West Coast group looking at LNG as marine fuel

Canada’s marine industry hopes to take advantage of the relatively low cost of natural gas and develop ways to use liquefied natural gas (LNG) as a marine fuel. A joint study has been launched, with seventeen West Coast organizations participating, to identify and address barriers to the use of the fuel. The project has an estimate cost of approximately $1.2 million. BC Ferries, the port authority of Vancouver and the British Columbia Institute of Technology are among the groups taking part.

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Switching to LNG as a marine fuel could save shippers money and help comply with new regulations on emissions. A West Coast group of companies and researchers is studying how it can be done for Canada’s shipping industry.

Aside from economic considerations, there is an environmental need for finding fuels that produce lower emissions. New emissions regulations, described as “stringent” in a release about the project, are due to come into force in 2015. Vessel owners operating within Canada’s waters will need to use lower sulphur distillate fuel, install exhaust after- treatment technologies or switch to LNG in order to comply. LNG offers significant air quality benefits producing 80 per cent lower NOx and particulate matter, and a 90 per cent reduction in SOx emissions. LNG can also reduce greenhouse gas emissions by up to 25 per cent from ships.

Some of the economic challenges facing the marine industry in switching to LNG fuel include significant investment in the ships themselves: LNG-fueled engines are more expensive than conventional diesel engines. Also, LNG takes up more storage space than diesel. a fact that can eat up cargo space. There has been little done to date in the retrofitting of existing ships to operate using LNG. Smaller vessels, such as those that operate in inland waters, will likely pose a greater challenge for retrofitting.

On the supply side, new liquefaction plants and storage facilities must be built, and new distribution systems put in place.

All of these costs have yet to be quantified, which is part of the project’s mandate.

The fact that at present the North American market is “exceptionally favourable” for increasing the use of LNG as a marine fuel is one variable that could change significantly. As both the US and Canada prepare to export more and more natural gas to Asia and other markets, that “exceptionally favourable” cost of LNG could disappear. At present, it is estimated that LNG would be about 25 per cent lower in cost than diesel.

“LNG bunkering is being considered by major ports around the world as one way to reduce emissions and enhance sustainability,” said Duncan Wilson, Vice President, Corporate Social Responsibility, Port Metro Vancouver, “We are committed to growing Canada’s largest Gateway to the Asia Pacific in a sustainable way and LNG offers the potential to improve environmental performance and enhance our competitive position.”

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