29 April 2009

Petronas - "State Owned Success"

It was reported in the Financial Mail (from South Africa) on 24th April 2009 that Petronas is a "state owned success". (Ref: Financial Mail, 24th April 2009. State Owned Success: Petronas Accounts for Half Malaysia's GDP, and It's Not Cutting Back. URL: http://free.financialmail.co.za/09/0424/features/afeat.htm) The reporter, Matthew Hill, interviewed Tan Sri Mohd Hassan Marican, head of Petronas. Among the interesting points disclosed during the interview, were:

  • Despite oil prices coming down (from the high price of USD$147 per barrel), the cost of oil production (that rose during the boom) has not come down. Margins have thinned.
  • Thinning margins have led to deferment of exploration and development of new oil fields.
  • In the long run, a shortage of supply would raise oil prices.
  • Petronas did not get caught up in last year's "frenzy" (presumably, to develop its supply capacity). It now has capacity for development.
  • 40% of Petronas' revenue comes from its overseas businesses. Much of this 40% is derived from Petronas' investments in Africa.
  • In North Africa, Petronas' main activities are extracting oil and gas. In the South, it is focussed on "downstream activities like refining and retail".
  • Petronas must sell 5% of its 80% in Engen (Rwanda) to a black empowerment company by 2010.
  • Petronas is in talks with PetroSA about a $9 billion refinery in Coega -- including a stake in the refinery.
  • Petronas accounts for nearly 50% of Malaysia's GDP.

Recognising Petronas' large contribution to Malaysia's economy, we wonder what the giant has been up to. Naturally, having a large overseas base means that it is often in the news. These include, in recent news:

  • Oman - Petronas Carigali Sdn Bhd inks deal to explore for gas in a 3,709 square km block in the Western part of Oman.
  • Indonesia - Indonesia has offered Petronas a chance to develop its Natuna D-Alpha gas fields.
  • Ireland - Marathon Oil Corp. successfully sold its wholly-owned subsidiary, Marathon Oil Ireland Ltd. to PSE Ireland Ltd., a subsidiary of Petronas. The transaction has a total value of US$180 million with an effective date of Dec. 31, 2007.
  • Sudan - Petronas is a "key player in Sudan's growing oil and gas industry"

Petronas is incidentally ranked by Fortune as the world's 8th most profitable company. Its operations span 32 countries in the world. (Tehran Times, 19th April 2009. Petronas keen to invest in Oman's energy sector. URL: http://www.tehrantimes.com/index_View.asp?code=192574)

I am proud to be Malaysian and of course proud of Petronas's success.

12 April 2009

A Little On Ethanol and Biodiesel

In Australia, it was reported by the Sydney Morning Herald that the Australian government's target that fuel companies should have at least 2% ethanol blended with their petrols by the end of 2008, was not met. (Ref: The Sydney Morning Herald, 23rd March 2009. Companies Miss Ethanol Target. URL: http://www.smh.com.au/environment/energy-smart/companies-miss-ethanol-target-20090322-95mu.html) From the same report:

The revelations cast doubt on the likelihood of achieving the Rees Government's mandatory target of 6 per cent by 2010, with plans to give motorists the choice in 2011 of only E10 (which contains 10 per cent ethanol) or premium unleaded.

Gasoline (a.k.a. petrol) containing a 10 percent blend of ethanol is known as E10 or "gasohol". (Source: US Energy Information Administration, February 2007. Biofuels in the US Transportation Sector. URL: http://www.eia.doe.gov/oiaf/analysispaper/biomass.html)

Is ethanol really the solution to the problem of peak oil? Some people say that ethanol is not the solution. Watch the following video and see if you agree.

The main controversy revolving around ethanol in fuels, at least for the USA, is that consumers' stomachs will be in direct competition with the auto industry for corn, and other organic sources of ethanol. From the US Energy Information Administration website (ibid), it is clear that the US relies primarily on corn for its ethanol needs:

The U.S. ethanol industry relies almost exclusively on corn, consuming 20 percent of the available corn supply in 2006. At current production levels, corn— which is produced domestically in large volumes—is the most attractive feedstock for ethanol. As ethanol production increases, competition for corn supplies among the fuel, food, and export markets, along with a decline in the marginal value of ethanol co-products, is expected to make production more expensive.

But the expected increase of human population and the non-increase of farming land would mean that in the long run corn is not viable. The same report also mentions switching to more energy efficient crops.

