LNG Platform (Dutch National LNG Platform) – Robert Goevaers RC, Program Manager
Robert Goevaers RC of the Nationaal LNG Platform speaks to EnergyBoardroom about the charge towards LNG as a fuel in the Netherlands. Capitalising on the construction of the Gas Access To Europe (GATE) terminal, the Dutch authorities have been working hand in hand with companies to accelerate the adoption of this fuel. Goevaers speaks of his organisations ambitions in quantitative terms, and the benefits LNG fuel offers the Netherlands.
The role of the LNG platform is to promote the use of LNG as a cleaner and quieter vehicular fuel source. What results have you attained so far, and what are the association’s main targets?
We have been lobbying to put LNG on the political agenda, and have ensured that there will not be any immediate excise increase on the fuel. This agenda is a wider one, and has seen us create a dialogue with environmental groups as well as look at safety programs and subsidy schemes- all with the intention of expanding use of this fuel. A core part of this dialogue is ensuring the facts are well researched and well-circulated, information after all, is crucial to understanding why LNG can offer benefits with regard to diesel.
It is important to understand that the Netherlands is the fourth largest gas consumer in the EU after the United Kingdom, Germany and Italy. In 2010, when I was still working for the government, we did a survey of the position of sustainable technology and energy in the Dutch transport sector. Leaving cars and small vehicles aside, we looked solely at trucks, small trucks and large trucks. For small trucks, there is no doubt that hybrid will work. But then you have the big trucks, and this is where it becomes complicated. For the time being, and the time being differs depending on who you ask, there is no alternative for diesel apart from LNG.], but the problem is that when you look from a broader perspective we know we will run out of oil in approximately 50 years. There may still be a little oil, and the price will go up. Therefore, we have to start searching for alternatives.
When we did this assessment for the Dutch government we had to ask ourselves what the alternatives were: if we wanted to become stronger in the future, we had to address the issue of fuel prices. So LNG became a very interesting proposition for us; this is how we started. With gas we now have 250 years of remaining reserves instead of approximately 50 years of oil remaining.
This was a huge advantage. Of course though, gas was nothing new for us. We had already been aware of CNG as a good solution, but the energy capacity of compressed gas is complicated and a vehicle needs to refuel every 250 km. For a transport company it doesn’t make any sense to have to refuel two times a day. This is the reason why we see CNG for buses, garbage trucks, and other large vehicles that stay more or less within city limits and do not travel long distances, but for commercial traffic CNG doesn’t work. However, in 2009 LNG solved a lot of these problems. Getting LNG on the market made a lot of people wonder if it could be an alternative, because from a technical and price point of view it really made sense. Furthermore, from a sustainability point of view it made sense: on average the rate of CO2 reduction is around 10-15 percent (LNG compared to diesel). The biggest issue was the noise involved in LNG and CNG. We then had to solve the problem of the noise, and we did.
Nationaal LNG platform hopes to have 50 seagoing ships, 50 river going vessels and 500 trucks running on LNG by 2015. How successful have you been in moving towards this target, and what have been some of the obstacles you have had to overcome?
We are somewhere between 220 and 250 trucks, and we are still growing. For the first two quarters of this year, there were no LNG truck units for sale, which was a minor setback. Nevertheless, the LNG tractor business is still going fine. It’s not going rapidly enough in my opinion, but change takes time and 250 trucks by the end of this year should be quite feasible. There is currently a bit of a supply challenge, and we are also experiencing some challenges with the development of the infrastructure.
With ships, the situation is somewhat more complicated. By volume, then a ship is far more interesting than a truck. At the moment, we have about seven ships up and running, it still takes a lot of effort, however, to get a ship retro-fitted with an engine. The problem for ships is that it takes a few years to order them, build them, and there is not enough cargo to fill ships at the moment, which is due in large part to the economic crisis of the past years. What is important to understand with ships is that shipowners want flexibility and the most flexible fuel for ships is still diesel. Unfortunately, for economic reasons some people are still hesitating when it comes to ships. Ultimately, the fiscal barrier is creating inertia in the process.
This year, the Dutch government declined to implement a previously planned tax on LNG fuel; how significant is this for the industry, and how would you describe broader government support for LNG?
The platform is a cooperation of the Dutch government and business firms, within the context of the Green Deal Rhine and Wadden. ‘Green Deals’ aim to stimulate a sustainable growth of the economy. By taking away bottlenecks (regulation, laws, and permits), activating cooperation or helping to source funds, in order to support the realization of the plans. Companies take initiatives that meet the targets set by the government in the field of climate and environment. LNG combines several items in the ‘Green Deal Rhine and Wadden’.
So, the broader picture from our government is OK, but what you see is that LNG has a clear market proposition. There are, of course, several reasons why LNG has an advantage. We deal with many different departments, but what we see with the department of economic affairs is that it has a very clear vision of the role of LNG for Holland. We want to be independent, of course, and not just on the supply side. In short, there are several reasons why LNG fits in the department’s vision and strategy on gas.
For the department of infrastructure, we recently did a study on the strategy of the fuel mix 2030 to 2050. The main questions of this study were based around the problem that we needed to realize the 60 percent CO2 reduction by 2050, and that for trucks and ships there are no alternatives apart from LNG. However, we do see that we need to work more on bioenergy: to achieve CO2 reduction we obviously have to consider all the options.
Safety fears are one of the key concerns raised by some stakeholders in smaller ports where LNG could potentially be stored. To what extent have these fears held back the more widespread use of LNG as a fuel, and what would you say about the current state of safety procedures and LNG use?
When we started the LNG platform, we decided that we were going to work together with other companies to address the market challenges. One of the most important of these is safety, of course. LNG was a new fuel and the first meetings we had with local authorities no one even knew the difference between LNG and LPG. This shows the level of problems that we were facing at that time.
Another issue was where to place the LNG stations. Holland is very densely populated and we didn’t want to put them close to where people lived. It is more logical to realise them where many trucks stops so at Distribution Centres. Nevertheless, we had to work with many people, from local authorities to local fire departments to the mayors of cities. Everyone understands that we need to be safe; but still, we needed to develop the infrastructure. We have come a long way with our safety program, which should be ready by the end of next year. It’s an integrated safety program where we are doing an assessment of all the different standards and procedures that already exist in different countries across the world. We are doing this together with the Dutch industry and the department of infrastructure so that we have in one clear study all the information we can dig up and have a clear idea of the best practices and procedures we will go ahead with.
At the moment, demand in the Netherland is met by domestic supply, but resources are declining. To what extent will the GATE terminal change the face of gas supply in the Netherlands and in Western Europe?
The question is not whether it will change, but how much it will change. When the decision was made to develop the GATE terminal, there were several reasons: independence, declining resources, and transport strategies. In principle, what we are now seeing is that from a strategic point of view the GATE terminal is a very easy and clear message to explain, but it will take time to develop further. At the moment, however, it is not at full capacity. So, it will certainly change things, which is part of the problem. When you start something like LNG, it’s always a chicken and egg discussion: some will say that if there is no clear demand for LNG, why would we build a GATE terminal? On the other hand, if there is no GATE terminal, no one will ask for LNG. At this critical moment, we have a clear statement that says: by 2030, 20,000 trucks or 25 percent should run on LNG in Holland. Furthermore, by 2050 we ought to have about 50,000 trucks on LNG. I’m entirely sure that in a few years, the price of LNG compared to diesel fuel will improve tremendously. It just takes time.