| LNG-powered RoRo 181 metres
long ferry German Shipbuilder FSG Wins Australian RoRo Order By George Backwell marinelink.com Flensburger-Schiffbau-Gesellschaft (FSG) says it has contracted with Australian shipping company SeaRoad for the construction of a 181 metres long, LNG-powered RoRo ferry. Claimed by FSG to be the world’s first RoRo ferry of this size powered by liquefied natural gas (LNG) fuel, the RoRo ferry will ply between Melbourne and Devonport in Tasmania. The new ferry is designed to transport containers, including reefer units, trailers, cars and hazardous cargo as well as live animals – for example cattle. For FSG Managing Director Peter Sierk this is very much more than just another contract. “On the one hand, our shipyard is to deliver a ship to Australia for the first time ever. On the other hand, this new building demonstrates yet again the high-level competence of our yard and our innovative capabilities.” He adds: "LNG operation is currently the cleanest fuel combustion process in existence. The emission of sulphur oxides (SOx) and dust is almost nil while that of nitrous oxides (NOx) is also reduced by nearly 100% and that of carbon dioxide (CO2) by about 20%. The liquefied natural gas is taken on board the ship in mobile tanks during regular ship loading and unloading. Once on board, the tanks are secured and become fixed ship fuel tanks without the need for any transshipment thanks to a special locking system also developed by FSG. The newbuilding will be 181 metres long, 26.6 metres wide and have more than 1960 lane metres available. Her speed will be 20.5 knots. FSG add that it is planned to start construction at FSG on Flensburg’s Batteriestrasse in September 2015 and to deliver the ship in the third quarter of 2016. |
| US Shale Debt Increases
as Drillers Push to Maintain Gains May 28, 2014 by Robin Dupre Rigzone Staff Shale debt has reportedly doubled over the past four years, according to a Bloomberg News analysis of 61 shale drillers, while revenue has increased just 5.6 percent. Many are spending at least 10 percent of their sales on interest compared with Exxon Mobil Corp.’s .1 percent, the news agency reported. As the struggle to keep pace with the increased spending is needed to unearth these resources, some investors are selling their assets at a loss. Loews Corp. subsidiary, HighMount Exploration & Production, announced May 23 that it is pursuing strategic alternatives, including a potential sale of the business. HighMount, primarily comprised of natural gas and oil reserves, has assets in the Sonora field within the Permian Basin in West Texas. The company reportedly lost $20 million in the first three months of 2014 and was not profitably successful over the past two years. “The list of companies that are financially stressed is considerable,” told Benjamin Dell, managing partner of Kimmeridge Energy, a New York-based alternative asset manager focused on energy, to Bloomberg. “Not everyone is going to survive. We’ve seen it before.” Financial problems might stagnate production growth, according to Ivan Sandrea, an Oxford Institute for Energy Studies (OIES) research associate and senior partner of Ernst & Young London. Fifteen of the main operators have wrote off $35 billion worth of assets since the shale boom started. “What is not clear from higher-level company data is if the industry (both large players and independents) can run a cash flow-positive business in both top-quality and in more marginal plays and whether the positive cash flow could be maintained when the industry scales up its operations,” he noted. “While most of the companies that have made write-downs are not quitting, many players in this industry have already noted that the revolution is not as technically and financially attractive as they expected,” the analyst writes. “However, to deem the [business] model flawed due to the investment write-downs of some large companies would be misleading and too early in the evolution of the business for some players.” Furthermore, independent producers will spend $1.50 on drilling this year for every dollar in return, Bloomberg noted in February. Producers will have to drill 2,500 new wells a year just to sustain output of 1 million barrels per day in the Bakken, according to International Energy Agency. Recent analysis by Energy Aspects show 6 years of progressively worsening financial performance by 35 independent companies focused on shale gas and tight oil plays in the United States. “This is despite showing production growth and shifting a large portion of their activity to oil since 2010, presumably to chase a higher-margin business,” he added. Oil and gas production by the companies represented 40 percent of output in unconventional plays in last year’s third quarter. |
| Russia-China Natural Gas
