Difference between revisions of "Liquefied Petroleum Gas (LPG)"

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Liquefied Petroleum Gas (LPG) is considered a clean and environmentally-friendly source of energy. As an energy source for cooking it can reduce the negative health impacts of 2.6 billion people who currently cook with inefficient biomass stoves that emit harmful smoke and particles.
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= What is LPG<br/> =
  
The potential of LPG as an alternative cooking fuel is know for several years now. In 2001, a joint study of the World Bank and the World LPG Association (WLPGA) describes the potential of Liquefied Petroleum Gas (LPG) for an improved supply in impoverished countries in the following way:
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'''Liquefied Petroleum Gas (LPG)''' is a blend of light hydrocarbon compounds. It mainly consists of butane (C<sub>4</sub>H<sub>10</sub>) or propane (C<sub>3</sub>H<sub>8</sub>) or a mixture of both. At room temperature, both gases are colourless and odourless. Propane has its boiling point at -42°C and butane at -0.5 °C. Under modest pressure or in cooler conditions, LPG transforms into a liquid state. LPG in domestic cylinders used for cooking generally comprises more butane than propane, because the fuel value per kilogram of butane is higher than propane and it liquefies under much lower pressure than propane and thus the handling is safer. National and international standards specify the minimum content of butane and a maximum LPG vapor pressure. When liquefied under pressure, the volume of butane and propane is reduced to around 1/260 of the gaseous aggregate state. The specific calorific value of LPG is around 46 MJ/kg or 12.78 kWh/kg depending on the composition of LPG. In comparison, wood has an energy content in the range of 14-18 MJ/kg or 3.89 - 5 kWh/kg (depending of the type of wood and the moisture content) and charcoal in the range of 27 - 33 MJ/kg or 7.5 - 8.34 kWh/kg (depending on the type of charcoal). If made available as a cooking energy fuel it could help to reduce the use of wood and biomass in households in developing countries.&nbsp;<br/>
  
„Liquefied Petroleum Gas (LPG) is a clean and environmentally-friendly source of energy. To protect the environment LPG could be made available to replace wood and biomass in all households in all developing countries.” ([http://documents.worldbank.org/curated/en/2013/01/18612457/west-africa-liquefied-petroleum-gas-lpg-market-development-study World Bank und WLPGA, 2001])
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Liquefied Gas is heavier than air and can therefore accumulate above the ground. This may lead to LPG-'lakes'. It is common practice to add a foul smelling odorant to the gas in order to detect leaks and reduce the risk of explosions.
  
Today, LPG plays an increasingly important role in cooking energy interventions. In order to estimate the long-term potential of LPG as a fuel in the cooking energy sector, this article presents key aspects regarding the use of LPG as a cooking fuel in low-income households. At the end of each chapter, further links are provided to allow for a deeper exploraiton of each of the presented topics.
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LPG is non toxic but highly flammable. Therefore, LPG has to be handled with care and all equipment and appliances used to store or transport the gas must comply with high safety standards. They have to be maintained and regularly inspected. Trading with LPG is normaly subject to government safety regulations and corresponding enforcement do prevent fire and explosion accidents. &nbsp;<br/>
  
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
= '''Facts & Figures about LPG''' =
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<u>Further Information:</u>
  
== '''What is LPG?''' ==
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<br/>
  
LPG stands for 'Liquefied Petroleum Gas' denoting mainly propane, butane and mixes of the two. These hydrocarbons are sourced during petroleum extraction and its refining process and thus count as fossil fuels.
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*[[:File:2014-03 Multiple Household Cooking Fuels GIZ HERA eng.pdf|Multiple Household Cooking Fuels]] (These factsheets present different characteristics of different cooking fuels)<br/>
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*[http://www.afsglobal.com/faq/gas-comparisons.html What’s the difference between CNG, LNG, LPG and Hydrogen?] (An article about the differences between Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and hydrogen.)<br/>
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*[http://dvfg.de/deutscher-verband-fluessiggas-e-v/ Deutscher Verband Flüssiggas e.V.] (This website (German) of the German Association of Liquid Gas communicates news information and events.)<br/>
  
Under normal atmospheric conditions LPG is a colourless and odourless gas. Under pressure, LPG becomes liquid. This process leads to the reduction of the volume to 1/260 of the gaseous aggregate state.
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
 
 
In relation to other fuels, the energy density of LPG (27.5 MJ/kg) is high (~ 10-times higher than wood). As a result, transport and storage of LGP is easier than it is for wood (Practical Action, 2003).
 
 
 
Liquefied Gas is heavier than air and can therefore create 'lakes' on the ground. To prevent explosions and to recognise leakages, it is a common practice to mix odorous substances into the gas.
 
  
 
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<br/>
 
<u>Further Information:</u>
 
*[https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf Multiple Household Cooking Fuels]
 
 
These factsheets present different characteristics of different cooking fuels
 
*[http://www.afsglobal.com/faq/gas-comparisons.html What’s the difference between CNG, LNG, LPG and Hydrogen?]
 
 
An article about the differences between Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and hydrogen.
 
*[http://dvfg.de/deutscher-verband-fluessiggas-e-v/ Deutscher Verband Flüssiggas e.V.]
 
 
This website (German) of the German Association of Liquid Gas communicates news information and events.
 
  
 
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== '''Supply and Demand of LPG''' ==
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= Supply and Demand<br/> =
  
=== <u>Four aspects regarding supply</u> ===
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=== LPG Supply<br/> ===
  
==== 1. How is LPG produced? ====
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<u>'''1. How is LPG produced?'''</u><br/>LPG is a byproduct of natural gas and oil extraction and crude oil refining. Around 60% of LPG stocks in the last years have been separated from raw gas and raw oil during the extraction of natural gas and oil from the earth, and the remaining 40% have been a byproduct when crude oil is refined.<ref>https://www.wlpga.org/about-lpg/production-distribution/</ref>&nbsp;
 
 
LPG is a by-product of the fossil fuel industry; it is separated during petroleum and gas extraction as well as during raw oil refining where it is separated from other types of energy (heavy oil, diesel etc.).
 
 
 
45% of global LPG production is a product of the refinery process. The remaining 55% of LPG stocks are separated as accompanying products during oil and gas extraction.
 
 
 
=====  =====
 
 
 
===== <u>a. LPG from petroleum gas and oil extraction (55%)</u> =====
 
 
 
Depending on its origin, natural gas is made up of gases and liquids to varying degrees. As commercially used gas has to consist almost purely of methane, the extracted raw gas needs to be cleaned. In this process, gases that are not desired in the commercial gas distribution have to be removed. Propane and butane are used as LPG. 1 - 10% of the total 'raw petroleum gas' will become LPG (WLPGA, 2014).
 
 
 
During oil extraction, LPG appears as an accompanying gas. Depending on the origin, each ton of extracted petroleum contains 25 - 800 m³ accompanying gas. This is immedialely extracted in order to stabilise the raw oil. These accompanying gases are then either processed or burnt on the spot. As part of the latter process - known as flaring - approximately 140 billion m³ of potential LPG are burnt every. This is equal to approx. 70 million tons (or 5 % of the global gas consumption) and a value loss of 30 - 35 billion USD (Roenn, 2013).
 
 
 
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===== <u>b. LPG from the refining process (45 %)</u> =====
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<br/><u>a. LPG from petroleum gas and oil extraction</u>
  
LPG is separated from other derivatives in oil and gas refineries (see image 1). Commonly 4 - 5 % of the total raw oil can be extracted as LPG. This value can sink to 1 % in relation to other oil products depending on the quality of the raw oil, the technical standard of a given refinery and current market prices for propane and butane in comparison to other oil products (WLPGA, 2014).
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Natural gas is made up of gases and liquids to varying degrees. In most cases the gas has to be processed to remove impurities such as ethane, propane, butane and water, to meet the specifications of commercial natural gas. A detailed description of natural gas processing can be found in Wikipedia.<ref>https://en.wikipedia.org/wiki/Natural_gas</ref> The separated propane and butane are used as LPG. Thus, 1 - 10% of the total 'raw petroleum gas' will become LPG<ref name="WLPGA, 2014">WLPGA, 2014</ref>.<br/>
  
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LPG also appears as an accompanying gas during oil extraction. Each ton of raw oil contains 25 - 800 m³ accompanying gas. This is immedialely extracted in order to stabilise the raw oil. The accompanying gases are then either processed or burnt on the spot. As part of the latter process - known as flaring - approximately 140 billion m³ of potential LPG are burnt every. This is equal to approx. 70 million tons (or 5&nbsp;% of the global gas consumption) or 30 - 35 billion USD<ref name="Roenn, 2013">Roenn, 2013</ref>.<br/>
  
==== 2. How much LPG is produced? ====
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<br/><u>b. LPG from the refining process</u>
  
230 million tons of LPG were produced in 2008. By 2012, the global production had risen to 274 million tons (equivalent to a 19 % increase).
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LPG is separated from other derivatives in oil and gas refineries. 4 - 5&nbsp;% of the total raw oil can usually be extracted as LPG. This can decrease to as little as 1&nbsp;% depending on the quality of the raw oil, the technical standard of a refinery and current market prices for propane and butane in comparison to other oil products.<br/>
  
Between 2011 and 2012 production rose another 3 %. This growth that can almost exclusively be attributed to the gas extraction sector- whose LPG production capacities grew 6 %. This especially includes the US-led expansion of shale gas extraction 'fracking'- since the expansion of 'fracking' US LPG production rose by 8 %. ([http://www.ogj.com/articles/print/volume-111/issue-6/processing/shale-gas-development-altering-lpg-demand--trade.html Leija and Gist, 2013]).
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<br/><u>'''2. How much LPG is produced?'''</u>
  
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In the last 15 years, LPG productions has been growing continuously and has always exceeded consumption.&nbsp; This growth&nbsp; can largely be attributed to the gas extraction sector- whose LPG production capacities grew substantially. This especially includes the US-led expansion of shale gas extraction called 'fracking', which provides LPG as by product <ref name="Leija and Gist, 2013 - http://www.ogj.com/articles/print/volume-111/issue-6/processing/shale-gas-development-altering-lpg-demand--trade.html">Leija and Gist, 2013 - http://www.ogj.com/articles/print/volume-111/issue-6/processing/shale-gas-development-altering-lpg-demand--trade.html</ref>.&nbsp; Since 2011, LPG production has always been above 270 million tons per year, Thus, it reached 284 million tons/year in 2014<ref>Argus & WLPGA. Statistical review of global LPG 2014. Paris: World LP Gas Association; 2015.</ref>. Excess of LPG is partly vented or burned off by the oil and gas companies. &nbsp;&nbsp;<br/>
  
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<u>'''3. Where is LPG produced?'''</u><br/>
#Where is LPG produced?
 
  
For a long time North America was the largest LPG producer. By now the Middle East is the leading LPG producing region. There, local processing capacities from oil or gas to LPG were strengthened substantially in the last couple of years. In 2012, 67 million tons of LPG were produced (see Fig. 2).
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LPG is currently produced in all continents. North America and the Middle East are the largest LPG producer followed by some Asian regions.&nbsp; Africa is producing less than 10% of the world production. Thus in 2014, only 16 million tons of LPG came from Africa, most of it from Algeria.<br/>
  
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North American production capacities are expected to grow further due to the expansion in the shale gas sector<ref name="PR Newswire, 2013 - http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html">PR Newswire, 2013 - http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html</ref>. It is also expected that LPG production will increase in West Africa, Australia, Russia and China<ref name="Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf">Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf</ref>. This increase is mainly possible through the development of refineries which allow the extraction of LPG.<br/>
  
 
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'''''Figure 2. Regional LPG production in million tons 2002-12 ('''''[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf Argus, 2013]''''')'''''
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<u>'''4. How much LPG will be available in the future?'''</u><br/>As byproduct of the oil and gas industry the supply of LPG is directly dependent on the extraction of fossil fuels. When fossil fuel extraction increases, more LPG becomes available. When it falls, LPG availability will also fall. While larger production capacities may open up from the development of new fossil fuel sources, it has to be highlighted that most conventional fossil fuel fields are already being exploited. Additional fossil fuel sources may be harnessed from unconventional sources. However, these are mostly linked to significant environmental risks.
  
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More LPG may also be made available from accompanying gases that are currently being flared. This ressource offers 70 million tons of gas. First attempts to power villages by converting such accompanying gases to electricity are prepared as part of a specific High Impact Opportunities (HIO) under the UN Initiative "Sustainable Energy for All" (see [http://www.se4all.org/hio/phase-out-of-gas-flaring-from-oil-production/ SE4All]).<br/>
  
In the next couple of years, North American production capacities are due to grow further due to shale gas expansion ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]). It is further estimated that production will also rise in West Africa, Australia, Russia and China ([http://media.argusmedia.com/~/media/Files/PDFs/White Argus, 2013]). This increase is mainly enabled through the development of refineries.
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
<br/>
 
<br/>
#How much LPG will be available in the future?
 
  
 
<br/>
 
<br/>
 
As a by-product of the oil production, the supply of LPG is contingent of the extraction of fossil fuels. As oil extraction rises, an increased production of LPG becomes possible. As it falls, LPG availability will also fall. Larger production capacities may open up from the discovery of new oil fields in Antarctica or from the extraction of shale gas. Nevertheless, this involves large environmental risks and it thus controversial.
 
  
 
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More LPG may be exploited through using the presently burnt accompanying gases during oil or gas extraction. This currently adds up to 70 million tons. The technology to exploit LPG from accompanying gases exist. First attempts to power villages from such accompanying gases are run by High Impact Opportunities as part as SE4All.
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=== LPG Demand ===
  
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<u>'''1. How much LPG is consumed where?'''</u>
  
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According to estimates, around 2 billion people worldwide use LPG for heating, cooking and other purposes. Global LPG consumption in 2008 stood at 230 million tons. By 2012, consumption rose to 265 million tons.
<ol style="list-style-type: lower-alpha;">
 
<li><u>Two aspects regarding demand</u><ol style="list-style-type: lower-roman;">
 
<li>How much LPG is consumed where?</li>
 
</ol></li>
 
</ol>
 
  
In 2008, global LPG consumption was 230 million tons. By 2012, consumption rose to 265 million tons.
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The largest proportion of the increase can be attributed to the Asian-Pacific region. Consumption there rose from 58,000 million tons to 80,000 million tons between 2000 and 2010. In 2011 the Asia-Pacific region made up 35&nbsp;% of global consumption. Annual growth rates of 4.8&nbsp;% in demand are anticipated until 2018<ref name="PR Newswire, 2013: http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html">PR Newswire, 2013: http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html</ref>.<br/>
  
The largest proportion of the increase can be attributed to the Asian-Pacific region (see Fig. 3). There, between 2000 and 2010, consumption rose from 58,000 million tons to 80,000 million tons. In 2011 the Asian-Pacific region already made up 35% of global consumption. Until 2018 annual growth rates of 4.8% are anticipated ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]).
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[[File:Global LPG consumption from 2002-2012.jpg|thumb|center|762px|Global LPG consumption from 2002-2012 (adapted from Argus, 2013)|alt=Global LPG consumption from 2002-2012 (adapted from Argus, 2013)]]<br/>
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<p style="text-align: center">''Fig. 1. Global LPG consumption from 2002-2012 (adapted from [http://media.argusmedia.com/~/media/Files/PDFs/White_Paper/Statistical_Review_of_Global_LP_Gas_2013.pdf Argus, 2013])''<br/></p>Regarding individual countries, [[China Energy Situation|China]] is the leading LPG consumer with 13.3 million tons p.a., followed by [[India Energy Situation|India]] consuming 9.9 million tons. USA, [[Mexico Energy Situation|Mexico]] and [[Brazil Energy Situation|Brazil]] consume 7.5, 6.3 and 5 million tons of LPG per year.<br/><br/>
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<u>'''2. What is LPG used for?'''</u><br/>Most consumption of LPG occurs at the household level (49&nbsp;%), followed by the use of LPG as feedstock in the petrochemical industry (21.6&nbsp;%) and other industrial uses (11.8&nbsp;%). Direct consumption in refineries and finally the agricultural sector make up 2&nbsp;% of global consumption. Other sectors (e.g. Autogas) add up to an aggregated 9.3&nbsp;% of total consumption<ref name="Stealthgas, 2013: http://www.stealthgas.com/images/stories/lpgglobaldemand.png">Stealthgas, 2013: http://www.stealthgas.com/images/stories/lpgglobaldemand.png</ref>.<br/>
  
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LPG is used for the following purposes:
  
''Fig. 3: Global LPG consumption from 2002-2012 (adapted from ''[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf Argus, 2013]'')''
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*'''Heating and Cooking - '''especially in locations that are not connected to local gas distribution systems.
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*'''Auto gas '''''- ''Consumption of auto gas is enhanced through low taxes. In 2008, more that 13 million cars ran on LPG globally. Industries are currently promoting the spread of car gas.
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*Furthermore, LPG is used for '''cooling''' and in the '''Petrochemical industry.''' The petrochemical industry uses LPG mainly as feedstock for instance in the production of plastic<ref name="LPGas 2013: http://www.lpgasmagazine.com/propane-a-wanted-commodity-in-petrochemical-sector/">LPGas 2013: http://www.lpgasmagazine.com/propane-a-wanted-commodity-in-petrochemical-sector/</ref>.<br/>
  
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In poor developing countries LPG is almost exclusively used as a cooking fuel. The users are predominately middle- to high-income households in regions with a supply network (mostly urban and peri-urban areas).
  
Regarding individual countries, China is the leading LPG consumer consuming 13.3 million tons, followed by India consuming 9.9 million tons. USA, Mexico and Brazil consume 7.5, 6.3 and 5 million tons of LPG per year.
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
<br/>
 
<br/>
#What is LPG used for?
 
  
There are more than 2000 different uses for LPG. Globally most consumption occurs at the household level (49%), followed by petrochemical usages (21.6%), industrial usages (11.8%), direct consumption in refineries and finally the agricultural sector (2%): Other sectors as e.g.: liquefied gas (Auto gas) add to 9.3% of total consumption ([http://www.stealthgas.com/images/stories/lpgglobaldemand.png Stealthgas, 2013]).
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=== Relationship between Demand and Supply<br/> ===
  
In industrial countries LPG is used for the following purposes:
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Since 2007, the global production capacity of LPG is growing faster than demand: In 2012, there were 9.7 million tons of LPG availalbe in excess. This gap is currently widening. In 2012, for example, consumption rose by 2&nbsp;% whereas production rose by 3&nbsp;%.
*'''Heating and Cooking- '''especially in locations that are not connected to local gas distribution systems.
 
*'''Car gas''''''.''' Consumption of car gas is enhanced through low taxes. In 2008, more that 13 million cars ran on LPG globally. Industries are currently promoting the spread of car gas.
 
