LP Gas: Exceptional Energy for Asia A developmental tool for urban and rural Asian communities without access to grid power

Michael KellyDeputy Managing DirectorWLPGA

3 November 2010, Singapore

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The Unique Global Association representing the LP Gas Industry for 20 years

More than 175 members operating in 90 countries in the world

Representing the interests of the full LP Gas value chain from producer to distributor

Partnering with key global organisations such as the ADB, UNFCCC and the WHO

As the authoritative, global voice for LP Gas, the WLPGA promotes the use of LP

Gas worldwide to foster a cleaner, healthier and more prosperous world.

A powerful Industry AssociationA powerful Industry Association

Asian Development Bank Energy for All (E4 All)Asian Development Bank Energy for All (E4 All)

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• 1 billion people in Asia and the Pacific region without access to modern energy• E 4 All will:

— Promote decentralized energy systems for urban and rural communities— New financing mechanisms for the poor such as Microfinance schemes

• E4 All has set a target of providing access to modern energy services for 100 million people in the region by 2015

• E4 LPG: WLPGA is leading a working group on LP Gas as part of the E4 All initiative

– Working group formed in Timor Leste– Formation of a working group on island developing states– Interventions in Bangladesh, India, China, Papua New Guinea

Why LP Gas is the right fuel for rural AsiaWhy LP Gas is the right fuel for rural Asia

• LP Gas is propane or butane or a mixture of the two. It is always present as a product of oil refining and also is always present naturally in natural gas (methane) fields and crude oil fields.

• It can be distributed in relatively cheap, small containers and used for cooking, heating, lighting and commercial/industrial activities.

• LP Gas has significant health, safety and environmental benefits compared to traditional solid fuels, such as wood/biomass and coal, or other refined fuels such as kerosene or paraffin.

• Neither Propane nor Butane is on the IPCC list of Greenhouse Gases.

• LP Gas is a very low emitter of Black Carbon

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Portability:• Bottles can be can be stored indefinitely• Easily transported• Used virtually anywhere -- from urban centres to

remote regions• Flexibility in applications

LP Gas is LP Gas is accessible

When and where costly, grid-based energy services are unavailable

LP Gas is propane or butane or a mixture of the two. It is always present as a product of oil refining and also is always present naturally in natural gas (methane) fields and crude oil fields.

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…Because it’s a clean fuel:• It burns cleanly• No smoke or residual particulate matter• Relatively low pollutant emissions• Low Green House Gas (GHG’s)

emissions• Helps fight deforestation by substituting

“traditional fuels”• Frees women and girls from drudgery of

searching for firewood

LP Gas is an LP Gas is an AcceptableAcceptable alternativealternative

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LP Gas LP Gas has a has a low GHG footprintlow GHG footprint

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Gas LPG

Ethanol(E

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LP Gas is NOT a zero – GHG fuel: However in most cases it can make major and immediate contributions to real emission reductions including major immediate reductions in Black Carbon emissions

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LP Gas LP Gas reduces reduces indoor air pollutionindoor air pollution

According to the landmark 2006 WHO study “Fuel For Life, Household Energy and Health”

• … smoke from indoor cooking fires kills 1.6 million every year, more more people than malaria, and almost as many as unsafe water and sanitation

• … smoke in the home is the fourth greatest cause of death and disease in the world’s poorest countries

• WHO have highlighted LP Gas as the cost effective solution for reducing pollution from cooking fuel

Investing US $ 13 billion per year to halve, by 2015, the number of people worldwide cooking with solid fuels by providing them with

access to LP Gas shows a payback of US $ 91 billion per year.

IEAIEA--UNDP report to be published this monthUNDP report to be published this month

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• IEA-UN report to publish next month “Energy Poverty: How to make modern energy access universal”

• Some 40% of the global population – 2.7 billion people – rely today on the traditional use of biomass for cooking

• In model 445 million people switch to LPG by 2015, 730 million by 2030• Additional oil demand associated with access to LPG in 2030 is equivalent to 5%

of oil demand in the US today• Estimates that 26% of a total 56 billion USD needs to be invested between

2010 - 2030 in providing LPG stoves to achieve universal access to clean cooking facilities

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LP Gas allows for LP Gas allows for incremental developmentincremental development

Stage 1: LP Gas cylinder inside feeding stove

Stage 2: LP Gas cylinder outside, piped in to fuel stove, refrigerator and light

Stage 3: LP Gas bulk tank, fuelling stove, refrigerator, water boiler and generator

• Pioneered by Hindustan Petroleum in India• The Rasoi Ghar is a ‘Village Kitchen’• Communities share a central facility• LP Gas cylinders supply a number of hot plates• Facilities are managed by a village focal point• Creates opportunities for hot water and electricity too• Consumer pays a rental - no upfront capital

A Possible Solution A Possible Solution –– The Rasoi GharThe Rasoi Ghar

LP Gas LP Gas reduces reduces outdoor air pollutionoutdoor air pollution

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The cost of fuel and its impacts on the economy are making headlines.But………. we hear little about the “hidden” economic and social issues:

Transport fuels make people SICKTransport fuels KILL people

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LP Gas LP Gas reduces reduces outdoor air pollutionoutdoor air pollution

• Air pollution in Asian cities is directly responsible for the death of thousands in Beijing, Jakarta, Seoul, Bangkok and Manila (The World Bank)

• More than 600 000 people die each year in China because of air pollution. Beijing has the highest mortality rate in East Asia followed by Jakarta and Manila (WHO)

• Air pollution in China leads to high incidence of respiratory diseases, costing China 3.8% of its GDP or approximately US$16Bn per year (The World Bank)

• 90 000 people in Manila suffer from severe chronic bronchitis, costing the government 7% of its GDP (WHO)

• Hong Kong's polluted air costs the city about 21.2 billion Hong Kong dollars, or $2.7 billion, a year in hospital admissions and productivity loss (University of Hong Kong)

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LP Gas is LP Gas is Flexible

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A word about global supplyA word about global supplyLP Gas Supply, Million TonsLP Gas Supply, Million Tons

North America

Middle East

Asia

Latin America

Europe

Africa

Other

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1990 1995 2000 2005 2010 2015 2020 2025

• LP Gas Production is Rising in Nearly Every Region of the World. Global Prod (2007) is 230 MM Tons

• Supply is expanding rapidly – a 60 million ton increase expected between 2006 and 2015

• The Middle East will Surpass North America Around 2010 to Become the Largest Producing Region

• Supply Growth will be Very Strong in the Middle East– with LP Gas Production Expanding by Over 60% Between 2007 and 2015

NOTE: 1.0 Million Tons per Year is NOTE: 1.0 Million Tons per Year is Approximately 32,000 BPD.Approximately 32,000 BPD.

Source: Purvin & GertzSource: Purvin & Gertz

Conclusions

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• LP Gas supply is increasing in supply• LP Gas is an ideal fuel for a rapidly changing and urbanizing Asia

as it is clean, low carbon, acceptable and accessible and requires minimal investments in infrastructure or R & D.

• Strong endorsement of LP Gas has been received from key global authorities

• Innovative applications for LP Gas can be found in both the developed and developing world

• The World LP Gas Association is ready to assist

Thank you

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