Gas our great hope
A large-scale switch to LPG won’t happen until petrol prices rise, writes NEIL McDONALD
GAS is the one fuel that can safeguard Australian transport from a global energy crisis. Transport analyst and managing director of energy group Rare Consulting Mark McKenzie has told a conference on gaseous fuels that, with abundant local supplies of LPG and LNG, Australia has to secure its energy independence.
‘‘We will have a fuel deficit by 2030,’’ he says. ‘‘Australia’s oil self-sufficiency will decline from 54 per cent in 2007 to less than 20 per cent by 2030 and possibly as low as 10 per cent if forecast oil discoveries are not realised.’’
McKenzie believes gas is a fuel of the future, particular given that transport consumes three quarters of oil supplies in Australia. ‘‘There is a good strategic fit for gas,’’ he says. ‘‘The other thing about LPG is we have all the infrastructure in place.’’
Currently Australia has 3200 LPG filling stations. ‘‘That’s one in every two service stations,’’ he says.
McKenzie sees LPG as a passenger-car mainstay, with LNG and CNG being more widely used in the heavy transport sector.
The benefits of LPG are well documented. It delivers lower emissions, can be used in diesel engines, generates less engine wear and is half the cost of petrol.
Australia’s gas reserves should last another 65 years, according to Geoscience Australia. McKenzie believes newer and more reliable LPG injection systems will help accelerate demand. However, another conference delegate, GM-Holden energy and environment director Richard Marshall, warns Australian motorists are unlikely to switch to LPG in great numbers while petrol remains relatively cheap.
Government incentives have helped get buyers into LPG-powered vehicles and its taxfree status means it is cheaper at the pump.
On the LPG excise question, McKenzie accepts it will affect growth to some extent when it comes in from 2011, but he says the fuel must start paying its way.
LPG attracts no excise until 2011, at which time a tax of 2.5c a litre will be introduced, increasing by 2.5c each year until July 1, 2015, when it will be capped at 12.5c a litre. McKenzie says the Federal Government could use a tax-free inducement for the development of other new fuels such as bio-fuel.
‘‘One challenge in terms of some of the new fuels, particularly bio-fuels, is they will not be competitive without that excise exemption, ever,’’ he says.
‘‘We should be looking for fuel sources that just need a window of exemption to allow them to gain a foothold in the market on the understanding they will be able to pay their way in the future.’’
Last year about 120,000 ex-factory and retro-fitted LPG cars were sold. Orbital Autogas Systems’ Tony Fitzgerald told the conference he expects 150,000 LPG vehicles will be sold each year by 2015. Of those, about 80,000 will have factory gas systems, and liquid injection and sequential vapour equipment will take over from the older systems.
Less than 5 per cent of Australia’s LPG fleet uses sequential injection, but Fitzgerald believes the rate of growth will accelerate.
‘‘One challenge the LPG industry faces is the range and degree of some of the technology,’’ he says. ‘‘Some needs improvement.’’
More gear: newer and more reliable injection systems will attract buyers.