*Furthermore, LPG is used for '''cooling''' and in the '''Petrochemical industry.''' To this end, petrochemical industries use e.g.: the process of propane dehydration to produce propene. Propane is used as a component to produce plastic. ([http://www.lpgasmagazine.com/propane-a-wanted-commodity-in-petrochemical-sector/ LPGas, 2013]).
 
  
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Despite excess capacities, LPG remains scarce in many regions - especially in the rural areas of developing countries (see e.g. [http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Chandra, 2010]). This is mainly due to lacking supply networks, which are not able to supply households with the excess LPG. Furthermore, the target group 'poor households' which is a large potential customer group often targeted in international initiatives tends to dispose of too little income to afford LPG. This will be discussed further below.<br/>
  
In developing countries LPG is popular as a cooking fuel. Users are predominately urban-dwellers in places where there is a supply network and people have the high disposable income necessary for acquisition cost and running fuel costs.
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The excess amount of LPG is thus often processed. LPG is used in petrochemical industries or in the production of Liquid Natural Gas<ref name="Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White">Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White</ref>.
  
 
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<u>Further Information:</u><br/>
  
 
<br/>
 
<br/>
#'''Relationship between demand and supply'''
 
  
Since 2007 global production capacity of LPG is growing faster than demand: In 2012, there was 9.7 million tons of excess LPG. This gap is widening. In 2012, for example, consumption rose by 2% while production rose by 3 %.
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*[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas2013.pdf Statistical Review of LP Gas] (Short overview of results of statistical research of Argus and WLPGA concerning the production and consumption of LPG.)<br/>
 
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*[http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Indian LPG Market Prospects] (A PowerPoint presentation on plans of the Indian government concerning LPG consumption and development.)<br/>
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*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries] (A World Bank sponsored study of LPG markets in 20 different countries.)<br/>
 
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*[http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html Global Liquefied Petroleum Gas (LPG) Market is Expected to Reach USD 266.41 Billion in 2018: Transparency Market Research] (Short overview of results of a market survey by Transparency Market Research about the future development of LPG markets.)<br/>
Despite the excess amounts produced, LPG is scarce in many regions- especially in rural areas of developing countries (see e.g.: [http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Chandra, 2010]). This is mainly due to lacking supply networks, which are not able to supply centres of demand with the excess LPG.
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*[http://www.youtube.com/watch?v=tZJKhZFr58I Gas Flaring - Warum Ölkonzerne auf Klimaschutz pfeifen] (Documentary (in German) about gas flaring and technical solutions to extract accompanying gases.)<br/>
 
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*[http://www.worldlpgas.com/resources/publications List of Publications of the World LPG Associations]
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The excess amount of LPG is thus often further processed. LPG is used in petrochemical industries or in the production of Liquid Natural Gas, as transportation into other markets was either not possible or viable ([http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas2013.pdf Argus, 2013]).
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
<br/>
 
<br/>
 
''<u>Further Information:</u>''
 
*[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas2013.pdf Statistical Review of LP Gas]
 
 
''Short overview of results of statistical research of Argus and WLPGA concerning the production and consumption of LPG.''
 
*[http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Indian LPG Market Prospects]
 
 
''A PowerPoint presentation on plans of the Indian government concerning LPG consumption and development.''
 
*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries]
 
 
''A World Bank sponsored study of LPG markets in 20 different countries.''
 
*[http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html Global Liquefied Petroleum Gas (LPG) Market is Expected to Reach USD 266.41 Billion in 2018: Transparency Market Research]
 
 
''Short overview of results of a market survey by Transparency Market Research about the future development of LPG markets.''
 
*[http://www.worldlpgas.com/resources/publications List of Publications of the World LPG Associations]
 
  
 
<br/>
 
<br/>
*[http://www.youtube.com/watch?v=tZJKhZFr58I Gas Flaring - Warum Ölkonzerne auf Klimaschutz pfeifen]
 
 
''Documentary (in German) about gas flaring and technical solutions to extract accompanying gases.''
 
  
 
<br/>
 
<br/>
#'''Supply routes of LPG'''
 
 
A number of different steps are necessary from the production-that is the extraction- of LPG until it reaches the end-consumer. This requires infrastructure for its distribution (see Fig. 5).
 
 
It starts with '''Step 1- Production'''. LPG is separated from petroleum gas or oil. As described above, this ensures the stabilisation of the petroleum or the cleansing of the gas. In this process 55% of global production is extracted.
 
  
In '''Step 2- Transport''', the remaining petroleum gas or oil as well as the separated LPG is transported through ships, pipelines and trains.
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= LPG Supply&nbsp; =
  
While oil and gas is transported to refineries, LPG is transported in special storage facilities where it is already put under pressure. This is '''Step 3- Refinery and Storage. '''As described above further LPG is separated and gained in refineries (45% of global production).
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== Value Chain and Supply Route ==
  
In '''Step 4 – Further Transport,''' LPG is transported from refineries or large warehouses to smaller warehouses or cylinder charging stations.
+
A number of different steps are necessary between the raw form of LPG up to the final consumer. A sophisticated infrastructure is required for the distribution. LPG either comes directly from gas wells or is a by-product of crude oil refining. Subsequently, it is delivered from supply points in a liquefied form to primary bulk storage facilities, where it is stored under refrigeration or pressurisation. The owners/operators of bulk storage facilities may also be the importers and have the necessary transport facilities. LPG for cooking is brought to cylinder filling plants. The cylinders are either owned by the bottling company or by distributers or by the consumers (see below the different distribution systems). The filled cylinders are distributed to a network of intermediaries, who operate depots and the necessary transportation facilities. The cylinders are supplied to retail points, where they are sold to customers. Empty cylinders are either returned along the chain to the filling plant or directly brought to a filling station by the customer.&nbsp;
  
 
<br/>
 
<br/>
 
+
<p style="text-align: center">[[File:Route of LPG from production to the end-consumer.jpg|thumb|center|765px|Route of LPG from production to the end-consumer|alt=Route of LPG from production to the end-consumer]]Figure 2. Route of LPG from production to the end-consumer (adapted from graphic on <font color="#0b0118">WLPGA website</font>)<br/></p>
Figure 5. Route of LPG from production to the end-consumer (adapted from [http://www.worldlpgas.com/about-lp-gas/distribution-chain WLPGA, 2014]''''')'''''
 
 
 
 
<br/>
 
<br/>
 
In '''Step 5- Cylinder charging and Storage''', LPG is filled into smaller cylinders or stored in warehouses for consumption.
 
 
This is followed by '''Step 6- Distribution,''' where cylinders or small quantities of LPG are distributed to the end-consumer. This is done mainly through Lorries.
 
 
In the last'''Step 7- End-consumer''', the route from production to the customer is finalised. Depending on the circumstances smaller cylinder merchants can locally store LPG and fill it into smaller cylinders. Alternatively, they can be sold directly to the consumer in small cylinders. Bigger customers in industries usually dispose of larger storage tanks.
 
  
 
<br/>
 
<br/>
  
<br/>
+
== Cylinder Distribution Systems ==
  
''<u>Further Information:</u>''
+
There are two main systems for distributing LPG cylinders to consumers: the '''Consumer Controlled Cylinder Model (CCCM)''' and the '''Branded Cylinder Recirculation Model (BCRM)'''.<br/>
*[http://www.youtube.com/watch?v=q3RXIYbQ83w PRIMAGAS Energie - Von der Nordsee in den Tank]
 
  
''A short film (German) about the supply routes of LPG from the North Sea to the end-consumer.''
+
In '''CCCM''' the consumer owns the cylinder and is fully responsible for maintaining the cylinder. The consumer can refill it at any refilling station. Main disadvantag of the CCCM is&nbsp;a possible decline in cylinder safety, leading to an increased risk of fire and explosion accidents. In addition, the CCCM is susceptible for black market LPG activities by unlicensed and uncertified refilling businesses disregarding safety.<br/>
  
<br/>
+
In '''BCRM''' the LPG marketing company owns the cylinder and hence, is fully responsible for maintaning the cylinder. Consumers can refill the cylinder only at authorized stations of the marketing company. The consumer generally pays a deposit to obtain the first cylinder from authorized distributers, which is typically set below the cost of the cylinder, plus the purchase price of the LPG it contains. Empty cylinders are exchanged for a full cylinder of the same brand for the refill price. Main disadvantages of BCRM are the often higher end consumer cost of the cylinder and the refilling and the exclusion of small enterprises from the LPG business.&nbsp;<br/>
  
 
<br/>
 
<br/>
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<br/>
 
<br/>
  
<br/>
+
= LPG as a Cooking Fuel for Low-Income Households<br/> =
  
<br/>
+
== General Factors Concerning the Choice of Cooking Fuels<br/> ==
  
'''<u>II. LPG as a cooking fuel for low-income households</u>'''
+
The selection of the type of fuel during cooking is contingent of several factors. Factors influencing the decision are availability, affordability, habits and the usability of the fuel. The prevailing use of fire food in many developing countries is primarily because it is cheap (often free) and widely available. In the future wood will remain the primary cooking fuel for rural households<ref name="GIZ, 2014 - https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf">GIZ, 2014 - https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf</ref>.
  
<br/>
+
An increase in LPG use could reduce the total amount of wood, coal and kerosene consumed. This is the case in some cities where LPG is available. But households do not tend to fully replace one fuel by another. Instead, they use a mix of fuels and a specifif fuel is chosen according to availability, affordability and convenience.
  
<br/>
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
#'''General factors concerning the choice of cooking fuels'''
 
  
 
<br/>
 
<br/>
 
The selection of the type of fuel during cooking is contingent of several factors. Factors influencing the decision are availability, affordability, habits and the usability of the fuel. The prevailing use of fire food in many developing countries is primarily because it is cheap (often free) and widely available. In the future wood will remain the primary cooking fuel for rural households ([https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf GIZ, 2014]).
 
  
 
<br/>
 
<br/>
  
An increase in LPG usage could reduce the total usage of wood, coal and kerosene. This is already the case in some cities where LPG was widely available leading to higher consumption rates. It should nevertheless be noted that households to not completely replace one fuel by another. Instead, they use a mix of fuels and a singular fuel in a given moment is chosen depending on the characteristic of the fuel (heating up time, type of food prepared, income etc.).
+
=== LPG Cooking Systems<br/> ===
 
 
<br/>
 
#'''Cooking systems using LPG'''
 
  
 
A typical cooking system which uses LPG is made up of a steel cylinder filled with LPG, a pressure controller, a tube connecting the cylinder to the pressure controller and the burner, and finally the burner itself. The burner can consist of one or more cooking tops.
 
A typical cooking system which uses LPG is made up of a steel cylinder filled with LPG, a pressure controller, a tube connecting the cylinder to the pressure controller and the burner, and finally the burner itself. The burner can consist of one or more cooking tops.
  
<br/>
+
The size of the system depends on the size of the cylinder. Cylinders exist in various sizes e.g.: 2.7 kg, 6 kg, 12 kg, 14,5 or 16 kg. A survey in 20 countries showed that low-income countries households mainly use cylinders smaller than 6 kg<ref name="World Bank, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/LPGReportWeb-Masami.pdf">World Bank, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/LPGReportWeb-Masami.pdf</ref>. Nevertheless, the majority of currently available LPG cylinders are larger (up to 47.5 kg). This proves problematic for low-income households both in the acquisition as well as the recharge of LPG.
 
 
The size of the system depends on the size of the cylinder. Cylinders exist in various sizes e.g.: 2.7 kg, 6 kg, 12 kg or 16 kg. A survey in 20 countries showed that low-income countries households mainly use cylinders smaller than 6 kg ([http://siteresources.worldbank.org/INTOGMC/Resources/LPGReportWeb-Masami.pdf Weltbank, 2011]).
 
 
 
Nevertheless, the majority of currently available LPG cylinders are larger (up to 47.5 kg). This proves problematic for low-income households both in the acquisition as well as the recharge of LPG. In low-income countries, the limited availability of small cylinders acts as a barrier to improving LPG supply.
 
 
 
LPG stoves tend to have an efficiency of 55 and 60%. A 14 kg LPG stove with equipment costs approximately 66$. The life-cycle is 5-8 years.<br/><br/>
 
#'''Advantages and disadvantages of LPG as a cooking fuel for low-income households'''
 
  
<br/>
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]<br/>
#<u>Advantages of LPG as a cooking fuel</u>
 
  
 
<br/>
 
<br/>
  
The main advantages of LPG provision of low-income households in comparison to conventional fuels are:
+
== Advantages & Disadvantages of LPG as a Cooking Fuel for Low-income Households<br/> ==
  
<br/>
+
=== Advantages of LPG<br/> ===
#Health
 
  
The use of LPG reduces the interior air pollution by 90% in comparison to traditional ways of burning biomass e.g.: three-stone fire ([http://www.who.int/hia/green_economy/en/ WHO, 2011]; [http://ldihealtheconomist.com/media/The_Health_Consequences_of_Indoor_Air_Pollution.pdf Polsky and Ly, 2012]). As LPG burns almost completely the proportion of pollutants is reduced.
+
<u>The main advantages of LPG provision of low-income households in comparison to conventional fuels (wood, wood charcoal) are:</u><br/>
#Environmental impacts
 
  
 
<br/>
 
<br/>
  
CO2 emissions are relatively low. Compared to coal, which is used in traditional stoves, greenhouse gases are reduced by 5-16 times per prepared meal ([http://rael.berkeley.edu/sites/default/files/very-old-site/OA5.1.pdf Bailis et al., 2003]). If LPG was used, wood consumption may reduce substantially; 45 kg LPG produces the thermic energy of about half a ton of wood. In regions with low biomass, or in region where more than the sustainably available amount of biomass is burnt, LPG could lead to a significant relief of current biomass resources.
+
#'''Health-related:''' The use of LPG reduces the interior air pollution by 90% in comparison to traditional ways of burning biomass e.g.: three-stone fire<ref name="WHO, 2011 - http://www.who.int/hia/green economy/en/">WHO, 2011 - http://www.who.int/hia/green economy/en/</ref><ref name="Polsky and Ly, 2012 - http://ldihealtheconomist.com/media/The Health Consequences of Indoor Air Pollution.pdf">Polsky and Ly, 2012 - http://ldihealtheconomist.com/media/The Health Consequences of Indoor Air Pollution.pdf</ref>). As LPG burns almost completely, the proportion of pollutants is reduced.<br/>
 +
#'''Environmental impacts-related''': CO<sub>2</sub> emissions are relatively low. Greenhouse gases are reduced by 5-16 times per prepared meal compared to coal<ref name="Bailis et al., 2003 - http://rael.berkeley.edu/sites/default/files/very-old-site/OA5.1.pdf">Bailis et al., 2003 - http://rael.berkeley.edu/sites/default/files/very-old-site/OA5.1.pdf</ref>. If LPG was used, the wood consumption can be substantially reduced - 45 kg of LPG is sufficient to produce the thermic energy of about half a ton of wood. In regions with low biomass availability, or in regions where more than the sustainably available amount of biomass is burnt, LPG could lead to a significant relief of biomass resources.<br/>
 +
#'''Further advantages''': LPG stoves quickly supply heat and work more efficient than stoves which burn biomass. The simple and precise regulation simplifies the cooking process and can save time.Due to its high energy density, LPG is easily transportable.<br/>
  
<br/>
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
#Further advantages
 
  
 
<br/>
 
<br/>
  
LPG stoves quickly supply very high heat and are more efficient that stoves which burn biomass. The simple and precise regulation possibilities simplifies cooking for the cook and can save time both during cooking, as well as during cleaning the kitchen.
+
=== Disadvantages of LPG ===
  
Due to the high energy density, LPG is easily transportable.
+
<u>The disadvantages of LPG as a cooking fuel are the following:</u><br/>
  
<br/>
+
'''1. Availability''': A UNDP study found that 120 billion tons of LPG are necessary to supply 2 billion people with cooking energy<ref name="UNDP, 2000 - http://www.undp.org/content/undp/en/home/librarypage/environment-energy/sustainable energy/world energy assessmentenergyandthechallengeofsustainability.html">UNDP, 2000 - http://www.undp.org/content/undp/en/home/librarypage/environment-energy/sustainable energy/world energy assessmentenergyandthechallengeofsustainability.html</ref>. This equates to 60 kg of LPG per capita and is equivalent to half of the current global production. These quantities are currently not available.
#<u>Disadvantages of LPG as a cooking fuel</u>
 
  
The disadvantages of LPG as a cooking fuel are following:
+
<u>A mix of the following strategies would therefore be required if 2 billion people were to be supplied with LPG as a cooking fuel:</u>
  
 
<br/>
 
<br/>
#Availability
 
  
In 2002 it was calculated that 120 billion tons of LPG are necessary to supply 2 billion people with cooking fuels ([http://www.undp.org/content/undp/en/home/librarypage/environment-energy/sustainable_energy/world_energy_assessmentenergyandthechallengeofsustainability.html UNDP, 2000]). This equates to 60 kg of LPG per head which currently equates to half of global production. Such quantities of LPG are currently not available to be used as a cooking fuel. It results that the following goals must be met for an efficient LPG supply as a cooking fuel:
+
#New fossil fuel sources would have to be developed
*new sources must be found (shale gas through fracking, oil extraction in the arctic).
+
#Current extraction processes would have to become more efficient
*current extraction processes must be made more efficient (higher LPG share as a refining product, accompanying gas)
+
#The use of LPG in other sectors would have to be reduced
 
 
or
 
*other uses must be reduced (e.g.; urban cooking demand must be met with conventional gas, decreased petrochemical use, reduced use of car gas).
 
  
 
<br/>
 
<br/>
#Costs
 
  
In most countries, in which an improved LPG provision would be reasonable, the LPG market is underdeveloped or non-existent. The development of available structures would require substantial financial means. These entail:
+
'''2. Costs''': The LPG market is underdeveloped in most regions where LPG would be an addition to current cooking fuels. Significant sums would have to be invested to develop these markets.
  
a). Costs of developing the market/ Infrastructure investments
+
'''<u>Costs entail:</u>'''<br/>
  
The development of the LPG market is bound up with significant investments. The necessary investments include:
+
<u>a. Market Development Costs include:</u>
*production capacities need to be built or developed
 
*in case of LPG import, import facilities must be available. In case of demand fluctuations, individual countries must be able to store large quantities of LPG.
 
*From there, LPG can either be transported to few large central stations or too many, decentralised stations.
 
