Driving Mexico Toward SustainabilityTue, 01/21/2020 - 18:25
Q: How is Enco GNV positioned in Mexico and how adequate is current infrastructure for growing the natural gas market?
A: Enco GNV has been working in Mexico for 20 years, although the company was previously known as Gazel. We have nine natural gas stations and in 2018 invested US$6.8 million to develop stations in Mexico City, State of Mexico, Puebla, Monterrey and Guadalajara. This investment covers permits and land use licenses and, by 2023, the company expects to grow sevenfold from where we are today. Given Mexico’s hesitance toward natural gas, this is no easy task but we are speaking with other companies and changing our working dynamic to achieve our goals. Mexico’s gas station coverage is very low compared to other countries. There are about 12,500 gas stations servicing around 38.5 million vehicles, meaning that there is one station for every 3,080 vehicles. In the US, 1,500 cars are serviced per station and Colombia services 650 per station. Clearly, gas stations and the associated infrastructure are needed. Of these numbers, natural gas vehicles account for 25,000 vehicles being served by just 35 stations. Natural gas vehicles account for less than 0.01 percent of the automotive market in Mexico. We believe a target of 5 percent of the market is realistic if a favorable environment is created.
Q: What are the political and social restrictions that are hampering the development and expansion of natural gas stations in Mexico?
A: We need to change the public’s perception because natural gas really is an improvement. When more natural gas stations are available, the shift to natural gas will become more attractive. Developing stations in Mexico City is becoming more difficult because of the city’s spontaneous and disorganized urban sprawl. This means there is nowhere left to develop and that elevated land prices mean companies are priced out. Natural gas stations are still not permitted near schools, malls or highly-populated zones, despite this being perfectly normal in other countries. In Monterrey, where people have been using gas for over 100 years, our developments are welcomed.
Q: How can the sector overcome these misconceptions and demonstrate the benefits of natural gas to the public?
A: Mexico can only achieve sustainability if it satisfies the needs of the economy, environment and society. There is a great deal of discussion about the viability of electric cars. Enco GNV does not believe electric cars are the answer because the infrastructure, as well as the cars themselves, are too expensive. Similarly, lithium batteries, which cost almost half the price of the car itself, are highly pollutant when discarded. Natural gas reduces CO2 emissions by 70 percent in comparison to diesel and is 50 percent cheaper per kilometer than traditional fuels. These are levers that should be used to promote natural gas as the fuel of choice for a more sustainable future. This should particularly be the case of Mexico City where pollution is getting worse.
Q: How does Enco promote the switch from traditional fuels to natural gas for vehicle users?
A: Enco GNV makes its products attractive to consumers by making costs more manageable. To reduce the financial burden on customers, we provide engine conversion kits without initial cost. Customers only begin to pay for the kit, which is valued at US$2,072, when they start filling their tank. Even when customers begin to pay for the conversion kit, they should still save around 50 percent per kilometer in comparison to traditional fuels. We also provide financing at up to 18-month terms. The benefits are clear and our studies show that a taxi driver can save approximately US$17,800 over five years by switching to natural gas. The fuel change will also help the environment and improve service. This is an incredible package for anyone but the problem lies in the lack of stations and the difficulty in gaining authorization for construction.
Enco GNV owns and operates natural gas stations in five states: Mexico City, State of Mexico, Monterrey, Puebla and Jalisco. The company also provides natural gas engine-conversion kits for vehicles.