China Using More Natural Gas Vehicles

We were excited that person else finally brought it up.

In a recent telecasting interview, Daniel Boone Pickens told a newsman he was surprised to detect there were 9,000 buses in People'S Republic Of China running play on natural gas.

In an epoch of unreassuring planetary heating events, it's hard to reason with a transportation system system that have proven to cut down particulate emanations by 95 percentage compared to Diesel engines and which also cut downs C monoxide and N oxides by 75 percentage and 49 percent, respectively.

Those are the statistics UPS supplies with sees to its 800 vehicles now running on compressed natural gas (CNG). UPS have the biggest private CNG fleet in the United States.

Many metropolises in People'S Republic Of China could utilize the same clean air treatment. And like anything Chinese, natural gas ingestion looks to be moving forward at breakneck speed.

Air pollution in Peking and in many other rapidly growing Chinese metropolises have been a shrewish aching in the side of China's leadership. The recent growing jet of car usage, replacing decennaries of bicycling, have got additional aggravated the untenable air climate. Compound this factor with Beijing's authorization to make clean up the air in clip for adjacent summer's Olympiad, and the first appropriate mark are the vehicles.

Although Peking won't convert its transportation system fleet that fast, every small spot assists in the strategy of things.

According to the International Association for Natural Gas Vehicles, the most recent (and mostly outdated) statistics demo more than than 6.3 million natural gas vehicles (NGV) and over 10,000 NGV refueling stations. As of January 2005, People'S Republic Of China stood just behind the United States in planetary rankings for such as vehicles, respectively 8th and ninth.

The figure of NGVs compared to traditional gasoline- and diesel-powered vehicles is a driblet in the bucket. But some of the more than ambitious trade groupings trust to attain a mark of 50 million by 2020.

China offers the most contiguous promise, which is probably what drove Daniel Boone Pickens to this marketplace. His California-based Clean Energy Fuels Corporation supplies 200 fleet customers, which have got about 13,000 NGVs, with the refueling capablenesses for those vehicles with the company's 168 natural gas refueling stations.

By edifice statistical distribution networks, corporate and authorities consumers can more readily entree the natural gas to powerfulness their vehicles.

This fact is evidenced by the impulse of bantam People'S Republic Of People'S Republic Of China Natural Gas, which is servicing the metropolis of Xi'an inch China's Shanxi province. Maybe you've never heard of the town, but the metropolis now touts a population of about 8 million. Compressed natural gas reportedly powerfulnesses 20,000 taxis, 3,000 buses and 2,000 particular intent vehicles. Over the adjacent three years, the city's leadership trust to nearly dual those numbers.

China Natural Gas now have 23 CNG filling stations in the metropolis and hopes to spread out outside Xi'an and into Henan province. Since late April, the company's shares have got more than than tripled in value.

Boone Pickens visualizes a large chance in China's natural gas for transportation system purposes. Generally, gas is used to fuel electrical powerfulness works or for cooking. We first brought up the accelerating usage of NGVs in our recent publication, "Investing in China's Energy Crisis," because of China's battle to quickly and efficiently importation sufficient oil to powerfulness its economy.

Face it, People'S Republic Of People'S Republic Of People'S Republic Of China have a monolithic energy appetite. Pickens remarked during a recent telecasting interview, "The activity is unbelievable." In former articles, we compared China's energy-consumption and enlargement to the Anglo-American-European Industrial Revolution during the eighteenth century.

China's Coalbed Methane Activity Intensifies

China have a immense appetency for foreign investing to develop all phases of the natural gas combustible cycle. We have got focused our insurance on the presence end of the cycle, especially on coalbed methane gas. This do sense for People'S Republic Of China as the state have one of the most plentiful stores of undeveloped coalbed methane (CBM) gas on the planet. In addition, the state have a long tradition of coal excavation and expertise. CBM come ups from coal ours and People'S Republic Of People'S Republic Of People'S Republic Of China have the biggest figure of operating coal ours in the world.

Speaking with Phil Flynn of Alaron Trading in Chicago, he told us about China's thrust to powerfulness their transportation system system with natural gas, "We are old age behind China." He pointed out that shift over in the United States would go a nearly impossible venture. "We don't have got the supply," he said. "We would have got got to bore under the Rocky Mountains and under the Great Lakes, and then we would still go dependent upon natural gas imports."

China have already begun the country's political campaign for an energy crossover.

About twelve calendar months after China's National Development and Reform Committee (NDRC) announced it approved the country's coalbed methane development plan, new developments have been parading across our microwave radar nearly every week. The committee targeted production to attain 10 billion three-dimensional metres by 2010.

On June 27, Shanghai CIMIC Life invested $196 million to develop a coalbed methane undertaking in Jiangxi province. Construction is already underway.

On July 4, People'S Republic Of People'S Republic Of People'S Republic Of China National Petroleum Corporation began exploring a new coalbed methane find in the Xinjiang Autonomous region.

On July 6, Shanxi Ganghua Coalbed Methane Corporation began building of China's first big scale of measurement CBM undertaking – a coalbed methane liquefaction project.

