Sustainable Transport in Asia Case Study of Korea and Russia

Sustainable Fuel Partnership, Regional and Sustainable Development Department, Asian Development Bank
This essay seeks to answer major questions in the project; these include, why do great ideas of "green transportation" projects have good initial momentum then often fail? It is based on case study of Korea`s successful CNG bus project vs. challenged and failed LNG truck, CNG taxis and bio-methane projects. Suggestions on: What mechanisms are required?
BACKGROUND:Korea is known for its most successful CNG bus project in the world; for instance, an implementation of 25,000 heavy duty CNG buses to run on natural gas, just within a 10 year time span. On one side, it was a huge "green transport" success case. On the other hand, it was the impact on the other side that caused failures of advancements of future similar projects.
WINNERS: Based on research by the Korean government the Korea`s CNG bus program 2000-2010, created $1.5 BN environmental benefits; in addition, $338 MN of the investments by government resulted in $1.15 net economic benefit. In Korea, 95% of all city buses are running on CNG. A CNG bus currently costs to fuel about $1000/ mo versus a diesel bus which would require $2000/mo, meaning $1000 a month in fuel cost savings. CNG station owners enjoy ongoing growth in gas sales. This means that a bus fleet owner of 100 buses would equal to annual company savings of $2,400,000, and for the nation, CNG bus energy expenditure savings are $300 million/year. Korea as a nation is absolutely benefiting with money being re-circulated domestically, which contributes to strengthening the national economy. Each year since 2000 there has been continuously enjoyed CNG bus sales growth, with Hyundai and Daewoo producing 6000 units in 2012, and growing export sales to 22 countries. Monopolistic government gas company; Korea Gas Corporation enjoys sales of 1.1 BN ㎥/ year which is consumed as a vehicle fuel; approximately $300 MN of natural gas sales, and small percent of bio-methane sales annually. Furthermore, as a country that does not produce one drop of oil, has hope of becoming energy producing country by fueling turning waste into energy to fuel their vehicles by bio-methane. With bio-methane plants currently operational, Korea has hope to utilize and convert their waste into energy, and positioned to fuel their all of the 25,000 city bus transport and reduce on their waste and dependence on foreign oil.
LOSERS: Due to the CNG bus program success, every year, oil companies` loss is $600 MN of diesel sales market. This was a business failure for oil companies, also for Saudi Arabia Armco, Korea`s main supplier of crude oil. Government budget which relies on 50 percent oil taxation, also suffered due to loss of government budget. Korean government is impacted, and as a result in 2012, due to limited government funds, needing to cut back on major national projects.
WHAT HAPPENED AS A RESULT? After a painful lesson, government and oil companies have joined hands behind the scenes, and became strongly determined to prevent further success of bio-methane/NG taxi and truck markets to go green and often frown upon ambitious ideas of "green growth" thus not supporting alternative green fuels. Negatively impacted groups which are most powerful and influential worked together and created "anti NGV and Biomethane" mechanisms to secure their interests. Many companies which strongly supported the industry ultimately became weak and suffered loss in sales, went under court`s protection, closed up offices, and numerous went bankrupt. Organizations which supported this industry had closed down departments and reorganizations took place with different responsibilities.
PERSONAL BACKGROUND: NGVI, Inc. a company which proved to remain committed to its motto of "Blue Skies and Energy Independence". Since 1995, NGVI acted as a key drivers and industry pioneer by introducing and proposing to CNG buses Korean government. It even was rewarded "Environment Award" by Korean government. The function of NGVI Company and reason for its existence was to fulfill the CEO`s personal goal to contribute to the nation of Korea, by cutting national energy import for transportation costs by 50 percent thus strengthening the economy.
In the pursuit of turning around this distressed company, which went under "court`s protection" especially from a personal objective of saving my father who is the president and sole legally liable person for the $16 million of debt, I personally invested 5 years full time dedication and spending my very valued "out of my own pocket" money of $500,000 as tuition fees, as if my life depended on it to save this company and my father`s life during a distressful period. Through it all, I learned through real life experience of the complex network of stakeholders, what are the barriers, the power and influence of oil companies and government, as meanwhile learned what prevents green transport of NGVs success in this nation. In this inquiry of how, this required knocking on doors over 5 years of all possible stakeholders; Ministry of Environment, Seoul City Waste Dept., Korea Environment Corporation, Ministry of Knowledge and Economy: Biomethane DeptEco-Holdings Biomethane company, GS Caltex, Hyundai Oil Bank, National Congress, Ministry of Knowledge and Economy, Korea Natural Gas Vehicles Association, Asia Natural Gas Vehicles Association, Gazprom, Gazprom`s NGV director, the Gorbachev Foundation, Mikhail Gorbachev; founder of "Green Cross International", Ministry of Energy of Russia, Ministry of Commerce and Industry, Anti-corruption association, Swedish Biogas, Shinhan Bank, Green Growth, Taxi Association, Taxi Labor Association, discussions with over 1000 taxi drivers, private taxi company owners, Cargo Truck Association, Asia Development Bank, Politicians including mayor of Donghae City, Minister of Environment, Associates of President of Korea Lee Myung Bak, Lee Myung Bak`s brother who is national congressman, Media, Environment TV, Energy Today newspaper, Hyundai, Daewoo Bus, Tata Daewoo, Gangwon Province "Biomethane Department", Ministry of Environment "Carbon Reduction Dept.", Investment companies, Macquarie Bank, Samsung, Hanwha, KOGAS, Samchully, Korea Gas Safety Corporation, etc. I also attended the Korea`s Green Car Fo...