Natural Gas Vehiclesteam.appsci.queensu.ca/documents/PerpetualEnergy-FINAL-Website-2011.pdf · fuel...
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4/24/2011 1 Natural Gas Vehicles Harnessing the power of natural gas at Perpetual Energy Inc. Derek Costeloe | Sheila Pan | Maria‐Rose Spronk | Joy Wakefield | Gary Wu
Transcript of Natural Gas Vehiclesteam.appsci.queensu.ca/documents/PerpetualEnergy-FINAL-Website-2011.pdf · fuel...
4/24/2011
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NaturalGasVehicles
HarnessingthepowerofnaturalgasatPerpetualEnergyInc.
Derek Costeloe | Sheila Pan | Maria‐Rose Spronk | Joy Wakefield | Gary Wu
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Agenda• Background on CNG vehicles• BackgroundonCNGvehicles
• Recommendation
• Cost‐BenefitAnalysis
• Surveyresults
• FuellingStations
• LegalRequirements
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CNGVehiclesOverview
Operation&design
CNGversusLPG
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Operation&Design:Conversion
• EngineoverhaulforCNGcapabilitiescapabilities
• ConversiontoBi‐FueledVehicles
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Operation&Design:Conversion
AutomaticSwitchbetween
l dgasolineandCNGfueltooptimizeCNGuse
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Operation&design:TankStorage
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Operation&design:Emissions
Comparedtogasoline‐poweredvehicle:• Reductioninhydrocarbons,CO2,CO• IncreaseinNOx
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LPGversusCNG
LiquidPetroleum
• Devoted• Heavier,lowerignition
CompressedNaturalGas
• Dual‐fuel• Lighter,higherignition
temperature• Liquid• Tendstopool• Refuellocationswidelyavailable
temperature• Gasform• Dissipateseasilyincomparison
• Limitedrefuelingl ilocations
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CurrentAlberta‐basedCompaniesusingCNGVehiclesCompany Operations
AtcoLtd. • Bi‐FueledFleetVehicles•BuiltmanyCNGfillingstationsinAlberta
EnCanaCorporation •Currently6fleetvehiclesinABusingATCOgasfillingsstations•2nd Quarterintroduce40‐50Bi‐FueledCNGsinStrathmoreandFort NelsonFortNelson•Plantobuildprivatefillingstations,constructedbyEnCanaNaturalGas
CenovusEnergyInc. •25CNGfleetVehiclesinPelicanLake•PrivateCNGfillingstationbuiltbyIMVIndustries
TalismanEnergyI
•PlantointroducevehiclesandbuildafillingstationintheEdsonInc. area
DevonEnergyInc. •PlantointroducevehiclesandbuildafillingstationintheDunvegan area
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FuellingStationTechnologyAvailabletechnology
Currentfuellingstations
Alternatives
Schematic
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FastFillStations
1) Inlet line, filter and dryer • Takes 3 5min1) Inletline,filteranddryer2) Compressor3) Storagecylinders4) Dispensers5) ControlPanel
• Takes3‐5min• BiggestmanufacturerinCanadaisIMWTechnologies
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SlowFillStations• Takes 8 10 hrs• Takes8‐10hrs• InCanada,itismadebyBRCFuelmaker
• Includesasmallcompressor,butnostoragetanks
• ADVANTAGE:Canbeprocuredanderectedquickly,whereverthereisaNGsupply
• POPULARITY:Itisnotapopularp pchoiceamongCNGfleetoperatorsinCanada
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PublicFillingStations
12publicfillingstationsinAlberta,mainlyinEdmontonandCalgary
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FuellingStationSafety
(1) (2)
(3) 1) QuickConnectforPositiveSeal2) DockingNozzleforCNGrefuelling3) CNG Valve set in the Fill Position3) CNGValvesetintheFillPosition
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Recommendations
Conversion
FuellingStation
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Recommendations
• Naturalgasvehiclesprovidecomparableperformancetoconventionalfuels
• Overall,PerpetualEnergyemployeeswouldnotbeopposedtoconversionifinformationisprovided
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Recommendations
• Convert16vehicles• LeasevehiclesfromJPLforconversion
Conversion
• BuildstationtoserveAthabascaregion
FillingStation
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Recommendations
If16vehiclesareconvertedaroundAthabasca:
• $1,052,000over12yearsNPV ($) $ , , yNPV($)
• 6yearsPayback(years)
• 20.55%IRR(%)
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Recommendations