Cellulosic biomass from switchgrass, hybrid willow and poplar trees, agricultural residues, and other sources has significant supply potential, possibly up to 4 times the potential of corn. Switchgrass and poplars could be grown on CRP lands, where corn cannot be grown economically, but they would not be competitive with corn until corn prices rose or the capital and non-feedstock production costs of cellulosic ethanol were significantly reduced. To expand beyond a production level of 15 to 20 billion gallons per year without seriously affecting food crop production and prices, the industry must make a transition to crops with higher yields per acre and grow crops in an environmentally permissible manner on CRP lands, while continuing to provide profits for producers.

Ethanol based fuels do not generate as much energy as petrol. (Ref: How Stuff Works, Is Ethanol Really More Eco-Friendly Than Gas? URL: http://auto.howstuffworks.com/ethanol-facts1.htm) The EIA report says:

E10 (10 percent ethanol) has 3.3 percent less energy content per gallon than conventional gasoline. E85 (which currently averages 74 percent ethanol by volume) has 24.7 percent less energy per gallon than conventional gasoline.
 

Producing ethanol requires more energy than the ethanol itself contains: "... ethanol could end up containing less energy than the gasoline consumed to produce it." (Ref: How Stuff Works, Ibid.) This is further confirmed in a report at The Oil Drum (Ref: The Oil Drum, 13th January 2009, The Effect of Natural Gradients on the Net Energy Profits from Corn Ethanol, URL: http://netenergy.theoildrum.com/node/4910):

... large amounts of corn must be grown and harvested to equal even a small portion of our gasoline consumption on an energy equivalent level, which will undoubtedly expand the land area that is impacted by the production process of corn-based ethanol.

Ethanol producers of course encourage petroleum marketers to blend their fuels with ethanol. They promise higher margins of profit to petroleum marketers. (Ref: American Coalition for Ethanol, Blending Economics. URL: http://www.ethanol.org/index.php?id=53&parentid=29)  Lobbyists also claim that food price increases are not caused by the production of ethanol, but are caused by higher energy prices. (Ref: American Coalition for Ethanol, Food & Fuel. URL: http://www.ethanol.org/index.php?id=83&parentid=25) 

The argument that food prices have gone up due to factors other than ethanol, are supported by a recent report by the "nonpartisan" US Congressional Budget Office.

The budget office estimates that ethanol was responsible for 10 percent to 15 percent of the increase in food prices between April 2007 and April 2008. Put another way, ethanol contributed 0.5 to 0.8 points of the 5.1 percent increase in food inflation during that period. By comparison, higher energy prices, which raised transportation and electricity costs, were responsible for as much as 36 percent of the food price inflation, the study says.

Find the study, and the budget office director's blog note, here: www.cbo.gov/doc.cfm?index=10057

Source: Des Moines Register, 12th April 2009. Study: Other Factors, Not Ethanol, Chief Culprit in Food Price Jumps. By Brasher, P. URL: http://www.desmoinesregister.com/article/20090412/BUSINESS03/904120322/-1/BUSINESS04



Presently independent ethanol producers in USA are suffering and a number are in trouble or have closed down:

The situation is neatly summed up by an article from Herald & Review, an Illinois newspaper.

Of course, the larger ethanol companies are not the only ones having difficulty. Many smaller one and two plant operations have also sought bankruptcy protection in the past year following the plummet in crude oil futures in the latter part of 2008. No, they were not all caught speculating on the long side of the crude oil market, but caught in a cost-price squeeze. With ethanol prices linked at the hip to unleaded gasoline, what goes up must come down and ethanol prices fell below cost of production. At least the cost of production that had been booked by the plant’s corn buyers.

The ethanol industry that had been flying high in 2008 with $140 crude oil, and market analysts predicting $200 prices, ethanol refiners were locking in corn prices at higher prices to help push that commodity well past $7. When the crude oil balloon popped, and prices deflated with the rest of the global economy, ethanol prices had to fall as well and that destroyed any hope of profits, for companies that are solely dependent upon ethanol sales. The result has been the closure of many ethanol plants, because there is no future in keeping open a plant that is losing money. That is something that cannot be made up on volume, no matter how large.


