BSNF's
Chief Executive Matthew Rose
Why railroads are taking a fresh look at natural gas
“The use of liquefied natural gas is a potential transformational change
for our railroad and for our industry,” BSNF's Chief Executive Matthew Rose
Why railroads are taking a fresh look at natural gas: Kemp
By John Kemp LONDON Wed Aug 13, 2014 (Reuters)
- Gas-fueled locomotives are not a new idea. Plymouth Locomotive Company
built the first propane-fueled rail engine as early as 1936.
The industry has experimented with natural gas-fueled trains on a small
scale for the past 80 years without ever moving beyond the prototype stage.
“Some members of the regulatory, engine supply and fuel supply communities
believe railroads have an opportunity to use natural gas as a locomotive fuel
to help meet emissions and performance goals,” Burlington Northern and Santa
Fe (BNSF), Union Pacific (UPRR) and the Association of American Railroads
wrote in a joint report in November 2007.
“Except for some potential niche applications, the railroads disagree,”
they told the California Air Resources Board (“An evaluation of natural-gas
fueled locomotives”).
But less than six years later, BNSF and the other major operators are sounding
far more enthusiastic.
“The use of liquefied natural gas is a potential transformational change
for our railroad and for our industry,” BSNF’s Chief Executive Matthew Rose
told an energy industry conference in March 2013 (“BNSF to test liquefied
natural gas in road locomotives”).
The 2007 evaluation was written as part of a memorandum of understanding
between the railroads and environmental regulators concerned about air pollution
in and around the rail yards in California.
The railroads told air-quality regulators that gas-fueled trains were not
a cost-effective way to reduce emissions of particulates and nitrogen oxides.
It would be cheaper and more effective to focus on improving the efficiency
and emissions filters on diesel locomotives, they said.
“Decades of research and development activities and over-the-rail locomotive
prototype demonstrations have given the railroads a great deal of information
about the practicality of using natural-gas fueled locomotives.”
Cost was the crucial issue. According to the rail operators: “Claims that
natural gas-fueled locomotives will be less expensive to operate than diesel
equipment are unfounded. In recent years, prices in the North American natural
gas market have been high and unstable.”
CLIMATE AND COSTS
Scepticism about gas-fueled trains was not new in 2007. The railroads quoted
from an even older report written in 1994: “Railroads believe improved diesel
technology is the way to achieve large emission reductions in a short time
period with a high probability of success and low cost per tonne of emissions
reduced.”
But now BNSF is undertaking a new pilot program that aims to put liquefied
natural gas-fueled locomotives on a limited number of tracks in revenue-service
by the end of this year.
“While there are daunting technical and regulatory challenges still to be
faced, this pilot project is an important first step that will allow BNSF
to evaluate the technical and economic viability of the use of liquefied natural
gas in through-freight service, potentially reducing fuel costs and greenhouse
gas emissions,” Rose said.
His comments provide clues about the two factors that have driven a re-appraisal
within the industry.
First, the focus has shifted from local to federal regulation as the concern
has shifted from air pollution to global warming.
The California Air Resources Board was concerned only about air pollution
near rail yards, and it could not do much to force change on the railroads
because its powers were mostly pre-empted by federal environmental regulations.
In 2005, the Air Resources Board reached an agreement with BNSF and UPRR
to reduce emissions from locomotives in the state but could not go much further.
“The national Clean Air Act has sweeping language protecting railroads and
the interstate commerce they represent from state interference,” the board
explained. “Only the most limited police powers to address nuisances, traffic
disruption, or public safety can be reserved to the states.”
But the federal Environmental Protection Agency has now ruled that greenhouse
gases including carbon dioxide are pollutants under the Clean Air Act and
has begun to regulate them.
Railroads face much stronger pressure to cut emissions, now and in future,
from regulators with far more sweeping powers.
Second, the economics of gas-fueled trains have been transformed by the
shale revolution. Fuel is one of the largest operating expenses for the railroad
industry, so the industry has a sharp incentive to minimize fuel bills.
For the 20 years to 2011, the energy-equivalent prices of diesel and natural
gas tracked one another fairly closely. There was no substantial advantage
to using gas, especially once all the extra conversion costs were taken into
account.
