Trinidad & Tobago Warms to Compressed Natural Gas

Fuel subsidies for premium gasoline and diesel are being cut as part of Trinidad & Tobago’s drive to promote switching to CNG. The Caribbean country is a major natural-gas producer, having proven reserves of 25.2 trillion cu.-ft.

Andrew Burnyeat

March 7, 2016

5 Min Read
Chinese company helping convert ldquomaxitaxis to run on CNG
Chinese company helping convert “maxi-taxisˮ to run on CNG.

A tax-incentive scheme launched by the government of Trinidad & Tobago has auto converters and dealers increasingly talking up compressed natural gas as a clean fuel for vehicles on the twin island Caribbean state.

Fuel subsidies for premium gasoline and diesel – the current choice of most of the country’s 1.3 million citizens – are being cut and the move is accompanied by a drive to promote switching to CNG. The country is a major natural-gas producer, having proven reserves of 25.2 trillion cu.-ft. (719 trillion L).

Strategic partnerships to develop CNG supply and infrastructure have been in place for some time.

Trinidad & Tobago’s National Gas Co. signed a memorandum of understanding in February 2014 with China’s ENN Group to accelerate the country’s CNG program with the construction of 22 dispensing points and the conversion of 300 buses and some high-use vehicles and maxi-taxis.

Meanwhile, NGC CNG, a subsidiary of NGC, executed a memorandum of understanding with Trinidad & Tobago National Petroleum Marketing and United Independent Petroleum Marketing in May 2014 with plans to invest TT$2 billion ($306 million) over five years to convert 17,000 vehicles and build NCG-only fuel stations.

The country has 12 CNG filling stations with plans to open four more this year. In addition, NGC says, mobile filling stations will “make CNG available where there are no physical pipelines.”

As well as removing and reducing subsidies for other fuels, the government has scrapped motor-vehicle and value-added taxes on imported vehicles less than 2 years old that are made to run on natural gas.

Individuals receive a 25% tax credit on the cost of converting to CNG up to TT$10,000 ($1,534) per vehicle.

Fleet owners can take advantage of a capital writeoff of 130% for wear and tear on the cost of converting to CNG. Installers get a similar 130% writeoff on the cost of plant, machinery and equipment needed for CNG installations.

A Politician's Magic Potion? 

Speaking in 2013 after a meeting with China’s ENN, then-Trinidad & Tobago Prime Minister Kamla Persad-Bissessar cited major public policy benefits from using inexpensive CNG.

“If we can take that (petroleum) subsidy out, not by giving people the petrol at a higher price but by instead using CNG which is cheaper for us to produce, then I can save TT$4 billion ($614 million) which I can then put into hospitals, into schools, into roads, whilst at the same time offering fuel, the CNG, at a reduced cost to our public.”

Persad-Bissessar lost an election in September to new Prime Minister Keith Rowley, whose government has said it will continue the CNG conversion policy. Finance Minister Colm Imbert said in October the new government would “support the present move to compressed natural gas in light of its environmental benefits and the positive impact on reducing the subsidy on transportation fuels.”

As a result, the federal budget increased the price of premium gasoline 15%, from TT$2.7/L ($0.41) to TT$3.11/L ($0.47) and diesel by 15%, from TT$1.50/L ($0.23) to TT$1.72/L ($0.26). Despite this, “even with these increased fuel prices, the fuel subsidy in 2016 is still expected to exceed TT$1 billion ($153 million),” Imbert warned, highlighting the benefits of increased CNG use.

The conversion project is being noticed around the world, and other initiatives with CNG are under way.

Keevin C. Larson is president of Pennsylvania-based KC Larson, which designs and installs CNG fueling stations in the U.S.

“I fuel one of my company pickup trucks with CNG at my office,” he says. “At present, it costs $1 per gasoline gallon equivalent.” This compares with Trinidad & Tobago’s CNG cost of $3.80 per gallon.

CNG conversions cost $2,500 for a car but can rise to $8,000 for a pickup truck, Larson says, adding: “There is a point where it is not cost effective to put a new CNG conversion system in an aged and heavily used vehicle – unless the same conversion kit can be installed within another vehicle once the old one is towed to the junkyard.”

Questions About Hardware

If Trinidadians are tempted by the prospect of inexpensive, clean CNG, any new car they buy must be capable of cost-effective conversion.

But there are other issues: “Incentives are great – but as demand increases, the availability of mechanics to convert and maintain CNG conversion components – and overall infrastructure – must be able to keep up,” Larson says.

Nevertheless, he says, all major automakers are planning ahead to allow for CNG conversion. The benefits could be huge, he adds: “No gasoline, oil or diesel spills, cleaner air, less commuting energy cost. People can fill their vehicle with CNG at home or at work, increased engine life, and so on.”  

John Lincoln, CEO of Australia-based OES CNG, which works with local and national governments around the world to develop CNG networks, says a vehicle running on CNG could travel two or three times as far as one fueled by gasoline. For $10 of fuel, a motorist could drive 195 miles (314 km) on CNG compared to just 65 miles (104 km) on gasoline, he notes.

CNG is the future of automobile fuel “in many countries where natural gas is naturally available,” such as the U.S., Australia, Argentina, India, Iran and many European states, Lincoln says, adding: “Other countries like Israel and Puerto Rico are currently importing liquefied natural gas, a liquid form of CNG.

“Much of Europe is piping it in from Russia and the Middle East. It is very abundant and so inexpensive. In fact, you can make it at home with sewage, food waste and garden cuttings.”

New CNG engines made by U.S. manufacturer Cummins are being installed in school buses and trucks.

“We convert cars for around $3,000 per vehicle, and we do a dual conversion, meaning you can run on gasoline or natural gas,” Lincoln says. 

Most U.S. states provide 50% rebates if three or more cars or fleet vehicles are converted. Almost any fuel-injected car can be converted.

Europe has 3,000 CNG filling stations but most of them are in just a few countries; Germany and Italy have around 1,000 each.

Fuel prices vary from €0.4/kg to €1.70/kg, with most countries charging around €1/kg.

A report on CNG and liquid-gas fuel from U.K. supplier Gasrec found gas-powered heavy trucks could reduce carbon-dioxide emissions 96% and NOx emissions 78%.

Gasrec CEO Rob Wood is lobbying the U.K. government for help: “Time is now running out for the government to tackle this critical issue.”

– with Juhel Browne in Port of Spain


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