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Caltex opens first CNG station

Natural fit: From left, AGL executive general manager new energy Marc England, Caltex executive general manager commercial Bruce Rosengarten and Toll national fleet and equipment manager Mark Witteman.

Toll Holdings agrees to support first public CNG service station outlet

25 Sep 2015

CALTEX Australia has become the first major fuel supplier to open a public service station outlet selling compressed natural gas (CNG).

The new outlet, near Melbourne Airport in Tullamarine, has been established in co-operation with gas supplier AGL and transport giant Toll Holdings.

Toll was the catalyst behind the new outlet as it is planning to establish a depot close to the airport, which is a major transport hub, and base all its 46 Melbourne-based CNG trucks at the new depot.

The company also runs CNG-powered vehicles in the Australian Capital Territory and Sydney.

Toll’s national fleet and equipment manager Mark Witteman said there were a number of factors behind the decision to use CNG to fuel the suburban delivery fleet, not just the price of the locally produced fuel.

In fact, CNG is currently more expensive than diesel due to the flooding of oil markets by Saudi Arabia, a policy that has driven oil prices to unusually low levels.

“At present CNG is not more economical than diesel,” Mr Witteman told GoAuto at the opening of the new outlet.

“Some time ago, when diesel went through the roof, absolutely CNG was a far better option.

“Diesel has now come back a fair way and, at this point of time CNG is not more economical, but there are other factors involved.

“It’s not all about the price. It’s the emissions, the future being greener, the vehicles,” he said.

Mr Witteman said Toll also appreciated the fact that CNG has a more stable price, making corporate planning and budgeting more reliable.

“There’s no doubt there will be volatility with the diesel price. World markets will change,” he said.

But he said CNG users were concerned that the price stability may be upset by the federal government, which has been increasing the excise on CNG.

“CNG is more stable, unless the government starts tinkering with it. And continuing with increases in excise, which makes it a bit of a challenge.” The recent excise rises have actually breached a government policy, which requires excise on alternate fuels be only 50 per cent of the excise on petrol and diesel. Currently, the excise on CNG is more than 70 per cent of the excise on diesel.

Caltex was agnostic about which fuels should be used, said the company's executive general manager of commercial, Bruce Rosengarten.

“Gas gives alternatives to our customers,” he said.

“Customers select what fuel is best for their needs. What we want to do is provide options for our customers.” But AGL would be pleased to see more private drivers using CNG is their cars and SUVs, according to Mr Rosengarten.

“Today what we see is commercial vehicles, particularly the smaller trucks, using CNG as a fuel,” he said.

“But without having a public service station provided for private vehicle usage, it really hasn’t been available to the general public.

“It’s a new technology in Australia. It’s not new in the world, though. There are 13 million vehicles using it globally. Let’s see what happens in the Australian market.” The advantages for private buyers was that they could also access natural gas supplied from the pipes that run into virtually every capital city house in Australia, although they would need to install a compressor and have a suitable vehicle.

“Most of the CNG you see in other countries is accessed through the domestic pipe network. Being able to take CNG domestically gives you access.

“I can’t predict exactly what the price will be. That’s one of the choices customers will have to make in terms of what are the economies.

“CNG does appear to give better fuel economy, but you really need to test that on your own vehicle and on the route you use.” Mr Rosengarten said CNG was different to liquefied petroleum gas (LPG) in that CNG was composed of methane. LPG is a mixture of propane, butane and methane, and this gives the gases markedly different combustion properties.

AGL’s policy of encouraging gas consumption in place of petrol and diesel was in line with the company’s greenhouse gas policy.

AGL’s executive general manager of new energy, Marc England, said AGL believes climate change is unequivocal and that anthropomorphic emissions are “extremely likely” to be the cause.

“In the New Energy group, we spend a lot of time thinking about electricity in a distributed sense, whether it’s solar power rooftops and batteries in garages, but also about fuels and the way they are going to change how transport works,” Mr England said.

“Earlier this year we launched a new carbon policy at AGL, which committed us to supporting the mandate to limit global warming to two degrees celsius.

“Despite the fact that we are a big carbon emitter in this country, we have been quite vocal about the need to evolve the energy fuel mix and the transport fuel mix, so we are always going to be looking for lower carbon sources of energy.

“We can’t turn back the clock and move back into the dark ages. We want to continue to travel, continue to travel live in homes and maintain our businesses, so we need fuel, we need energy, But we have to find lower-carbon ways to produce it and AGL is very committed to that.”

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