(Source: Herald & Review Blogs, Farm Blog by STU ELLIS. 12th April 2009. Ethanol Industry Burning Through Equity. URL: http://www.herald-review.com/blogs/stuellis/?p=159

This article now turns its eyes to Malaysian shores. What about the Malaysian scenario? A 2006 report indicates that the same difficulties plague our biofuel efforts. The report, Biofuels For The Malaysian Transport Sector, was prepared under the Malaysian-Danish Environmental Co-operation Program and is worth reading. It can be found at http://eib.ptm.org.my/upload/files/Bio-fuels%20for%20the%20Malaysian%20Transport%20Sector.doc

Among others, the salient points in the article are:

  • Road transport is expected to double its energy consumption between 2004 to 2020.
  • Without change of energy strategy, Malaysia will turn from its present status as oil supplier to a future (2014) status as an importer of oil.
  • The potential Malaysian raw materials for biodiesel production were identified as Crude Palm Oil (CPO), used cooking oil, animal fat or oils that in future may be produced by new oil crops such as e.g. Jatropha oil. CPO is used as raw material for biodiesel in several plants worldwide, but also in Malaysia. CPO has the highest potential ... In 2005, the production of CPO was nearly 15 mio. tons, and it is forecasted to rise to nearly 18 mio. tons in 2020.
  • Available raw materials for production of cellulose-ethanol were identified as EFB, trunks, and fronds from the palm industry. EFB is assessed to have the highest commercial potential for bioethanol production, in that the supply chain can be extended from the palm-oil mill to the ethanol production plant. The EFB production is 6.1 mio. tons dry EFB and forecasted to be at 7.6 mio. tons dry EFB in 2025. 
  • With the existing production techniques and market conditions (raw material prices at 1,400 RM / t and raw oil prices of 60 US$ / barrel), the production price of biodiesel exceeds the production prices of fossil fuel. That picture also fits the production of bioethanol.
  • For Malaysia, the existing price structures for fuels are also influenced by the fossil fuel-subsidising policy, which makes biofuels even less competitive. Therefore, utilisation of biofuels is highly depending on political decisions.
  • Technically, it is realistic to introduce 10% - 20% biodiesel (B10) and 5% bioethanol (E5) to fuels, without any major changes in the existing engine technology. 

The push in Malaysia seems to veer towards biodiesel without much news about bioethanol. In Malaysia the push is towards B5 biodiesel (palm methyl ester) which utilizes crude palm oil. It was launched as Envo Diesel. These are seen as follows:

  • August 2005: The Malaysian government launches the "Five fuel diversification policy". It comprises three main strategies: (1) production and utilisation of biofuel for transportation, (2) production of biofuel for export, especially to the European market, and (3) commercialisation of biofuel technology as a local technology. (Source: Department of Environment newsletter, IMPAK issue #4 of 2008. Palm Oil Based Diesel: An Inconvenient Opportune? URL: http://www.doe.gov.my/files/multimedia141/Impak08-4.pdf)
  • January 2006: The Plantation Industries and Commodities Ministry announced that B5 biodiesel would be supplied free for one (1) year to ministries and government agencies that volunteer to try it out. (Source: The Star, Nation section, 2nd January 2006. One year trial of B5 fuel. URL: http://thestar.com.my/news/story.asp?file=/2006/1/2/nation/13002911&sec=nation)
  • May 2006: The Plantation Industries and Commodities Ministry announced that petrol stations must supply B5 Envo Diesel by 2007. (Source: National Economic Action Council, quoting Business Times report dated 5th May 2006. Oil Firms In Malaysia Must Supply Envo Diesel Next Year. URL: http://www.neac.gov.my/index.php?ch=66&pg=186&ac=2018)
  • October 2006: Shell announces that it will undertake research with the Malaysian Palm Oil Board into the B5 biodiesel. (Source: The Star, 6th October 2006. Shell in joint biodiesel study. URL: http://biz.thestar.com.my/news/story.asp?file=/2006/10/6/business/15642935&sec=business)
  • October 2008 : The Plantation Industries and Commodities Ministry announced that it would push for a mandatory B5 biodiesel policy to help reduce the overstock of crude palm oil by 500,000 tonnes per month. (Source: The Star, Business Section, 14th October 2008. Ministry to push for mandatory use of biofuel. URL: http://biz.thestar.com.my/news/story.asp?file=/2008/10/14/business/2263373&sec=business)
  • As at 31st October 2008, 91 palm-based biofuel manufacturing licences with a total capacity of 10.2 million tonnes annually have been approved. (Source: The Star, 24th January 2009. Further hiccups ahead. URL: http://biz.thestar.com.my/news/story.asp?file=/2009/1/24/business/3097732)
  • December 2008: The mandatory B5 biodiesel policy is to take effect by 2010, i.e. all diesel vehicles in the country must use B5 biodiesel by 2010. (Source: Biofuels Digest, 11th December 2008. Malaysia to impose B5 palm oil biodiesel mandate in 2010. URL: http://biofuelsdigest.com/blog2/2008/12/11/malaysia-to-impose-b5-palm-oil-biodiesel-mandate-in-2010/)
  • March 2009 : The Plantation Industries and Commodities Ministry announced that mandatory B5 biodiesel policy will not be deferred. It has been in operation since 1st February 2009 and is being implemented in stages. (Source: The Star, Business Section, 25th March 2009. Deferment of blend biofuel implementation unlikely. URL: http://biz.thestar.com.my/news/story.asp?file=/2009/3/25/business/3547743&sec=business)
  • B5 biodiesel currently retails about RM2.80 per liter compared to RM1.70 per liter fordiesel. Malaysia will utilize the MPOB RM250 million fund to stabilize the oil palm price until end of 2009. (Source: The Star, Business Section. 24th March 2009. Challenges await Asian biodiesel producers. By Hanim Adnan. URL: http://biz.thestar.com.my/news/story.asp?file=/2009/3/24/business/3539878&sec=business)

