Friday, September 24, 2010

One if by land, two if by sea

As natural gas vehicle proponents concentrate on selling the idea to more local governments, school districts, and businesses, a Finnish engine manufacturer has identified a US market for NGV marine systems.

John F. Hatley, vice president of Wartsila Corp.’s Americas division in Houston, invoked instructions given to Revolutionary War patriot Paul Revere more than 225 years ago at a recent American Gas Association Natural Gas Roundtable. This time, he indicated, the signal isn’t coming from Boston’s Old North Church, but from a marine engine market which will have to meet new government environmental regulations.

The United States and Canada have agreed to establish an emissions control area within 200 miles of their coasts, and the US Environmental Protection Agency plans to tighten requirements beginning in August 2012, Hatley said. “It’s a regulatory game-changer for fuel and nitrogen oxide in the marine marketplace,” he maintained.

He said that the United States represents 8% of total global ocean vessel calls, second only to China, and is ripe for 284 billion cubic feet of annual gas sales for marine NGVs. Wartsila is looking initially at the nation’s more than 6,000 inland barges and workboats (which Hatley termed “a very focused track for your infrastructure”); dockside power supplies for 60,000 oceangoing ships (concentrating initially on the ports of Los Angeles-Long Beach; New York; Savannah, Ga.; Houston; and Seattle-Tacoma), and 4,300 cruise ships which visit US ports annually.

“Because of who they serve, we believe the cruise industry will be one of the earliest adopters of clean natural gas,” said Hatley. “We’re working very closely with some major lines. There may be some announcements in the future.” Targeted annual demand in the 3 markets is 213 Bcf for inland barges and workboats, primarily on the Mississippi River and its tributaries; 29 Bcf for ocean vessel ports (with the 5 mentioned above representing about two-thirds of the possible demand), and 4 Bcf for cruise ships (with about half the demand occurring at Miami, Port Canaveral, Fort Lauderdale, and Los Angeles).

These marine transportation markets are also ripe for gas because it’s so much less expensive than petroleum fuels, Hatley suggested. Delivery can be accomplished by compressing or liquefying the gas onshore, and putting it in a delivery truck which pulls up alongside the docked vessel, he said. Wartsila has been doing this for years overseas, he noted.

Typical of such presentations about NGV markets, actual infrastructure details weren’t immediately forthcoming. So I asked former US Energy Information Administration chief Guy F. Caruso after the luncheon, where he also spoke, how he thought more efficient refueling systems might be developed in one case: the domestic inland waterways along the Mississippi River and its tributaries. “One large facility in New Orleans and another in St. Louis possibly could do the job,” he replied.

State and local governments would need to take the lead, he continued, but since federal subsidization already is being discussed for establishing extensive refueling systems for fleets of gas-burning long-haul trucks, it wouldn’t be that big a leap for inland barges, Caruso said. “The goal in both cases would be to reduce greenhouse gases,” he observed.

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