Flicking through the Fin Review at lunch today, there was all manner of interesting tidbits about the budget. For instance, the means testing of the baby bonus will scrape back a lot less revenue than the scrapping of an obscure tax exemption on the byproducts from natural gas production - a form of light crude oil called condensate. And disappointingly, the FBT concession for company cars stayed, so we’ll continue to have the spectacle of people driving around in circles, burning fuel and releasing CO2, just to collect a tax rebate.
But there’s one little program that was rumoured to get the axe, but didn’t - the LPG vehicle scheme. This scheme provides a rebate of $2000 to get your car converted to run on LPG, and $1000 if you buy a pre-converted vehicle from a manufacturer. Even without the rebate, if you drive a reasonable-sized car around the average distance, it pays for itself in a couple of years. With the rebate, it seems to be a complete no-brainer - it pays for the remaining cost of the conversion within a year, and saves around $1000 per year, every year after that.
Which brings me to a simple question, which relates to adapting to higher energy prices. If LPG is such a no-brainer - particularly after the government bribe - why isn’t everybody installing it?
In my case, the answer’s simple - I commute on a motor scooter, which not only saves me fuel but even more on parking, and Rex is a high-powered indulgence which gets driven relatively little. But, LP readers, why aren’t you? Do you all drive very little? Worried about the effect on the reliability and resale value of the car? Think that the lower fuel economy will take away all the advantage of the cheaper fuel (from all reports, it does use substantially more fuel, but the costs aren’t that bad). Don’t want to lose any engine power? Or is it simply not worth the hassle of doing the conversion for you?
Very disappointing.
True story: My accountant sent me a letter this week asking why I wasn’t driving enough and spending enough on petrol.
Who says Australia’s not serious about climate change. What can you expect when the government’s coffers are filled with coal money. Would the Taliban try to curtail the use of heroin?
- The bloody great tank in the boot.
- LPG is perceived as a dangerous good (unlike nice safe petrol that we’re all familiar with)
- Shorter range, poorer fuel economy, reduced performance.
Meanwhile diesel’s share of the UK new car market has hit 43.7 percent and diesel is 7p/L more expensive than petrol in the UK.
Diesel = no brainer, in Europe at least.
(Sorry Robert, you really didn’t expect me to let slip a chance to plug diesels did you?)
Good points well made Robert.
It’s a question I’ve asked several managers (regarding company cars) over the years about - the common response has been “why would we want to do that when we only have them for 3 years”? In one way this has been a benefit, the cars we get have been progressively more fuel efficient, in another way it’s bad because there is a real “use-it-then-throw-away” mentality. Another problem is the perceived lack of power (almost irrelevant in Sydney traffic these days) and the way our fuel is paid for. Add in FBT and there are positive disincentives regarding fuel savings.
In fact the only solid reasons I can find against it is the up-front costs (several grand last time I looked, with rebate), and that some country towns still don’t have gas (even that’s pretty rare now - farmers love the stuff!).
Given the way fuel prices are going I think if I keep pushing we’ll get it fitted (just need to lead the way).
If I ever end up getting another personal car it will either be a modern diesel or an LPG-fitted vehicle, otherwise it’ll be the pushbike. Though I can’t really carry all my tools and PCBs in the back panniers
Isn’t LPG subsidised at the moment? I thought that it was and that the subsidy was due to end soonish and that meant that the actual cost of LPG would be much higher, making it a very uneconomical fuel. Can’t remember where I heard it though.
Gaston the truck is ripe for conversion, but the bloody $2000 rebate made it almost impossible to get it done. The waiting list for the conversion at the nearest LPG fitter (in Tamworth) went from 2 weeks to 6 months in the month following the announcement. Not suprisingly, the cost for this particular vehicle (a 4 barrel carb , 6 litre V8) pretty much doubled, making the rebate somewhat moot.
“The bloody great tank in the boot.”…. of my ute, which has all sorts of heavy, often pointy, objects/muck/rubbish/stuff that gets chucked in there with reckless abandon.
Oh and 2 vehicles I know that used gas devloped a ‘funny smell’ when the tanks leaked. Don’t like gas, don’t trust it.
I don’t like diesel either, not sure why exactly, but the next ute, which we’ll buy as soon as this one no longer does the job [and that looks like it could be a very long time] might be diesel.
Is that a good idea or not? Economy wise, performance wise and environmentally speaking?
Robert, you know you want to.
