- Close to 1 million NGVs
- More than 1,000 fuelling stations
- 140 cities served by natural gas
- Government support  to displace diesel from metropolitan buses

Background

The search for alternative fuels in Brazil was first initiated in the 1940s, becoming more intensive in the early 1970s, when the country faced the impact of the first oil shock. At that time, limited data was available on oil and gas reserves in the country, and Brazil start producing automotive fuel in large scale, from biomass.  Today, the gasoline sold in every fuelling station in the country is oxygenated with 25% sugar cane ethanol.

Natural gas was first used as a fuel in light vehicles in 1996. This was a result of a new law that extends this application, previously authorized only to metropolitan buses, to all type of vehicles. Starting slowly, the natural gas vehicle (NGV) industry has progressed to a point where close to 1 million vehicles are on Brazil’s roads, a remarkable number in only 9 years. Most of these vehicles are aftermarket converted taxicabs or commercial medium duty vehicles. 

Conversions

Aftermarket conversions are subject to two sets of regulations. The first is related to the quality and safety, issued by Inmetro, and the other is the environmental set of rules applied to NGVs, issued by Ibama . Both Inmetro and Ibama are government entities with responsibilities  in those areas. A recent report from Ibama has demonstrated the environmental benefits of the aftermarket converted  NGVs in comparison with a 2004 gasoline engine, as shown in the diagram. 

 
Natural Gas Supply and Demand

Brazilian natural gas proven reserves is 316 billions cu.m and new discoveries are estimated to be 419 billion cu.m. The projected demand for 2010 has been estimated as 100 million cu.m/day, assuming the country would be capable to import 30 million cu.m/day from Bolivia. The recent political crises in Bolivia has generated some concerns, requiring a review of existing efforts and investments on the Brazilian side, to eliminate the possibility of a potential shortage in the future. Total consumption today is 39 million cu.m/day. NGVs consumption represents 13% of this total.

Today, the production and transportation of natural gas in the country is handled by Petrobras, and delivered at city gates to different gas companies in every state, which has the responsibility of distributing the fuel to their customers, including thermal generating plants, industrial customers, residential customers, fueling stations, etc. 

Refueling Stations

Brazil is a recent arrival in the natural gas arena. This was partially due to the fact that a great portion - 44% - of country’s primary energy requirements comes from renewable sources, mainly hydroelectric. Second, for a long time the known gas reserves of the country were located in the Amazon region, very far from the consumption market.  Just recently, with the help of new developed technologies applied to deep ocean exploration, it has become possible to identify large gas reserves, close to the consumption points. As a result of that, the natural gas distribution network is still in construction in a large portion of the country. NGV fuelling stations have been a powerful feasibility instrument to justify the construction of pipelines in areas that otherwise may not have been viable.

In the last two years, where a pipeline is not available, a “mother-daughter” system has been developed, which is operational in several areas within a radius of 150-200 km from a pipeline source. Right now, there is an LNG plant under construction in the Southeast region, planned to start-up next year, which will be of great help in hauling liquid natural gas to remote locations.

The country today has more than a thousand stations spread throughout 140 cities. Most of these facilities are multiple fuel filling stations, where the natural gas has arrived later. However, space availability and other constraints mean that this is not always possible.

OEMs

The majority of global automakers have industrial plants in the country. Their total capacity has been disclosed as three million vehicles per year. Sales last year were close to two million internally, plus some exports. 

The big successes today are ‘flex-fuel’ cars. These units are different models re-designed to run with gasoline or ethanol, or a mix of both in any proportion, using a single fuel tank. In April, the industry sold approximately 50,000 flex-fuel vehicles in Brazil. The technology to make vehicles capable of running with a third fuel, natural gas, is available, as developed by Bosch and Magnetti-Marelli, called tri-fuel. The picture shows a tri-fuel VW Polo 1.0. However, OEMs are concentrated in producing the flex-fuels, which are sold at the same price as a regular gasoline vehicle, while the tri-fuel vehicles are more expensive.

Government Involvement and Support

In some large metropolitan areas, like Sao Paulo or Rio de Janeiro, the government has been planning to promote programs to displace diesel with natural gas in the city buses. Strategies are being developed to resolve issues such as technology, price differentials to diesel engines and fuel, taxation, and operating and maintenance practices used today, to make natural gas attractive to fleet operators. This is a niche that is expected to grow significantly in coming years. 

Another interesting project in discussion, to be developed in the south cone of South America are the ‘Blue Corridors’. When implemented, this will interconnect some cities such as Rio de Janeiro and Sao Paulo, with Buenos Aires (Argentina), Montevideo (Uruguay), and Santiago (Chile).  These corridors are routes where natural gas is or would be available to fuel NGVs and enhance existing conditions to improve export-import transactions and political integration among nations in that region. 

Brazilian NGV Statistics

Final Remarks

In October 27-29, this year, the Expo GNV 2005, the 3rd. edition of this NGV event of Brazil and South America will take place at the Marina da Gloria, Rio de Janeiro, RJ. The objective is to celebrate the accomplishments of the industry in the last two years and discuss expected progress and opportunities for the coming years. It is also an excellent occasion to see the latest news on vehicles, equipment and components for the industry. Don’t miss.


R.Fernandes
Vice President of ALGNV – Latin American NGV Association
Coordinator of the NGV Committee of IBP – Brazilian Petroleum and Gas Institute