Container ships ordered today should be able to operate until the late s, provided that a viable propulsion system is chosen. A new DNV guidance document provides comprehensive decision support. LNG presently remains the most attractive option.
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For shipowners ready to order new ships today, the tough question is what fuel to build for. Answering that question is actually not as difficult as some may think, says Jan-Olaf Probst, Business Director Container Ships at DNV. While the ultimate carbon-free propulsion technology has yet to be determined, there are some fairly safe assumptions for decision makers to go by – for example that the future ship fuel landscape is going to be more diversified than in the past, i.e. that certain fuels will be predominant on specific routes and/or for specific ship types. Furthermore, there is currently no alternative to combustion engines in sight for ocean-going vessels. The crucial question is which fuel technology is the safest investment decision for the lifetime of a vessel built in the mid-s.
To provide decision support to owners, DNV has published a guidance document called Alternative fuels for containerships. The paper should be viewed as a “living document”, says Probst – it will be amended over time as new findings become available. The first edition provides some general information as well as an in-depth discussion of LNG; chapters on other alternative fuels will follow soon, starting with methanol. “Since DNV has no vested interest in any particular fuel solution, our advice is entirely neutral, based on scientific facts, sound industry experience and feasibility calculations only,” stresses Probst. “Our main goal is to support the maritime industry in meeting the decarbonization targets.”
The reason DNV decided to begin its discussion of alternative fuels with LNG is simple, Probst says. “LNG is fully established as a ship fuel and embedded in a comprehensive regulatory framework, in particular the IGF Code; LNG technology and expertise is mature and has been around for a long time. Moreover, LNG is the most frequently transported gas worldwide; LNG is the first gaseous fuel to have received full regulatory approval; there is proven know-how for building, bunkering and operating LNG-powered ships; and the bunkering infrastructure has grown so fast that nearly all major seaports can now provide refuelling opportunities.” LNG bunkering vessels can be deployed practically anywhere, and bunkering does not necessarily have to occur in port.
Governments and energy companies around the world are driving the development of massive green hydrogen production capacity using renewable energy and hydrolysis. They plan to use biohydrogen and CO2 captured from industrial combustion processes to produce synthetic methane, the main component of natural gas. “Once sufficient quantities of ‘green’ methane are available, it can be blended with fossil LNG or fully replace LNG to achieve the required level of CO2 neutrality,” Probst points out. “No infrastructure or on-board modifications will be necessary. In other words, LNG is currently the most realistic and low-risk alternative fuel for newbuilds, especially for deep-sea shipping.”
The container-shipping segment has been showing the strongest interest in alternative fuels. A growing number of large container vessels are equipped with dual-fuel engines and either run on LNG or are LNG-ready. “The DNV alternative fuels document thoroughly discusses all aspects of building LNG-ready ships, including considerations such as different tank types and tank arrangement options and their pros and cons. It provides solid, well-founded, unbiased decision support,” says Probst.
Of course, there cannot be a one-size-fits-all solution to decarbonization; the topic has to be evaluated individually for each ship type and operating pattern, Probst cautions. A number of uncertainties regarding future fuel prices and availability remain for the time being; it is up to the individual owner to draw the final conclusions for the best way to proceed based on the facts available today. “Based on DNV’s analyses, it makes sense to build ships with propulsion systems that leave several future options open, so whatever conversion or retrofitting decision has to be made in ten or more years’ time, the financial consequences will be manageable,” says Probst.
Probst emphasizes that it is time for the industry to stop using HFO as a baseline fuel – whether in terms of fuel costs, the simplicity of on-board fuel handling systems or the distances that can be travelled without bunkering. These operating conditions are unsustainable, and the industry is well advised to look ahead and accept that the fuel future will be more complex – but it will be so for everybody.
“Building a ship for alternative fuels is definitely more costly than building a conventional vessel,” Probst contends. “However, considering the extra costs and space requirements of a scrubber and SCR system in an HFO-fuelled vessel, the extra costs for LNG propulsion appear much less significant. Once an LNG-powered vessel reaches the break-even point after five to eight years of operation, its operating cost is actually lower than that of a conventionally powered vessel. Provided that plans to introduce a CO2 taxation system go ahead, which appears likely, the cost difference will shrink even further and the break-even point will be reached faster as well.”
As a low-carbon technology that can eventually become carbon-neutral, LNG propulsion makes a newbuilding project much more attractive to financiers and charterers, the cargo market and, ultimately, the general public. What is more, combining a low-carbon project with an environmentally friendly financing scheme gives projects a compelling “green” character. Several newbuilding orders for larger container vessels running on LNG are already being financed as environmentally friendly projects via a “syndicated green loan” conforming to the Loan Market Association’s principles. “This kind of project is sure to set a new benchmark and will be the new normal,” says Probst.