 
 
WLPGA states that the set-up of central cylinder filling station with a capacity of 50,000 tons would require ca. 7 million € ([http://www.worldlpgas.com/uploads/Modules/Publications/wlpga-guidelines-for-the-development-of-sustainable-lp-gas-markets.pdf WLPGA, 2013]). 500 smaller facilities with a capacity of 1,000 tons each cost 12 million €. While the latter is more expensive, it could reduce transport costs.<br/><br/>Regarding the necessary size of Investments: in the next couple of years the Indian energy ministry plans to make investments of 2 billion US$ to develop import facilities, storage facilities and cylinder filling to develop the LPG market ([http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Chandra, 2010]).
 
  
 
<br/>
 
<br/>
  
b) Initiating costs for the consumer
+
*LPG production capacities if a country has access to fossil fuel ressources
 +
*Import facilities if a country does not have access to fossil fuel ressources
 +
*A distribution network with storage and filling stations
  
Next to investment into infrastructure, consumers require capital to buy a stove which can use LPG. A LPG cylinder system of 14 kg costs 66 $. This acts as a barrier for many households and is a disadvantage in relation to competing cooking fuels like wood, coal and kerosene. Average costs for a kerosene stove are 83% lower ([http://www.thisdaylive.com/articles/hindering-growth-of-nigeria-s-lpg-market-with-kerosene-subsidy/157397/ TDL, 2013]).
+
No reports are known that explore the necessary investment costs of developing an LPG market in-depth. Further research is needed in this field.<br/>
  
 
<br/>
 
<br/>
#Running costs for the consumer
 
  
In November 2010, the international market price for LPG was at 850 US$ per ton. The World Bank estimates that the supply chain costs 300 US$ per ton until it reaches the end-consumer. This equates to 1.15 US$ per kg of LPG (excluding taxes and subsidies). In the 20 countries in which the local price of LPG was surveyed, 6 countries were found to have prices within 0.10 US$ of this price level. In the remaining 14 countries larger price variations were found (Morocco: 0.40 US$, Turkey: 3.26 US$ see. Fig. 6).
+
<u>b. Costs for Households</u>
  
<br/>
+
Households require capital to buy hardware such as the LPG stove and the cylinder. Again, limited data exists that compares regional prices. A typical 14 kg LPG cylinder system usually costs between 60 - 70 US$. This is a barrier for many households. A competitive kerosene-based cooking systems is 83&nbsp;% cheaper<ref name="TDL, 2013 - http://www.thisdaylive.com/articles/hindering-growth-of-nigeria-s-lpg-market-with-kerosene-subsidy/157397/">TDL, 2013 - http://www.thisdaylive.com/articles/hindering-growth-of-nigeria-s-lpg-market-with-kerosene-subsidy/157397/</ref>. Improved wood or wood charcoal stoves can be obtained for as little 2 US$.
  
''Figure 6. LPG prices for the end-consumer in December 2010 (adapted from ''[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Matthews and Zeissig, 2011]'')''
+
Furthermore, households need to be able to pay the running costs for LPG. A survey that explored the costs to the consumer in 20 countries found that large discrepancies exist. One kg of LPG costs between 0.40 US$ in Morocco and 3.26 US$ in Turkey.
  
 +
[[File:LPG prices for the end-consumer in December 2010.jpg|thumb|center|763px|LPG prices for the end-consumer in December 2010|alt=LPG prices for the end-consumer in December 2010.jpg]]
 +
<p style="text-align: center">''Figure 3. LPG prices for the end-consumer in December 2010 (adapted from ''[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Matthews and Zeissig, 2011]'')''</p>The price of LPG is affected by taxes, subsidies and market distribution costs. LPG becomes cheaper when distribution routes are short or bought in bulk. Low-income households mostly live in remote rural areas and buy small amounts. This is a disadvantage in comparison to wood, which can be collected free of charge. A survey in a medium-sized city in northern Madagascar provided some data on comparable prices for different cooking fuels. It shows that a kg of LPG costs approx. 2.80 US$. This is 17 times higher than the price for a kg of charcoal and 30 times higher than the price for wood (see figure 4).
 
<br/>
 
<br/>
 
+
<p style="text-align: center">''[[File:Urban consumer prices in Diego-Madagascar (2013).png|thumb|right|763px|Urban consumer prices in Diego-Madagascar (2013)|alt=Urban consumer prices in Diego-Madagascar (2013).png]]''</p><br/>
 
<br/>
 
<br/>
 
The price of LPG decreases in line with the bought quantity and shorter travel routes. Low-income households in rural areas will thus pay a higher price for LPG. This is a disadvantage to wood and coal, given that wood is often free and coal fairly cheap. Furthermore, low-income households can often not afford bulk buys.
 
  
 
<br/>
 
<br/>
#Insecurities regarding price development
+
<p style="text-align: center">''Figure 4. Urban consumer prices in Diego, Madagascar in 2013 ([http://www.eco-consult.com/fileadmin/user_upload/pdf/Multiple-Household_Fuel_Use.pdf GIZ HERA, 2014] )''</p>In terms of useful energy delivered, LPG costs 0.13 US$ / MJ. Firewood costs 0.05 US$ / MJ and charcoal costs 0.03 US$ / MJ.
 
+
More recent data from 2019 are available from refugee camps in Bangladesh. A 12 kg cylinder and a simple gas stove cost around 45 USD. Refilling the cylinder cost 12 US$ or 1 US$/kg. According to the data from UNHCR around 82g of LPG is consumed per person and day. For a 5 household with 5 persons it would mean around 12 kg per month.<ref>LPG Distribution at Refugee Camp in Bangladesh, https://energypedia.info/images/d/df/Webinar_Series-_Sustainable_Energy_in_Humanitarian_Settings.pdf</ref>
A further disadvantage of LPG is the fluctuating running costs. In India the price of unsubsidized LPG cylinders of 14.2 kg was increased by 20% ([http://timesofindia.indiatimes.com/business/india-business/Price-of-non-subsidized-LPG-hiked-by-Rs-220-a-cylinder/articleshow/28250706.cms ToI, 2014]). Beyond this, information regarding long-term price development of LPG are hardly available.
 
 
 
<br/>Potential LPG customers thus reject changing to LPG. In South Africa a household surveys stated that households decided not to use LPG due to the insecure price developments ([http://www.engineeringnews.co.za/article/good-growth-predicted-for-lpg-2010-08-27 Burger, 2010]).
 
  
 
<br/>
 
<br/>
#<u>Table summarizing advantages and disadvantages</u>
 
  
The following table summarises the most important advantages and disadvantages of LPG as a cooking fuel for low income households:
+
=== Tabular Overview of Advantages & Disadvantages<br/> ===
  
<br/>
+
<u>The following table summarises the most important advantages and disadvantages of LPG as a cooking fuel for low income households:</u><br/>
  
 
<br/>
 
<br/>
  
<br/>
+
{| style="width: 100%" cellspacing="1" cellpadding="5" border="1"
 
+
|-
{| border="1" cellspacing="0" cellpadding="0"
+
| style="width: 113px;  background-color: rgb(204, 204, 204)" | <br/>
 +
| style="width: 373px;  background-color: rgb(204, 204, 204)" | '''Advantages'''
 +
| style="width: 335px;  background-color: rgb(204, 204, 204)" | '''Disadvantages'''
 
|-
 
|-
| style="width: 313px; height: 29px;" |  
+
| style="width: 113px" | '''Overall'''
Advantages
+
| style="width: 373px" |  
 +
*Nearly smoke-free
 +
*Easy handling
 +
*Simple Regulation
 +
*Fast heat-up time
 +
*Efficient
 +
*Easilty transportable
  
| style="width: 313px; height: 29px;" |  
+
| style="width: 335px" |  
Disadvantages
+
*Fossil fuel (finite ressource)
 +
*Markets - especially in rural areas - not developed
 +
*Absence of adequate infrastructure
 +
*Irregular supply
 +
*Risk of explosion
  
 
|-
 
|-
| style="width: 313px; height: 474px;" |  
+
| style="width: 113px" | '''Economic'''
''General''
+
| style="width: 373px" | <u>Macro</u><br/>
*nearly smoke-free burning of LPG and thus more healthy
 
*easy handling: turning the stove on and off does not involve major health and safety risks e.g.: burns.
 
*Simple Regulation: It is easy to regulate the heat
 
*fast heating
 
*very efficient (high fuel value)
 
*transportable
 
*will burn despite wind
 
*stable on different surfaces
 
*no fire risks
 
*portable
 
 
 
<br/>
 
 
 
''Cost effectiveness''
 
*durable devices
 
*low running costs
 
 
 
<br/>
 
 
 
<br/>
 
 
 
<br/>
 
 
 
''Social''
 
*diversified energy supply
 
*especially women and children spend less time collecting firewood
 
*Arbeitsplätze Kohle- sowie Holzkohlegewinnung I don’t understand this point
 
 
 
<br/>
 
 
 
<br/>
 
 
 
<br/>
 
 
 
''Environment''
 
*lower deforestation
 
*lower greenhouse emissions compared to burning biomass or coal
 
 
 
| style="width: 313px; height: 474px;" |  
 
''General''
 
*fossil fuel
 
*markets -especially rural markets- not developed
 
*lacking infrastructure for supply (currently few storage and filling facilities)
 
*irregular supply
 
*risk of explosion
 
*few filling stations
 
*dependant on imports
 
 
 
<br/>
 
 
 
 
<br/>
 
<br/>
  
<br/>
+
*Fuel diversity
  
<br/>
+
<u>Micro</u>
  
 
<br/>
 
<br/>
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<br/>
 
<br/>
  
<br/>
+
*Long operating life (durable devices)
 
 
''Cost effectiveness''
 
*high starting costs for equipment
 
*high running costs ( how can that be an advantage and disadvantage
 
*price developments ambiguous
 
  
 +
| style="width: 335px" | <u>Macro</u><br/>
 
<br/>
 
<br/>
  
''Social''
+
*Import dependency
*cylinders may not completely filled at purchase
 
*may lead to unemployment; 10-20 jobs are created per TJ of LPG while coal creates 200-350 jobs per TJ
 
  
<br/>
+
<u>Micro</u>
 
 
''Environment''
 
*LPG demand may enhance the environmentally devastating shale gas and oil extraction
 
  
 
<br/>
 
<br/>
 
|}
 
  
 
<br/>
 
<br/>
  
''Table 1. Overview of advantages and disadvantages of LPG as a cooking fuel''
+
*High upfront costs
 +
*Higher running costs than biomass fuels
  
<br/>
 
 
''<u>Further Information:</u>''
 
*[https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf Multiple Household Cooking Fuels]
 
 
''Fuel Factsheets show different cooking fuels.''
 
*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries]
 
 
''A study sponsored by the World Bank reviewing 20 countries''
 
 
<br/>
 
 
<br/>
 
 
<br/>
 
 
<br/>
 
#'''LPG as a cooking fuel for low-income households'''
 
 
<br/>
 
#<u>Challenges for an improved supply of cooking fuels through LGP</u>
 
 
The challenges of an improved supply of LPG as a cooking fuel in low-income households can be divided into five areas:
 
#Administration
 
 
A central role in the development of the development of a LPG market is its effective regulation. This holds for the establishment of functioning market structures, as well as for the security of consumers. The report from the World LPG Association presents the most important aspects to be considered in the regulation of LPG markets. The report contains different sales models, ways to handle cylinders and outlines the definition and regulation of safety standards (see [http://www.worldlpgas.com/uploads/Modules/Publications/wlpga-guidelines-for-the-development-of-sustainable-lp-gas-markets.pdf WLPGA, 2013]).
 
 
For enhancing investment long-term statement from politicians would be helpful. In this regard subsidies are especially important ([http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/ IEA, 2011]).
 
 
To enable access for the target group, regulations and subsidies must be targeted.
 
 
<br/>
 
#Availability
 
 
In many countries private sector investments ensured the supply of LPG to especially high-income households in cities. Some countries and many rural areas have little or no supply infrastructure. Without public sector initiatives, private companies are unlikely to invest in peripheral regions. This is why state intervention, targeting rural low-income households especially, are necessary. The private sector can be partially involved in the costs ([http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/ IEA, 2011]).
 
 
Next to the provision of decentralised distribution networks, filling stations are also important for the supply of rural areas. LPG should always be disposable in these stations, as a secure supply would increase people's acceptance of LPG. Acceptance is likely to fall if supply is unstable.
 
 
<br/>
 
#Affordability
 
 
As soon as supply is assured, affordability becomes the largest barrier to an improved usage of LPG. Subsidies are necessary both for initial and running costs if LPG is to be made available for low-income households.
 
#Subsidising initial costs
 
 
Subsidising the initial costs allows access to LPG usage. Nevertheless, subsidies of the equipment without subsidies of running costs could lead to a situation in which families cannot afford to actually use LPG. Such would be a 'dead' investment ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
<br/>
 
#Subsidising running costs
 
 
Die Förderung des Treibstoffs ist sinnvoll, wenn die Nutzung von LPG für einkommensschwächere Gruppen ermöglicht werden soll. (Den Satz verstehe ich vom Sinn nicht. Was meint ihr mit 'foerderung'?). Different precautionary measures have to be made. The amount of low-priced LPG could be limited through coupons. Subsidised cylinders could be marked with colours to prevent subsidised LPG being sold-on to other households ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
The grading of subsidies according to usage would ensure that households with low consumption pay a low price. According to this model large-scale consumers would pay a progressively rising tariff ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
<br/>
 
#Who pays the subsidies?
 
 
LPG subsidies require large investment sums. A study of the OECD and the IEA found that they would have needed 1.5 billion US $ for the supply of LPG-stoves and cylinders ([http://www.iea.org/publications/freepublications/publication/cooking.pdf OECD und IEA, 2006]). The financing of hardware could stem from various sources. Microcredit institutions could hand out credits. Alternatively, LPG entrepreneurs could keep the ownership of the cylinders and demand rent or a deposit from its customers. Furthermore, the distribution of smaller cylinders would decrease the necessary amount of capital or subsidies.
 
 
Regarding the running costs, there are various possibilities to keep the costs of LPG subsidies low. Subsidies of kerosene could be used for LPG investments which would enable a 'fuel switch' without increasing costs for the public sector. In Indonesia such a switch from kerosene to LPG subsidies actually saved the government 6.9 million US$. It should be ensured that low-income consumers to not carry the costs of potential price increases. In Indonesia this was not the case; Energy costs for the consumer dropped by 42 % ([http://www.worldlpgas.com/about-lp-gas/production WLPGA, 2011]).
 
 
Subsidies can further be enhanced through the progressive tariffs mentioned above: LPG prices can rise along with quantity bought. The surplus gained by such tariff schemes can then subsidise the low-income households.
 
 
<br/>
 
#Guidelines of subsidies
 
 
Badly defined subsidies can decrease incentives to invest, decrease efficiency, encourage wasteful behaviour and burden public finances ([http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Matthews and Zeissig, 2011]). Because consumers quickly get used to subsidies, a reduction of subsidies, even with prior warnings, is difficult to push.
 
 
Thus the following points should be considered in the design of different subsidy programs of LPG for low-income households:
 
*investment in concrete system parts can be presented as more cost-efficient and require less monitoring than investments in fuels;
 
*subsidies for rural households must be targeted and transparent as without necessary restrictions subsidy regulations are often ignored;
 
*time-bound subsidies reduces costs but can lead to a market crash (e.g. in Indonesia);
 
*the price structure in relation to other fuels should be in line with the energy supply strategy of a given country, so that LPG is cheaper than kerosene for example<br/><br/>
 
 
The private sector should be integrated into all financing plans. The private sector could, for example, enable the distribution of small cylinders. The extra costs of such endeavours can be counteracted through long-term consumption.
 
#Awareness
 
 
LPG is seen as a modern, clean and easily-used fuel. Nevertheless, educational campaigns are sometimes useful. Especially health and environmental benefits should be underlined to target groups. Furthermore, to avoid accidents, the correct application should be advocated.
 
 
<br/>
 
 
<br/>
 
 
Furthermore, consumer confidence regarding the correct filling of cylinders needs to be raised. In underdeveloped LPG markets consumers sometimes obtain less LPG than they have paid for.<br/><br/>Technical solutions to this problem such as see-through cylinders have been developed by [http://www.ragasco.co.za/retailers Ragasco]<u>n. Such cylinders allow the consumer to check the filling level him/herself. Yet, such cylinders are not established on the market. In a well-functioning LPG market, where the cylinders are refilled and sealed by a regulated market actor such schemes would not be necessary.</u>
 
 
<br/>
 
#Security of supply
 
 
Current production surpluses of 9.7 million tons allow the increased distribution of LPG to low-income households. Nevertheless, it should be considered that prices will rise as soon as demand exceeds production. At this point, the distribution of limited LPG will be determined by the purchasing power of a given customer. As prices rise, low-income households will be excluded from an adequate LPG supply. This is important to consider as for many low-income households, current LPG price levels are already too high.
 
 
<br/>
 
#Short and middle-term security of supply for low-income households
 
 
LPG demand of petrochemical industries rose markedly in the US and the Middle East. It is expected that petrochemical industries will absorb current supply surpluses as long as prices remain low ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]). Increased demand is also expected in the car gas sector. Consumption is expected to rise annually by 4.4 % between 2012 and 2018.
 
 
In can nevertheless be anticipated that LPG will be available for consumption by low-income households. This is due to anticipated increases in LPG production raising quicker than consumption levels.
 
 
Furthermore, unused accompanying gases can be used to supply low-income households. In Nigeria, where large parts of the population use traditional cooking fuels and LPG-consumption remains low despite available oil resources, the usage of accompanying gases would be viable.
 
 
Whilst accompanying gases are used for electrification programs through SE4All-Initatives, there are no known programs which specialise in LPG supply through using accompanying gases. This is the case despite the existence of the technological know-how.
 
 
<br/>
 
#Long-term security of supply for low-income households
 
 
Since LPG supply is directly related to the availability of finite oil and gas deposits, supply for low-income households cannot be guaranteed in the long-term. To the contrary; as demand increases and availability decreases, prices will rise and thus increase the costs for low-income households.
 
 
Thus to ensure the long-term supply of LPG for low-income households, the development of supply strategies should be agreed with representatives of both politics and industry. As described above, demand is state-aided in various sectors (car gas, petrochemical industries etc.); this already threatens supply of low-income households in the middle-term.
 