The future of the B5 biodiesel would, according to an April 2009 report, hinge on whether Saudi Arabia can maintain the price of crude oil. If crude oil prices slide to USD35 per barrel, CPO prices could come down to RM1,500 per tonne by the end of the year. (Source: The Star, 10th April 2009. Saudi Arabia holds the key to CPO price. URL: http://biz.thestar.com.my/news/story.asp?file=/2009/4/10/business/3668005&sec=business)

Finally, in July 2007 the Secretary General of the Plantation Industries and Commodities Ministry, Datu Dr Michael Dosim Lunjew presented a talk at an ICS-MPOB workshop on "Status of biofuels development in Malaysia". (URL: http://www.ics.trieste.it/Portal/ActivityDocument.aspx?id=4710) The contents of the talk are quite relevant. Some points are as follows:

  • The biodiesel industry takes the following paths: Palm oil blended with methanol is marketed for the export market. Methyl ester blended with glycerol will be made available locally only if necessary. Finally, 5% palm olein is blended with 95% petroleum to form B5 biodiesel for local consumption.
  • The government has planned three stages for palm oil biodiesel: short term, medium term, and long term. Various measures would be implemented depending on the stage. The most important of these would appear to be: establishing a standard for methyl ester biofuels; establishing the Biofuel Industry Act 2006; increasing the blend from B5 to B20; and (most importantly) stabilising crude palm oil price at higher levels.

Is this the end of it? Not likely. Since peak oil is a recognised concept, the search for biofuels and alternative fuels is likely to continue. Curious readers may like to further their reading with the following:

  • Isobutanol as an alternative to ethanol biofuel. (Source: Forbes, 20th March 2008. Beyond Ethanol. URL: http://www.forbes.com/2008/03/19/innovation-ethanol-fuel-tech-innovation08-cx_wp_0319innovation.html)
  • Algae as a source of gasoline. (Source: Forbes, 28th May 2008. Turning Algae Into Gasoline. URL: http://www.forbes.com/2008/05/28/alternative-fuels-biofuels-tech_sciences_cz_kad_0528fuels.html)
  • Utilizing microbes and enzymes to break down cellulosic material and quicken ethanol production. (Source: Forbes, 19th March 2008. Superbugs May Save Biofuels. URL: http://www.forbes.com/2008/03/19/superbugs-biofuels-innovation_leadership_clayton_jw_innovation08_0319innovation.html)

Thanks for reading.


09 April 2009

Some Thoughts on Car Pooling

While browsing about the Internet today I was curious about the state of car pooling in Malaysia. Car pooling is also known as ride sharing. Car pooling is the act of several individuals using the same vehicle at the same time to get from one point to another. For obvious reasons, car pooling works best in the "get to work" commute, and back. But there is nothing to stop individuals from sharing a ride for a different kind of commute, e.g. four individuals who want to go to Penang from KL can always share a ride.

A few years ago the Government suggested that all vehicles entering the city center (Kuala Lumpur) should be charged a toll, and the toll would depend on whether the car was on car pool. That phase engendered some funny comments from an uncle of mine who joked that I might like to buy an inflatable doll (I can't mention the type) to put on the appearance of car pooling! Fancy that ... an inflatable doll of unmentionable proportions being my comrade of commutes. 

