The Wise Gas Soap Box Arena
They say that "everyone has an opinion" and the folks behind Wise Gas, Inc. are no different. Truth be told, we sometimes grow exhausted of listening to each other rant and rave, so this forum has been created as an "outlet".
The essays, editorials and opinions shared here are strictly the opinions of the individual authors. While we see eye-to-eye most of the time, we certainly can not all agree on every issue.
What follows is not Wise Gas corporate policies or positions, merely a collection of points of view that you may find helpful or informative.
All information on this website and the following essays, editorials and opinions are strictly the property of Wise Gas, Inc. and the individual authors. You are welcome to link to any article, we simply ask that you drop us a note to let us know where we can find it by emailing email@example.com. If you wish to use any of the pieces for publication, please contact us directly for permission (which we almost always give).
The most current contribution is available below. Articles have been divided and archived by authors and we encourage you to browse them and take a peak inside the minds behind Wise Gas. (Yes, it often scares us too.)
|The Greene Page|
The Natural Gas Revival:
According to recent media reports, there are some people who believe that $4 per gallon gasoline will result in the loss of hundreds of thousands of jobs due to the reduction in disposable income from higher priced fuel. I disagree with this train of thought based on two theories; one that Americans will drive the vehicle they want to drive, when they want and where they want until they no longer have the physical ability to do so; and two Americans will seek the best way to get what they want and acquire the technology to do so, especially when economically feasible.
Assumptions in this case are the following:
There are three breakeven models that have to be reviewed to determine the economic viability of an alternative fuel on a large scale in the United States: (1) The economic viability of the consumer, (2) the economic viability of the Station owner and (3) the economic viability of the equipment/gas supplier.
First, is it cost effective for the consumer to convert their vehicle to run on CNG or purchase a new vehicle that is capable of running on CNG with NO government subsidies?
Based on our limited market research, we have found that the average consumer is willing to have a three (3) year breakeven on a vehicle conversion to CNG. Now, based on the assumptions of $4.00 gasoline and $2.35 CNG, that would make a vehicle conversion at a price below $7,227 a logical purchase. With a price in the $5000 range, we would not only be able to sway the average consumer, but anyone that is using a minimum of 2.8 gallons per day.
Second, is it cost effective for a station owner to build a CNG Fuel station with little or no government subsidies?
Based on our experience and the experience of our clients we can safely assume that sales of 280-400 gasoline gallon equivalents of CNG per day, initially, with a growth plan averaging four to six times that amount over the next several years can make the station work. In some cases, additional revenue sources may be required for success; such as an alternative fuel vehicle conversion/repair facility and/or a convenience store. The cost of the land, cost of the commodity and cost of the equipment to satisfy the fueling expectations of the customers are the factors that are assessed in determining a stations feasibility.
Lastly, is it cost effective for suppliers? We can answer that simply by saying YES.
What has changed that makes CNG such a viable alternative to traditional petroleum based fuels? The answer is simple; supply has increased faster than demand. Combined with the fact that you cannot convert existing gasoline powered vehicles to electric and considering that the government and private fleets are extending the life of vehicles currently in their fleets due to budget cuts. GM is hoping to sell 10,000 Volts this year and that depends on getting all of the parts they require and getting them shipped out to their dealers on time. That is good, but it is a drop in the bucket of what we need to accomplish in the big picture. For every new Volt that is purchased, we could convert approximately 10 vehicles to CNG and reduce our dependence on foreign oil that much faster.
Now let’s look at the tax implications of CNG. As a domestic fuel, every GGE (gasoline gallon equivalent) of CNG is taxed at the supply level. Let’s assume that number is $200 from each station per month. Additionally, let’s assume that we are reducing at least 10 barrels of imported oil per station per day. At $110 per barrel, we are reducing our trade deficit by $33,000 per month. If our program was fully implemented, we would reduce our trade deficit by $2,739,000,000 per MONTH. Since we aren’t spending it abroad we don’t have to borrow to pay for it, resulting in interest savings of another $990 per month per station or $85,140,000 in savings to the country per MONTH upon project completion.
Now, let’s look at employment. We are currently at a national average of 8.8% unemployment as a country. The hardest hit industry in the country is construction. The development of CNG stations throughout the country will result in thousands of construction jobs, with the resulting lower fuel costs increasing the disposable income enabling people to buy houses and thus revitalizing the construction industry. Assuming we take 5 people off of unemployment per station built, we would save the United States over $2000 per month in reduction of unemployment benefits and increase revenue with payroll and sales tax on the purchases they are able to make. This is not the biggest reason, but half a million permanent jobs and 2.5 million part time jobs would put a big dent in our unemployment costs and give a big boost to our economy.
