US shale boom could help establish LNG as bunker fuel alternative: US FMC member

2014-09-08

The US natural gas production boom could help to establish LNG as a practical and cost-effective option for complying with stricter marine emissions regulations once necessary infrastructure is built, according to a member of the US Federal Maritime Commission.

According to remarks prepared for an industry conference Thursday, Commissioner William Doyle said LNG is both cheaper and more environmentally friendly than other ways of complying with emissions regulations coming next year and later.

“The major challenges for wide acceptance of LNG as a marine fuel are linked to LNG logistics and infrastructure,” Doyle said. “There needs to be accessible LNG bunkering options — whether shore-side or through barge operations.” He spoke at the All About Marine Conference and Expo held in Biloxi, Mississippi.

Beginning January 1, ships traveling within 200 miles of shore in North America and the Baltic and North seas must cut sulfur emissions from fuel to 0.1% from 1%, according to International Maritime Organization rules. The US Environmental Protection Agency and US Coast Guard will enforce the regulations in US waters.

The rule is designed to to improve air quality and public health through stricter controls on emissions of sulfur oxide, nitrogen oxide and particulate matter.

Ship owners are now figuring out ways to comply with the regulation and are considering such options at installing exhaust gas scrubbers, switching to LNG, blending fuel oil with ULSD, buying marine gasoil or changing routes to avoid Emission Control Areas as much as possible.

LNG is often touted as a fuel for the future of shipping, but there are barriers to its use. The fuel faces a similar dilemma to the electric or natural gas car industry — do you build a fueling infrastructure and hope that demand will follow or do you wait for demand before committing to build the infrastructure?

Doyle cited a number of projects in Louisiana, California and Pennsylvania — where LNG is making inroads in the marine transportation industry.

Further, he said the US government is getting involved. The Coast Guard is seeking input on guidance for LNG bunkering operations and the Department of Transportation last week published results from a study examining natural gas as a propulsion fuel.

Source from : Platts

HEADLINES