The Alternative Fuels document also provides valuable input for key decisions about the on-board energy concept. “Every machinery concept comes with specific, calculable emission levels,” explains DNV expert Jan-Olaf Probst. “For example, a high-pressure main engine has only negligible methane slip but cannot burn boil-off gas. Type C tanks can handle overpressure, while membrane tanks cannot, which can be an issue during a longer stay in port.” All these considerations are discussed thoroughly in the DNV document and presented in a way that helps decision makers arrive at the most appropriate solution for the ship they want to build.
“We frequently hear the argument that valuable container slots will be lost when LNG tanks must be installed,” Probst mentions. “But the actual number of slots sacrificed is minimal on a modern large container ship.” It is advisable to position the LNG tanks below the deckhouse in the case of a twin-island design, he points out, and to optimize the shape of the tank to account for the risk of sloshing. “Opting for Type B or C tanks instead eliminates this issue. However, there is no solution that has only positive aspects,” he says. “It is also important to fine-tune the engine, tank and fuel-handling arrangements to create an efficient and coherent overall system, and to discuss all these aspects in depth with the yard so considerations of economy on the shipbuilder’s side won’t compromise the operational fitness and profitability of the resulting ship.”
Designers of LNG container vessels should be aware of the regulatory restrictions surrounding bunkering. “It makes sense to arrange the bunkering equipment in a section of the ship where the bunkering process has the lowest possible impact on efficient loading and discharging,” says Probst. Furthermore, the crew of an LNG-powered vessel must undergo specific training, and the responsible persons for bunkering must obtain a special certificate. “All this can be taken care of prior to delivery, and a comprehensive risk assessment should be a standard part of the planning process for any newbuild,” he emphasizes.
LNG is available today and is easier to implement than what is commonly believed. It opens up a fuel perspective for the entire lifetime of a vessel built during this decade, including multiple options to eventually switch over to eco fuels to ensure compliance with emission regulations far into the future. DNV will continuously update its Alternative fuels for containerships paper and incorporate lessons learned. The document thus provides owners with solid, state-of-the-art knowledge as a basis for planning the next generation of containerships and other vessels.
LNG is created by cooling fracked gas to -160ºC, creating a clear, colourless and liquid, 600 times smaller than natural gas. This makes it easier to transport in pipelines long distances, and to load on to tankers for global export. In B.C., there are five proposed export and liquefaction facilities proposed along the coast.
Both the government and industry in B.C. have touted Liquified Fracked Gas (LFG, also known as LNG) as a transition fuel to limit the burning of thermal coal for energy. However, project proponents admit that they cannot guarantee that the development of a Liquified Fracked Gas industry in B.C. would have any measurable impact on the mining or burning of thermal coal.
There are currently five export facilities proposed for B.C. These facilities would lead to a massive increase in fracking in Northeastern B.C., and support destructive pipelines through sacred Indigenous territory – such as the Coastal GasLink pipeline.
Natural gas is actually mostly methane – a dangerous fossil fuel which traps 86 times more heat than the same amount of CO2. In B.C., over 80% of that gas is fracked – putting communities and waterways at risk from methane leaks into air and groundwater and the burning off of noxious gasses from flaring. In fact, last year the B.C. Oil and Gas Commission supported a new study which found that uncaptured methane leaks directly into the atmosphere were between 1.8 and 2x higher than originally thought.
LNG is just fracked gas which has been cooled down dramatically to make it easier for transport across distances – but it is a fossil fuel like any other. Continued investment in a nascent, and economically unviable LNG industry for B.C. is putting us further behind on zero-carbon alternatives that will be essential for facilitating a just transition away from fossil fuels and protecting communities from the worst impacts of climate change.
If even one of the five currently proposed LNG facilities are built, B.C. will have almost no chance of successfully meeting its or emission reduction targets.
And LNG Canada would be one of the worst climate culprits. Unlike other proposed terminals in B.C., LNG Canada would burn gas to power its compressors. This means they will emit roughly 3.45 megatonnes per year, making the terminal the largest single source of climate pollution in B.C. – before we even include the new downstream emissions from increased fracking. Click here to sign the petition to end the expansion of fracking and LNG in B.C.
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There are already approximately 31,000 fracking wells in BC. Each well uses around 80 million liters of water a year (that is 32 olympic swimming pools per well, or almost 500,000 total) about 84% of which gets turned into radioactive waste water.
Water studies conducted over the decades in Northeastern B.C. have shown an increase in trace minerals in ground and surface water such as benzene, strontium, manganese, and aluminum. Many of these are aligned with the chemicals used in fracking, or typically rock bound metals present in the area.
Fracking and fracked gas have been shown to have significant adverse effects on human health. In areas of heavy extraction, an increase in, and exacerbation of asthma has been documented, as well as increased adverse birth outcomes and childhood leukemia.