• LeasevehiclesfromJPL• ConvertinAlberta• Conversionkitscanbereused
ShortTerm
• Purchase vehiclesfrommanufacturer
• ConvertinAlbertaLongTerm
• ConversionkitsreusedTerm
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Cost‐BenefitAnalysisSSummary
Conversion
FuellingStations
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ConversionOptions
1 2 3Leasevehicles
Newconversionkit
Leasevehicles
Newconversionkit
Leasevehicles
“Recycled”conversionkit
ConvertinAlberta
ConvertoutsideAlberta
ConvertinAlberta
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ConversionOptions
4P h
5P h
6P hPurchase
vehicles
Newconversionkit
Purchasevehicles
Newconversionkit
Purchasevehicles
“Recycled”conversionkit
ConvertinAlberta
ConvertoutsideAlberta
ConvertinAlberta
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ConversionOptions
7Purchase dual‐fuel CNG
8Purchasedual fuelCNGvehiclesdirectfrom
manufacturer
Forexample,HondaCivicGX
Leasevehicles
Leasingcompanypaysforconversion
PEIpaysincreasedmonthlylease costs
NoneavailableinCanada
leasecosts
Leasingcompanytodoowneconomicanalysis
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Summaryofeconomicanalysis
12YearofOperation
Vehicle# Options
16* 1 2 3 4 5 6DiscountedPaybackP i dPeriod(years) 7 7 6 4 4 4
NPV($) $964,917 $1,042,410 $1,052,380 $2,050,693 $2,128,177 $2,138,147
IRR(%) 19.28% 20.74% 20.55% 25.18% 26.23% 25.98%
*UsingtheAthabascaregion
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Summaryofeconomicanalysis
24YearofOperation
Vehicle# Scenario
16* 1 2 3 4 5 6
DiscountedPaybackPeriod(years) 7 7 6 4 4 4
NPV($) $5,108,479 $5,211,107 $5,332,332 $6,807,618 $6,927,070 $6,943,401
IRR (%) 24 86% 25 89% 25 86% 28 07% 28 94% 28 70%IRR(%) 24.86% 25.89% 25.86% 28.07% 28.94% 28.70%
*UsingtheAthabascaregion
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Costs
Initialconversion(includingkit)
• $11,000‐12,000inAlberta
• $7,500‐10,000(estimated)
Justlabour
• $4,000‐5,000inAlberta
Vehiclemaintenance
• 15%morethangasoline
• $271annuallyhicle
onversion
(estimated)outsideAlberta
Fuellingstationconstruction
Stationmaintenance
Ve Co
• $627,500 • $0.23pergasolinelitreequivalentFu
elling
Station
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SavingsfromNaturalGas
Natural Gas
• $0.27pergasolinelitreequivalent
• Assumed annual usage of
Gasoline
• $1.15perlitre• Annualusageof100%gasolineAssumedannualusageof
75%NG+25%gasoline• Assumedannualgrowthof5%
gasoline• Assumedannualgrowthof13%
Save≅$3,966.68annually
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DepreciationTaxShield
FuellingStation
• Class1at4%over24years
ConversionKit
• Class8at20%over8years
Vehicle
• Class10at30%over4
• Over24years≅ $109,000(beforediscount)
• Over24years≅ $5,000(beforediscount)
years• Over24years≅ $40,000(beforediscount)
Taxrateof28%(2009)
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RiskAnalysis
• Mostsensitiveinputinproject:numberofvehiclesconverted
• Analysisdonewithrangeofvehiclesfrom11‐20
• Resultsshow90%probability thatprojectwillhaveIRRof14.25‐25.53%over12years
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RiskAnalysis
ChangeinInputs• PriceofNGincreaseby
ResultinOptimalScenarioy
50%to$0.41perlitre ofgasolineequivalent
• Costofconversionincreasefrom$12,000to$14,000
• 12‐yearIRRdropsfrom21%to19%
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SurveyResultsInternal SurveyInternalSurvey
• Predictedissues
ExternalSurvey• Mitigation
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InternalSurvey:Format&Responses
Format• One‐on‐oneinterviewwithstandardized
Responses• Overallreactionwascautious
standardizedquestions
• Allowedforopendiscussion&comments
• Understanding
• Moreinformationrequested
• DrivershopedtocommunicatewithcurrentCNGvehicle
• Understandingdrivers’valuesandneeds
users
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InternalSurvey:Purpose
Purpose• Successful project
DrivingHabits• Success also depends• Successfulproject
requiresusersupport• Currentdriversarevaluableresource
• Needtocollectfeedbackfrom
Successalsodependsondrivinghabits
• Firsthanddrivingstatisticsarecrucial
• Valuesareincludedineconomic
currentemployees evaluation
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InternalSurvey:Perceptions&Issues
CurrentPerceptions
HowwillPEIemployeesi th h ?
