The plucky engineering company has since found customers among oil refiners and gas utilities, keeping the operation alive – although not profitably. And now the company is betting the farm on a non-hydrogen-powered future. Under the terms of an agreement announced in March, QuestAir would merge with Montreal-based Xebec Adsorption Inc., a maker of compressed-natural-gas (CNG) fuelling equipment.
The merged company would retain the name Xebec and the Montreal headquarters, with QuestAir making cuts to its administration and manufacturing staff. (The merger is subject to a QuestAir shareholder vote, scheduled for late May.) QuestAir president and CEO Andrew Hall, who is to become Xebec’s head of sales and business development, explains how it all came to be.
We make gas-purification equipment, and our particular focus is biogas, which is a renewable natural gas formed from waste sources such as landfills, agricultural waste or manure. Our equipment upgrades that so you can use it as pipeline-quality fuel in homes and businesses or as a vehicle fuel.
We’ve just installed a unit at a major dairy down in California. They take the manure from probably 9,000 cattle and put it in what’s called an anaerobic digester and produce the biogas. Now they’re using our equipment to upgrade that biogas to CNG, and they’re running some of their milk trucks on this fuel.
In 2007 there were about 10,000 CNG fuelling stations around the world, and that’s estimated to increase to about 70,000 by 2020.
The growth rates in natural-gas-vehicle use are 30 to 50 per cent a year, largely from countries in Asia that have a lot of natural gas. Rather than import a lot of oil, they’ll use the natural gas as a fuel. But to do that, you’ve got to dry it, to remove the water vapour. So in every CNG station, you’ll need a dryer, and that’s Xebec’s market.
How we came together was, their customers started asking them for a biogas solution and they didn’t have the full capability to do that, but we did. Biogas is not going to be the whole CNG market, but there are some places where it will be an attractive market, mainly in the U.S. where greenhouse gas emissions are a big concern.
Hydrogen fuel for vehicles was a pretty active market a couple years back when you got your first wave of fuel-cell-car demonstrations – I think we’ve got 17 purifiers units installed at hydrogen stations around the world – but the industry hasn’t really gone to the next level yet. So while CNG is a fairly young industry, it has fewer barriers to market. Most CNG is going to ultimately come from straight natural gas, but biogas is an interesting renewable part of that market. If you look at electricity, there are various ways you can get renewable electricity, but on the gas side biogas is about the only way.
I still think there are opportunities for hydrogen fuel, particularly in the forklift and work vehicle market, where the value proposition is very well defined versus lead-acid batteries. Of course, ultimately, the big win is still passenger vehicles.