Deal Set LNG Price Floor By Isis Almeida bloomberg.com May 27, 2014 Russia’s deal to sell natural gas to China after a decade of talks will set a floor for prices of the liquefied fuel as the Asian nation is set to become the world’s leading consumer, according to Bank of America Corp. The 30-year accord for 38 billion cubic meters a year (3.8 billion cubic feet a day) of supplies from 2018 by pipeline from eastern Siberia was probably reached at a price of $10.50 to $11 per million British thermal units, the bank said in a report e-mailed today. China, which consumes about half of the world’s coal, copper and iron ore and 4 percent of its gas, is set to become the biggest gas user by 2035. The deal “establishes possibly the most important gas benchmark in decades,” said Francisco Blanch, the bank’s global head of commodities research. “If liquefied natural gas prices were to fall below Russian import parity levels several years into the future, the Chinese market would probably absorb them rather easily.” Global gas markets will probably converge to the Russian export price into China, with spot Asian LNG cargoes likely from the Chinese floor of $11 per million Btu to the Japanese ceiling of about $16 per million Btu, the bank said. LNG supplies may rise by 18 billion cubic feet a day by 2020 to 43 billion cubic feet a day, an amount that can be “relatively easy” to absorb by emerging markets such as China, the bank said. The Russia-China agreement will also set a long-term price floor of $4 per million Btu for U.S. gas as regasification, liquefaction and transport costs of as much as $7 per million Btu from the U.S. to Asia become a “key component” of Henry Hub pricing, Bank of America said. Demand from Asia will likely keep western Europe gas prices well bid, it added. “Potential markets that could tap America’s heavily discounted natural gas prices include both Europe and Asia,” Blanch said. “With Chinese demand now set to grow meaningfully over the coming years, we see European gas prices holding up relatively well and being floored by this new gas pricing structure in China.” |
| Small Scale LNG in northeast
Canada 28 May 2014 Stolt-Nielsen Gas Investment in Small Scale LNG and Logistics Services in Québec, Canada Norwegian company Stolt-Nielsen Limited announced today that Stolt-Nielsen Gas Ltd., SunLNG Holding Ltd.and LNGaz Ltd. have agreed to form a new start-up focused on the development of small-scale LNG liquefaction and logistics services in Bécancour, Québec, Canada. The new joint venture, to be named Stolt LNGaz Ltd., will have a Canadian operating subsidiary, Stolt LNGaz Inc. The transaction represents an initial investment of US$ 20 million with SNG owning 50% of the venture. Stolt LNGaz intends to provide clean burning natural gas to remote mining operations and other industrial customers in northeast Canada at a substantially lower cost than diesel and residual fuel oil, which are the primary energy sources today. Under the current plan, gas delivered via existing pipelines terminating in southeast Canada will be liquefied at a small-scale plant to be constructed by Stolt LNGaz. The fuel will then be transported primarily via LNG carriers to a number of customers and hubs across northeast Canada. Cost advantages are expected to enable surplus production to be exported to northern Europe. Stolt LNGaz expects the total capital investment to be approximately US$ 570 million over the next four years in infrastructure and services development, partly funded with debt financing secured by long-term customer contracts. Commenting on the transaction, Niels G. Stolt-Nielsen, Chief Executive Officer of Stolt-Nielsen Limited, said: "This start-up investment leverages Stolt-Nielsen's expertise in marine logistics. We are pleased to be partnering with SunLNG, along with the experienced energy entrepreneurs, Bjørn Torkildsen and Rodney Semotiuk." |
| Bakken ethane lifts outlook
of Canada Nova Chemicals 05.27.2014 by JACK KASKEY and CECILE GUTSCHER Bloomberg Nova is in the final stages of securing low-cost ethane, an NGL, piped from US shale formations to facilities in Ontario and Alberta -- just south of Canada’s oil sands production region. Nova Chemicals Corp. debt is trading as if Canada’s largest chemical maker is rated investment grade for the first time in a decade, with projects set to tap cheap US shale gas seen cutting costs and swings in earnings. Nova has secured supplies of ethane for its only two production sites, both in Canada, as competitors such as Dow and Westlake Chemical also expand production because of the cost advantage provided by shale gas. Nova, owned by the Abu Dhabi government’s International Petroleum Investment Co., turns hydrocarbons such as ethane into ethylene, the most-used petrochemical, and then into pellets of polyethylene. The plastic pellets are sold to makers of shopping bags, food packaging and auto parts, among other end markets. Bakken Region In Joffre, Alberta, located halfway between Calgary and Edmonton, Nova hasn’t been able to run its three ethylene plants at full capacity because of a shortage of ethane in the province, said Pace Markowitz, a company spokesman. Nova has now secured an agreement to buy Hess