PredictingIssues
Whatproblemsdol f ?receivethechange?
Willemployeesbeinconvenienced?
employeesforesee?
Driverscanidentifyprospectiveissues
Informationcanhelpfurtherresearch
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EmployeeConcerns
• Shorterrangeonnaturalgasisinevitable
• Overallrangeofvehicleimproved
Willvehiclerangesbediminished?
• Driversgo500kMbeforerefuel,butusingWherewillICNGwillrestrictthis
• Fillingupmoreoftenwillbenecessary
beabletofillup?
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EmployeeConcerns
• EarlyCNGvehicleshadissueswithcoldstarts
• Newtechnologyeliminatesthisissue
CouldCNG
vehicleshandleAlbertawinters?
• Inatruckbed,100Lofstoragedoesnotdrastically reduce space
Willthefueltanklimit drasticallyreducespace
• Maybeaproblemwithtrunkboxes
limitstoragespace?
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ExternalSurvey:Format&Sample
ormat Onlinesurvey
Emphasisonfindingareasofuser am
ple Totalsamplesize:65
Respondentsfrom EnbridgeFo user
satisfaction&concerns
Sa fromEnbridge,Cenovus,Encana &Atco
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ExternalSurveyHighlights
AdvantagesofCNGhi l
Majorconcernsvehicles• Usersgenerallysatisfiedwithallaspectsofvehicle
• Usersmoresatisfiedwithenvironmentalbenefit
• Majority of users would
• Lesscargospaceandvehiclepower
• Lackoffuellingstation(fordailyfuelling)
• MajorityofuserswoulduseCNGvehiclesaspersonalvehicle
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UsersatisfactionCNGVehiclevs.RegularVehicles
Mean
1
2
3
4
51 Safety (on roads)
2 Safety (off road)
3 Fuel Economy (on road)
4 Fuel Economy (off road)
5 Convenience of Refueling (fast fill)
6 Convenience of Refueling (slow fill)
7
Reliability / Doesn't break down
( d )
Mean
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
7 (on roads)
8
Reliability / Doesn't break down
(off road)
9 Maintenance (Speed of Service)
10 Maintenance (Ease)
11 Maintenance (Cost)
12 Environmental Impact
13 Cargo Storage Space
14 E f U 1
2Skew
14 Ease of Use
15 Power (on roads)
16 Power (off road)
17 Winter Startups
18 Overall Performance
‐1
0
1
1 2 3 4 5 6 7 8 9 101112131415161718
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UsersatisfactionCNGVehicle
Mean1 Safety (on roads)
2 Safety (off road)
3 Fuel Economy (on road)
4 Fuel Economy (off road)
5 Convenience of Refueling (fast fill)
6 Convenience of Refueling (slow fill)
7
Reliability / Doesn't break down
( d )1
2
3
4
7 (on roads)
8
Reliability / Doesn't break down
(off road)
9 Maintenance (Speed of Service)
10 Maintenance (Ease)
11 Maintenance (Cost)
12 Environmental Impact
13 Cargo Storage Space
14 E f U
1 2 3 4 5 6 7 8 9 101112131415161718
0.5
1
Skew
14 Ease of Use
15 Power (on roads)
16 Power (off road)
17 Winter Startups
18 Overall Performance
‐1
‐0.5
0
1 2 3 4 5 6 7 8 9 101112131415161718
SurveyCategory
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CargoSpaceCargoSpaceRelativetoRegular
Vehicle
• >80%rateasworse,but
• 70%aresatisfiedwithcargo
Vehicle
MuchWorse
Worse
TheSame
ABitBetter
Much Better
space
• Tankreducescargospace
MuchBetter
CargoSpaceSatisfaction
Very Unsatisfied
butlimitedimpactonlong‐
bedtrucks
VeryUnsatisfied
Unsatisfied
Satisfied
VerySatisfied
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CNGVehiclePowerEnginePowerOnRoadsRelative
toGasolineVehicle
• 80%aresatisfiedwithpowerinCNGvehicles,although
to Gaso e e c e
MuchWorse
Worse
TheSame
ABitBetter
Much Better although
• >45%rateitasworsethanregularvehicles
MuchBetter
OnRoadPowerSatisfaction
Very UnsatisfiedVeryUnsatisfied
Unsatisfied
Satisfied
VerySatisfied
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SurveyComments
Difficultyinfindingfuellingstation• 98%usefillingstationsownedandoperatedbythesurveypersonnel’scompany.ConvenienceofrefillingCNGvehicleshasbeenratedasequallysatisfactoryasrefillingconventionalvehicles.