 
To realistically ensure the goal of ' universal access to clean cooking fuels by 2030' stated by the IEA through 50% use of LPG, the following conflicts should be consciously avoided:
 
#conflicts between producing and importing countries
 
#conflicts between consumers on a household level, car gas and petrochemical industries
 
#conflicts between demand centres in the city and rural areas
 
 
<br/>
 
#<u>Table summarizing challenges</u>
 
 
<br/>
 
 
<br/>
 
 
{| border="1" cellspacing="0" cellpadding="0"
 
 
|-
 
|-
| style="width: 133px; height: 17px;" |  
+
| style="width: 113px" | '''Social'''
Barrier
+
| style="width: 373px" |  
 +
*Diversified energy supply
 +
*Less time for collecting firewood
  
| style="width: 498px; height: 17px;" |  
+
| style="width: 335px" |  
Characteristics
+
*Cylinders are sometimes filled incompletely
 +
*Less employment: 10-20 jobs are created per TJ of LPG while coal creates 200 - 350 jobs per TJ
  
 
|-
 
|-
| style="width: 133px; height: 17px;" |  
+
| style="width: 113px" | '''Environment'''
1. Regulation
+
| style="width: 373px" |  
 
+
*Less deforestation if wood use is replaced with LPG
| style="width: 498px; height: 17px;" |  
+
*Lower greenhouse gas emissions compared to burning biomass or coal
*the absence of clear rules can lead to security risks or the development of black markets
 
*lack of regulations discourages investors
 
*the mixing of cylinders from different producers may occur
 
*fraud may occur during refilling
 
  
<br/>
+
| style="width: 335px" |  
 
+
*LPG can be extracted from environmentally harmful sources (low standard oil industry, shale gas, etc.)
|-
 
| style="width: 133px; height: 17px;" |
 
2. Availability
 
 
 
| style="width: 498px; height: 17px;" |  
 
*storage capacities are insufficient to compensate demand fluctuations. Thus shortages or surpluses will arise.
 
*market participants, end suppliers or merchants staffing filling stations may not be available or have lacking capacities
 
*supply routes are not developed and companies are unlikely to develop access to remote areas
 
*lack of domestic production: dependence on LPG exporters
 
*low availability of small systems and system parts such as cylinders, connection hoses, regulators and cooking stoves
 
 
 
<br/>
 
 
 
|-
 
| style="width: 133px; height: 18px;" |
 
3. Affordability
 
 
 
| style="width: 498px; height: 18px;" |
 
*high initial costs compared to other fuels
 
*prices are higher in undeveloped markets
 
*lack of regulation may lead to the development of black markets
 
*subsidies for alternatives fuels such as coal or kerosene make LPG expensive
 
*low-income households have a low disposable income and sometimes have no costs for cooking fuels
 
*the remoter the supply, the more expensive the fuel
 
 
 
<br/>
 
 
 
|-
 
| style="width: 133px; height: 17px;" |
 
4. Awareness
 
 
 
| style="width: 498px; height: 17px;" |
 
*health and environmental benefits of LPG are sometimes not known
 
*insecurity regarding die economic development of LPG
 
*LPG is sometimes seen as unsafe; this is a result of few cases of improper usage of LPG cylinders which lead to accidents
 
*bad reputation of LPG due to improper filling and refilling of LPG cylinders
 
 
 
<br/>
 
 
 
|-
 
| style="width: 133px; height: 17px;" |
 
5. Supply security
 
 
 
| style="width: 498px; height: 17px;" |
 
*as derived from fossil fuels the availability of LPG is limited
 
*in the middle-term and long-term conflicts may arise due to increasing demand of LPG from different sectors. The escalation of such conflicts should be avoided
 
*increased usage may lead to the proliferation of fracking and oil extraction in Antarctica
 
 
 
<br/>
 
  
 
|}
 
|}
  
''Table 2. Overview of the most important barriers to LPG supply''
+
Table 1. Overview of advantages and disadvantages of LPG as a cooking fuel
  
 
<br/>
 
<br/>
  
 
<u>Further Information:</u>
 
<u>Further Information:</u>
*[http://www.worldlpgas.com/uploads/Modules/Publications/kerosene-to-lp-gas-conversion-programme-in-indonesia.pdf Kerosene to LP Gas Conversion Programme in Indonesia]
 
 
''This case study from Indonesia presents the experiences from shifting from Kerosene to LPG.''
 
*[http://www.cleancookstoves.org/resources/reports-and-research/ GACC Reports and Research]
 
 
''This website contains publications of 'Global Alliance on Clean Cook stoves.''
 
*[https://energypedia.info/index.php/Senegal:_Best_Practice_Case_Studies Senegal: Best Practice Case Studies]
 
 
''This case study documents the experiences of a programme which aimed to increase LPG-usage in Senegal.''
 
 
<br/>
 
 
<br/>
 
<ol style="list-style-type: upper-roman;">
 
<li>'''<u>Activities of international Organisations</u>'''<ol style="list-style-type: lower-alpha;">
 
<li>United Nations Development Programme (UNDP)</li>
 
</ol></li>
 
</ol>
 
 
UNDP is developing a regional project which, as part of the SE4All-Initiative, enables access to modern cooking fuels for 500,000 households. With partners from the private sector and local NGOs, mainly Asia is targeted to reduce existing barriers which inhibit the improved supply of LPG. Activates to improve LPG supply are identified as action plans and established through multi-stakeholder meetings and market surveys. Through dialogue and facilitation of cooperation with the relevant actors, strategies to enable market developments are devised. The initiative is presented in a Vimeo video: [http://vimeo.com/74797780 500.000 Smoke Free Households]
 
 
<br/>
 
 
<br/>
 
#[http://www.worldlpgas.com/ World LPG Association] (WLPGA)
 
 
<br/>
 
 
WLPGA is an interest group of the global LPG industry. Its goal is to increase the demand of LPG and establish good business practice and safety standards. Through lobbying, knowledge management and consulting, the group increases LPG consumption and enhances market development.
 
 
In 2012, WLPGA started the 'Cooking for Life' campaign. Its goal is to to enable one billion people access to LPG as a cooking fuel by 2030. The campaign involves government representatives, representatives from the health sector, energy industry and NGOs. Next to the prevention of 500,000 deaths per year due to 'indoor air pollution', the campaign states that it protects 2.65 million hectares of forest (this equals 51% of global annual deforestation).<br/>To this end different resources and approaches are made available. Experiences of successful programmes should be made accessible and communicated. More information is available on the website of the campaign: [http://www.cooking-for-life.org/ Cooking for Life]
 
  
 
<br/>
 
<br/>
#[http://www.se4all.org/commitment/global-lpg-partnership/ Global LPG Partnership] (GLPGP)
 
  
<br/>
+
*[[:File:2014-03 Multiple Household Cooking Fuels GIZ HERA eng.pdf|Multiple Household Cooking Fuels]] (Fuel Factsheets show different cooking fuels.)
 +
*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries] (A study sponsored by the World Bank reviewing 20 countries)
  
GLPGP is a partner of the VN (UN?)-Initiative SE4All. The partnership was developed by ETG, a LPG industry company considered by WLPGA, a national LPG company and various other actors. A global private-public partnership was chosen as a structure for this partnership. The goal of the partnership is to work on the political requirements for investments which ensures a reliable LPG supply in developing countries.
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
 
 
The implementation of GLPGP starts in Ghana, Cameroon, Kenya, Uganda and Tanzania. Initially, a capital fund of 250 million US $, as well as 250 million US $ credit for investments is made available. This fund is enhanced through a 250 million US $ concessional fund which targets the financing and building of local trading networks. These funds should provide access to LPG for ca. 70 million people and create 150.000 new jobs. Through this, 2% of African forests are protected annually.
 
 
 
More information is available on the internet website of SE4All: [http://www.se4all.org/commitment/global-lpg-partnership/ Global LPG Partnership]
 
  
 
<br/>
 
<br/>
  
'''Liquefied Petroleum''''''Gas (LPG)'''
+
== The Interventionist Perspective ==
  
<br/>
+
=== Challenges to an improved LPG supply ===
  
Liquefied Petroleum Gas (LPG) is seen as a clean and environmentally-friendly source of energy. As an energy source for cooking it can improve the health of the 2.6 billion people who currently use traditional stoves burning biomass.
+
The challenges that arise when working towards an improved supply of LPG as a cooking fuel in low-income households can be divided into five areas:
  
The potential of LPG as an alternative fuel for stoves was already identified in 2001 in a joint study of the World Bank and the World LPG Association (WLPGA). In the preface they describe the potential of Liquefied Petroleum Gas (LPG) for an improved supply in developing countries in the following way:
+
<u>'''1. Administration'''</u>
  
„Liquefied Petroleum Gas (LPG) is a clean and environmentally-friendly source of energy. To protect the environment LPG could be made available to replace wood and biomass in all households in all developing countries.” ([http://documents.worldbank.org/curated/en/2013/01/18612457/west-africa-liquefied-petroleum-gas-lpg-market-development-study World Bank und WLPGA, 2001])
+
A centrepiece of a LPG market is its effective administration. This includes the regulation of market actors, subsidies, authorising retailers and ensuring a safe and correct procedure e.g. when cylinders are being refilled. This is vital both for functional market structures and the security of consumers. A strong and functioning market administration may also help to attract foreign investments.
  
LPG currently plays in an important role in the strategies of many approaches which aim to improve the supply of cooking fuels. To estimate the long-term potential of LPG in the cooking energy sector, this article presents the most important aspects regarding LPG as well as LPG as cooking fuel in low-income households.<br/>At the end of each chapter further links provide a deeper insight into each of the presented topics. Focussing on low-income income countries, the presented information should enable the reader to judge possible implementations of LPG as a cooking fuel.
+
A report from the World LPG Association reviews the most important aspects to be considered in the regulation of LPG markets. The report contains different sales models, ways to handle cylinders and outlines the definition and regulation of safety standards (see [http://www.worldlpgas.com/uploads/Modules/Publications/wlpga-guidelines-for-the-development-of-sustainable-lp-gas-markets.pdf WLPGA, 2013]).
  
 
<br/>
 
<br/>
#'''<u>LPC general</u>'''
 
##'''What is LPG?'''
 
##'''Supply and Demand of LPG'''
 
  
<br/>
+
<u>'''2. Availability'''</u>
<ol style="list-style-type: lower-alpha;">
 
<li><u>Four aspects regarding supply</u><ol style="list-style-type: lower-roman;">
 
<li>How is LPG produced?
 
<ol style="list-style-type: upper-alpha;">
 
<li>LPG from petroleum gas and petroleum</li>
 
<li>LPG from the refinery process</li>
 
</ol></li>
 
<li>How much LPG is produced?</li>
 
<li>Where is LPG produced?</li>
 
<li>How much LPG will be available in the future?</li>
 
</ol></li>
 
</ol>
 
 
 
<br/>
 
<ol style="list-style-type: lower-alpha;">
 
<li><u>Two aspects regarding demand</u><ol style="list-style-type: lower-roman;">
 
<li>How much LPG is consumed where?</li>
 
<li>What is LPG used for?</li>
 
</ol></li>
 
</ol>
 
  
<br/>
+
In many countries the private sector already supplies LPG to high-income households in urban areas. However, many countries and rural areas in particular still lack supply infrastructure. These regions are unlikely to be covered by the private sector alone. Therefore, interest groups such as the World LPG Association (WLPGA) lobby for increased public sector investments. The private sector can be partially involved in these costs, if a supply strategy is in development<ref name="IEA, 2011 - http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/">IEA, 2011 - http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/</ref>.
#'''Relationship between demand and supply'''
 
#'''Supply routes of LPG'''
 
  
<br/>
+
Next to the provision of decentralised distribution networks, filling stations are important for the supply of rural areas. LPG should always be disposable, as a secure supply would increase people's acceptance of LPG. Acceptance is likely to fall if supply is unstable.
  
 
<br/>
 
<br/>
#'''<u>LPG as a cooking fuel for low-income households</u>'''
 
##'''General factors concerning the choice of cooking fuels'''
 
##'''cooking systems using LPG'''
 
##'''Advantages and disadvantages of LPG as a cooking fuel for low-income households'''
 
  
<br/>
+
<u>'''3. Affordability'''</u>
<ol style="list-style-type: lower-alpha;">
 
<li><u>Advantages of LPG as a cooking fuel</u><ol style="list-style-type: lower-roman;">
 
<li>Health</li>
 
<li>Environmental impact</li>
 
<li>Further improvements</li>
 
</ol></li>
 
</ol>
 
  
<br/>
+
As soon as supply is assured, affordability becomes the largest barrier to an increased use of LPG. Subsidies are necessary both for initial and running costs if LPG is to be made available for low-income households.
<ol style="list-style-type: lower-alpha;">
 
<li><u>Disadvantages of LPG as a cooking fuel</u><ol style="list-style-type: lower-roman;">
 
<li>Availability</li>
 
<li>Costs
 
<ol style="list-style-type: upper-alpha;">
 
<li>Costs of developing the market/ Infrastructure investments</li>
 
<li>Initiating costs for the consumer</li>
 
<li>Running costs for the consumer</li>
 
<li>Insecurities regarding price development</li>
 
</ol></li>
 
</ol></li>
 
</ol>
 
  
<br/>
+
<u>a. Subsidies for upfront and running costs</u>
#<u>Table summarizing advantages and disadvantages</u>
 
  
<br/>
+
Subsidising the initial costs allows access to LPG usage. Nevertheless, subsidies of the equipment without subsidies of running costs could lead to a situation in which families cannot afford to actually use LPG. This would lead to 'dead' investments<ref name="IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf">IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf</ref>.
#'''LPG as a cooking fuel for low-income households'''
 
  
<br/>
+
Subsidising the fuel makes sense when LPG is to be made availabe for low-income households.Different precautions measures have to be taken. For instance, the amount of low-priced LPG could be limited through coupons that are distributed to the poor households. Subsidised cylinders can be marked with colours to prevent subsidised LPG being sold-on to other households<ref name="IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf">IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf</ref>. The grading of subsidies according to usage ensures that households with low consumption pay a comparitively low price. According to this model, large-scale consumers can be made to pay a progressively rising tariff that cross-subsidises poor users with limited consumption<ref name="IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf">IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf</ref>.
<ol style="list-style-type: lower-alpha;">
 
<li><u>Challenges for an improved supply of cooking fuels through LGP</u><ol style="list-style-type: lower-roman;">
 
<li>Administration</li>
 
<li>Availability</li>
 
<li>Affordability
 
<ol style="list-style-type: upper-alpha;">
 
<li>Subsidising initial costs</li>
 
<li>Subsidising running costs</li>
 
<li>Who pays the subsidies?</li>
 
<li>Guidelines of subsidies</li>
 
</ol></li>
 
<li>Awareness</li>
 
<li>Security of supply
 
<ol style="list-style-type: upper-alpha;">
 
<li>Short and middle-term security of supply for low-income households</li>
 
<li>Long-term security of supply for low-income households</li>
 
</ol></li>
 
</ol></li>
 
<li><u>Table summarizing challenges</u></li>
 
</ol>
 
  
 
<br/>
 
<br/>
  
<br/>
+
<u>b. Who pays for the subsidies?</u>
  
<br/>
+
LPG subsidies would require large investment sums. The financing of hardware costs could stem from various sources. Microcredit institutions could distribute credits. Alternatively, LPG entrepreneurs could remain owners of the cylinders and demand rent or a deposit from the customers. The distribution of smaller cylinders would decrease the overall amount of capital or subsidies required.
  
<br/>
+
Regarding the running costs, there are various possibilities to keep the costs of LPG subsidies low. Subsidies of kerosene could be shifted to the LPG sector which would encourage a 'fuel switch' without increased costs for the public sector. In Indonesia such a switch from kerosene to LPG subsidies saved the government 6.9 million US$ p.a.. It has to be ensured that low-income consumers to not carry the burden of potential price increases as this is the target group most likely to become incapable of paying for the running costs.
<ol style="list-style-type: upper-roman;">
 
<li>'''<u>Activities of international Organisations</u>'''<ol style="list-style-type: lower-alpha;">
 
<li>United Nations Development Programme (UNDP)</li>
 
<li>World LPG Association (WLPGA)</li>
 
<li>Global LPG Partnership (GLPGP)</li>
 
</ol></li>
 
</ol>
 
  
 
<br/>
 
<br/>
  
<br/>
+
<u>c. Guidelines for subsidies</u>
  
<br/>
+
Badly defined subsidies can decrease incentives to invest, decrease efficiency, encourage wasteful behaviour and burden public finances<ref name="Matthews and Zeissig, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/Review of LPG market in 20 countries 2011.pdf">Matthews and Zeissig, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/Review of LPG market in 20 countries 2011.pdf</ref>. As consumers quickly grow accustomed to subsidies, reducing subsidies is difficult realise once they were introduced.
  
<br/>
+
<u>The following points should therefore be considered in the design of different subsidy programs of LPG for low-income households:</u>
  
 
<br/>
 
<br/>
#'''LPG General'''
 
  
<br/>
+
*Subsidies for system components can be more cost-efficient and requires less monitoring than investments in fuel
 +
*Subsidies for rural households must be targeted and transparent as without necessary restrictions subsidy regulations are often ignored
 +
*Time-bound subsidies reduce costs but can cause to market collapse once subsidies are withdrawn
 +
*The price structure in relation to other fuels should be aligned with the energy supply strategy of a given country
  
<br/>
+
The private sector should be involved in all financing plans, for instance by taking responsibility for the distribution of small cylinders.
#'''What is LPG?'''
 
  
 
<br/>
 
<br/>
  
LPG stands for 'Liquefied Petroleum Gas' denoting mainly propane, butane and mixes of the two. These hydrocarbons are sourced during petroleum extraction and its refining process and thus count as fossil fuels.
+
<u>'''4. Awareness'''</u>
  
Under normal atmospheric conditions LPG is a colourless and odourless gas. Under pressure LPG turns liquid. This process leads to the reduction of the volume to 1/260 of the gaseous aggregate state.
+
LPG is considered as a modern, clean and easy-to-use fuel. Nevertheless, educational campaigns are sometimes useful. Especially health and environmental benefits should be underlined to target groups. The correct utilisation should be advocated in order to avoid accidents. Also, consumer confidence regarding the correct filling of cylinders needs to be raised. In underdeveloped LPG markets consumers sometimes obtain less LPG than what they have paid for.
  
In relation to other fuels the energy density of LPG (27.5 MJ/kg) is high (10-times higher than wood). As a result transport and storage of LGP is easier than it is for wood (Practical Action, 2003).
+
Technical solutions to this problem such as see-through cylinders have been developed by [http://www.ragasco.co.za/retailers Ragasco]. Such cylinders allow the consumer to check the filling level him/herself. Yet, such cylinders are not established on the market.
 
 
Liquefied Gas is heavier than air and can therefore create a 'lake' on the ground. To prevent explosions and to recognise leakages, it is common practice that odorous substances are mixed into the gas.
 
