How Liquid Natural Gas May Revolutionize Shipping, And Make Goods Cheaper
The world as we know it today would not exist without the behemoths that traverse the high seas. An astonishing 80 percent of global trade is carried by ship: the Nikes on your feet, the gasoline in your car, the Toyota Prius in your driveway all came on container ships.
In February, San Diego-based TOTE Shipholdings ordered the world's first LNG-powered container ships. It also plans to convert its fleet of four ships to LNG power.
In January, the Mississippi-based Gulf Coast Shipyard Group launched the first of six LNG dual-fuel offshore supply vessels, the first of their kind in the Gulf of Mexico.
And in Europe, French operator Brittany Ferries recently ordered a massive, 2,500-passenger LNG-powered passenger ferry expected to enter service in 2017. General Electric and petroleum giant Royal Dutch Shell are also looking to get in on the act.
Fuel typically amounts to 70 percent of the overall cost of moving a container ship from A to B; most ships today run on cheap, dirty bunker fuel. It's a dense oil residue said to contain 2,700 times more toxic sulfur than vehicular fuels. According to studies cited by the watchdog group Transport & Environment, airpollution from shipping causes 50,000 deaths in Europe alone every year. Regulations to be introduced by the International Maritime Organization next year and in 2020 will make high-sulfur fuels, such as bunker fuel, illegal for use in ships sailing in numerous emission-control zones around the world.
Enter LNG, which, unlike bunker fuel, contains no harmful sulfur dioxide, emits 26 percent less carbon dioxide, and produces almost zero smoke.
And it’s cheaper than bunker fuel too.
Gas contains more energy than bunker fuel. In the U.S., he said, this works out to around $100 per metric ton cheaper than bunker fuel.
"The relative low price of natural gas and LNG compared to current high residual bunker and distillate fuel prices in the U.S and Europe has added to the attractiveness of LNG," wrote Frederick Adamchak, an adviser at New York-based brokerage Poten & Partners, in an industry publication last year.
America is also flush with gas: the U.S. Energy Information Administration estimates there’s enough of it underground to last 92 years at expected demand.
And yet, of the 87,000 vessels that make up the global fleet today, LNG ships number just 50. So why isn't everybody converting their ships to a cheaper, abundant, cleaner fuel?
LNG presents challenges: building and converting ship engines takes time and is expensive. That's an important consideration in an industry where profit margins, hit hard by overcapacity after the global financial crisis, have shrunk in recent years.
Hundreds of LNG bunkering and refueling facilities will also have to be built at ports around the world.
“As of today, the infrastructure of LNG supply is limited and installation of LNG engines is an expensive investment. But LNG might be a viable solution for new-built container vessels sometime in the future when the infrastructure is in place,” said Mikkel Elbek Linnet, a spokesman for shipping giant Maersk Line.
Analysts say the number of ships converted to LNG will increase 20-fold by 2020. But in some cases, it's possible to reduce emissions and improve fuel consumption by using recycled engine heat and more efficient engines, rather than invest in an LNG conversion.
Source:http://www.ibtimes.com/how-liquid-natural-gas-may-revolutionize-shipping-make-goods-cheaper-1564660