Corp. ethane produced in the Bakken shale region of North Dakota and piped through Saskatchewan to Alberta, he said. The pipeline will deliver ethane to the Joffre site in the next several weeks, Markowitz said. Credit-default swaps show the cost to insure debt of Nova against default over five years has dropped 50% since June 2013 to 125 basis points, in line with borrowers rated at the lowest investment-grade of Baa3, according to Moody’s Analytics. Calgary-based Nova is rated Ba1 by Moody’s Investors Service and BB+ by Standard & Poor’s, the highest junk-bond grades for each company. Nova is in the final stages of securing low-cost ethane, a natural-gas liquid, piped from US shale formations to facilities in Ontario and Alberta -- just south of Canada’s oil sands production region. The projects should stabilize fluctuating earnings and cash flow and eventually boost profit, said David Fisher, a Toronto-based analyst at S&P. “We expect the conditions for a possible upgrade to be met sometime in 2014,” Fisher said by phone on May 23. “What we need to see is the company is well on its way to having the projects fully operational and that there are not going to be any major execution challenges as they ramp up.” Nova, which has C$924 million ($850 million) of debt, hasn’t been rated investment grade by S&P since 2002. S&P raised the company’s outlook to positive on Feb. 14. Yield Spreads For Nova, being freed from a junk rating would translate into 10-year borrowing costs about 80 basis points, or 0.80 percentage point, lower. The company’s 5.25% notes due in August 2023 yield 4.2%, about 224 basis points more than government benchmarks, according to Bank of America Merrill Lynch index data. US dollar-denominated bonds of investment-grade rated peers including Dow Chemical and Airgas yield an average 3.36% for similar-maturity debt, according to the Bank of America Merrill Lynch US Corporate Chemical Index. By comparison, the average yield for speculative-grade chemical companies is 5.13%, according to another index. Another part of Nova’s feedstock diversification plan for Joffre is securing off-gas extracted by Williams Partners from oil sands in northern Alberta. The Bakken and oil-sands feedstocks will allow Joffre to run at capacity, boosting production by 1 billion lb/year of ethylene, and the company plans to spend $1 billion to expand polyethylene production by a similar amount in the first half of 2016, Markowitz said. Cracker Capacity In Corunna, Ontario, about 90 miles north of Detroit, Nova is investing about $250 million to allow the ethylene plant, known a cracker, to run entirely on ethane feedstock, up from a maximum of 70% ethane and 30% naphtha, Markowitz said. Sunoco's Mariner West pipeline in December started bringing Nova ethane from the Marcellus shale region of western Pennsylvania, he said. Nova is receiving about 60% of its contracted ethane from the Marcellus, a level that will rise through the next few months, Markowitz said. The company plans to spend about $300 million to boost the cracker’s capacity by 20% and expand production of polyethylene, he said. Reducing exposure to oil derivatives and increasing use of low-cost North American gas is set to improve Nova’s financial results, said John Rogers, a New York-based chemicals analyst at Moody’s, which hasn’t rated Nova investment grade since 2002. “Once they get their pipelines in place and they can show a couple quarters of improved performance, we would upgrade them,” Rogers said May 22. “Sometime in the next few months, we will take a look at that.” |
| New Canadian self-unloader
Rand Logistics MAY 27, 2014 Rand Logistics, Inc. is adding another river class self unloader to its fleet. It says it will be the first new Canadian flagged river class self-unloader introduced into service on the Great Lakes in over 40 years. Back in March, the company announced that it had acquired a Danish-flag chemical tanker for conversion into the new ship. Today it said it has entered into a shipyard contract for the construction and assembly of a new forebody that will be affixed to the aft section of the chemical tanker. The conversion project will take place in Jiangyin, China, at the Chengxi Shipyard Co., Ltd. "We are very pleased to be working with the Chengxi shipyard on this important project for our company," commented Scott Bravener President of Lower Lakes Towing. "As previously disclosed, much of the tonnage that will be dedicated to our 17th vessel is a result of market share gains that we have been awarded beginning in the 2015 sailing season. Subsequent to introducing the vessel into service, we will operate five of the seven Canadian flagged river class vessels in the market. The new vessel will not only have the largest carrying capacity of any existing Canadian river class self-unloader, but it will also be the most efficient river class vessel on the Great Lakes." Rand Logistics, Inc. is a leading provider of bulk freight shipping services throughout the Great Lakes region. Through