  
 
<br/>
 
<br/>
  
<u>Further Information:</u>
+
<u>'''5. Security of Supply'''</u>
*[https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf Multiple Household Cooking Fuels]
 
  
These factsheets present different characteristics of different cooking fuels
+
Current production surpluses of 9.7 million tons allow for the increased distribution of LPG to low-income households. Nevertheless, it should be considered that prices will rise as soon as demand exceeds production. At this point, the distribution of the limited LPG ressource will be determined by the purchasing power of the customers. As prices rise, low-income households will be the first to be excluded from an adequate LPG supply. This is important to consider as many low-income households are already excluded due to the LPG price level as they are today.
*[http://www.afsglobal.com/faq/gas-comparisons.html What’s the difference between CNG, LNG, LPG and Hydrogen?]
 
  
An article about the differences between Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and hydrogen.
+
<u>a. Short and mid-term security of supply</u>
*[http://dvfg.de/deutscher-verband-fluessiggas-e-v/ Deutscher Verband Flüssiggas e.V.]
 
  
This website (German) of the German Association of Liquid Gas communicates news information and events.
+
The demand for LPG of the petrochemical industry rose markedly in the US and the Middle East. It is expected that petrochemical industries will absorb current supply surpluses as long as prices remain low<ref name="PR Newswire, 2013 - http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html">PR Newswire, 2013 - http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html</ref>. Increased demand is also expected in the autogas sector. Overall LPG consumption is expected to rise by 4.4&nbsp;% p.a. between 2012 and 2018.<br/>
  
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In can nonetheless be anticipated that LPG will be available for consumption by low-income households. This is due to anticipated increases in LPG production raising quicker than consumption levels.
  
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Furthermore, unused accompanying gases can be used to supply low-income households. In Nigeria, where large parts of the population use traditional cooking fuels and LPG-consumption remains low despite available oil resources, the usage of accompanying gases would be viable.
  
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Whilst accompanying gases are used for electrification programs through SE4All-Initatives, there are no known programs which specialise in LPG supply through using accompanying gases. This is the case despite the existence of the technological know-how.
#'''Supply and Demand of LPG'''
 
  
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<u>b. Long-term security of supply</u>
  
<u>A. Four aspects regarding supply</u>
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Since LPG supply is directly related to the availability of finite oil and gas deposits, supply for low-income households cannot be guaranteed in the long-term. To the contrary; as demand increases and availability decreases, prices will rise and thus increase the costs for low-income households.
 
 
<br/>
 
#How is LPG produced?
 
 
 
<br/>
 
 
 
LPG is a by-product of the fossil fuel industry; it is separated during petroleum and gas extraction as well as during raw oil refining where it is separated from other types of energy (heavy oil, diesel etc.).<br/><br/>45% of global LPG production is a product of the refinery process. The remaining 55% of LPG stocks are separated as accompanying products during oil and gas extraction.
 
 
 
<br/>
 
 
 
a. LPG from petroleum gas and oil extraction (55%)
 
 
 
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Depending on its origin petroleum gas is made up of varying mixes of gases and liquids. Because commercially used petroleum gas should mainly consist of methane, the extracted gas needs to be cleaned. In this process other gases, mainly propane and butane, are removed and transformed into LPG. From 'raw petroleum gas' a total of 1-10% are separated as LPG (WLPGA, 2014).
 
 
 
<br/>
 
 
 
During oil extraction LPG is found as an accompanying gas. Depending on the point of origin each ton of extracted petroleum contains 25-800 m3 accompanying gas. This is immediately put aside to stabilise the raw oil. The accompanying gases are then either processed or burnt on the spot (TAZ, 2011). Through this process approximately 140 billion m3 of potential LPG per year are immediately burnt. This equals approx. 70 million tons- (5% of global gas consumption) and a value loss of 30-35 billion USD (Roenn, 2013).
 
 
 
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b. LPG from the refining process (45%)
 
 
 
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In oil and gas refineries LPG is separated from other derivatives (see Image 1). Commonly LPG is 4-5% of the total raw oil. Depending on the quality of the raw oil, the technical standard of a given refinery, as well as of market prices of propane and butane the value can sink to 1% in relation to other oil products (WLPGA, 2014).
 
 
 
<br/>
 
#How much LPG is produced?
 
 
 
In 2008, 230 million tons of LPG were made available. In 2012, global production rose to 274 million tons (19% increase).
 
 
 
<br/>
 
 
 
Between 2011 and 2012 production rose another 3%. This growth that can almost exclusively be attributed to the gas extraction sector- whose LPG production capacities grew 6%. This especially includes the US-led expansion of shale gas extraction 'fracking'- since the expansion of 'fracking' US LPG production rose by 8%. ([http://www.ogj.com/articles/print/volume-111/issue-6/processing/shale-gas-development-altering-lpg-demand--trade.html Leija and Gist, 2013]).
 
 
 
<br/>
 
 
 
<br/>
 
#Where is LPG produced?
 
 
 
For a long time North America was the largest LPG producer. By now the Middle East is the leading LPG producing region. There, local processing capacities from oil or gas to LPG were strengthened substantially in the last couple of years. In 2012, 67 million tons of LPG were produced (see Fig. 2).
 
 
 
<br/>
 
 
 
<br/>
 
 
 
'''''Figure 2. Regional LPG production in million tons 2002-12 ('''''[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf Argus, 2013]''''')'''''
 
 
 
<br/>
 
 
 
In the next couple of years, North American production capacities are due to grow further due to shale gas expansion ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]). It is further estimated that production will also rise in West Africa, Australia, Russia and China ([http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf Argus, 2013]). This increase is mainly enabled through the development of refineries.
 
 
 
<br/>
 
#How much LPG will be available in the future?
 
 
 
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As a by-product of the oil production, the supply of LPG is contingent of the extraction of fossil fuels. As oil extraction rises, an increased production of LPG becomes possible. As it falls, LPG availability will also fall. Larger production capacities may open up from the discovery of new oil fields in Antarctica or from the extraction of shale gas. Nevertheless, this involves large environmental risks and it thus controversial.
 
 
 
<br/>
 
 
 
More LPG may be exploited through using the presently burnt accompanying gases during oil or gas extraction. This currently adds up to 70 million tons. The technology to exploit LPG from accompanying gases exist. First attempts to power villages from such accompanying gases are run by High Impact Opportunities as part as SE4All.
 
 
 
<br/>
 
 
 
<br/>
 
<ol style="list-style-type: lower-alpha;">
 
<li><u>Two aspects regarding demand</u><ol style="list-style-type: lower-roman;">
 
<li>How much LPG is consumed where?</li>
 
</ol></li>
 
</ol>
 
 
 
In 2008, global LPG consumption was 230 million tons. By 2012, consumption rose to 265 million tons.
 
 
 
The largest proportion of the increase can be attributed to the Asian-Pacific region (see Fig. 3). There, between 2000 and 2010, consumption rose from 58,000 million tons to 80,000 million tons. In 2011 the Asian-Pacific region already made up 35% of global consumption. Until 2018 annual growth rates of 4.8% are anticipated ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]).
 
 
 
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''Fig. 3: Global LPG consumption from 2002-2012 (adapted from ''[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf Argus, 2013]'')''
 
 
 
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Regarding individual countries, China is the leading LPG consumer consuming 13.3 million tons, followed by India consuming 9.9 million tons. USA, Mexico and Brazil consume 7.5, 6.3 and 5 million tons of LPG per year.
 
 
 
<br/>
 
#What is LPG used for?
 
 
 
There are more than 2000 different uses for LPG. Globally most consumption occurs at the household level (49%), followed by petrochemical usages (21.6%), industrial usages (11.8%), direct consumption in refineries and finally the agricultural sector (2%): Other sectors as e.g.: liquefied gas (Auto gas) add to 9.3% of total consumption ([http://www.stealthgas.com/images/stories/lpgglobaldemand.png Stealthgas, 2013]).
 
 
 
In industrial countries LPG is used for the following purposes:
 
*'''Heating and Cooking- '''especially in locations that are not connected to local gas distribution systems.
 
*'''Car gas''''''.''' Consumption of car gas is enhanced through low taxes. In 2008, more that 13 million cars ran on LPG globally. Industries are currently promoting the spread of car gas.
 
*Furthermore, LPG is used for '''cooling''' and in the '''Petrochemical industry.''' To this end, petrochemical industries use e.g.: the process of propane dehydration to produce propene. Propane is used as a component to produce plastic. ([http://www.lpgasmagazine.com/propane-a-wanted-commodity-in-petrochemical-sector/ LPGas, 2013]).
 
 
 
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In developing countries LPG is popular as a cooking fuel. Users are predominately urban-dwellers in places where there is a supply network and people have the high disposable income necessary for acquisition cost and running fuel costs.
 
 
 
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#'''Relationship between demand and supply'''
 
 
 
Since 2007 global production capacity of LPG is growing faster than demand: In 2012, there was 9.7 million tons of excess LPG. This gap is widening. In 2012, for example, consumption rose by 2% while production rose by 3 %.
 
 
 
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Despite the excess amounts produced, LPG is scarce in many regions- especially in rural areas of developing countries (see e.g.: [http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Chandra, 2010]). This is mainly due to lacking supply networks, which are not able to supply centres of demand with the excess LPG.
 
 
 
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The excess amount of LPG is thus often further processed. LPG is used in petrochemical industries or in the production of Liquid Natural Gas, as transportation into other markets was either not possible or viable ([http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas2013.pdf Argus, 2013]).
 
 
 
<br/>
 
 
 
''<u>Further Information:</u>''
 
*[http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas2013.pdf Statistical Review of LP Gas]
 
 
 
''Short overview of results of statistical research of Argus and WLPGA concerning the production and consumption of LPG.''
 
*[http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Indian LPG Market Prospects]
 
 
 
''A PowerPoint presentation on plans of the Indian government concerning LPG consumption and development.''
 
*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries]
 
 
 
''A World Bank sponsored study of LPG markets in 20 different countries.''
 
*[http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html Global Liquefied Petroleum Gas (LPG) Market is Expected to Reach USD 266.41 Billion in 2018: Transparency Market Research]
 
 
 
''Short overview of results of a market survey by Transparency Market Research about the future development of LPG markets.''
 
*[http://www.worldlpgas.com/resources/publications List of Publications of the World LPG Associations]
 
 
 
<br/>
 
*[http://www.youtube.com/watch?v=tZJKhZFr58I Gas Flaring - Warum Ölkonzerne auf Klimaschutz pfeifen]
 
 
 
''Documentary (in German) about gas flaring and technical solutions to extract accompanying gases.''
 
 
 
<br/>
 
#'''Supply routes of LPG'''
 
 
 
A number of different steps are necessary from the production-that is the extraction- of LPG until it reaches the end-consumer. This requires infrastructure for its distribution (see Fig. 5).
 
 
 
It starts with '''Step 1- Production'''. LPG is separated from petroleum gas or oil. As described above, this ensures the stabilisation of the petroleum or the cleansing of the gas. In this process 55% of global production is extracted.
 
 
 
In '''Step 2- Transport''', the remaining petroleum gas or oil as well as the separated LPG is transported through ships, pipelines and trains.
 
 
 
While oil and gas is transported to refineries, LPG is transported in special storage facilities where it is already put under pressure. This is '''Step 3- Refinery and Storage. '''As described above further LPG is separated and gained in refineries (45% of global production).
 
 
 
In '''Step 4 – Further Transport,''' LPG is transported from refineries or large warehouses to smaller warehouses or cylinder charging stations.
 
 
 
<br/>
 
  
Figure 5. Route of LPG from production to the end-consumer (adapted from [http://www.worldlpgas.com/about-lp-gas/distribution-chain WLPGA, 2014]''''')'''''
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Thus to ensure the long-term supply of LPG for low-income households, the development of supply strategies should be agreed with representatives of both politics and industry. As described above, demand is state-aided in various sectors (autogas, petrochemical industries etc.); this already threatens supply of low-income households in the middle-term.
  
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<u>To realistically ensure the goal of ' universal access to clean cooking fuels by 2030' stated by the IEA through 50% use of LPG, the following conflicts should be consciously avoided:</u>
 
 
In '''Step 5- Cylinder charging and Storage''', LPG is filled into smaller cylinders or stored in warehouses for consumption.
 
 
 
This is followed by '''Step 6- Distribution,''' where cylinders or small quantities of LPG are distributed to the end-consumer. This is done mainly through Lorries.
 
 
 
In the last'''Step 7- End-consumer''', the route from production to the customer is finalised. Depending on the circumstances smaller cylinder merchants can locally store LPG and fill it into smaller cylinders. Alternatively, they can be sold directly to the consumer in small cylinders. Bigger customers in industries usually dispose of larger storage tanks.
 
  
 
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#Conflicts between producing and importing countries
 
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#Conflicts between consumers on a household level, car gas and petrochemical industries
''<u>Further Information:</u>''
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#Conflicts between demand centres in the city and rural areas
*[http://www.youtube.com/watch?v=q3RXIYbQ83w PRIMAGAS Energie - Von der Nordsee in den Tank]
 
  
''A short film (German) about the supply routes of LPG from the North Sea to the end-consumer.''
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[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
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=== Tabular Overview of Challenges ===
  
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{| style="width: 100%" cellspacing="0" cellpadding="0" border="1"
 
 
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'''<u>II. LPG as a cooking fuel for low-income households</u>'''
 
 
 
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<br/>
 
#'''General factors concerning the choice of cooking fuels'''
 
 
 
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The selection of the type of fuel during cooking is contingent of several factors. Factors influencing the decision are availability, affordability, habits and the usability of the fuel. The prevailing use of fire food in many developing countries is primarily because it is cheap (often free) and widely available. In the future wood will remain the primary cooking fuel for rural households ([https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf GIZ, 2014]).
 
 
 
<br/>
 
 
 
An increase in LPG usage could reduce the total usage of wood, coal and kerosene. This is already the case in some cities where LPG was widely available leading to higher consumption rates. It should nevertheless be noted that households to not completely replace one fuel by another. Instead, they use a mix of fuels and a singular fuel in a given moment is chosen depending on the characteristic of the fuel (heating up time, type of food prepared, income etc.).
 
 
 
<br/>
 
#'''Cooking systems using LPG'''
 
 
 
A typical cooking system which uses LPG is made up of a steel cylinder filled with LPG, a pressure controller, a tube connecting the cylinder to the pressure controller and the burner, and finally the burner itself. The burner can consist of one or more cooking tops.
 
 
 
<br/>
 
 
 
The size of the system depends on the size of the cylinder. Cylinders exist in various sizes e.g.: 2.7 kg, 6 kg, 12 kg or 16 kg. A survey in 20 countries showed that low-income countries households mainly use cylinders smaller than 6 kg ([http://siteresources.worldbank.org/INTOGMC/Resources/LPGReportWeb-Masami.pdf Weltbank, 2011]).
 
 
 
Nevertheless, the majority of currently available LPG cylinders are larger (up to 47.5 kg). This proves problematic for low-income households both in the acquisition as well as the recharge of LPG. In low-income countries, the limited availability of small cylinders acts as a barrier to improving LPG supply.
 
 
 
LPG stoves tend to have an efficiency of 55 and 60%. A 14 kg LPG stove with equipment costs approximately 66$. The life-cycle is 5-8 years.<br/><br/>
 
#'''Advantages and disadvantages of LPG as a cooking fuel for low-income households'''
 
 
 
<br/>
 
#<u>Advantages of LPG as a cooking fuel</u>
 
 
 
<br/>
 
 
 
The main advantages of LPG provision of low-income households in comparison to conventional fuels are:
 
 
 
<br/>
 
#Health
 
 
 
The use of LPG reduces the interior air pollution by 90% in comparison to traditional ways of burning biomass e.g.: three-stone fire ([http://www.who.int/hia/green_economy/en/ WHO, 2011]; [http://ldihealtheconomist.com/media/The_Health_Consequences_of_Indoor_Air_Pollution.pdf Polsky and Ly, 2012]). As LPG burns almost completely the proportion of pollutants is reduced.
 
#Environmental impacts
 
 
 
<br/>
 
 
 
CO2 emissions are relatively low. Compared to coal, which is used in traditional stoves, greenhouse gases are reduced by 5-16 times per prepared meal ([http://rael.berkeley.edu/sites/default/files/very-old-site/OA5.1.pdf Bailis et al., 2003]). If LPG was used, wood consumption may reduce substantially; 45 kg LPG produces the thermic energy of about half a ton of wood. In regions with low biomass, or in region where more than the sustainably available amount of biomass is burnt, LPG could lead to a significant relief of current biomass resources.
 
 
 
<br/>
 
#Further advantages
 
 
 
<br/>
 
 
 
LPG stoves quickly supply very high heat and are more efficient that stoves which burn biomass. The simple and precise regulation possibilities simplifies cooking for the cook and can save time both during cooking, as well as during cleaning the kitchen.
 
 
 
Due to the high energy density, LPG is easily transportable.
 
 
 
<br/>
 
#<u>Disadvantages of LPG as a cooking fuel</u>
 
 
 
The disadvantages of LPG as a cooking fuel are following:
 
 
 
<br/>
 
#Availability
 
 
 
In 2002 it was calculated that 120 billion tons of LPG are necessary to supply 2 billion people with cooking fuels ([http://www.undp.org/content/undp/en/home/librarypage/environment-energy/sustainable_energy/world_energy_assessmentenergyandthechallengeofsustainability.html UNDP, 2000]). This equates to 60 kg of LPG per head which currently equates to half of global production. Such quantities of LPG are currently not available to be used as a cooking fuel. It results that the following goals must be met for an efficient LPG supply as a cooking fuel:
 
*new sources must be found (shale gas through fracking, oil extraction in the arctic).
 
*current extraction processes must be made more efficient (higher LPG share as a refining product, accompanying gas)
 
 
 
or
 
*other uses must be reduced (e.g.; urban cooking demand must be met with conventional gas, decreased petrochemical use, reduced use of car gas).
 
 
 
<br/>
 
#Costs
 
 
 
In most countries, in which an improved LPG provision would be reasonable, the LPG market is underdeveloped or non-existent. The development of available structures would require substantial financial means. These entail:
 
 
 
a). Costs of developing the market/ Infrastructure investments
 
 
 
The development of the LPG market is bound up with significant investments. The necessary investments include:
 
*production capacities need to be built or developed
 
*in case of LPG import, import facilities must be available. In case of demand fluctuations, individual countries must be able to store large quantities of LPG.
 
*From there, LPG can either be transported to few large central stations or too many, decentralised stations.
 
 
 
WLPGA states that the set-up of central cylinder filling station with a capacity of 50,000 tons would require ca. 7 million € ([http://www.worldlpgas.com/uploads/Modules/Publications/wlpga-guidelines-for-the-development-of-sustainable-lp-gas-markets.pdf WLPGA, 2013]). 500 smaller facilities with a capacity of 1,000 tons each cost 12 million €. While the latter is more expensive, it could reduce transport costs.<br/><br/>Regarding the necessary size of Investments: in the next couple of years the Indian energy ministry plans to make investments of 2 billion US$ to develop import facilities, storage facilities and cylinder filling to develop the LPG market ([http://petrofed.winwinhosting.net/upload/Apurva_Chandra.pdf Chandra, 2010]).
 