In 2006 Bernama ran a two part article on car pooling. It was in support of the Ministry of Domestic Trade and Consumer Affairs' campaign "Smart Consumer Campaign". The two articles can be accessed as follows:

In 2005, Minister in the Prime Minister's Department Datuk Mustapa Muhamed (as then he was) was quoted in a Bernama interview saying: "The transportation sector constitutes 41 per cent of energy consumption. With prior planning of trips, car pooling and the use of public transport, the expenditure on fuel could be reduced." (Ref: Bernama, 31st July 2005. Why Petrol Subsidy Should Be Reduced. URL: http://web10.bernama.com/kpdnhep/news.php?id=147829)

In 2008, FOMCA's communications director, Mohd Yusof Abdul Rahman was quoted in a Bernama interview saying: "Whenever possible, try to car pool and use lower cc vehicles as they consume less petrol." (Ref: Bernama, 6th June 2008. Fuel Price Hike: Time For Prudent Spending. URL: http://web10.bernama.com/kpdnhep/news.php?id=337692)

In early 2008 as well, under the previous Penang state government (then under Barisan), it was suggested that the Penang Bridge congestion could be partly eased by car pooling. (Ref: Bernama, 11th January 2008. Penang Bridge Traffic Congestion: Causes, Solutions? By Muna Khalid. URL: http://www.bernama.com/bernama/v5/newsindex.php?id=307113)

Needless to say there are many more examples in the news. Car pooling as a concept has been advocated countless times by our politicians and community leaders.

In mid-March 2009 it was reported in Bernama that American and German researchers found in a study of heart attack cases, reported over 4 years, that: (i) 8% of heart attacks were directly caused by being in traffic; (ii) there is a 3.2 times higher risk of heart attack within the first hour of exposure to traffic; (iii) being a driver was the most common form of traffic exposure. (Ref: Bernama, 17th March 2009. Traffic Jams Might Lead To Heart Attack. URL: http://www.bernama.com/bernama/v5/newsworld.php?id=396736)

Back to the two part Bernama article I referred to earlier, the second part quoted Muslim Consumers Association of Malaysia's executive secretary, Datuk Nadzim Johor Abu Johan, regarding some tips on car pooling. 

CAR-POOLING TIPS

To ensure smooth car-pooling, Nadzim gives several tips:

1. Establish a "fare" based on fuel, maintenance and parking costs. Agree on a specific date for the fares to be collected.

2. Set a fixed time schedule and pick-up points. Be punctual as "chronic" and habitual late car-poolers can disrupt a happy ride.

3. Draw up a schedule for driving responsibilities. If all members of a particular car-pool want alternate driving, then decide whether it is for daily, weekly or monthly basis.

4. Set up a back-up or contingency plan and establish a chain of communication. Ensure that everyone in a car-pool has the contact number of other car-poolers and agree in advance as to what should be done in the event of illness to the driver or mechanical problems to the car -- it is best to expect the unexpected.

5. An automobile association membership can be a "great investment" for those rare occasions when the ignition keys are accidentally left in a locked car or a jump-start is needed.

6. Establish policies. Smoking or non-smoking; radio and music volume; food and drinks.

Your car-pool would be more pleasant and has a better chance of success if possible irritations and distractions are eliminated.

7. The golden rule of car-pooling -- no detours or making stops along the way.

Car-pooling serves only one purpose, that is travelling to and from work and never allow the car-pool to become a shopping ride or errand service.

8. Vehicle maintenance.

A poorly maintained car consumes between 15 and 50 per cent more fuel than one that is properly maintained. A well maintained vehicle will ensure safe, reliable and comfortable ride.

9. Drive carefully as there are others in the car. No excuse for over-speeding and reckless driving.

10. Sometimes it is the "petty thing" that make a big difference. Car-pool partners would be sitting close to each other in the car and any perfume, cologne and deodorant can be offending and irritating to some people who are highly sensitive to certain smells.

Datuk Nadzim was also quoted suggesting the setting up of a car pooling website. It is this point which actually got me interested in the car pooling idea. I wondered how many efforts have been made online as to car pooling / ridesharing in Malaysia. The following are what I found.

