Peter Keller, executive vice president of TOTE, which has put two containerships fueled with liquefied natural gas into service between Florida and Puerto Rico, chairs the group, SEA/LNG.
The decision by the U.N.’s International Maritime Organization (IMO) to limit the amount of sulfur in marine fuel to 0.5 percent (as measured in mass) by 2020 could spur wider use of liquefied natural (LNG) gas as a fuel to power ships or cause more ships to install scrubbers so they can continue to burn fuel with high amounts of sulfur but prevent its escape into the atmosphere by cleaning exhaust gas.
The IMO’s Marine Environment Protection Committee (MEPC) decided last month to move to the lower sulfur cap in fuel in 2020, and not delay the changeover until 2025.
The requirement to use cleaner fuel is expected to significantly drive up the cost of bunker fuel for ships by as much as $5 billion to $30 billion for container shipping alone, according to a study by the International Transport Forum of the Organization for Economic Cooperation and Development (OECD). The global sulfur cap is currently 3.5 percent, though it is already capped at 0.1 percent at so called “emission control areas (ECAs),” which extend 200 miles from most of the U.S. and Canadian coast, and also include the North Sea and Baltic Sea.
The action by IMO “is going to accelerate the use of LNG because it is the most viable fuel environmentally that we know of,” said Peter Keller, executive vice president at TOTE, which built two LNG-powered ships for its service between Florida and Puerto Rico.
“It is encouraging that MEPC has made a positive declaration and now
it’s up to the industry to start to implement and move forward,” he
said.
Keller is chairman of a new organization called SEA/LNG, which he said is committed to using LNG as a maritime fuel. “It is different from other groups because what we do is we address the value chain all the way from the molecules and supply of the fuel to the port authorities and bunkering the vessels,” he said.
TOTE currently fuels its ships using LNG carried by trucks, but is currently in the process of having a barge built that will be used to bunker its ships.
Stephen Cadden, the chief operating officer of SEA/LNG, said the group’s “last vessel count review showed 86 LNG-fueled ships in operation
worldwide (excluding LNG carriers) and a further 95 on order.”
SEA/LNG was formed in August, and in addition to TOTE, its members include Carnival Corporation, Eagle LNG Partners, NYK Corp., the Port of Rotterdam, ENGIE, GE, GTT, Keppel Offshore & Marine, the Mitsubishi Corporation, Qatargas, Shell, Wärtsilä, and classification societies ABS, Lloyd’s Register and DNV GL.
Keller said the group will address commercial issues related to LNG use. “That is, basically selling the idea, selling the concept, using proof statements, moving it forward, and getting all members of the value chain to try to start to work together to further it.”
The IMO made its decision to require the use of low sulfur fuel globally after reviewing two conflicting studies on whether the refining industry will be able to produce enough low sulfur bunker fuel to meet the needs of the shipping industry.
“We will see where it winds up. Certainly the fuel suppliers will work very hard to do that,” Keller said.
“But more importantly, LNG is the maritime fuel we know of today that really has the capability of meeting the environmental thresholds that are now out there post 2025.”
Keller noted that engine manufacturers are developing conversion kits for marine engines, and many ships have been built to be “conversion ready.”
He believes it is a given that shipping companies will look much more seriously at LNG technology to power their vessels.
“Scrubbers are a very viable option but scrubbers in my personal opinion are more of a shorter term solution,” he said. “They are good for older vessels that need some work, like cruise ships and things like that. It’s great for that, but for new builds and for newer ships, conversions and consideration of LNG is really I think the most viable option.”
New group seeks to promote use of LNG as marine fuel