Rather than increase the luxury tax on vehicles, I think it would have been much better to add a tax to fuel-innefficient vehicles. But then they seem so adverse to doing anything which would be to the detriment of working families I really wonder how they are going to achieve any of the carbon reductions that we need.
My car gets 7.2 litres/100km (tested, real world), is a hatchback, is offset with Greenfleet, and does >10 000 km a year. That’s me excused.
Was just involved in a major carbon offset program. Bought a lot of offsets for between $8.50 and $14 a tonne.
Robert, is your scooter two stroke or four stroke? Better be the latter, 2 stroke is disgusting.
No, its just not taxed as much. No fuel excise ATM, but its being phased in over the next three years.
Economy wise you’ll use about a third less fuel, but diesel is 10%-15% more expensive than petrol. Performance wise, if you like grunt (torque) you’ll be amazed. Environmentally its tradeoff between lower CO2 emissions and higher particulate and NOx emissions, but within the next couple of years we should start seeing U.S. spec “50 state diesels” in Australia. However, a clean diesel is still dirtier than a clean petrol engined car in terms of particulates and NOx. Cue Robert’s attack on all things diesel…
Yes feebates for all cars and appliances should have happened years ago. Its not enough just to put a price on carbon, we need to reduce the “sticker shock” of efficient cars/appliances.
Can’t be bothered … and the boot is small enough already without having to insert the previously mentioned tank.
Out in the country where NOx and particulates aren’t such an issue (nobody shoves pollution sensors down tractor exhausts) diesel is a no-brainer environmentally. To drive, they’re just fine, and the torque is really handy for idling round the farm or driving on dirt tracks.
In the city, I remain very concerned about the direct health impacts of pollution from diesel vehicles.
Wilful: My scooter is a four stroke. As far as I’m concerned, the sale of two-stroke scooters should be banned immediately. For that matter, so should 50cc scooters generally. They’re dangerously underpowered for riding in traffic.
I should buy some offsets to cover my car and scooter while I’m at it, too (just bought a bunch to cover some air travel, which absolutely dwarfs the CO2 emissions from anything else I do)…
I live in the country (if you can call a lefty, greenie enclave “the country”), does that excuse me? I also do 1,600km round trips to Sydney about 3 times a year, and a good diesel will beat a good hybrid at that kind of driving every time.
There are offsets and offsets. I paid $1.72 for a Jetstar “offset” on a flight from the Gold Coast to Sydney this year. I don’t pretend for a moment that came anywhere close to offsetting the damage I did. I mean, I can’t buy a rainforest tube for that!
What kind of offsets are you buying Robert?
My car gets 5.1 litres/100km (tested, real world), is a hatchback, is offset with with no-one, but I’ve planted 300 trees in my backyard. Am I excused?
You’re right, offsetting is a complex issue, and, frankly, the el-cheapo offsets offered by the airlines are a bit of a joke. I use Climate Friendly for my offsets.
As far as I can tell, they’re about as genuine as you can get.
Of course, when the emissions trading scheme starts offsetting will become very easy - just buy as many extra carbon credits as you want on that.
A one-way Sydney to Gold Coast offset at Climate Friendly costs $5.53 which is only marginally more believable, but its good to see they’re putting the money into renewable energy projects and not planting trees.
BTW, another reason why LPG isn’t a no-brainer: Limited availability outside metropolitan areas.
I don’t think I’m excused, despite driving the i30 diesel back from a certain District Court sitting (400km one way) with a colleague from the law firm who owns the car. I had the following mobile conversation ie pisstake via the laptop and Yahoo’s version of Messenger with the owner of said chariot which I sublease in a way, (and the deal is I don’t pay for fuel directly):
I have a bike. I’m sure there are plenty of LPers who are public transport users, as well.
Just curious. If LPG is such a good idea, why aren’t cars manufactured to use it?
Good for you, Sam. And I’m sure you’re right about LP’ers taking public transport.
But this is more an economic question than an environmental one (the benefits of LPG over petrol are pretty marginal). For those who do have cars and drive them a lot, what’s stopping you saving a pile of cash?
Debbieanne: Ford and Holden do sell cars equipped for LPG - the Falcon E-Gas and the Dual-fuel Commodore.
I changed to LPG when the rebate came in for $2000. Got all my money back. GREAT:
1.Worked out it is only very slightly cheaper but not to worry.
2.Not as good going up hills but I’m old man (60) don’t care!