CNG conversions have exceeded the economic viability test up until this point. What has changed to make this a reality? The EPA has finally created a regulatory and certification process that is affordable, meaningful and realistic allowing more widespread use of CNG. You can read more about the rule change at http://www.epa.gov/otaq/consumer/fuels/altfuels/420f10002.htm.
How many stations can be built in the United States? This is a tough question, assuming 300 vehicles per station upon maturity and assuming that CNG will never exceed 10% of the total fuel picture we would be looking at over 83,000 stations. With an initial cost in the $350,000 range that would be an infrastructure investment of over $29 Billion. Why would the American public want a $29B gaseous fuel infrastructure system in place? The answer is clear: if a hydrogen fuel cell is ever produced that can be sold commercially and cost effectively, it is going to require natural gas and gaseous fuel stations. If electrification is ever going main stream, it is going to require a 480V charging system that is not in place and could be easily added to these stations when electric is being added if the electricity providers will install the equipment on anticipation (a request that was denied by the utility at our first station).
The alternative fuel market is going to happen in pockets; Pockets of acceptance around the country with accommodating utility providers and willing mechanics and permitting officials. Not every group of environmentalists is wrong. Not every group of climate change deniers is wrong. Argument can be made that we are simply in a waxing and waning period between ice ages. Assuming we have another 10 Million years before the next ice age, we have to figure out a way to provide energy to 7 billion people In the World.
The largest number of Natural Gas Vehicles (NGV's) is found in Argentina, Brazil, Iran, Pakistan and Thailand according to Wikipedia. The Chinese are following in the United States footprint. Looking at battery and hydrogen while buying more gasoline powered vehicles. “The entire surface transport of India is based on petroleum fuel, but its availability is of growing concern. The production of domestic crude has been declining and the transport system has been increasingly dependent on imported crude oil to meet its needs. There is a growing concern that the world may run out of petroleum based fuel resources. All these make it imperative that the search for alternative fuels is taken in right earnest.” according to Auto Guide, an Indian publication. The alternative fuels aspiring to take the place of petroleum are the same as all other countries; natural gas, propane, ethanol, electric, bio-diesel, bio-fuel and hydrogen.
China and the United States are very close to having the same amount of vehicles on the road now. The difference is that the United States has an option and China does not. Shell is drilling 17 wells, including for tight gas and shale gas, in China and plans to spend $1 billion a year over the next five years on shale gas in China if its exploration works under way prove a success. China is the early stages of developing shale gas and does not have any reliable reserves estimate of the alternative fuel. Until either a battery is designed that can efficiently and cost-effectively power a vehicle or a hydrogen fuel cell is created with a cost-effective refueling mechanism, China is going to be using oil. As long as China continues to use oil, the demand will exceed the supply at prices below $110 per barrel and likely continue to spike and rescind but constantly increase in price until such time that the reserves are exhausted, whether that is in 20 years or 20,000 years is irrelevant if the cost of extraction makes it economically unrealistic to use.
The United States has 32% of
the world’s vehicles. ( Nearly 1 car per person.)
The United States of America has long prided itself on being a world leader. For our country to fall so greatly behind on a matter which impacts us environmentally, economically and from a position of national security is a travesty. The enormous sums of money being paid to foreign countries – most of which we have tense relationships with at best – is a seriously flawed position – especially in consideration of the fact that in return for the hundreds of billions we are spending annually for a product which is inherently dirty to our environment, unhealthy for our society and an economic burden we can no longer afford to bear.
Whether you believe that alternative fuels must be driven by the frightening status of our economy and bring this foreign problem home to a domestic solution, environmentally in an effort to improve the quality of our air or from a position of ensuring a national security position that does not put us at risk of being controlled diplomatically or financially by other nations – the very real fact we must face today is that this is a change that is long overdue and must be implemented today.
It’s going to take everything we have to make it happen: wind, solar, CNG, electric, biofuels, propane, ethanol, hydrogen, gasoline, diesel, nuclear, thermo, hydro…everything.
Isn’t it time we catch up with the rest of the planet and embrace CNG? www.wisegasinc.com