its subsidiaries, the Company operates a fleet of ten self-unloading bulk carriers, including eight River Class vessels and one River Class integrated tug/barge unit, and three conventional bulk carriers, of which one is operated under a contract of affreightment. The Company is the only carrier able to offer significant domestic port-to-port services in both Canada and the U.S. on the Great Lakes. The Company’s vessels operate under the U.S. Jones Act – which dictates that only ships that are built, crewed and owned by U.S. citizens can operate between U.S. ports – and the Canada Marine Act – which requires Canadian commissioned ships to operate between Canadian ports. Headquartered in New York, NY, Rand Logistics was formed in 2006 through the acquisition of the outstanding shares of capital stock of Lower Lakes Towing Ltd. Common shares of Rand Logistics trade on the NASDAQ Capital Market under the symbol RLOG. |
| Gasoline output US monthly
surges to all-time high 05.22.2014 By MARK SHENK Bloomberg Total deliveries of petroleum products 19 million bpd Gasoline 9.79 million bpd Distillates 4.21 million bpd Natural gas liquids, drilling by-product, 2.7 million bpd. Total oil and fuel imports 0.6% rise April 10.1 million bpd lowest in 17 years. Production of gasoline jumped 9.2% from a year earlier to a record 9.79 million bpd last month, the industry-funded American Petroleum Institute (API) trade group said today in a new report. US gasoline production climbed to an all-time high in April as fuel exports surged, the American Petroleum Institute (API) said in a monthly report. Production of gasoline jumped 9.2% from a year earlier to a record 9.79 million bpd last month, the industry-funded group said. Output of distillate fuel, a category that includes diesel and heating oil, rose 12% to 4.95 million, a record for the month. “Demand is up for both gasoline and distillate, and refiners are meeting it,” said John Felmy, chief economist at the API in Washington. Gasoline consumption jumped 2.7% to 9 million bpd. Demand for distillates increased 8.8% to 4.21 million, the most for April since 2007. Total deliveries of petroleum products, a measure of demand, advanced 2.3% to 19 million bpd. Refineries processed 16.1 million bpd, a record for April. Production of gasoline, distillate, jet fuel and residual fuel exceeded domestic demand, leading to a gain in exports. Horizontal drilling and hydraulic fracturing, or fracking, have unlocked supplies from shale formations in the central US, including the Bakken in North Dakota and the Eagle Ford in Texas. Most of the output from shale is light, sweet crude, or oil with low density and sulfur content, which yields a high proportion of diesel and gasoline. Fuel exports rose 16% to 3.72 million bpd, a record for the month. The all-time high of 4.4 million came in December. “I suspect that the influx of light, sweet crude from the Bakken and Eagle Ford, along with the gain in refinery input, is behind the rise in gasoline output,” Felmy said. “We’re lucky to be able to export the additional barrels, which helps the refinery sector.” US crude oil output increased 13% to 8.25 million bpd, the most for April since 1988. Output of natural gas liquids, a drilling by-product, climbed 9.2% to 2.7 million. Jet fuel consumption dropped 0.5% to 1.41 million bpd, the second-lowest April level in 19 years. Demand for residual oil, used for commercial and industrial heating, electricity generation and ship propulsion, dropped 13% to 248,000 bpd. Total oil and fuel imports rose 0.6% in April to 10.1 million bpd, the second-lowest total in 17 years. |
| BNSF executive sees 'big
opportunity' in switch from diesel to LNG locomotives May 23, 2014 BISMARCK – As a North Dakota company prepares to fire up the state’s first production facility for liquefied natural gas, the nation’s largest railroad is pursuing a switch from diesel-powered to LNG-powered locomotives, potentially opening up a major market for the product. By: Mike Nowatzki, Forum News Service, INFORUM BISMARCK – As a North Dakota company prepares to fire up the state’s first production facility for liquefied natural gas, the nation’s largest railroad is pursuing a switch from diesel-powered to LNG-powered locomotives, potentially opening up a major market for the product. “We’re serious. We are testing them right now,” Matt Rose, executive chairman of BNSF Railway, told Forum News Service in an interview Wednesday at the Williston Basin Petroleum Conference in Bismarck. Rose said BNSF must first prove the technology of using LNG in trains. The railroad currently has two LNG-powered locomotives running around a test track in Pueblo, Colo., he said. “It’s not a slam dunk, but we continue to be bullish on the ability to do this,” he said. The U.S. Energy Information Administration predicts that LNG will play an increasing role in powering freight trains in coming years. The seven major U.S. railroads, which consumed 3.6 billion gallons of diesel fuel in 2012, or 7 percent of all