 
 
<br/>
 
 
 
b) Initiating costs for the consumer
 
 
 
Next to investment into infrastructure, consumers require capital to buy a stove which can use LPG. A LPG cylinder system of 14 kg costs 66 $. This acts as a barrier for many households and is a disadvantage in relation to competing cooking fuels like wood, coal and kerosene. Average costs for a kerosene stove are 83% lower ([http://www.thisdaylive.com/articles/hindering-growth-of-nigeria-s-lpg-market-with-kerosene-subsidy/157397/ TDL, 2013]).
 
 
 
<br/>
 
#Running costs for the consumer
 
 
 
In November 2010, the international market price for LPG was at 850 US$ per ton. The World Bank estimates that the supply chain costs 300 US$ per ton until it reaches the end-consumer. This equates to 1.15 US$ per kg of LPG (excluding taxes and subsidies). In the 20 countries in which the local price of LPG was surveyed, 6 countries were found to have prices within 0.10 US$ of this price level. In the remaining 14 countries larger price variations were found (Morocco: 0.40 US$, Turkey: 3.26 US$ see. Fig. 6).
 
 
 
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''Figure 6. LPG prices for the end-consumer in December 2010 (adapted from ''[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Matthews and Zeissig, 2011]'')''
 
 
 
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The price of LPG decreases in line with the bought quantity and shorter travel routes. Low-income households in rural areas will thus pay a higher price for LPG. This is a disadvantage to wood and coal, given that wood is often free and coal fairly cheap. Furthermore, low-income households can often not afford bulk buys.
 
 
 
<br/>
 
#Insecurities regarding price development
 
 
 
A further disadvantage of LPG is the fluctuating running costs. In India the price of unsubsidized LPG cylinders of 14.2 kg was increased by 20% ([http://timesofindia.indiatimes.com/business/india-business/Price-of-non-subsidized-LPG-hiked-by-Rs-220-a-cylinder/articleshow/28250706.cms ToI, 2014]). Beyond this, information regarding long-term price development of LPG are hardly available.
 
 
 
<br/>Potential LPG customers thus reject changing to LPG. In South Africa a household surveys stated that households decided not to use LPG due to the insecure price developments ([http://www.engineeringnews.co.za/article/good-growth-predicted-for-lpg-2010-08-27 Burger, 2010]).
 
 
 
<br/>
 
#<u>Table summarizing advantages and disadvantages</u>
 
 
 
The following table summarises the most important advantages and disadvantages of LPG as a cooking fuel for low income households:
 
 
 
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{| border="1" cellspacing="0" cellpadding="0"
 
 
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| style="width: 133px; height: 17px; background-color: rgb(204, 204, 204)" | '''Barrier'''
Advantages
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| style="width: 498px; height: 17px; background-color: rgb(204, 204, 204)" | <p style="text-align: center">'''Characteristics'''</p>
 
 
| style="width: 313px; height: 29px;" |  
 
Disadvantages
 
 
 
 
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| style="width: 133px; height: 17px" | 1. Regulation
''General''
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*nearly smoke-free burning of LPG and thus more healthy
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*The absence of regulation leads to security risks and black markets
*easy handling: turning the stove on and off does not involve major health and safety risks e.g.: burns.
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*Lacking regulations discourage potential investors
*Simple Regulation: It is easy to regulate the heat
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*Fraud may occur during refilling
*fast heating
 
*very efficient (high fuel value)
 
*transportable
 
*will burn despite wind
 
*stable on different surfaces
 
*no fire risks
 
*portable
 
  
 
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<br/>
  
''Cost effectiveness''
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|-
*durable devices
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| style="width: 133px;  height: 17px" | 2. Availability
*low running costs
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| style="width: 498px;  height: 17px" |
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*Storage capacities are insufficient to compensate demand fluctuations
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*Filling stations may not be available or have lacking capacities
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*Supply routes are not developed - the private sector is unlikely to develop LPG-access in remote areas
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*Dependence on LPG imports
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*Low availability of small systems and system components such as cylinders, connection hoses, regulators and cooking stoves
  
 
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|-
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| style="width: 133px;  height: 18px" | 3. Affordability
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| style="width: 498px;  height: 18px" |
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*High initial costs compared to other fuels
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*High running costs esp. in remote areas
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*Low-income households have low disposable income - refill costs are high and at once
  
 
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''Social''
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|-
*diversified energy supply
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| style="width: 133px;  height: 17px" | 4. Awareness
*especially women and children spend less time collecting firewood
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| style="width: 498px;  height: 17px" |
*Arbeitsplätze Kohle- sowie Holzkohlegewinnung I don’t understand this point
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*Health and environmental benefits of LPG are sometimes not known
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*Insecurity regarding price development of LPG
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*LPG can be dangerous - improper use and lack of maintenance of LPG cylinders leads to accidents
 +
*Sometimes bad reputation of LPG due to improper refilling of LPG cylinders
  
 
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|-
 
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| style="width: 133px;  height: 17px" | 5. Supply security
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| style="width: 498px; height: 17px" |  
 
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*Fossil fuel derivative therefore limited availability of LPG
''Environment''
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*Increasing demand of LPG from different sectors will lead to confcilts in the middle- and long-term
*lower deforestation
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*Increased use may lead to the proliferation of unconventional sources
*lower greenhouse emissions compared to burning biomass or coal
 
 
 
| style="width: 313px; height: 474px;" |  
 
''General''
 
*fossil fuel
 
*markets -especially rural markets- not developed
 
*lacking infrastructure for supply (currently few storage and filling facilities)
 
*irregular supply
 
*risk of explosion
 
*few filling stations
 
*dependant on imports
 
 
 
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''Cost effectiveness''
 
*high starting costs for equipment
 
*high running costs ( how can that be an advantage and disadvantage
 
*price developments ambiguous
 
 
 
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''Social''
 
*cylinders may not completely filled at purchase
 
*may lead to unemployment; 10-20 jobs are created per TJ of LPG while coal creates 200-350 jobs per TJ
 
 
 
<br/>
 
 
 
''Environment''
 
*LPG demand may enhance the environmentally devastating shale gas and oil extraction
 
  
 
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Table 2. Overview of the most important challenges in the use of LPG as a cooking fuel
 
 
''Table 1. Overview of advantages and disadvantages of LPG as a cooking fuel''
 
  
 
<br/>
 
<br/>
  
''<u>Further Information:</u>''
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<u>Further Information:</u>
*[https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf Multiple Household Cooking Fuels]
 
 
 
''Fuel Factsheets show different cooking fuels.''
 
*[http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Residential Market for LPG: A Review of Experience of 20 Developing Countries]
 
 
 
''A study sponsored by the World Bank reviewing 20 countries''
 
 
 
<br/>
 
 
 
<br/>
 
 
 
<br/>
 
 
 
<br/>
 
#'''LPG as a cooking fuel for low-income households'''
 
 
 
<br/>
 
#<u>Challenges for an improved supply of cooking fuels through LGP</u>
 
 
 
The challenges of an improved supply of LPG as a cooking fuel in low-income households can be divided into five areas:
 
#Administration
 
 
 
A central role in the development of the development of a LPG market is its effective regulation. This holds for the establishment of functioning market structures, as well as for the security of consumers. The report from the World LPG Association presents the most important aspects to be considered in the regulation of LPG markets. The report contains different sales models, ways to handle cylinders and outlines the definition and regulation of safety standards (see [http://www.worldlpgas.com/uploads/Modules/Publications/wlpga-guidelines-for-the-development-of-sustainable-lp-gas-markets.pdf WLPGA, 2013]).
 
 
 
For enhancing investment long-term statement from politicians would be helpful. In this regard subsidies are especially important ([http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/ IEA, 2011]).
 
 
 
To enable access for the target group, regulations and subsidies must be targeted.
 
 
 
<br/>
 
#Availability
 
 
 
In many countries private sector investments ensured the supply of LPG to especially high-income households in cities. Some countries and many rural areas have little or no supply infrastructure. Without public sector initiatives, private companies are unlikely to invest in peripheral regions. This is why state intervention, targeting rural low-income households especially, are necessary. The private sector can be partially involved in the costs ([http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/ IEA, 2011]).
 
 
 
Next to the provision of decentralised distribution networks, filling stations are also important for the supply of rural areas. LPG should always be disposable in these stations, as a secure supply would increase people's acceptance of LPG. Acceptance is likely to fall if supply is unstable.
 
 
 
<br/>
 
#Affordability
 
 
 
As soon as supply is assured, affordability becomes the largest barrier to an improved usage of LPG. Subsidies are necessary both for initial and running costs if LPG is to be made available for low-income households.
 
#Subsidising initial costs
 
 
 
Subsidising the initial costs allows access to LPG usage. Nevertheless, subsidies of the equipment without subsidies of running costs could lead to a situation in which families cannot afford to actually use LPG. Such would be a 'dead' investment ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
 
<br/>
 
#Subsidising running costs
 
 
 
Die Förderung des Treibstoffs ist sinnvoll, wenn die Nutzung von LPG für einkommensschwächere Gruppen ermöglicht werden soll. (Den Satz verstehe ich vom Sinn nicht. Was meint ihr mit 'foerderung'?). Different precautionary measures have to be made. The amount of low-priced LPG could be limited through coupons. Subsidised cylinders could be marked with colours to prevent subsidised LPG being sold-on to other households ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
 
The grading of subsidies according to usage would ensure that households with low consumption pay a low price. According to this model large-scale consumers would pay a progressively rising tariff ([http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf IEI, 2004]).
 
 
 
<br/>
 
#Who pays the subsidies?
 
 
 
LPG subsidies require large investment sums. A study of the OECD and the IEA found that they would have needed 1.5 billion US $ for the supply of LPG-stoves and cylinders ([http://www.iea.org/publications/freepublications/publication/cooking.pdf OECD und IEA, 2006]). The financing of hardware could stem from various sources. Microcredit institutions could hand out credits. Alternatively, LPG entrepreneurs could keep the ownership of the cylinders and demand rent or a deposit from its customers. Furthermore, the distribution of smaller cylinders would decrease the necessary amount of capital or subsidies.
 
 
 
Regarding the running costs, there are various possibilities to keep the costs of LPG subsidies low. Subsidies of kerosene could be used for LPG investments which would enable a 'fuel switch' without increasing costs for the public sector. In Indonesia such a switch from kerosene to LPG subsidies actually saved the government 6.9 million US$. It should be ensured that low-income consumers to not carry the costs of potential price increases. In Indonesia this was not the case; Energy costs for the consumer dropped by 42 % ([http://www.worldlpgas.com/about-lp-gas/production WLPGA, 2011]).
 
 
 
Subsidies can further be enhanced through the progressive tariffs mentioned above: LPG prices can rise along with quantity bought. The surplus gained by such tariff schemes can then subsidise the low-income households.
 
 
 
<br/>
 
#Guidelines of subsidies
 
 
 
Badly defined subsidies can decrease incentives to invest, decrease efficiency, encourage wasteful behaviour and burden public finances ([http://siteresources.worldbank.org/INTOGMC/Resources/Review_of_LPG_market_in_20_countries_2011.pdf Matthews and Zeissig, 2011]). Because consumers quickly get used to subsidies, a reduction of subsidies, even with prior warnings, is difficult to push.
 
 
 
Thus the following points should be considered in the design of different subsidy programs of LPG for low-income households:
 
*investment in concrete system parts can be presented as more cost-efficient and require less monitoring than investments in fuels;
 
*subsidies for rural households must be targeted and transparent as without necessary restrictions subsidy regulations are often ignored;
 
*time-bound subsidies reduces costs but can lead to a market crash (e.g. in Indonesia);
 
*the price structure in relation to other fuels should be in line with the energy supply strategy of a given country, so that LPG is cheaper than kerosene for example<br/><br/>
 
 
 
The private sector should be integrated into all financing plans. The private sector could, for example, enable the distribution of small cylinders. The extra costs of such endeavours can be counteracted through long-term consumption.
 
#Awareness
 
 
 
LPG is seen as a modern, clean and easily-used fuel. Nevertheless, educational campaigns are sometimes useful. Especially health and environmental benefits should be underlined to target groups. Furthermore, to avoid accidents, the correct application should be advocated.
 
 
 
<br/>
 
  
 
<br/>
 
<br/>
  
Furthermore, consumer confidence regarding the correct filling of cylinders needs to be raised. In underdeveloped LPG markets consumers sometimes obtain less LPG than they have paid for.<br/><br/>Technical solutions to this problem such as see-through cylinders have been developed by [http://www.ragasco.co.za/retailers Ragasco]<u>n. Such cylinders allow the consumer to check the filling level him/herself. Yet, such cylinders are not established on the market. In a well-functioning LPG market, where the cylinders are refilled and sealed by a regulated market actor such schemes would not be necessary.</u>
+
*[http://www.worldlpgas.com/uploads/Modules/Publications/kerosene-to-lp-gas-conversion-programme-in-indonesia.pdf Kerosene to LP Gas Conversion Programme in Indonesia] (This case study from Indonesia presents the experiences from shifting from Kerosene to LPG.)
 
+
*[http://www.cleancookstoves.org/resources/reports-and-research/ GACC Reports and Research] (This website contains publications of 'Global Alliance on Clean Cook stoves.)
<br/>
+
*[[Senegal: Best Practice Case Studies|Senegal: Best Practice Case Studies]] (This case study documents the experiences of a programme which aimed to increase LPG-usage in Senegal.)
#Security of supply
 
  
Current production surpluses of 9.7 million tons allow the increased distribution of LPG to low-income households. Nevertheless, it should be considered that prices will rise as soon as demand exceeds production. At this point, the distribution of limited LPG will be determined by the purchasing power of a given customer. As prices rise, low-income households will be excluded from an adequate LPG supply. This is important to consider as for many low-income households, current LPG price levels are already too high.
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
<br/>
 
<br/>
#Short and middle-term security of supply for low-income households
 
  
LPG demand of petrochemical industries rose markedly in the US and the Middle East. It is expected that petrochemical industries will absorb current supply surpluses as long as prices remain low ([http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html PR Newswire, 2013]). Increased demand is also expected in the car gas sector. Consumption is expected to rise annually by 4.4 % between 2012 and 2018.
+
= Activities of International Organisations =
  
In can nevertheless be anticipated that LPG will be available for consumption by low-income households. This is due to anticipated increases in LPG production raising quicker than consumption levels.
+
== United Nations Development Programme (UNDP) ==
  
Furthermore, unused accompanying gases can be used to supply low-income households. In Nigeria, where large parts of the population use traditional cooking fuels and LPG-consumption remains low despite available oil resources, the usage of accompanying gases would be viable.
+
[http://www.undp.org/content/undp/en/home.html UNDP] is developing a regional project as part of the SE4All-Initiative. It mainly targets Asia and aims to enable access to modern cooking fuels for 500,000 households. UNDP cooperates with the private sector and local NGOs to reduce existing barriers that inhibit the improved supply of LPG. Potential activities to improve the LPG supply are identified and action plans are established through multi-stakeholder meetings and market surveys. Strategies to enable market developments are devised through dialogue and facilitation of cooperation with the relevant actors. The initiative is presented in a Vimeo video: [http://vimeo.com/74797780 500.000 Smoke Free Households]
  
Whilst accompanying gases are used for electrification programs through SE4All-Initatives, there are no known programs which specialise in LPG supply through using accompanying gases. This is the case despite the existence of the technological know-how.
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
  
 
<br/>
 
<br/>
#Long-term security of supply for low-income households
 
  
Since LPG supply is directly related to the availability of finite oil and gas deposits, supply for low-income households cannot be guaranteed in the long-term. To the contrary; as demand increases and availability decreases, prices will rise and thus increase the costs for low-income households.
+
== World LPG Association (WLPGA) ==
  
Thus to ensure the long-term supply of LPG for low-income households, the development of supply strategies should be agreed with representatives of both politics and industry. As described above, demand is state-aided in various sectors (car gas, petrochemical industries etc.); this already threatens supply of low-income households in the middle-term.
+
[http://www.wlpga.org WLPGA] is an interest group of the global LPG industry. Its goal is to increase the demand of LPG and establish good business practice and safety standards. Through lobbying, knowledge management and consulting, the group increases LPG consumption and enhances market development.
  
To realistically ensure the goal of ' universal access to clean cooking fuels by 2030' stated by the IEA through 50% use of LPG, the following conflicts should be consciously avoided:
+
In 2012, WLPGA started the 'Cooking for Life' campaign. Its goal is to enable one billion people access to LPG as a cooking fuel by 2030. The campaign involves government representatives, representatives from the health sector, energy industry and NGOs. Next to the prevention of 500,000 deaths per year due to 'indoor air pollution', the campaign states that it protects 2.65 million hectares of forest (this equals 51% of global annual deforestation).<br/>To this end different resources and approaches are made available. Experiences of successful programmes should be made accessible and communicated. More information is available on the website of the campaign: [http://www.cooking-for-life.org/ Cooking for Life]
#conflicts between producing and importing countries
 
#conflicts between consumers on a household level, car gas and petrochemical industries
 
#conflicts between demand centres in the city and rural areas
 
  
<br/>
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
#<u>Table summarizing challenges</u>
 
 
 
<br/>
 
  
 
<br/>
 
<br/>
  
{| border="1" cellspacing="0" cellpadding="0"
+
== Global LPG Partnership (GLPGP) ==
|-
 
| style="width: 133px; height: 17px;" |
 
Barrier
 
 
 
| style="width: 498px; height: 17px;" |
 
Characteristics
 
  
|-
+
[http://www.se4all.org/commitment/global-lpg-partnership/ The Global LPG Partnership (GLPGP)] was set up as a '''High Impact Initiative (HII)''' under the '''SE4All High Impact Opportunity (HIO)''' "Universal Adoption of Clean Cooking Solutions". The HII is led by the '''Energy Transportation Group (ETG)''' and aims to accelerate the transition to LPG for cooking by engaging public and private sectors. Other key players of the HIO are the WLPGA, representatives of national governments, local LPG businesses and the health community. The strategy of the Partnership is to implement a multi-phase process in 4-5 countries in '''Sub-Saharan Africa (SSA)'''.
| style="width: 133px; height: 17px;" |
 
1. Regulation
 
  
| style="width: 498px; height: 17px;" |
+
The implementation of GLPGP will start in Ghana, Cameroon, Kenya, Uganda and Tanzania. A total of 750 million US$ are to be made available through the launch of a commercial equity fund for infrastructure (250 million US$), commercial debt (250 million US$) and a 250 million US$ concessional fund for consumer cost finance and local retail distribution. It is estimated that 70 million people will gain access to LPG for cooking through these measures <span lang="en-gb">and </span><span lang="en">that </span><span lang="en-gb">2&nbsp;% of Africa's biomass will be offset</span>.
*the absence of clear rules can lead to security risks or the development of black markets
 
*lack of regulations discourages investors
 
*the mixing of cylinders from different producers may occur
 
*fraud may occur during refilling
 
  
<br/>
+
► More information is available on the website of the HII: [http://www.se4all.org/commitment/global-lpg-partnership/ Global LPG Partnership]
  
|-
+
[[Liquefied Petroleum Gas (LPG)#toc|► Go to Top]]
| style="width: 133px; height: 17px;" |
 
2. Availability
 
 
 
| style="width: 498px; height: 17px;" |
 
*storage capacities are insufficient to compensate demand fluctuations. Thus shortages or surpluses will arise.
 