  1. Tune Travel -- registered to Teles Systems Sdn. Bhd. (Administrative Contact: Alvin Dass 03-78046364 / 03-78777291). It seems to have potential as the main features of a ridesharing website are present: forum, travel listing, and most importantly blog.
  2. CarPool2Day -- registered to Synapses Enterprises. (Administrative Contact: Marshal Yung 03-80764376). News updates stopped at 2005. However, a quick perusal of the "Search Rides" feature at the bottom of the front page shows that there are quite a number of posts, mostly from Kuala Lumpur and Selangor. The interface could be improved but it has potential. 
  3. Malaysia Car Pool -- Hosted at Blogger.com, it seems to be a blog. Yet careful perusal of the site shows that the webmaster was clever enough to create some forms to interact with his site visitors/users. Last post was in 2008. While the idea is good, the use of a standard Blogger template may be a turn off to visitors. (Nevertheless it may be worth a visit to his form provider -- Response-O-Matic)
  4. Carpool King -- An international website (registered 2007) which serves a number of countries. Naturally the look and feel of this website are quite impressive -- but the number of listings are quite dismal. There are 4 from Kuala Lumpur and 3 from Selangor. Nevertheless a look at the Safety Features shows that some thought has gone into designing the site, although the verification of identity may be a bit tough. The web master chose to hide his details from WHOIS searches. Nevertheless you can read the press release about Mr Brian Hsu from New Zealand who founded the site.
  5. Tumpang.My -- Registered to GIS Innovation Sdn Bhd. (Administrative Contact: Lyes Mokraoui 03-42705172). The forum has been set up but there are only a few posts. Perhaps the look is too bare or the user needs to click too many times to see the listings? 
  6. Carpool Malaysia -- Registered to one Chin Wei Choong (Administrative Contact:  +60.176029199) since 2007. So far it is only one page with an e-mail contact. A project slotted for later development, perhaps?
  7. Carpool World -- Quite an innovative design using Google Maps to indicate the location of the rides for sharing. There are a number of recent posts from March and even April. The site is registered to Datasphere Corporation in New York. This website is quite innovative as they are providing a system for other car pooling groups to operate. The charges are USD10 for 500 user trip records and USD2 for every 100 additional trip records. You can also check out the service agreement.
  8. KL CarPool.com -- Registered to Chong Yu Nam (Administrative Contact: 0378802369) It aims to serve the crowd from Kuala Lumpur, Selangor and Seremban. A forum has been set up since 2008 but sadly there have been no posts.

There are probably some successful carpool websites in Singapore. Some of these sites are from a January 2008 Singaporean newspaper clipping

  1. OLX Singapore -- Free classifieds website which has a section dedicated to car pooling. Reasonable level of activity with 3 to 6 posts per month. 
  2. SG Carpool -- Requires a registration / login to view the listings. There is a blog showing activity from September 2007.
  3. Carpool.SG -- Has a forum which has reasonable level of activity.
  4. Tagxe -- Pronounced as "teksi", it has since closed down. Its webmaster redirected it to his personal blog where he also explained the reasons for the closure of the site: "At time of death, we are exactly 1 year old and we have 1,493 registered users and 349 rides created. However on our key benchmark of our success, we have no successful ride that we have matched up so far." The redirection of users to the old forum is also not satisfactory because the forum has been overrun with spam posts.
  5. Singapore Cars Forum -- Has a forum dedicated to car pooling. It draws respectable traffic post of about 10 new posts per month.
  6. Singapore Gumtree Rideshare forum -- also gets quite respectable traffic.
  7. Tompang Buddy -- also set up a forum but the traffic is not quite as much as the other sites mentioned here.
  8. Locanto Rideshare -- A forum format which draws good traffic. Many recent posts.

I am also quite impressed with Carpool Australia, which boasts that it is "Australia’s First National Car Pooling System".

04 April 2009

On V-Power Racing Fuel and Shell Model Cars

Shell is currently selling model race cars in conjunction with the F1 races which usually take place in March. There are seven models available. You can buy them at RM6.90 when you buy a minimum RM40.00 of V-Power Racing fuel and/or RM8.90 when you buy a minimum RM40.00 of other types of fuel. The campaign ends on 11th May 2009. (Ref: The Star Business, Shell's Model Cars A Hit Among Consumers, 28th March 2009. URL: http://biz.thestar.com.my/news/story.asp?file=/2009/3/28/business/3542375)

An advert on the model cars. Thanks to user OgilvyShell@YouTube.