diesel fuel consumed in the country, are considering using LNG in locomotives “because of the potential for significant fuel cost savings,” the EIA reported last month in its 2014 outlook. North Dakota LNG announced plans earlier this month for a liquefaction plant near Tioga that’s expected to produce 10,000 gallons of LNG per day by the end of July and 75,000 to 80,000 gallons daily by the end of the year, company CEO Patrick Hughes told conference attendees Tuesday. Hughes, who also is CEO of North Dakota LNG’s parent firm, Watford City-based Prairie Companies LLC, spoke mostly about how LNG can displace more than 50 percent of the diesel fuel burned by drilling rigs, resulting in cost savings of 20 percent or greater. Thirty drilling rigs in North Dakota have undergone a dual-fuel conversion to burn both diesel and LNG, he said. But Hughes said afterward that he also looks forward to working with the railroads on LNG as the opportunity arises. “I think it’s a matter of when,” he said. Before LNG locomotives can hit the rails, Rose said BNSF will need to work with regulatory agencies such as the Environmental Protection Agency and Federal Railroad Administration to accommodate the change. The railroad also will need to identify LNG production facilities and a tank car to handle the fuel, and build or overhaul locomotives to burn the LNG once it’s re-gasified, he said. “We see this as a big opportunity,” he said. “One, we’re awash in natural gas in this country. And we think that from a cost and an environmental impact standpoint, it’d be a big idea to have the nation’s largest railroad hauling LNG and burning LNG instead of diesel. But it’s like everything in this world – anything that’s really important is really hard, and this is going to be really hard.” The final piece, Rose said, will be an analysis of the long-term trends of the cost of crude oil versus natural gas to determine if LNG locomotives pencil out. Rose said it will likely be a several-year process working with regulators and others to move the initiative forward through public policy. He said he has talked to a lot of people about the idea, including North Dakota’s governor and U.S. senators and the White House. “There’s no one that has said, ‘Gee, that’s a really stupid idea,’ ” he said. “In fact, everybody says just the opposite, what a great idea this is. So there’s this belief that this makes a tremendous amount of sense. But again, implementing it is not without its challenges.” Reach Nowatzki at (701) 255-5607 or by email at mnowatzki@forumcomm.com. |
| Global
Gas Emissions http://earthobservatory.nasa.gov Since the beginning of the industrial revolution, humans have transformed about 40 percent of Earth's land surface and have increased carbon dioxide levels by about 25 percent. Scientists estimate that from 1850 to 1980, between 90 and 120 billion metric tons (90-120 trillion kilograms) of carbon dioxide were released into the atmosphere from tropical forest fires. Comparatively, during that same time period, an estimated 165 billion metric tons of carbon dioxide were added to the atmosphere by industrial nations through the burning of coal, oil, and gas. Today, an estimated 5.6 gigatons of carbon are released into the atmosphere each year due to fossil fuel burning. Burning of tropical forests contributes another 2.4 gigatons of carbon per year; or, about 30 percent of the total. Over the last decade, it seems that the regional distribution of biomass burning has increased worldwide, as well as the length of burning time. The result is a continuing increase in the release of emission products, and an increase in the severity of their impact on climate and on the environment. Scientists estimate that in just a few months the burning that took place in 1997 in Indonesia released as many greenhouse gases as all the cars and power plants in Europe emit in an entire year. After carbon dioxide, the most significant greenhouse gas is methane, another emission product from biomass burning (about 10 percent globally). Although methane is about 200 times less abundant than carbon dioxide in the atmosphere, molecule for molecule methane is 20 times more effective at trapping heat. Since the beginning of the Industrial Revolution, methane has doubled in the troposphere. Additionally, its concentration has been increasing about 1 percent per year, so scientists are concerned that its relative significance as a greenhouse gas may dramatically increase in the future, although there are indications that this increase may have slowed down in the last decade. Nitrous oxide (N2O) concentrations have been increasing at about 0.3 percent per year for the last several decades. Yet, nitrous oxide has a lifetime of 150 years in the atmosphere, which contrasts sharply with the 10-year lifetime of methane. A single nitrous oxide molecule is the equivalent of 206 carbon dioxide molecules in terms of its greenhouse gas effect. Biomass burning accounts for about 2-3 percent of the total amount of tropospheric