*market participants, end suppliers or merchants staffing filling stations may not be available or have lacking capacities
 
*supply routes are not developed and companies are unlikely to develop access to remote areas
 
*lack of domestic production: dependence on LPG exporters
 
*low availability of small systems and system parts such as cylinders, connection hoses, regulators and cooking stoves
 
  
 
<br/>
 
<br/>
  
|-
+
= Further Information =
| style="width: 133px; height: 18px;" |
 
3. Affordability
 
  
| style="width: 498px; height: 18px;" |  
+
*[[Portal:Improved Cooking|Cooking Portal on Energypedia]]
*high initial costs compared to other fuels
+
*[[BLEENS - Biogas, Liquefied Petroleum Gas, Electricity, Ethanol, Natural Gas, and Solar|BLEENS - Biogas, Liquefied Petroleum Gas, Electricity, Ethanol, Natural Gas, and Solar]]
*prices are higher in undeveloped markets
+
*[[LPG for cooking|Cooking with Liquefied Petroleum Gas (LPG)]]
*lack of regulation may lead to the development of black markets
+
*[[LPG cooking system|LPG Stoves]]
*subsidies for alternatives fuels such as coal or kerosene make LPG expensive
+
*[[Cost-Benefit Analysis of LPG Cookstove Intervention|Cost-Benefit Analysis of LPG Cookstove Intervention]]
*low-income households have a low disposable income and sometimes have no costs for cooking fuels
+
*[[Access to Modern Energy|Access to Modern Energy]]
*the remoter the supply, the more expensive the fuel
+
*[[Cooking Fuels|Cooking Fuels]]
 +
*[[Cooking with Clean Fuels: Designing Solutions in Kakuma Refugee Camp|Cooking with Clean Fuels: Designing Solutions in Kakuma Refugee Camp]]
 +
*[[Cooking Energy in Refugee Situations|Cooking Energy in Refugee Situations]]
 +
*[[Cooking Energy in Refugee Camps- Challenges and Opportunities|Cooking Energy in Refugee Camps- Challenges and Opportunities]]
 +
*[[Using Liquid Petroleum Gas in Mozambique Households|Using Liquid Petroleum Gas in Mozambique Households]]
 +
*[[From the 'Energy Ladder' to 'Fuel Stacking'|From the 'Energy Ladder' to 'Fuel Stacking']]
 +
*PAYG for LPG: [https://www.engineeringforchange.org/news/challenges-opportunities-scaling-pay-go-lpg/ https://www.engineeringforchange.org/news/challenges-opportunities-scaling-pay-go-lpg/]
 +
*LPG Smart Metering for Kenya: [https://www.engineeringforchange.org/news/kenyan-bureau-standards-launched-worlds-first-lpg-smart-metering-standard/ https://www.engineeringforchange.org/news/kenyan-bureau-standards-launched-worlds-first-lpg-smart-metering-standard/]
  
 
<br/>
 
<br/>
  
|-
+
= References =
| style="width: 133px; height: 17px;" |
 
4. Awareness
 
 
 
| style="width: 498px; height: 17px;" |
 
*health and environmental benefits of LPG are sometimes not known
 
*insecurity regarding die economic development of LPG
 
*LPG is sometimes seen as unsafe; this is a result of few cases of improper usage of LPG cylinders which lead to accidents
 
*bad reputation of LPG due to improper filling and refilling of LPG cylinders
 
 
 
<br/>
 
 
 
|-
 
| style="width: 133px; height: 17px;" |
 
5. Supply security
 
 
 
| style="width: 498px; height: 17px;" |
 
*as derived from fossil fuels the availability of LPG is limited
 
*in the middle-term and long-term conflicts may arise due to increasing demand of LPG from different sectors. The escalation of such conflicts should be avoided
 
*increased usage may lead to the proliferation of fracking and oil extraction in Antarctica
 
 
 
<br/>
 
 
 
|}
 
 
 
''Table 2. Overview of the most important barriers to LPG supply''
 
 
 
<br/>
 
 
 
<u>Further Information:</u>
 
*[http://www.worldlpgas.com/uploads/Modules/Publications/kerosene-to-lp-gas-conversion-programme-in-indonesia.pdf Kerosene to LP Gas Conversion Programme in Indonesia]
 
 
 
''This case study from Indonesia presents the experiences from shifting from Kerosene to LPG.''
 
*[http://www.cleancookstoves.org/resources/reports-and-research/ GACC Reports and Research]
 
 
 
''This website contains publications of 'Global Alliance on Clean Cook stoves.''
 
*[https://energypedia.info/index.php/Senegal:_Best_Practice_Case_Studies Senegal: Best Practice Case Studies]
 
 
 
''This case study documents the experiences of a programme which aimed to increase LPG-usage in Senegal.''
 
 
 
<br/>
 
 
 
<br/>
 
<ol style="list-style-type: upper-roman;">
 
<li>'''<u>Activities of international Organisations</u>'''<ol style="list-style-type: lower-alpha;">
 
<li>United Nations Development Programme (UNDP)</li>
 
</ol></li>
 
</ol>
 
 
 
UNDP is developing a regional project which, as part of the SE4All-Initiative, enables access to modern cooking fuels for 500,000 households. With partners from the private sector and local NGOs, mainly Asia is targeted to reduce existing barriers which inhibit the improved supply of LPG. Activates to improve LPG supply are identified as action plans and established through multi-stakeholder meetings and market surveys. Through dialogue and facilitation of cooperation with the relevant actors, strategies to enable market developments are devised. The initiative is presented in a Vimeo video: [http://vimeo.com/74797780 500.000 Smoke Free Households]
 
 
 
<br/>
 
 
 
<br/>
 
#[http://www.worldlpgas.com/ World LPG Association] (WLPGA)
 
 
 
<br/>
 
 
 
WLPGA is an interest group of the global LPG industry. Its goal is to increase the demand of LPG and establish good business practice and safety standards. Through lobbying, knowledge management and consulting, the group increases LPG consumption and enhances market development.
 
 
 
In 2012, WLPGA started the 'Cooking for Life' campaign. Its goal is to to enable one billion people access to LPG as a cooking fuel by 2030. The campaign involves government representatives, representatives from the health sector, energy industry and NGOs. Next to the prevention of 500,000 deaths per year due to 'indoor air pollution', the campaign states that it protects 2.65 million hectares of forest (this equals 51% of global annual deforestation).<br/>To this end different resources and approaches are made available. Experiences of successful programmes should be made accessible and communicated. More information is available on the website of the campaign: [http://www.cooking-for-life.org/ Cooking for Life]
 
 
 
<br/>
 
#[http://www.se4all.org/commitment/global-lpg-partnership/ Global LPG Partnership] (GLPGP)
 
 
 
<br/>
 
 
 
GLPGP is a partner of the VN (UN?)-Initiative SE4All. The partnership was developed by ETG, a LPG industry company considered by WLPGA, a national LPG company and various other actors. A global private-public partnership was chosen as a structure for this partnership. The goal of the partnership is to work on the political requirements for investments which ensures a reliable LPG supply in developing countries.
 
 
 
The implementation of GLPGP starts in Ghana, Cameroon, Kenya, Uganda and Tanzania. Initially, a capital fund of 250 million US $, as well as 250 million US $ credit for investments is made available. This fund is enhanced through a 250 million US $ concessional fund which targets the financing and building of local trading networks. These funds should provide access to LPG for ca. 70 million people and create 150.000 new jobs. Through this, 2% of African forests are protected annually.
 
  
More information is available on the internet website of SE4All: [http://www.se4all.org/commitment/global-lpg-partnership/ Global LPG Partnership]
+
<references />
  
 +
[[Category:Cooking]]
 
[[Category:Liquid_Petroleum_Gas_(LPG)]]
 
[[Category:Liquid_Petroleum_Gas_(LPG)]]
[[Category:Short_Pages]]
 

Latest revision as of 11:42, 8 May 2020

What is LPG

Liquefied Petroleum Gas (LPG) is a blend of light hydrocarbon compounds. It mainly consists of butane (C4H10) or propane (C3H8) or a mixture of both. At room temperature, both gases are colourless and odourless. Propane has its boiling point at -42°C and butane at -0.5 °C. Under modest pressure or in cooler conditions, LPG transforms into a liquid state. LPG in domestic cylinders used for cooking generally comprises more butane than propane, because the fuel value per kilogram of butane is higher than propane and it liquefies under much lower pressure than propane and thus the handling is safer. National and international standards specify the minimum content of butane and a maximum LPG vapor pressure. When liquefied under pressure, the volume of butane and propane is reduced to around 1/260 of the gaseous aggregate state. The specific calorific value of LPG is around 46 MJ/kg or 12.78 kWh/kg depending on the composition of LPG. In comparison, wood has an energy content in the range of 14-18 MJ/kg or 3.89 - 5 kWh/kg (depending of the type of wood and the moisture content) and charcoal in the range of 27 - 33 MJ/kg or 7.5 - 8.34 kWh/kg (depending on the type of charcoal). If made available as a cooking energy fuel it could help to reduce the use of wood and biomass in households in developing countries. 

Liquefied Gas is heavier than air and can therefore accumulate above the ground. This may lead to LPG-'lakes'. It is common practice to add a foul smelling odorant to the gas in order to detect leaks and reduce the risk of explosions.

LPG is non toxic but highly flammable. Therefore, LPG has to be handled with care and all equipment and appliances used to store or transport the gas must comply with high safety standards. They have to be maintained and regularly inspected. Trading with LPG is normaly subject to government safety regulations and corresponding enforcement do prevent fire and explosion accidents.  

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Further Information:


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Supply and Demand

LPG Supply

1. How is LPG produced?
LPG is a byproduct of natural gas and oil extraction and crude oil refining. Around 60% of LPG stocks in the last years have been separated from raw gas and raw oil during the extraction of natural gas and oil from the earth, and the remaining 40% have been a byproduct when crude oil is refined.[1] 


a. LPG from petroleum gas and oil extraction

Natural gas is made up of gases and liquids to varying degrees. In most cases the gas has to be processed to remove impurities such as ethane, propane, butane and water, to meet the specifications of commercial natural gas. A detailed description of natural gas processing can be found in Wikipedia.[2] The separated propane and butane are used as LPG. Thus, 1 - 10% of the total 'raw petroleum gas' will become LPG[3].

LPG also appears as an accompanying gas during oil extraction. Each ton of raw oil contains 25 - 800 m³ accompanying gas. This is immedialely extracted in order to stabilise the raw oil. The accompanying gases are then either processed or burnt on the spot. As part of the latter process - known as flaring - approximately 140 billion m³ of potential LPG are burnt every. This is equal to approx. 70 million tons (or 5 % of the global gas consumption) or 30 - 35 billion USD[4].


b. LPG from the refining process

LPG is separated from other derivatives in oil and gas refineries. 4 - 5 % of the total raw oil can usually be extracted as LPG. This can decrease to as little as 1 % depending on the quality of the raw oil, the technical standard of a refinery and current market prices for propane and butane in comparison to other oil products.


2. How much LPG is produced?

In the last 15 years, LPG productions has been growing continuously and has always exceeded consumption.  This growth  can largely be attributed to the gas extraction sector- whose LPG production capacities grew substantially. This especially includes the US-led expansion of shale gas extraction called 'fracking', which provides LPG as by product [5].  Since 2011, LPG production has always been above 270 million tons per year, Thus, it reached 284 million tons/year in 2014[6]. Excess of LPG is partly vented or burned off by the oil and gas companies.   

3. Where is LPG produced?

LPG is currently produced in all continents. North America and the Middle East are the largest LPG producer followed by some Asian regions.  Africa is producing less than 10% of the world production. Thus in 2014, only 16 million tons of LPG came from Africa, most of it from Algeria.

North American production capacities are expected to grow further due to the expansion in the shale gas sector[7]. It is also expected that LPG production will increase in West Africa, Australia, Russia and China[8]. This increase is mainly possible through the development of refineries which allow the extraction of LPG.


4. How much LPG will be available in the future?
As byproduct of the oil and gas industry the supply of LPG is directly dependent on the extraction of fossil fuels. When fossil fuel extraction increases, more LPG becomes available. When it falls, LPG availability will also fall. While larger production capacities may open up from the development of new fossil fuel sources, it has to be highlighted that most conventional fossil fuel fields are already being exploited. Additional fossil fuel sources may be harnessed from unconventional sources. However, these are mostly linked to significant environmental risks.

More LPG may also be made available from accompanying gases that are currently being flared. This ressource offers 70 million tons of gas. First attempts to power villages by converting such accompanying gases to electricity are prepared as part of a specific High Impact Opportunities (HIO) under the UN Initiative "Sustainable Energy for All" (see SE4All).

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LPG Demand

1. How much LPG is consumed where?

According to estimates, around 2 billion people worldwide use LPG for heating, cooking and other purposes. Global LPG consumption in 2008 stood at 230 million tons. By 2012, consumption rose to 265 million tons.

The largest proportion of the increase can be attributed to the Asian-Pacific region. Consumption there rose from 58,000 million tons to 80,000 million tons between 2000 and 2010. In 2011 the Asia-Pacific region made up 35 % of global consumption. Annual growth rates of 4.8 % in demand are anticipated until 2018[9].

Global LPG consumption from 2002-2012 (adapted from Argus, 2013)
Global LPG consumption from 2002-2012 (adapted from Argus, 2013)


Fig. 1. Global LPG consumption from 2002-2012 (adapted from Argus, 2013)

Regarding individual countries, China is the leading LPG consumer with 13.3 million tons p.a., followed by India consuming 9.9 million tons. USA, Mexico and Brazil consume 7.5, 6.3 and 5 million tons of LPG per year.

2. What is LPG used for?
Most consumption of LPG occurs at the household level (49 %), followed by the use of LPG as feedstock in the petrochemical industry (21.6 %) and other industrial uses (11.8 %). Direct consumption in refineries and finally the agricultural sector make up 2 % of global consumption. Other sectors (e.g. Autogas) add up to an aggregated 9.3 % of total consumption[10].

LPG is used for the following purposes:

  • Heating and Cooking - especially in locations that are not connected to local gas distribution systems.
  • Auto gas - Consumption of auto gas is enhanced through low taxes. In 2008, more that 13 million cars ran on LPG globally. Industries are currently promoting the spread of car gas.
  • Furthermore, LPG is used for cooling and in the Petrochemical industry. The petrochemical industry uses LPG mainly as feedstock for instance in the production of plastic[11].

In poor developing countries LPG is almost exclusively used as a cooking fuel. The users are predominately middle- to high-income households in regions with a supply network (mostly urban and peri-urban areas).

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Relationship between Demand and Supply

Since 2007, the global production capacity of LPG is growing faster than demand: In 2012, there were 9.7 million tons of LPG availalbe in excess. This gap is currently widening. In 2012, for example, consumption rose by 2 % whereas production rose by 3 %.

Despite excess capacities, LPG remains scarce in many regions - especially in the rural areas of developing countries (see e.g. Chandra, 2010). This is mainly due to lacking supply networks, which are not able to supply households with the excess LPG. Furthermore, the target group 'poor households' which is a large potential customer group often targeted in international initiatives tends to dispose of too little income to afford LPG. This will be discussed further below.

The excess amount of LPG is thus often processed. LPG is used in petrochemical industries or in the production of Liquid Natural Gas[12].


Further Information:


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LPG Supply 

Value Chain and Supply Route

A number of different steps are necessary between the raw form of LPG up to the final consumer. A sophisticated infrastructure is required for the distribution. LPG either comes directly from gas wells or is a by-product of crude oil refining. Subsequently, it is delivered from supply points in a liquefied form to primary bulk storage facilities, where it is stored under refrigeration or pressurisation. The owners/operators of bulk storage facilities may also be the importers and have the necessary transport facilities. LPG for cooking is brought to cylinder filling plants. The cylinders are either owned by the bottling company or by distributers or by the consumers (see below the different distribution systems). The filled cylinders are distributed to a network of intermediaries, who operate depots and the necessary transportation facilities. The cylinders are supplied to retail points, where they are sold to customers. Empty cylinders are either returned along the chain to the filling plant or directly brought to a filling station by the customer. 


Route of LPG from production to the end-consumer
Route of LPG from production to the end-consumer

Figure 2. Route of LPG from production to the end-consumer (adapted from graphic on WLPGA website)



Cylinder Distribution Systems

There are two main systems for distributing LPG cylinders to consumers: the Consumer Controlled Cylinder Model (CCCM) and the Branded Cylinder Recirculation Model (BCRM).

In CCCM the consumer owns the cylinder and is fully responsible for maintaining the cylinder. The consumer can refill it at any refilling station. Main disadvantag of the CCCM is a possible decline in cylinder safety, leading to an increased risk of fire and explosion accidents. In addition, the CCCM is susceptible for black market LPG activities by unlicensed and uncertified refilling businesses disregarding safety.

In BCRM the LPG marketing company owns the cylinder and hence, is fully responsible for maintaning the cylinder. Consumers can refill the cylinder only at authorized stations of the marketing company. The consumer generally pays a deposit to obtain the first cylinder from authorized distributers, which is typically set below the cost of the cylinder, plus the purchase price of the LPG it contains. Empty cylinders are exchanged for a full cylinder of the same brand for the refill price. Main disadvantages of BCRM are the often higher end consumer cost of the cylinder and the refilling and the exclusion of small enterprises from the LPG business. 



LPG as a Cooking Fuel for Low-Income Households

General Factors Concerning the Choice of Cooking Fuels

The selection of the type of fuel during cooking is contingent of several factors. Factors influencing the decision are availability, affordability, habits and the usability of the fuel. The prevailing use of fire food in many developing countries is primarily because it is cheap (often free) and widely available. In the future wood will remain the primary cooking fuel for rural households[13].