What is V-Power? I've sometimes bought it and admittedly it does give my gas guzzler a bit of a kick. From Shell's website:

Shell V-Power is a high-octane fuel (98 RON) designed to help improve the performance of many modern engines with adaptive spark timing capacity.

It is helped by Friction Modification Technology (FMT) which is formulated to reduce friction between the cylinder and piston rings, a critical area of the engine where lubrication is difficult to achieve. FMT is designed to help the engine turn more freely, and so support more efficient energy transfer from the fuel to the wheels.

Powerful cleansing

While driving, deposits can develop around a car engine’s inlet valves, impeding the air flow and reducing power. Shell V-Power is designed to reduce the build-up of deposits and help remove existing ones, enabling the fuel to burn more efficiently. This effective deposit control can help keep a new engine running like new for longer. Shell V-Power can also help rejuvenate older engines.

Friction Modification Technology

Shell V-Power also contains our Friction Modification Technology (FMT), whose special components are designed to coat the cylinder wall. Friction reduction between the cylinder wall and the piston inside the engine helps to increase the total energy delivered to the wheels, to aid overall driving performance.

High Octane

Shell V-Power is also a higher octane fuel (98 RON). This enhanced octane rating is designed to help provide improvements in power delivery and to help drivers achieve enhanced performance from octane responsive engines. And even vehicles designed for standard octane levels may benefit.

(Source: Shell in Malaysia, Shell V-Power. URL: http://www.shell.com/home/Framework?siteId=my-en&FC2=/home/au-en/html/iwgen/leftnavs/zzz_lhn3_3_1.html&FC3=/au-en/tailored/shell_for_motorists/fuels/v-power_pkg/tech_spec/tech_spec.html. Accessed: 5th April 2009.)

So far it reads like a promo without much technical details. We only know that it is a RON 98 higher octane fuel with FMT (Friction Modification Technology). A Singaporean car enthusiast website, OneShift, reported in 2006 that the present V-Power (incorporating FMT) is the third generation "of high performance fuel introduced by Shell since the Formula Shell XO was launched in 1999". V-Power in Singapore is "processed at the Pulau Bukom Refinery Complex in Singapore, Shells biggest crude distillation refinery in the world". (Ref: OneShift, Shell Launches Its Latest Performance Designer Fuel, 27th March 2006. URL: http://www.oneshift.com/news/news.php?newsid=237) Parts of the report echo the press release from Shell's own website. (Ref: Shell in Singapore, Shell’s New V-Power, Breaking New Frontiers in Performance Fuel Technology. 23rd March 2006. URL: http://www.shell.com/home/content/sg-en/news_and_library/press_releases/2006/shell_vpower_launch_0323.html)

In the highly popular Motor Trader magazine it was reported that:
According to Eric Holthusen, Fuels Technology Manager, Shell Global Solutions (Asia-Pacific Service Centre), the 1% is the only amount which the FIA (the motorsports authority governing F1) allows to vary so that the fuel can be optimised for different conditions.

“FIA rules require 99% of the fuel’s formulation, ie its components, be the same as what is available to the public and the 1% is where we can alter the fuel characteristics to suit specific racing conditions such as humidity levels at each track. How we do this is proprietary technology which can give an edge to Ferrari’s racing cars,” he explained.

For the new V-Power Racing, which Malaysians have the honour of being the first consumers in Asia (excluding Australia) to start using, the formulation has been enhanced with the use of a new hydrocarbon component developed by Shell. This is the Friction Modifier Technology (FMT) which is also a Shell development and Top Secret. Basically, FMT ‘survives’ the superhot combustion process and can reduce friction which causes power loss. The result is improved acceleration as well as less deposit formation.

(Ref: Malaysian Motor Trader, Shell V-Power Racing. 24th November 2006. URL: http://www.motortrader.com.my/NUS/articles/article_712/page_m.asp)

I wonder how in November 2006, it is possible that Malaysians were its "first consumers in Asia" when the same racing fuel was launched in Singapore in March 2006? Further, the same Motor Trader report also stated: "The new Shell petrol continues to have a RON97 octane rating which Tuan Haji Mohzani said is regulated by the government." It is different from Shell's official website which states that V-Power is a RON 98 fuel. But perhaps the fact that the Motor Trader report was dated 2006, should be taken into consideration. Nevertheless, at Formula Student, a website setup by IMechE (The Institution of Mechanical Engineers), the product information sheet for Shell's V-Power(Unleaded) shows that V-Power, as of September 2006, is rated as a RON 99 fuel. A Japanese car website based in the UK reported August 2006 that V-Power was launched in the UK as a RON 99 fuel. (Source: Japmobiles.com, Shell V-Power Petrol. 24th August 2006. URL: http://www.japmobiles.com/news/news_detail.asp?id=245)

