In a constantly changing world, in search of new alternatives for the use of energy, it is logical to ask ourselves about the future of fossil fuels and, particularly, of service stations and their role in this transition. In an interview for Global Energy, Luis Chavarría Meza, CEO of Kepler Oil & Gas, addresses various approaches to the gas sector in Mexico, as well as the challenges that are expected in terms of mobility in the coming years.
“Without a doubt, mobility will never cease to be necessary and it seems that some type of alternative fuel or energy booster will be required for these vehicles. Therefore, the spaces currently occupied by the service stations will be necessary, although with other types of added services”, shared Luis Chavarría.
He assures that, at this stage, the reaction capacity of the gasoline businessmen will be very important to continue in the business, since a sense of adaptation to the new mechanisms is required, in addition to providing added services, and contemplating the migration of gasoline and diesel to less polluting fuels, such as LP gas and natural gas, and later to other types of technologies, such as hydrogen or electric cars.
Mexico has environmental commitments, derived from the Paris Agreement and the Sustainable Development Goals. To meet them, it is necessary to carry out a gradual energy transition and, from the vision of Luis Chavarría, one option to achieve this is the conversion of urban transport and cargo vehicles, currently powered by gasoline or diesel, to natural gas. In the same way, new technologies for electric vehicles powered by hydrogen must be incorporated.
Challenges on the horizon
Currently, the sector faces challenges in regulatory compliance, both in terms of industrial and environmental safety, by the Agency for Safety, Energy and Environment (ASEA) and Semarnat; as well as in the fiscal measurement of hydrocarbons and cybersecurity, requirements established by the Energy Regulatory Commission (CRE) and the State. In this sense, Luis Chavarría assures that the greatest challenge for permit holders is compliance with annexes 30 and 31 of the SAT.
The expert points out that, currently, the fact that technology is an imperative factor can be considered as a complication in the way gas stations operate. “The fact that these advances complicate or hinder the processes does not mean that they are not good, it could be considered that there are not enough companies to supply all the service station permit holders,” he adds.
Likewise, he shares that another of the challenges is, at this moment, the granting of permits and the speed with which the authority responds to the requests. Although to date the delivery of these has been improved, the time is still considerably long and must be reduced to improve the current and future situation.
Compliance with regulations in the sector
The CEO of Kepler Oil & Gas comments that, two years after the provisions on volumetric controls were published, currently only 1% of service stations have complied, while natural gas stations have 39 %, and 0% at LP gas stations. This, he explains, demonstrates a significant lag in the development of the sector.
In relation to the extension ruled by the SAT for the fulfillment of the financial year 2022, the expert considers that, with little time left, it is estimated that 8% compliance will be reached in service stations, 3% in LP gas stations and 60% in natural gas stations.
The lag, he explains, is due to the fact that four types of providers are required for officials to comply: 1) providers of volumetric control software; 2) calibration laboratories and equipment; 3) fuel quality laboratories and 4) measurement management system consultants.
Additionally, the permit holder must carry out daily measurement activities. “The fact that the sector is unaware of measurement, fiscal and technological issues has also slowed down compliance”, he declares. On the other hand, the impact on the modification of the controls has not been relevant, because, in the opinion of Luis Chavarría, these modifications have been few and not so clear, so that at some point they contradict each other.
The expert considers that one way to speed up the processes is to minimize the times for them, in addition to not compiling the different hydrocarbon sectors in a single category, since in the long run it could generate a bottleneck.
The evolution of the business
At present, service stations have evolved into three types of business that are divided into: highway, urban and rural type stations, explains Luis Chavarría. In the case of the highway type, there are various business models associated with the evolution, such as the sale of fuel in multimodal modality, where gasoline, diesel, natural gas and electricity are required. In addition, he shares, they cover the need of users to have a shopping mall where there is a convenience store, pharmacy, cafeteria, food, service payment, ATMs, among other establishments.
“The highways of Mexico are very busy, the main arteries of the country that carry passenger vehicles, urban transport vehicles, cargo transport. For this reason, a service station where you can find amenities that allow you to rest and that has technology, is a necessity. This is where augmented reality and artificial intelligence are also going to play a role in end-customer loyalty”, he assures.
On the other hand, urban stations have a similar business model, but not the same. The sale of fuels is multimodal, offering gasoline and diesel, although later on it will also need to offer natural gas and electricity. Similarly, these stations will require augmented reality and artificial intelligence in the near future.
For its part, in the case of rural stations, the business model must integrate low-cost prefabricated stations, which only supply gasoline and diesel, since, from the vision of the CEO of Kepler Oil & Gas, in these areas the Access to technology is still limited, therefore the goal is to get the product out there, rather than to see a technological breakthrough.
In business development, Luis Chavarría concludes that Kepler Oil & Gas seeks to be a national reference, by carrying out actions in energy and hydrocarbon matters, hand in hand with the regulations proposed by the institutions and the federal government. Likewise, they are currently working to enter the water industry, to regularize the measurement of national waters in the exploitation of resources, thus becoming the only company accredited with the four competition standards, established by Conagua.