government rebates may be available for CNG vehicle conversions AND for installing a CNG home refueling station.


US EPA Regulations

According to their website, in a Regulatory Announcement EPA-420-F-12-058 dated August, 2012, “the U.S. Environmental Protection Agency (EPA) is adopting changes to the regulations found in 40 CFR part 85 subpart F for clean alternative fuel conversion manufacturers. This action affects regulations applicable to manufacturers of light-duty vehicle and heavy-duty highway vehicle and engine clean alterna­tive fuel conversion systems. The revisions will streamline the compliance process while maintaining environmentally protective controls. These systems allow gasoline or diesel vehicles to operate on alternative fuels such as natural gas, propane, alcohol, or electricity. Use of alternative fuels opens new fuel supply choices and can help consumers address concerns about fuel costs, energy security, and emissions. EPA supports such innovation and encourages the development of clean aftermarket technologies that enable broader transportation fuel choices. At the same time EPA is responsible for ensuring that all vehicles and engines sold in the United States, including clean alternative fuel conversions, meet emission standards. EPA is adopting a new approach that simplifies and streamlines the process by which manufacturers of clean alternative fuel conversion systems may demonstrate compliance with these vehicle and engine emissions requirements.  The new approach builds upon the concept that it is appropriate to treat conversions differently based on the age of the vehicle or engine being converted. “

Some Key Elements of the Rulemaking  are as follows... “The Clean Air Act prohibits altering a vehicle or engine from its certified configuration. The revised regulations provide compliance options that allow conversion manufacturers to make the necessary changes without violating the law. “Under the new regulations, testing and compliance procedures differ based on the age category of the vehicle or engine that is converted: new and relatively new, intermediate age, or outside useful life. The new and relatively new category includes vehicles and engines less than about two years old: those of a model year that is greater than or equal to the current calendar year minus one. A certified conversion system retains its tampering exemption even after the certificate expires such that annual re-certification is no longer required. The intermediate age category covers vehicles and engines at least two years old (those of a model year less than or equal to the current calendar year minus two) but still within their regulatory useful life. The outside useful life age category covers vehicles and engines that have exceeded their regulatory useful life” (the standard applied here is 10 years or 120,000 miles). For these last 2 categories of vehicles, “No certificate is issued, and annual re-certification is not required.”

“This fact sheet is a brief informational summary. For further information about this rule, please contact the Compliance Information Hotline at complianceinfo@epa.gov

EPA (Environmental Protection Agency) website link www.epa.gov

 

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