In September 2008 MRT Performance, an Australian company that sells tuned up cars, reported that Shell Australia is phasing out RON 100 V-Power Racing Fuel. Shell V-Power (RON 98) would still be made available. (Ref: MRT Performance, Shell Phases Out V-Power Racing Fuel (100 RON). 8th September 2008. URL: http://mrtperformance.com.au/content/view/437/58/)

I find it funny that Shell's V-Power should have so many different RON ratings. Nevertheless the RON rating may not be important. It seems that RON (Research Octane Number) is "not an absolute number but rather a relative value based on accepted standards... In practice octane numbers do not blend linearly. To accommodate this, complex blending calculations employing blending octane numbers as opposed to the values for pure hydrocarbons are routinely employed. There is no universal blending program used industry wide. In fact, for a given oil company, blending calculations that are refinery specific are not uncommon. ... For RON it is well known that increasing the aromatic, iso-/normal ratio and olefin content of gasoline results in significant increases in octane." (RefiningOnline.net, FCC Octane MON Versus RON. URL : http://www.refiningonline.net/EngelhardKB/crep/TCR4_29.htm. Accessed: 5th April 2009)

What is the secret that keeps the V-Power working? It may already be known to petrol industry chemists. But for the ordinary man on the road like me, V-Power is just a powerful fuel to add that "Vroom!" factor to my car. Nevertheless out of curiosity I just decided to check at Google Patents to see if any "friction modification technology" has been patented and assigned to Shell. Here are some of the results:

03 April 2009

Malaysia gets new Prime Minister

Today Najib Tun Razak was sworn in as Malaysia's sixth Prime Minister. He is the son of Malaysia's second Prime Minister, Tun Abdul Razak. Our new Prime Minister's father, Tun Abdul Razak, according to Wikipedia, is most well known for two things: the formation of Barisan Nasional (ruling coalition) , and the New Economic Policy (NEP). (Ref: Wikipedia, Tun Abdul Razak. URL: http://en.wikipedia.org/wiki/Tun_Abdul_Razak)

His inauguration has been covered by Bloomberg TV.


So did CCTV China.


Before his ascent as Prime Minister, some people commented that he should await the outcome of a certain high profile court case. (But why should he? He was not made a party to that court case.) He was interviewed by talk show host, Riz Khan, on Al-Jazeera, in December 2008.

Part One

If you look at the Al-Jazeera video above, you will see that one watcher emailed, "Why was the petrol price so suddenly decreased? Was it a tactic to silence the opposition?"

Part Two


It is said that Najib, during his party's general assembly recently, gave a message of change to save the party.


Not all foreign media has been positive about the ascension. Take for example, New York Times. (Ref: NYT, Scandals Cloud Succession in Newly Unsure Malaysia. 23rd March 2009. URL: http://www.nytimes.com/2009/03/24/world/asia/24malaysia.html) Is it a fair statement to state that Malaysia suffers from a dysfunctional political system, as evidenced by the constant preoccupation with politics?

Our new PM holds a bachelor degree in industrial economics. (Source: Wikipedia, Najib Tun Razak. URL: http://en.wikipedia.org/wiki/Najib_Tun_Razak) He is articulate and well spoken. Judging from the video, it seems that he has better speaking skills than his predecessor, and possibly better speaking skills than most leaders of the Opposition.

One of the best things that he has done is ordering the immediate release of 13 ISA detainees. (Ref: The Star, Nightmare ends for wives of Hindraf leaders. 4th April 2009. URL: http://thestar.com.my/news/story.asp?file=/2009/4/4/nation/3630935&sec=nation)

One of interesting things about the Prime Minister of Malaysia is that the post has always been by apppointment by the outgoing head of state. There is nothing wrong with the present system, although I imagine that many of the younger generation of Malaysians prefer to see some kind of democratic election process to determine who would be appointed as PM. Perhaps, in the distant future, we can have elected Members of Parliament vote from among their ranks who will be the PM. Or a direct election for that post can be held. (Ref: Wikipedia, Prime Minister. URL: http://en.wikipedia.org/wiki/Prime_Minister)