On July 8, a PetroChina (NYSE: PTR) subordinate signed an understanding with Shanxi Energy Industries to develop a CBM land site in northern China's Shanxi province. The World Depository Financial Institution will finance US$80 million of the US$190 million project.

On July 20, the metropolis of Shenyang, and working capital of Liaoning province, announced it would get increasing its coalbed methane ingestion in the region's heavy industries to assist cut down the degree of pollution in the area.

On July 24, China's NDRC approved a proposal from the first foreign company to develop a coalbed methane mine in China's Shanxi province. Asiatic American Gas is the first foreign company to obtain NDRC blessing in 20 years, and the first to make so in partnership with state-owned China United Coalbed Methane (CUCBM) since this corporation was formed. The plan's initial capacity was reported at 500 million three-dimensional metres annually. We reported in late January that U.S. coal baron, E. Lewis Henry Morgan Massey, had backed this company.

China is optimistic about the country's coalbed methane reserves. Two old age ago, Xu Dingming, a manager of the NDRC's energy agency estimated that China's CBM militia were roughly like to the country's natural gas reserves.

In December 2006, China's Ministers of Finance, Customs and Tax agreed to present taxation interruptions to companies which imported equipment for the development of coalbed methane resources.

This notice came after it was reported that China's CBM-utilization had failed to ran into the targeted 36 percentage – falling short by nearly one-third. Since then, state-owned companies and the authorities have got been intensifying their attempts to speed up CBM geographic expedition and development in China's coal fields.

Over the adjacent twelve months, we anticipate these attempts to intensify CBM development to a more than highly seeable international level.

More Players Entrance China's CBM Sector

One of the jobs in the United States, according to Phil Flynn, is complacence with storage numbers. "Natural gas storage is a buffer against supply," he said. "But if we have got got utmost weather condition this summertime or a long, cold winter, production can't maintain up with demand." He pointed to the spike followers Hurricane Katrina in the summertime of 2005.

The Chinese don't have this buffer. Instead, they are faced with either additional straining the world's energy beginnings by importing natural gas (and crude) or by developing their domestic energy fields.

The important news from Asiatic American Gas, a privately held company which we previously covered, is encouraging for others now developing their projects.

Companies we've featured in the past – such as as Far East Energy, Green Dragon Gas and Pacific Ocean Asia People'S Republic Of China Energy – have moved their undertakings forward against a very bearish tide. We believe they are well-positioned to follow in the footfalls of Asiatic American Gas. Current end product is modest at the company's six diagnostic test Wells at 300 thousand three-dimensional meters, but again, this is a nice start.

Many North American investors haven't yet looked beyond their boundary lines in developments for natural and coalbed methane gas projects. The terms of natural gas in North United States is relatively meaningless in Peking or Xi'an.

These companies should profit from China's recent acceleration to obtain more than methane gas, natural or CBM, to powerfulness their vehicles. The norm autobus consumes about 70 three-dimensional metres of compressed natural gas per twenty-four hours (CNG). A typical hack utilizes an norm of 30 three-dimensional metres CNG every day.

A strong merchandising point for the increased usage of natural gas vehicles: the terms of fuel. A loanblend vehicle, which also utilizes compressed methane gas, cuts the refueling cost by 60 percent. How would the U.S. consumer feel about paying $1.20 per gallon instead of $3/gallon at the gas pump? Probably the same manner – one three-dimensional metre of compressed CBM gas is the equivalent of 1.13 litres of gasolene and retails for less than half.

As we pointed out in late June, establishments have got begun investment in this sector. With the adjacent unit of ammunition of conferences in North America, during the 4th one-fourth and early adjacent year, we surmise more than establishments should take China's coalbed methane undertakings more seriously. 'Celebrity' name calling such as as Daniel Boone Pickens, Lewis Henry Morgan Massey and others supply a comfortableness degree for many cautious investors. But then again, it is the innovators who do the greatest money, if the undertakings materialize.

In early July, W.R. Hambrecht rated Clean And Jerk Energy Fuels a "buy" with an $18 terms target. During his recent telecasting appearance, Pickens noted another two analysts picked up on the company. And we couldn't hold more than with Pickens, judging from electronic mails readers have got sent us. Pickens thought people didn't really understand the story, at first. Now as more than have got digested what is taking place, Pickens said, 'they like the story.'

And we completely hold with Pickens' remarks to reporters, saying, "We believe that (natural gas refueling stations) will be very large concern in China." This development is not unlike the growing of cellular telephones in China. The state skipped the tremendous substructure execution for traditional landlines and zoomed to mobile telecommunications. Judging from our communications, and from what others have got told us, the lucidity of response and dependability surpasses the criteria in North America.

Building more than NGV refueling stations will assist thrust the demand to convey more natural and CBM gas into China's statistical distribution network. It is probably a major gun trigger to capture both international mass media and investor attending for this sector.

While we take natural gas for given in the United States, the Chinese have got taken this combustible beginning very seriously and embraced it. By devoting their energies in developing their transportation system systems with increased natural gas consumption, the country's flagitious pollution history might be reversed.

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