But since 2011, the commodity price of gas has been just one-fifth of the
price of diesel for the last three years, thanks to the shale revolution,
and the gap shows no sign of closing. (link.reuters.com/wak62w)
In 2007, the railroads explicitly warned about the high and volatile price
of gas, and worried it would climb even higher in future as the United States
was forced to import an increasing share of its gas from abroad.
By 2013, however, the idea of a “gas glut” was firmly established and led
many analysts to conclude gas prices would remain comparatively low and stable
for years to come. Suddenly, gas-fueled trains started to look like an attractive
way to save money and cut greenhouse emissions at the same time.
TECHNICAL CHALLENGES
There are still formidable technical and safety challenges to be overcome
before gas-fueled trains could become common in line-haul service.
The joint report chronicles at least 13 small-scale experiments with natural
gas-fueled locomotives since 1936, testing a variety of fuels (propane, compressed
natural gas and liquefied natural gas) and ignition systems (spark ignition,
low-pressure direct injection and high-pressure direct injection).
Burlington Northern, one of the forerunners of BNSF, showed the most interest,
and tested various gas-fueled trains between 1983 and 1995. UPRR, locomotive
manufacturers General Electric and Electro-Motive Diesel, as well as the U.S.
Department of Energy, have also been involved in engine trials at various
times over the last 30 years.
BNSF was still operating four small gas-fueled locomotives inherited from
earlier experiments in switchyard service in the Los Angeles area when the
report was written in 2007. The report observes: “High purity LNG is delivered
to BNSF from a fuel supplier in Arizona by truck, and the locomotives are
fueled directly from a truck beside the locomotive.”
But using gas-fueled locomotives in marshalling yards, called switchyards
in the United States, is very different from long-distance line-haul.
Experimental results suggest the most efficient and cost-effective system
for line-haul would be to use liquefied natural gas (because of its higher
energy density) and high-pressure direct injection (because it makes the engine
more energy efficient).
Previous trials produced mixed results about the technical efficiency and
cost effectiveness of gas-fueled trains, a sense that the technology was tantalizingly
close but not quite ready to be deployed.
There is no garantee that the BNSF pilot program will be any more successful
than its predecessors. But the financial incentives to make it work have never
been stronger.
|
GDF SUEZ Agreement with
Gaz Metro LNG of Montreal for New England Supply
12 August 2014
GDF SUEZ Gas NA (GSGNA) today announced it has entered into a purchase
agreement with Gaz Metro LNG, L.P. of Montreal that will make available
up to 1.0 Bcf of additional LNG to meet the peak 2014-2015 winter demand
in New England.
Under the contract, GSGNA will commit to purchase 475,000 Mcf of natural
gas over a five-month period beginning in July 2014, with the potential
to purchase an additional 500,000 Mcf over the same period. The LNG
will be transported by tanker trucks to New England utilities to help meet
gas inventory refill requirements.
"This second annual arrangement with Gaz Metro represents an important
step in the further diversification of our supply portfolio, as well as
an opportunity for us to take advantage of gas purchases on this continent
to increase our supply assets, and to continue to ensure reliability to
New England when resources can be tight—the winter heating season," said
Frank Katulak, President and Chief Executive Officer of GSGNA. "Additional
and reliable supplies such as these will also allow us to cost effectively
provide more services to the marketplace by optimizing existing natural gas
infrastructure in the region."
|
Liquiline, Fjord Line
first Denmark LNG bunkering terminal
Tuesday, August 12, 2014 RADAL, Norway
Liquiline and Fjord Line stated that the two companies have entered
into a contract for the construction of a dedicated LNG ship bunkering terminal
in Denmark. The terminal will be constructed at the Port of Hirtshals, where
Fjord Line on a daily basis arrives with one of its two LNG-fuelled cruise
ferries MS Stavangerfjord and MS Bergensfjord. This will be the first LNG
ship bunkering terminal in Denmark.
The ship bunkering terminal will be of Liquiline-design, a LiquiStation®
Bulk™ ST2FF type. The terminal will have an on-site storage tank with a
gross volume of 500 m3
and a bunkering solution having a bunkering capacity of upto 400
m3 of LNG per hour. This design will enable Fjord Line to bunker its ships
within two hours, which is the time that the cruise ferries are docked to
the port. The ship bunkering terminal is expected to be operational in Q4,
2014.