These are in addition to the rise in anxiety and mental health concerns caused by ongoing noise and light pollution that are a part of fracking operations.
In places where natural gas is used as a method for home heating, indoor fireplaces, or in cooking stoves, it has been shown to endanger indoor air quality and human health. We have the technology now to not have to choose between the health of our family and the planet, and access to affordable and reliable home energy and heating.
An increasing number of public subsidies and programs means that making climate safe choices on how to heat your home is more possible for more people. If the government used the subsidies and rebates they provide to the LNG industry to invest in renewable energy, climate friendly choices could become the most economic choices when it comes to heating your home.
Bunkering is LNG that is intended for use as a shipping fuel. Though deceptively marketed as a climate solution, LNG is not a climate-friendly fuel. LNG is an ineffective tool to reduce our emissions due both to the energy required to cool it and ship it, and due to widespread methane leakage from all areas of production. A recent report from the International Council on Clean Transportation found that using LNG fuel for cruise ships emitted 70-80% more lifecycle emissions than other traditional shipping fuels.
In addition, using LNG as a shipping fuel can lead to ‘methane slip’, where unburned methane escapes through the engine directly into the atmosphere. Methane is 86 times more toxic for the environment than CO2 – even in small amounts – and recent studies by the US Environmental Protection Agency reveals that natural gas production emits more methane than previously thought.
In B.C., fracked gas is currently being used to power a small number of B.C. ferries, despite the research that shows that using LNG for ship fuel can actually be worse for the climate than the dirty fuel currently being used around the world.
In B.C., Oil and gas accounts for 19% of our emissions, but contributes only 2% towards B.C.’s GDP, and accounts for only 0.5% of BC’s workforce.
B.C.’s oil and gas sector also depends heavily on being propped up by public subsidies. Even after recent reforms, B.C. still has some of the highest provincial fossil fuel subsidies in Canada, second only to Alberta. Without breaks on royalty rates to incentivise new fracking wells, deep discounts on water rates for oil and gas companies, and reduction on the carbon tax for LNG Canada, this industry and the pollution it creates, wouldn’t be a thing.
The LNG industry in B.C. is bad for communities, bad for the environment, and bad for meeting B.C.’s climate targets. Instead, B.C. should provide long-term prosperity to remote and northern communities through investing in the renewable energy sector.
Fracking has been banned or a moratorium has been put in place in over 11 jurisdictions. Recently, the state of California set a date by which it intends to phase out fracking, demonstrating that even in heavy oil and gas industry jurisdictions, an end to fracking is possible.
Right now, less than 12% of the gas extracted in B.C. stays in B.C. for domestic use. Meanwhile, the province produces a surplus of electrical power it has to try and sell to other jurisdictions in the US, because we don’t have a demand for it in B.C – and this is before mega electric projects like Site C become operational.
The liquefaction of fracked gas would make it easier to export, not use in the province – both of which are incompatible with a transition away from fossil fuels.
Many of the skills required for working in the fracking industry are easily transferable to other types of construction, renewable industries such as geothermal, and well reclamation. There are ample solar and wind resources that have been massively under developed in B.C. – and in the Northeast specifically. Right now, only 0.5% of B.C.’s workforce is employed in oil and gas – a manageable number of workers to transition.
Two reasons: First, increasing the supply of LNG won’t necessarily bring down gas prices. Fortis has a commitment to its shareholders and has no reason to decrease gas prices from their current state. In fact, Fortis has already petitioned the B.C. Utilities Commissions – even before it has approval for its project – to allow it to pass on the $780 million in costs of this expansion, as well as capital and operating costs to B.C. ratepayers. Meaning that the cost of gas is more likely to go up than down.
Secondly, Fortis has publicly stated that this expansion will facilitate the export of gas from B.C. to serve other markets overseas – this will do nothing to decrease gas prices in B.C.
In addition to these financial impact of the project, industrial facilities like Tilbury can decrease air quality in the areas in which they are built, would lead to an increase in up to 365 additional tankers in the Fraser River Estuary annually, and could have a significant impact on endangered and threatened species of Trout, Salmon, and Southern Resident Killer Whales. Lastly, LNG is highly combustible, and the facility will be located directly across from a jet fuel storage facility – if an explosion were to occur at the facility, most of metro Vancouver as well as swaths of North and West Vancouver would be within the blast zone. Click here to your MLA with your concerns about the Tilbury expansion.
The recent IPCC and IEA reports state unequivocally that this must be the turn-down-decade for oil and gas. Without a doubt, transitioning away from fossil fuels will mean changes to the way we live, but the longer we delay the transition the harder it will be and the more inequitable it will be. We need a just transition away from oil and gas for workers and communities, but that won’t be possible if we aren’t proactive in developing zero-emission alternatives. We may not feel ready for the transition, but we certainly aren’t prepared to survive the worst impacts of runaway climate change either.
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