3.Woolworths don’t give 4c rebate on LPG only petrol(Coles Do)
4.After 2 years car won’t start. Friendy Mechanic says you have “old” fuel in tank and it has wrecked the injectors! (Sure its old fuel. I only use LPG 90% of the time). $1500 to fix injectors.
5.Buy new car (new to me not brand new). Now $4000 to change to LPG but still only get back $2000 (If register car in Wife’s name cause I already have claimed rebate) so seems rebate now going as extra profit to LPG man.
Pissed Off. Back to Petrol and will have more room in Boot
The easiest way to do that is increase the tax on petrol. Very popular with “working families” I’m sure.
Why haven’t I converted the car to LPG? It gets driven less than once a week. It’s a tiny 4-cylinder, so even when driven it doesn’t use much fuel. And most of my transport is by bicycle.
Its simple, but it also punishes those who drive an efficient vehicle. Basing it on say kg/CO2 per km at time of sale of the car may encourage people to buy more fuel efficient cars - or at least smaller ones. For people who have already bought an innefficent car its much harder for them to change their car.
On a vaguely related note - have people noticed that the solar PV rebate has been means tested? (<$100,000 household income to qualify). I imagine that will exclude the majority of those currently accessing the rebate.
Robert, it’s beginning to look like one of your interests is collecting rebates. :p
Also, I have a feeling that it’s something to do with rebates requiring the initial outlay be met by the user and in a world of rising interest rates and mortgage stress, people aren’t willing to pony up the cash even if it does save them in the long run. This is why my parents haven’t replaced their halogen downlights with LEDs and many of their incandescent bulbs with CFLs. People are just not good long term planners.
Why haven’t I converted the car to LPG?
One of those things in life we keep meaning to do - but just never get around to doing. Nobody promotes it - so it tends to get forgotten.
LPG isn’t a no brainer. We run out of abundant LPG when we run out of crude oil, as it is a by product of refining oil to get petrol etc. It was essentially a waste substance that is now being utilised for transport fuel, which is OK.
The other source of LPG is natural gas - it comprises less than 5%.
CNG would be a better long term option given that we have about 20 times as much methane compared to LPG. But we have no infrastructure for refuelling.
CNG conversions cost about the same as LPG but the two are not compatible. And you need a heavier more robust tank for CNG.
The govt rebate only applied to LPG, and was rushed in by Howard when back benchers started squealing about petrol prices rises.
No long term planning here, no strategy, and no commitment to real action on transport alternatives (e.g. public transport) or alternative fuel sources for transport (apart from some biofuels which are very damaging to the enviroment too - such as ethanol from corn and palm oil).
Sigh. I’m with Sam, riding a bike is the best option where feasible.
Chris: if you buy a fuel-efficient car and drive it to work every day, that’s worse for the environment than the guy who buys a V8 and takes public transport to work. So, from an environmental perspective, you should pay more tax. Or are you trying to make a different point?
Sam: that’s true, but If the government is throwing money around, I’m happy enough to take it. And for everybody who’s prepared to admit that they’re exploiting dumb government largesse, there’s a thousand who’ll just take the coin. If you’re annoyed about it, blame the policy, not me for exploiting it…
In any case, Chris is spot-on about another issue, the solar rebate is to be means tested. I no longer qualify for the rebate, the Victorian feed-in tariff is virtually useless for me. So forget the plan for solar panels on my roof. And, frankly, I doubt that there’s that many people with household incomes under $100,000 that are prepared to lock up capital in solar panels. So the government’s probably just destroyed the Australian solar PV industry.
As you know, I don’t think that’s such a bad thing. The MRET is still around, and has to be met somehow. It’ll just be met by wind, micro-hydro, biomass and possibly geothermal (cross fingers…).
Anyway, I’m going to have to do a post on the solar panel thing, thank you to Chris.
Robert - I agree with your point about the usage of cars being the problem, rather than just the existence of fuel innefficient cars. However I’d suggest that many people don’t make good long term decisions and so presenting an up front incentive or disincentive can be useful (just look at the lack of adoption of solar hot water systems as an example). Also for those at the lower end of the market who can only afford to buy second hand cars - they rely on other people buying fuel efficient new cars first. With taxes as they are, people who drive efficient vehicles a lot already get hit quite a bit.
Re: the solar rebate - I too think they’ve pretty much killed the domestic market. It was only marginally economic with the rebate and the proposed feed in tariffs. I’m really surprised there wasn’t more immediate and vocal opposition to the decision - hopefully it won’t have negative flow on effects to the development of large scale solar farms.
