The study offers the first in-depth look at the challenges and prospects for converting U.S.-flagged marine vessels to liquefied natural gas (LNG). Low natural gas prices – coupled with rising oil prices – have opened up a significant gap between LNG and traditional marine fuels.
On the environmental front, the maritime industry is facing federal regulations to reduce emissions of nitrogen oxide, particulate matter and sulfur dioxide, which will require switching to ultra-low sulfur diesel. Low in sulfur, LNG can be used to comply with the regulations. Norwegian shipping fleets have been successfully operating on LNG for years.
The report points to two obstacles to fuel switching: the high cost of vessel conversion and the lack of LNG infrastructure, especially at marine ports. The most promising sites are where LNG liquefaction/storage facilities are located close to ports.
The most promising and economical conversions would be large towing tugs, medium-to-large car and passenger ferries, and Great Lakes bulk carriers.
The maritime industry can follow the path of other transportation sectors, which have looked to natural gas to move goods instead of relying on more expensive (and dirtier) diesel fuel. One Great Lakes bulk carrier consumes about at much energy as 110 tractor-trailers or more than 4,100 cars.
The principal authors of the report are Thomas Balon, Dana Lowell, Tom Curry, Christopher Van Atten and Lily Hoffman-Andrews of M.J. Bradley & Associates.