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Page added on October 31, 2012

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China prioritizes use of natural gas by vehicles, ships


China unveiled on Wednesday a natural gas policy designed to spur the transport sector’s use of the cleaner-burning fuel, and particularly of liquefied natural gas (LNG), as the world’s second-largest user of fuel reins in consumption of dirtier oil.

Besides homes, utilities and factories, the government for the first time targeted the transport sector, covering buses, taxis, trucks, and vessels as preferred users of natural gas, according to a document published on the website of the National Development & Reform Commission (

“It’s certainly a good policy that will see gas replacing quite a lot of diesel, which is the main fuel used in China’s transport sector and is much more polluting,” said analyst Yan Kefeng of Cambridge Energy Research Associates (CERA).

The world’s top energy user is poised to triple natural gas use to meet about 10 percent of total energy demand by the end of this decade, to cut emissions from coal use, and dependence on oil imports.

The policy push would lead to the world’s biggest fleet of LNG-fuel led vehicles, as it is both cheaper and more efficient than the conventional gasoline and diesel, experts have said.

To supply the fuel, leading energy firms CNOOC Ltd , PetroChina and Sinopec Corp are building a string of facilities along China’s eastern shore to import LNG, gas super-cooled to liquid form for shipping in tankers.

Others are building smaller plants inland to liquefy natural gas from gas fields distant from the main pipeline networks. LNG tankers then truck them across the country to end-users.

In the eastern province of Jiangsu alone, the number of LNG-fuelled vehicles is expected to exceed 6,000 by 2015. Southern Guangdong province wants to replace LPG, a more costly refinery product, with LNG for buses.

In the NDRC statement, the government bans use of natural gas as feedstock for making methanol or the base-load gas-fuelled power generations in coal-rich regions.

It also curbs use of natural gas to produce fertilizer.

“Natural gas is still a precious resource in China, so the government wants to manage the demand side as well,” said Yan.

The NDRC, China’s top economic planning agency, also said it would push gas price reform and establish a better link between prices of natural gas and alternative fuels. A pricing link between gas production and consumption and a seasonal gas pricing system are also in the pipeline.

Beijing last revamped its gas pricing model in December 2011, freeing up wholesale prices for unconventional gas and launching a pilot scheme to link domestic gas prices to imported fuel.


6 Comments on "China prioritizes use of natural gas by vehicles, ships"

  1. BillT on Wed, 31st Oct 2012 12:38 pm 

    Easier to do when the government can just say…”Do it” and doesn’t have to wait for the profit levels to make the banksters drool over the profit possibility. Not going to happen in the Us. The gas bubble there will burst before anything major can be built to use it. And try to get more than a few percent of the 200,000,000 drivers to convert to LPG. lol.

  2. DC on Wed, 31st Oct 2012 12:50 pm 

    IS this just like how China was going to promote the hell out of so called ‘hybrids’ and EV’s. How did that turn out? Not even 1% of all the garbage bins clogging China’s shiney new road system are either. Gas burners as far as the eye can see. Somehow, I dont think this new found love of NG burners is going to have any more effect than the love for say, EV’s had.

  3. BillT on Wed, 31st Oct 2012 1:38 pm 

    DC, the Chinese leadership can dictate changes and will if they need to. All they have to do is stop making gas/diesel hogs and switch to LPG cars. They don’t have enough on the highway yet to make a difference anyway.

  4. Ham on Wed, 31st Oct 2012 2:28 pm 

    Correct me if I am wrong, I am no engineer, but is it not the case that only propane and butane (as a mixture) can be used? The majority of natural gas is methane is it not?
    It is that old chestnut, exponential increase that is our blind, irrational answer; growth, growth, growth. When are we going to stop banging our heads against the wall and realise that growth is impossible on a finite planet? We do not lack for infinite stupidity that for sure.

  5. fea_seat on Thu, 1st Nov 2012 11:24 am 

    It is good to have this policy but the question is are the people in china willing to obey this policy. Good governance depends on the governtment and its society.

  6. Kenz300 on Thu, 1st Nov 2012 6:07 pm 

    Oil has had a monopoly on transportation fuels for too long. This will come to an end caused by higher prices for oil.

    Bring on the electric, flex-fuel, biofuel, hybrid, CNG, LNG and hydrogen fueled vehicles.

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