I think you’re right, and although the PV rebate was never the smartest policy in the world, but this is unambiguously a bad move by Rudd.
But hey, the “clever country” has gone outta style. Non-resource exporters are being crushed by the dollar, manufacturers are on their last legs, so why not wipe out the solar industry too?
P.S. Didn’t we invent this stuff?
Robert, I wonder how much money would be made available for renewables if the government just scrapped all these ridiculous subsidies and rebates which encourage homes, businesses and industry to pollute. Company car fuel excise rebates, funding for clean coal research (last I checked, coal profits were up), LPG conversion rather than plain old not driving, etc.
Perhaps the government should start buying back drivers’ licenses and the fuel-inefficient cars could be recycled into buses and bicycles.
Sam - the coal miners are raking it in as you say. Thermal coal for power stations has increased in price by 50% this year - and has doubled in a year.
Australia’s surplus, future funds, education revolutions and child-care rebates are looking good.
If you have an A.B.N. (as I do), then you’re not eligible for the rebate to convert to LPG. Apparently, the Federal Government was frightened that cabbies would all put their hands out for some money.
Then there’s all the other points that other posters have made regarding LPG conversions.
What would interest me in getting an LPG conversion, however, would be if I drove a diesel.
I’ve just finished a shift driving a cab around Sydney. Tonight it cost $30 for 300km — a saving of at least $15 to $20 a shift. There is sigificant loss of power on very hot days with air conditioner on. I declined the opportunity to buy a second hand cab because there is tendency to backfire and stall when the air filter and electrics start playing up.On early 1990’s ford the engine would backfire and the fuel hose would come off — it took 8 months of trial and error to fix the bloody thing. Each cab has its LPG idiosyncracies.On the last cab the day driver had to sometimes hose the tank to cool it before he could fill up.Hot weather would cause a malfuntion in the filling valve.
Personally I don’t own a car and never have. I find public transport quite adequate (buses and trains).
Use of LPG will lead to lower petrol use by individuals which will cause petrol injectors to clog up. Solution: Do not use petrol at all! LPG is available virtually everywhere and so maximize your savings. Also less equipment to maintain.
Just don’t have those buses driver around at night or the middle of the day with one or 2 people in them. I’ve often wondered if running more smaller mini-buses would be better for the environment - and drivers would probably be cheaper as they wouldn’t need big vehicle licences (great job for uni students out of hours).
Approximatly 12 months ago I had LPG installed with the government rebate in a VX Commodore.
Could not be happier. The car still drives the the same, no lack of power, still heaps of space in the boot and great on long trips as with a full tank of petrol and lpg can get 1000k out of it.
It seems a no brainer, now that I can fill up for around $40 vs $80 - $90.
Chris @ 35, I believe TransLink is trialling using Maxi Taxis on certain local routes surrounding the Prince Charles Hospital in Chermside. There’s always talk of integrating taxis into the TransLink (and Go Card) system network to fill the late night public transport gap without having to be charged through the roof.
Of course, electric trolley buses running at night on wind power are low-emissions and low-noise. You could probably even take advantage of off-peak coal fired electricity tariffs to do it.
Trains and bikes are a no brainer unless you live out in the sticks, we lost our train line some 30 years ago and there’s many hills and many kilometres between towns ’round here.
I fitted LPG through the 90s and recently opened shop again with an emphasis on alternative fuels, so allow me to address some of the assumptions made to date.
Price and performance
Pre ‘04 vehicles with a gas ring or air valve system can be converted for around 2-3,000, they work all right if you stay away from chop shops and keep the car well tuned, most problems are caused by worn spark plugs and faulty leads.
Post ‘03 vehicles with vapour injection would be around 4-5,000 and have no discernible power loss, there is no chance of the gas backfiring as it is injected in a measured dose rather than filling the intake (and waiting for the bang)
A well tuned and appropriate system will use around 5% more gas than petrol, maybe 10% on an old carburreted banger, any more and you need a better gas mechanic.
Safety
Safety switches close valves at the tank and under bonnet as soon as the engine stops turning or loses ignition and an excess flow valve cuts gas flow if a line is ripped open, this stuff is safer than petrol sitting in a plastic tank.
Tanks under vehicles are protected by a stone tray (I hope) and those in ute trays should have the same or a box cover to protect them from shifting loads, these are easily retro fitted.
Maintenance
An annual check and leak test along with regular servicing nips most problems in the bud, using a quarter tank of petrol per month stops the fuel going stale and keeps the injectors in good order.