An increase in LPG use could reduce the total amount of wood, coal and kerosene consumed. This is the case in some cities where LPG is available. But households do not tend to fully replace one fuel by another. Instead, they use a mix of fuels and a specifif fuel is chosen according to availability, affordability and convenience.

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LPG Cooking Systems

A typical cooking system which uses LPG is made up of a steel cylinder filled with LPG, a pressure controller, a tube connecting the cylinder to the pressure controller and the burner, and finally the burner itself. The burner can consist of one or more cooking tops.

The size of the system depends on the size of the cylinder. Cylinders exist in various sizes e.g.: 2.7 kg, 6 kg, 12 kg, 14,5 or 16 kg. A survey in 20 countries showed that low-income countries households mainly use cylinders smaller than 6 kg[14]. Nevertheless, the majority of currently available LPG cylinders are larger (up to 47.5 kg). This proves problematic for low-income households both in the acquisition as well as the recharge of LPG.

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Advantages & Disadvantages of LPG as a Cooking Fuel for Low-income Households

Advantages of LPG

The main advantages of LPG provision of low-income households in comparison to conventional fuels (wood, wood charcoal) are:


  1. Health-related: The use of LPG reduces the interior air pollution by 90% in comparison to traditional ways of burning biomass e.g.: three-stone fire[15][16]). As LPG burns almost completely, the proportion of pollutants is reduced.
  2. Environmental impacts-related: CO2 emissions are relatively low. Greenhouse gases are reduced by 5-16 times per prepared meal compared to coal[17]. If LPG was used, the wood consumption can be substantially reduced - 45 kg of LPG is sufficient to produce the thermic energy of about half a ton of wood. In regions with low biomass availability, or in regions where more than the sustainably available amount of biomass is burnt, LPG could lead to a significant relief of biomass resources.
  3. Further advantages: LPG stoves quickly supply heat and work more efficient than stoves which burn biomass. The simple and precise regulation simplifies the cooking process and can save time.Due to its high energy density, LPG is easily transportable.

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Disadvantages of LPG

The disadvantages of LPG as a cooking fuel are the following:

1. Availability: A UNDP study found that 120 billion tons of LPG are necessary to supply 2 billion people with cooking energy[18]. This equates to 60 kg of LPG per capita and is equivalent to half of the current global production. These quantities are currently not available.

A mix of the following strategies would therefore be required if 2 billion people were to be supplied with LPG as a cooking fuel:


  1. New fossil fuel sources would have to be developed
  2. Current extraction processes would have to become more efficient
  3. The use of LPG in other sectors would have to be reduced


2. Costs: The LPG market is underdeveloped in most regions where LPG would be an addition to current cooking fuels. Significant sums would have to be invested to develop these markets.

Costs entail:

a. Market Development Costs include:


  • LPG production capacities if a country has access to fossil fuel ressources
  • Import facilities if a country does not have access to fossil fuel ressources
  • A distribution network with storage and filling stations

No reports are known that explore the necessary investment costs of developing an LPG market in-depth. Further research is needed in this field.


b. Costs for Households

Households require capital to buy hardware such as the LPG stove and the cylinder. Again, limited data exists that compares regional prices. A typical 14 kg LPG cylinder system usually costs between 60 - 70 US$. This is a barrier for many households. A competitive kerosene-based cooking systems is 83 % cheaper[19]. Improved wood or wood charcoal stoves can be obtained for as little 2 US$.

Furthermore, households need to be able to pay the running costs for LPG. A survey that explored the costs to the consumer in 20 countries found that large discrepancies exist. One kg of LPG costs between 0.40 US$ in Morocco and 3.26 US$ in Turkey.

LPG prices for the end-consumer in December 2010.jpg
LPG prices for the end-consumer in December 2010

Figure 3. LPG prices for the end-consumer in December 2010 (adapted from Matthews and Zeissig, 2011)

The price of LPG is affected by taxes, subsidies and market distribution costs. LPG becomes cheaper when distribution routes are short or bought in bulk. Low-income households mostly live in remote rural areas and buy small amounts. This is a disadvantage in comparison to wood, which can be collected free of charge. A survey in a medium-sized city in northern Madagascar provided some data on comparable prices for different cooking fuels. It shows that a kg of LPG costs approx. 2.80 US$. This is 17 times higher than the price for a kg of charcoal and 30 times higher than the price for wood (see figure 4).


Urban consumer prices in Diego-Madagascar (2013).png
Urban consumer prices in Diego-Madagascar (2013)




Figure 4. Urban consumer prices in Diego, Madagascar in 2013 (GIZ HERA, 2014 )

In terms of useful energy delivered, LPG costs 0.13 US$ / MJ. Firewood costs 0.05 US$ / MJ and charcoal costs 0.03 US$ / MJ.

More recent data from 2019 are available from refugee camps in Bangladesh. A 12 kg cylinder and a simple gas stove cost around 45 USD. Refilling the cylinder cost 12 US$ or 1 US$/kg. According to the data from UNHCR around 82g of LPG is consumed per person and day. For a 5 household with 5 persons it would mean around 12 kg per month.[20]


Tabular Overview of Advantages & Disadvantages

The following table summarises the most important advantages and disadvantages of LPG as a cooking fuel for low income households:



Advantages Disadvantages
Overall
  • Nearly smoke-free
  • Easy handling
  • Simple Regulation
  • Fast heat-up time
  • Efficient
  • Easilty transportable
  • Fossil fuel (finite ressource)
  • Markets - especially in rural areas - not developed
  • Absence of adequate infrastructure
  • Irregular supply
  • Risk of explosion
Economic Macro


  • Fuel diversity

Micro



  • Long operating life (durable devices)
Macro


  • Import dependency

Micro



  • High upfront costs
  • Higher running costs than biomass fuels
Social
  • Diversified energy supply
  • Less time for collecting firewood
  • Cylinders are sometimes filled incompletely
  • Less employment: 10-20 jobs are created per TJ of LPG while coal creates 200 - 350 jobs per TJ
Environment
  • Less deforestation if wood use is replaced with LPG
  • Lower greenhouse gas emissions compared to burning biomass or coal
  • LPG can be extracted from environmentally harmful sources (low standard oil industry, shale gas, etc.)

Table 1. Overview of advantages and disadvantages of LPG as a cooking fuel


Further Information:


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The Interventionist Perspective

Challenges to an improved LPG supply

The challenges that arise when working towards an improved supply of LPG as a cooking fuel in low-income households can be divided into five areas:

1. Administration

A centrepiece of a LPG market is its effective administration. This includes the regulation of market actors, subsidies, authorising retailers and ensuring a safe and correct procedure e.g. when cylinders are being refilled. This is vital both for functional market structures and the security of consumers. A strong and functioning market administration may also help to attract foreign investments.

A report from the World LPG Association reviews the most important aspects to be considered in the regulation of LPG markets. The report contains different sales models, ways to handle cylinders and outlines the definition and regulation of safety standards (see WLPGA, 2013).


2. Availability

In many countries the private sector already supplies LPG to high-income households in urban areas. However, many countries and rural areas in particular still lack supply infrastructure. These regions are unlikely to be covered by the private sector alone. Therefore, interest groups such as the World LPG Association (WLPGA) lobby for increased public sector investments. The private sector can be partially involved in these costs, if a supply strategy is in development[21].

Next to the provision of decentralised distribution networks, filling stations are important for the supply of rural areas. LPG should always be disposable, as a secure supply would increase people's acceptance of LPG. Acceptance is likely to fall if supply is unstable.


3. Affordability

As soon as supply is assured, affordability becomes the largest barrier to an increased use of LPG. Subsidies are necessary both for initial and running costs if LPG is to be made available for low-income households.

a. Subsidies for upfront and running costs

Subsidising the initial costs allows access to LPG usage. Nevertheless, subsidies of the equipment without subsidies of running costs could lead to a situation in which families cannot afford to actually use LPG. This would lead to 'dead' investments[22].

Subsidising the fuel makes sense when LPG is to be made availabe for low-income households.Different precautions measures have to be taken. For instance, the amount of low-priced LPG could be limited through coupons that are distributed to the poor households. Subsidised cylinders can be marked with colours to prevent subsidised LPG being sold-on to other households[22]. The grading of subsidies according to usage ensures that households with low consumption pay a comparitively low price. According to this model, large-scale consumers can be made to pay a progressively rising tariff that cross-subsidises poor users with limited consumption[22].


b. Who pays for the subsidies?

LPG subsidies would require large investment sums. The financing of hardware costs could stem from various sources. Microcredit institutions could distribute credits. Alternatively, LPG entrepreneurs could remain owners of the cylinders and demand rent or a deposit from the customers. The distribution of smaller cylinders would decrease the overall amount of capital or subsidies required.

Regarding the running costs, there are various possibilities to keep the costs of LPG subsidies low. Subsidies of kerosene could be shifted to the LPG sector which would encourage a 'fuel switch' without increased costs for the public sector. In Indonesia such a switch from kerosene to LPG subsidies saved the government 6.9 million US$ p.a.. It has to be ensured that low-income consumers to not carry the burden of potential price increases as this is the target group most likely to become incapable of paying for the running costs.


c. Guidelines for subsidies

Badly defined subsidies can decrease incentives to invest, decrease efficiency, encourage wasteful behaviour and burden public finances[23]. As consumers quickly grow accustomed to subsidies, reducing subsidies is difficult realise once they were introduced.

The following points should therefore be considered in the design of different subsidy programs of LPG for low-income households:


  • Subsidies for system components can be more cost-efficient and requires less monitoring than investments in fuel
  • Subsidies for rural households must be targeted and transparent as without necessary restrictions subsidy regulations are often ignored
  • Time-bound subsidies reduce costs but can cause to market collapse once subsidies are withdrawn
  • The price structure in relation to other fuels should be aligned with the energy supply strategy of a given country

The private sector should be involved in all financing plans, for instance by taking responsibility for the distribution of small cylinders.


4. Awareness

LPG is considered as a modern, clean and easy-to-use fuel. Nevertheless, educational campaigns are sometimes useful. Especially health and environmental benefits should be underlined to target groups. The correct utilisation should be advocated in order to avoid accidents. Also, consumer confidence regarding the correct filling of cylinders needs to be raised. In underdeveloped LPG markets consumers sometimes obtain less LPG than what they have paid for.

Technical solutions to this problem such as see-through cylinders have been developed by Ragasco. Such cylinders allow the consumer to check the filling level him/herself. Yet, such cylinders are not established on the market.


5. Security of Supply

Current production surpluses of 9.7 million tons allow for the increased distribution of LPG to low-income households. Nevertheless, it should be considered that prices will rise as soon as demand exceeds production. At this point, the distribution of the limited LPG ressource will be determined by the purchasing power of the customers. As prices rise, low-income households will be the first to be excluded from an adequate LPG supply. This is important to consider as many low-income households are already excluded due to the LPG price level as they are today.

a. Short and mid-term security of supply

The demand for LPG of the petrochemical industry rose markedly in the US and the Middle East. It is expected that petrochemical industries will absorb current supply surpluses as long as prices remain low[7]. Increased demand is also expected in the autogas sector. Overall LPG consumption is expected to rise by 4.4 % p.a. between 2012 and 2018.

In can nonetheless be anticipated that LPG will be available for consumption by low-income households. This is due to anticipated increases in LPG production raising quicker than consumption levels.

Furthermore, unused accompanying gases can be used to supply low-income households. In Nigeria, where large parts of the population use traditional cooking fuels and LPG-consumption remains low despite available oil resources, the usage of accompanying gases would be viable.

Whilst accompanying gases are used for electrification programs through SE4All-Initatives, there are no known programs which specialise in LPG supply through using accompanying gases. This is the case despite the existence of the technological know-how.

b. Long-term security of supply

Since LPG supply is directly related to the availability of finite oil and gas deposits, supply for low-income households cannot be guaranteed in the long-term. To the contrary; as demand increases and availability decreases, prices will rise and thus increase the costs for low-income households.

Thus to ensure the long-term supply of LPG for low-income households, the development of supply strategies should be agreed with representatives of both politics and industry. As described above, demand is state-aided in various sectors (autogas, petrochemical industries etc.); this already threatens supply of low-income households in the middle-term.

To realistically ensure the goal of ' universal access to clean cooking fuels by 2030' stated by the IEA through 50% use of LPG, the following conflicts should be consciously avoided:


  1. Conflicts between producing and importing countries
  2. Conflicts between consumers on a household level, car gas and petrochemical industries
  3. Conflicts between demand centres in the city and rural areas

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Tabular Overview of Challenges

Barrier

Characteristics

1. Regulation
  • The absence of regulation leads to security risks and black markets
  • Lacking regulations discourage potential investors
  • Fraud may occur during refilling


2. Availability
  • Storage capacities are insufficient to compensate demand fluctuations
  • Filling stations may not be available or have lacking capacities
  • Supply routes are not developed - the private sector is unlikely to develop LPG-access in remote areas
  • Dependence on LPG imports
  • Low availability of small systems and system components such as cylinders, connection hoses, regulators and cooking stoves


3. Affordability
  • High initial costs compared to other fuels
  • High running costs esp. in remote areas
  • Low-income households have low disposable income - refill costs are high and at once


4. Awareness
  • Health and environmental benefits of LPG are sometimes not known
  • Insecurity regarding price development of LPG
  • LPG can be dangerous - improper use and lack of maintenance of LPG cylinders leads to accidents
  • Sometimes bad reputation of LPG due to improper refilling of LPG cylinders


5. Supply security
  • Fossil fuel derivative therefore limited availability of LPG
  • Increasing demand of LPG from different sectors will lead to confcilts in the middle- and long-term
  • Increased use may lead to the proliferation of unconventional sources


Table 2. Overview of the most important challenges in the use of LPG as a cooking fuel


Further Information:


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Activities of International Organisations

United Nations Development Programme (UNDP)

UNDP is developing a regional project as part of the SE4All-Initiative. It mainly targets Asia and aims to enable access to modern cooking fuels for 500,000 households. UNDP cooperates with the private sector and local NGOs to reduce existing barriers that inhibit the improved supply of LPG. Potential activities to improve the LPG supply are identified and action plans are established through multi-stakeholder meetings and market surveys. Strategies to enable market developments are devised through dialogue and facilitation of cooperation with the relevant actors. The initiative is presented in a Vimeo video: 500.000 Smoke Free Households

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World LPG Association (WLPGA)

WLPGA is an interest group of the global LPG industry. Its goal is to increase the demand of LPG and establish good business practice and safety standards. Through lobbying, knowledge management and consulting, the group increases LPG consumption and enhances market development.

In 2012, WLPGA started the 'Cooking for Life' campaign. Its goal is to enable one billion people access to LPG as a cooking fuel by 2030. The campaign involves government representatives, representatives from the health sector, energy industry and NGOs. Next to the prevention of 500,000 deaths per year due to 'indoor air pollution', the campaign states that it protects 2.65 million hectares of forest (this equals 51% of global annual deforestation).
To this end different resources and approaches are made available. Experiences of successful programmes should be made accessible and communicated. More information is available on the website of the campaign: Cooking for Life

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Global LPG Partnership (GLPGP)

The Global LPG Partnership (GLPGP) was set up as a High Impact Initiative (HII) under the SE4All High Impact Opportunity (HIO) "Universal Adoption of Clean Cooking Solutions". The HII is led by the Energy Transportation Group (ETG) and aims to accelerate the transition to LPG for cooking by engaging public and private sectors. Other key players of the HIO are the WLPGA, representatives of national governments, local LPG businesses and the health community. The strategy of the Partnership is to implement a multi-phase process in 4-5 countries in Sub-Saharan Africa (SSA).

The implementation of GLPGP will start in Ghana, Cameroon, Kenya, Uganda and Tanzania. A total of 750 million US$ are to be made available through the launch of a commercial equity fund for infrastructure (250 million US$), commercial debt (250 million US$) and a 250 million US$ concessional fund for consumer cost finance and local retail distribution. It is estimated that 70 million people will gain access to LPG for cooking through these measures and that 2 % of Africa's biomass will be offset.

► More information is available on the website of the HII: Global LPG Partnership

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Further Information


References

  1. https://www.wlpga.org/about-lpg/production-distribution/
  2. https://en.wikipedia.org/wiki/Natural_gas
  3. WLPGA, 2014
  4. Roenn, 2013
  5. Leija and Gist, 2013 - http://www.ogj.com/articles/print/volume-111/issue-6/processing/shale-gas-development-altering-lpg-demand--trade.html
  6. Argus & WLPGA. Statistical review of global LPG 2014. Paris: World LP Gas Association; 2015.
  7. 7.0 7.1 PR Newswire, 2013 - http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html
  8. Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White Paper/Statistical Review of Global LP Gas 2013.pdf
  9. PR Newswire, 2013: http://www.prnewswire.com/news-releases/global-liquefied-petroleum-gas-lpg-market-is-expected-to-reach-usd-26641-billion-in-2018-transparency-market-research-219382641.html
  10. Stealthgas, 2013: http://www.stealthgas.com/images/stories/lpgglobaldemand.png
  11. LPGas 2013: http://www.lpgasmagazine.com/propane-a-wanted-commodity-in-petrochemical-sector/
  12. Argus, 2013 - http://media.argusmedia.com/~/media/Files/PDFs/White
  13. GIZ, 2014 - https://energypedia.info/images/3/32/2014-03_Multiple_Household_Cooking_Fuels_GIZ_HERA_eng.pdf
  14. World Bank, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/LPGReportWeb-Masami.pdf
  15. WHO, 2011 - http://www.who.int/hia/green economy/en/
  16. Polsky and Ly, 2012 - http://ldihealtheconomist.com/media/The Health Consequences of Indoor Air Pollution.pdf
  17. Bailis et al., 2003 - http://rael.berkeley.edu/sites/default/files/very-old-site/OA5.1.pdf
  18. UNDP, 2000 - http://www.undp.org/content/undp/en/home/librarypage/environment-energy/sustainable energy/world energy assessmentenergyandthechallengeofsustainability.html
  19. TDL, 2013 - http://www.thisdaylive.com/articles/hindering-growth-of-nigeria-s-lpg-market-with-kerosene-subsidy/157397/
  20. LPG Distribution at Refugee Camp in Bangladesh, https://energypedia.info/images/d/df/Webinar_Series-_Sustainable_Energy_in_Humanitarian_Settings.pdf
  21. IEA, 2011 - http://www.iea.org/publications/worldenergyoutlook/resources/energydevelopment/energyforallfinancingaccessforthepoor/
  22. 22.0 22.1 22.2 IEI, 2004 - http://www.iei-asia.org/IEIBLR-LPG-IndianhomesReport.pdf
  23. Matthews and Zeissig, 2011 - http://siteresources.worldbank.org/INTOGMC/Resources/Review of LPG market in 20 countries 2011.pdf