The two cruise ferries are trading between Norway and Denmark. They each
have a capacity of 1,500 passengers and 600 cars, trucks and cargo. They
are fitted with Rolls-Royce Marine gas engines. MS Stavangerfjord was commissioned
and set in operation in July 2013. MS Bergensfjord was commissioned and
set in operation in March 2014.
Dag Lilletvedt, CEO of Liquiline Group, says in a comment: "We are very
pleased with this agreement with Fjord Line, since it is based on our new
LNG ship bunkering terminal design. In Fjord Line we get a strong and innovative
industrial partner, being in the forefront of using LNG as bunker fuel in
their new cruise ferries".
Gert Balling, Director of Fjord Line, stated that "Fjord Line is very much
looking forward to have this LNG ship bunkering terminal from Liquiline
established. It will enable us to bunker our ships quickly and give us the
possibility to make use of this terminal commercially".
|
GAZPROM MOU LNG Market
with Baltic Sea Port
21 July 2014
GAZPROM has announced it has signed a have signed a memorandum
of understanding with the operator of the Baltic Sea port of Rostock, Hafen-Entwicklungs-gesellschaft
Rostock mbH for cooperation in the LNG market.
According to GAZPROM the cooperation will focus on the development,
marketing, and usage of LNG in road transport and shipping in the German
state of Mecklenburg-Western Pomerania. The companies share the long-term
goal of providing the infrastructure required to bunker LNG and will creating
an additional sales channel for LNG.
GAZPROM noted establishing infrastructure at Germany’s largest
multi-purpose Baltic Sea port will allow LNG to be delivered to Rostock
– and thereby to Germany. The port of Rostock provides the necessary port
space. The GAZPROM Group is also investigating transporting the LNG from
intermediate storage to independent gas utilities by truck and supplying
it for use in natural gas vehicles. The LNG will be shipped from the planned
liquefaction plant in the Gulf of Finland.
“We look forward to working with GAZPROM. LNG has the best environment
and safety balance of all the fuels used to power ships, and that allows
shippers to meet the high environmental protection requirements”, says
Ulrich Bauermeister, Managing Director of Hafen-Entwicklungsgesellschaft
Rostock.
Stricter environmental standards will apply to shipping in the
North Sea and Baltic Sea from 2015. Under the new standards, shipping fuel
will be allowed to contain just 0.1 % sulphur instead of the 1.0 % currently
permitted.
|
Rosneft eyes construction
of LNG complex in Bronka, Gorskaya or Ust-Luga
2014 August 8 13:41
Rosneft is in preliminary negotiations on the location of an LNG complex
at the Gulf of Finland. As Peotr Parinov, head of the Baltic Sea Ports
Administration, told IAA PortNews, several possible locations are considered
in the declaration of intent: Bronka and Gorskaya districts of Big Port
St. Petersburg as well as Vysotsk and Ust-Luga seaports.
Gazprom also considers three locations for a complex of liquefied
natural gas. Primorsk seems to be the most probable location. Also, Cryogas
CJSC is selecting a ground for the construction. It can locate the complex
in Vysotsk.
Read full interview with Peotr Parinov in a new edition of “Port
Service. Bunkering Market.” journal which is available in IAA PortNews
office.http://portnews.ru/redaction/contacts/
|
PGN FSRU project commences
commercial operations offshore Sumatra
OSLO, Norway 8 7 2012 worldoil.com
The PGN FSRU Lampung project offshore Indonesia reached an important
milestone 21 July 2014 when the unit, along with its associated mooring
and pipeline to shore was deemed mechanically complete and commenced commercial
operation for its client Perusahaan Gas Negara (PGN). The PGN FSRU Lampung
further completed receiving its first cargo of LNG through a Ship-To-Ship
(STS) transfer on 27 July, and has now entered its final commissioning
phase. The contract with PGN is for 20 years.
Sveinung J.S. Stohle, President and CEO of Hoegh LNG Holdings Ltd,
commented: "We are proud to have commenced commercial operation of this
technically advanced and innovative FSRU project for our client PGN. This
is the largest and most complex FSRU project Hoegh LNG has undertaken so
far, and the project team and the Company deserves a lot of praise for their
excellent performance. With the second and third FSRU scheduled to commence
commercial operation later this year and the fourth FSRU being delivered
in the first quarter next year, the Company is in the process of preparing
for further expansion within the FSRU segment, thus demonstrating our commitment
to keep growing the Company within the FSRU market."
|