Inconvenienceofdailyrefuellingy g• 62%refueldaily,and23%refuel2‐3timesperweek.Dailyrefuellingrepresentsaninconvenience,butdoesnotimpacttheoverallperformanceofCNGvehicles.Theaveragefillingtimeis5.8min.
Stallingproblem• This risk is likely introduced by the improper conversion of the vehicle 86% felt it• Thisriskislikelyintroducedbytheimproperconversionofthevehicle.86%feltitwaseasytouseaNGV.
CNGfuellingstationmaintenancecostsarehigh• AconservativeestimateforthefuellingstationmaintenanceisaddedtotheCBA
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CNGVehiclesforPersonalUse
• 81%wouldconsiderusingaCNGvehiclefortheirpersonalvehicle
• OneNGVoperatorindicatesthathe/shewouldonlybuyaNGVvehiclemadebyacarmanufacturer,withtheguaranteesthatappliestoanewvehicle
• Concern:safetyissuewithCNGtankinthevehicle
Accordingtothesurvey,usersareequallysatisfiedwithCNGvehiclesafetyasconventionalvehicles.TheGovernmentofCanadasaysCNGvehiclesaresaferinacrashthanregularvehicles.
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LegalRequirementsMunicipalRequirementsp q
ProvincialRequirements
FederalRequirements
InternationalTrends
CommonLawobligations
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MunicipalRequirements• New commercial buildings• Newcommercialbuildings,commercialaddition,accessorystructure,demolition
• Performanceguarantee(refundable) or Development(refundable)orDevelopmentagreement
• Permitsforbuilding,gas,electricalandplumbingmayapply (they range from a coupleapply(theyrangefromacouplehundredtoacouplethousanddollarsdependingonthesizeoftheproject)
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ProvincialRequirements
• SignApplication(possible)– Nocost
• RoadsideDevelopmentApplication(possible)
• TankRegistrationCertificate
• CertificateofInspectionPermit(BoilerorPressureVessel)
• CommercialVehicleRegistration(PEIlikelyhasthis)
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FederalRequirements•• Standards for vehicles/stationsStandards for vehicles/stationsStandardsforvehicles/stationsStandardsforvehicles/stations
–– CSACanada'sPassengerAutomobileandLightTruckCSACanada'sPassengerAutomobileandLightTruckGreenhouseGasEmissionRegulationsRenewableFuelsGreenhouseGasEmissionRegulationsRenewableFuelsRegulationsRegulations
–– MotorVehicleSafetyRegulationsMotorVehicleSafetyRegulations
–– CNGFuelSystemIntegrityCNGFuelSystemIntegrity
•• TaxTax–– noexcisetaxonnaturalgasnoexcisetaxonnaturalgas
•• RegisterRegisteraStorageTankSystemaStorageTankSystem&inspection&inspection
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EnvironmentalTrends• United Nations Framework Convention (UNFC)• UnitedNationsFrameworkConvention(UNFC)onClimateChange– CopenhagenAccord
• KyotoProtocol
• EnvironmentEnvironment• CanadianEnvironmentalProtectionAct1999
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CommonLawObligations
• Contracts
– Lease
Sale Agreements– SaleAgreements
– Contractors
– Employment
– Interprovincialconcerns
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KeyTakeaways
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KeyTakeaways
PerpetualEnergyInc.should:
√Proceedwithconversionusingleasedvehicles
√BuildfuellingstationnearAthabascafieldoffice
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KeyTakeaways
EmployeePerceptions:
√TheperformanceofCNGvehiclesshouldbesufficienttosatisfytheyrequirementsofPEI’sfieldstaff.
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KeyTakeaways
PerpetualEnergyshouldseekcooperation with other companies lookingcooperationwithothercompanieslooking
toexpandnaturalgasuse
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M i R JMaria‐Rose Joy Sheila
Thank you!
Gary Derek
Thankyou!Questions?
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Credits
Thankyouto:
OurclientJeffGreenandPerpetualEnergyOurprofessorDaveModyOur advisor & team of staffOuradvisor&teamofstaff
