China's nat gas vehicle explosion

[admin]

From Yahoo

TWST: What is happening in China's natural gas vehicle market, and which of your companies could benefit from growth in China?

Mr. Molchanov: Investors in the United States are probably familiar with the fact that North American gas prices are about as cheap as they've been in the past decade, and of course that creates opportunities for natural gas fuels to become more mainstream in the domestic market.

What investors may be less familiar with is that the trend of natural gas fuels adoption has been progressing much more rapidly outside of North America. So even though the price of natural gas is more expensive in China, in India and certainly in Europe than it is in North America, governments have been much more supportive of developing the natural gas fuels market, and industry adoption has generally been more rapid.

Here is one very specific example for you. In 2013, China plans to build more natural gas fuel stations in one year than the United States has built in its entire history. And in China, who is building these stations? Well, it is the state-controlled energy companies such as PetroChina (PTR).

The government is mainly responsible for this big push, which as far as Washington goes, has not materialized. So there is tremendous opportunity for natural gas fuels in the Chinese market, and I think the growth curve there is likely to continue to be much more rapid than it has been in the U.S.

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With all that shale gas, they should do this in the US as well, if you ask me, but then again, nobody is asking me, haha.

[kommonsents]

I have been a big proponent of NG and LNG technology for transportation for over 4 decades (had a 1973 Ford F250 with dual fuel, gasoline and propane, that could be switched on the fly) and was instrumental in helping some client companies in converting the trucking fleets over to NG and propane over the years.

It makes a lot of sense economically, including up to about triple the engine life and fewer oil changes. I got involved in Westport Innovations, WPT.TO, way back after they went public because I believed in the technology. I have not been disappointed.

There is some efforts to develop the NG/LNG refueling stations along the major arteries of the US. A few years back, a couple major Port Authorities in California decided to require that the big rigs that serviced their ports would be required to use NG/LNG and helped fund the conversions of then present trucks to the new fuel, to swap out engines and to buy new rigs. They built refueling stations on the trucking arteries servicing their ports out several hundred miles (more I think, but don't remember the details).

We will see more of this conversion to NG/LNG for transportation as the refueling stations are developed.

All good for NG/LNG and IOC.

[Palm]

It's not that it isn't happening. Just gaining momentum and will take some people by surprise.

http://news.thomasnet.com/IMT/2013/08/21...formation/

[admin]

It's not that it isn't happening. Just gaining momentum and will take some people by surprise. http://news.thomasnet.com/IMT/2013/08/21...formation/

Well, they better hurry up as alternatives are making ground. I have to admit that I was a big skeptic in relation to electric cars (influenced by a guy called Peterson writing endless technical articles on battery economics on Seeking Alpha), but I take note at what Tesla is doing, and fuel cells, ten years ago trouted as "the future" could stage something of a comeback

[Palm]

A big difference is that in the US you don't hear about it as much because the government isn't out touting it as one of their programs. So rightfully private industry is taking up the charge. Just like developing our own oil and natural gas resources. The government pushes and pushes wind and solar as a way to energy independence and that's still only projected to be a small piece even by 2030; but its in the headlines every day. Large vehicles and equipment are making the switch first to NG. It'll be much more the norm and surprise people IMO. Fossil fuels are the scourge as far as the government here is concerned. And in the end the consumer will decide. And that decision will be largely decided upon cost to purchase and operate.

[kommonsents]

I believe, and have for over a decade, that NG/LNG is the fuel to transition away from oil, including for transportation, which has been underway for years.

The next generation of energy for transportation and for homes, will probably come from fuel cells powered by various fuels including NG/LNG, hydrogen and others using various technologies.

Eventually, I believe the fuel winner will be hydrogen since the supply is inexhaustible and the raw material, water, is so cheap. As the process technology advances, so will the conversions.

In the many decades in the interim, NG/LNG will be the big winner, IMHO.

[trans]

For a great place to start research on this area, I would recommend the following:

1- Clean Energy Fuels (CLNE) - for North America and parts of South America.

2- Westport Innovations (WPRT) - Holds basic patents in the HPDI (important to develop maximum power) area from LNG engines. Venturing into smaller truck engines with many OEM's . This is my favorite. Mostly overlooked by many is the fact that WPRT joint ventures with the largest truck manufacturer in China for LNG/CPG engines. They are huge. They should be well into start up operations.

Yes, I agree this imo is the next fuel technology to be advanced with strong growth, because oil production is gradually slowing down.

[admin]

["The government pushes and pushes wind and solar as a way to energy independence and that's still only projected to be a small piece even by 2030; but its in the headlines every day."]

Wind, as far as I know, doesn't provide the steeply downward cost curve that solar does, and it's not surprising. You put out all kinds of blade designs in a wind tunnel and measure how they perform, and that's about it. Perhaps some different materials can make a few % point changes, but it's nothing compared to the opportunities for cost cutting and efficiency gains in solar.

The wheels are coming off of these 2030 projections. Solar has already achieved grid parity in almost a dozen markets or so, and by 2020 will have achieved that in most, see both stories here:
http://shareholdersunite.com/mybb/showthread.php?tid=4487&pid=27962#pid27962

It's in the headline for all the wrong reasons as the debate is needlessly politicized, which is unfortunate. No single energy source is likely to dominate anytime soon and for the foreseeable future, we need many energy sources as we can develop, but if I was forced to make a bet, solar would be a strong candidate simply because there are hundreds of labs and companies around the world keeping that cost curve steeply declining. A solar cell cost $25/Watt 25 years ago, today that's a little over 50 cents and there is no reason to think this trend isn't continuing. Most other energy sources have upward sloping cost curves, by the way.

Then again, there is always the possibility of a fundamental break-through, a game changer, like perhaps these fuel cells from Redox Power Systems:
http://www.greentechmedia.com/articles/read/the-fuel-cell-to-beat-all-fuel-cells?utm_source=Daily&utm_medium=Headline&utm_campaign=GTMDaily
http://www.technologyreview.com/news/518516/an-inexpensive-fuel-cell-generator/?utm_campaign=newsletters&utm_source=newsletter-daily-all&utm_medium=email&utm_content=20130822

[kommonsents]

Industrial and consumer energy requirements are demand based, not availability based.

Wind and solar are both only available when the wind blows or the sun shines. They both need batteries and inverters along with proper regulation and backup generator to make a reliable system.

And let's not forget the maintenance requirements.

Only a fuel based system can meet the demands that our society requires. However, solar and/or wind along with batteries, inverter and proper regulation and a backup generator makes for an excellent system for one's home, one we intend to install in our next home.

Our next improvement would be a fuel cell.

[sfiaes]

Check out CYD, one of the leading natural gas engine manufacturers in China. Still a relatively small part of their business, but growing fast.

The stock is very cheap with a good balance sheet.