Diesels
The earlier link to dieselgas.com shows what can be done with them, another no-brainer in my book, also worth a look is veggiecars.com -they have a dodgy looking website but a good product, he modifies the fuel system to run vegetable/ cooking oil direct rather than modifying the fuel with dangerous chemicals to make bio-diesel.
LPG is the cleanest, readily available fuel that we have at the moment but the future probably lies with natural gas for the plebs and electric for the well off.
Cheers
http://nakedmechanic.blogspot.com/2008/02/update.html
Post ‘03 vehicles with vapour injection would be around 4-5,000 and have no discernible power loss
Glad to hear this from someone well placed to know.
Way back, I drove taxis night after night in LPG cars for two long years. As did every other taxi driver, since who knows how long (30 yrs?).
Loss of power is an urban myth. I was young and stupid enough back then to habitually overtake from the inside lane and I never felt at a disadvantage.
To change the subject, but in line with Robert’s post, Woodside have been squealing like a stuck pig over the LPG decision and as far as I can see with good reason. The concession was in the form of an agreement with the Commonwealth of Australia as an incentive to make the development of the NW shelf viable. This agreement has now been unilaterally dishonoured with no discussion at all. It’s what they call sovereign risk, which you might expect from Bolivia or Venezuala, but not from Australia.
For Woodside I understand it is a hit of over $1 billion to the bottom line.
OK conditions have changed, and to put it into perspective Woodside’s share price went up yesterday by $1.62 to a new high of $63.02. So investors are not worried. Nevertheless it was poor form and reduces the trust business can have in Labor governments.
http://www.news.com.au/perthnow/story/0,21598,23699064-2761,00.html
No discussion at all between the parties involved.Apart from being a tax grab from a large company what was the motive?
murph, it could be argued that the original aims of the concession had been achieved, but there has been no explanation and it looks like a tax grab.
I haven’t seen any comment from broking services and other analysis services I subscribe to, but in the last few years Woodside’s net after tax profit has been a bit over $1 billion, significant, but less than half our major banks. Investorweb has the forecasts for 2008 and 2009 at about $1.8b. So whatever the grab actually amounts to specifically it’s quite significant in terms of the bottom line.
That said most investors in Woodside would be investing for capital gain rather than the dividend stream. That’s pretty much how it’s priced with a yield around 2% and in future that will now become miniscule.
Mind you, Brian, the exemption does seem a bit of an anomaly, unjustifiable on environmental and economic grounds, and probably should have been phased out.
But the manner in which it’s been done is pretty brutal.
The original agreement probably should have had a sunset clause or at least a provision for review built in. Failing that there probably was a case for review anyway. But you’re right this is a brutal way to do it.
Politically a unilateral snatch as part of the budget does seem to have been successful, as it has been largely lost in the noise.
Just to be contrary, I did take up the $2000 LPG bribe… for my 20+ year old yoot, book valued at $3500, paid $1500 for it 3 years ago.
I opted for a dual-fuel system with a vestigial 25L (1/3 size) petrol tank for $3000. LPG only was $2800. Since I don’t have an LPG jerrycan, I thought dual-fuel had a practical advantage, so spent the extra $200.
Nope, the power loss is real. Spark ignited piston engines can be set up to run just as well on LPG as on petrol, but conversions of petrol vehicles (particularly older ones) just don’t make as much peak HP or low end torque.
The power loss is most noticeable when max power is required frequently, as in heavy vehicles with relatively small engines. My yoot weighs 1650kg and only has a 2.0L engine. Foot on the floor often, particularly when accelerating to motorway speed or climbing hills. More downshifting while climbing hills. The low end torque loss means revving the engine higher before engaging the clutch, else the engine may stall ie taking off from a stoplight.
The power loss IS irrelevant in Sydney traffic, on mostly flat roads, in a passenger car with an automatic transmission and a relatively high power-to-weight ratio. A light truck with a manual gearbox in the Blue Mountains has a bit more trouble with the power loss.
These guys drove an LPG car around Australia, 13,000km, under $1000 worth of fuel. LPG is more widely available now than ever.
I agree. Before the rebate, LPG installs were about $1000 cheaper.
Still, while petrol is at $1.54 and LPG at 61.9c, I’ll recoup my $1000 out-of-pocket in a year or less. At those pump prices, the yoot costs 7.2c/km to run on LPG vs. 17.3c/km on petrol. $30 to fill the LPG (52L) as opposed to $72 for 46L of ULP, both to cover about 420km. That part IS a no-brainer.