nitrous oxide. Emissions of nitrous oxides and methane are further associated with the production of tropospheric ozone. Unlike "good" ozone in the stratosphere (upper atmosphere) that acts as a shield to screen out the sun's harmful ultraviolet rays, ozone in the troposphere is a pollutant that, when breathed, damages lung tissue and is also harmful to plants. Greenhouse gases—such as carbon dioxide, methane, and nitrous oxide—are mostly "transparent" to incoming solar radiation; that is, they rarely interact with sunlight. However, these gases are very efficient at trapping heat radiated from the Earth's surface by absorbing and re-emitting it. There is a wide margin of error in the estimates of biomass burning given above—significantly more error than in our estimates of industrial emissions. The accuracy of scientist's biomass burning emission estimates must be improved if they are to better understand, model and predict the impacts of the emissions on climate change. |
| Methane and the atmosphere http://www.earthobservatory.nasa.gov/Features/CarbonCycle/page5.php May 24, 2014 Scientists know which wavelengths of energy each greenhouse gas absorbs, and the concentration of the gases in the atmosphere, they can calculate how much each gas contributes to warming the planet. Carbon dioxide causes about 20 percent of Earth’s greenhouse effect; Water vapor accounts for about 50 percent; And clouds account for 25 percent. The rest is caused by small particles (aerosols) and minor greenhouse gases like methane. Water vapor concentrations in the air are controlled by Earth’s temperature. Warmer temperatures evaporate more water from the oceans, expand air masses, and lead to higher humidity. Cooling causes water vapor to condense and fall out as rain, sleet, or snow. Carbon dioxide, on the other hand, remains a gas at a wider range of atmospheric temperatures than water. Carbon dioxide molecules provide the initial greenhouse heating needed to maintain water vapor concentrations. When carbon dioxide concentrations drop, Earth cools, some water vapor falls out of the atmosphere, and the greenhouse warming caused by water vapor drops. Likewise, when carbon dioxide concentrations rise, air temperatures go up, and more water vapor evaporates into the atmosphere—which then amplifies greenhouse heating. So while carbon dioxide contributes less to the overall greenhouse effect than water vapor, scientists have found that carbon dioxide is the gas that sets the temperature. Carbon dioxide controls the amount of water vapor in the atmosphere and thus the size of the greenhouse effect. Rising carbon dioxide concentrations are already causing the planet to heat up. At the same time that greenhouse gases have been increasing, average global temperatures have risen 0.8 degrees Celsius (1.4 degrees Fahrenheit) since 1880. Since the beginning of the industrial revolution, humans have transformed about 40 percent of Earth's land surface and have increased carbon dioxide levels by about 25 percent. Scientists estimate that from 1850 to 1980, between 90 and 120 billion metric tons (90-120 trillion kilograms) of carbon dioxide were released into the atmosphere from tropical forest fires. Comparatively, during that same time period, an estimated 165 billion metric tons of carbon dioxide were added to the atmosphere by industrial nations through the burning of coal, oil, and gas. Today, an estimated 5.6 gigatons of carbon are released into the atmosphere each year due to fossil fuel burning. Burning of tropical forests contributes another 2.4 gigatons of carbon per year; or, about 30 percent of the total. Over the last decade, it seems that the regional distribution of biomass burning has increased worldwide, as well as the length of burning time. The result is a continuing increase in the release of emission products, and an increase in the severity of their impact on climate and on the environment. Scientists estimate that in just a few months the burning that took place in 1997 in Indonesia released as many greenhouse gases as all the cars and power plants in Europe emit in an entire year. After carbon dioxide, the most significant greenhouse gas is methane, another emission product from biomass burning (about 10 percent globally). Although methane is about 200 times less abundant than carbon dioxide in the atmosphere, molecule for molecule methane is 20 times more effective at trapping heat. Since the beginning of the Industrial Revolution, methane has doubled in the troposphere. Additionally, its concentration has been increasing about 1 percent per year, so scientists are concerned that its relative significance as a greenhouse gas may dramatically increase in the future, although there are indications that this increase may have slowed down in the last decade. Nitrous oxide (N2O) concentrations have been increasing at about 0.3 percent per year for the last several decades. Yet, nitrous oxide has a lifetime of 150 years in the atmosphere, which contrasts sharply with the 10-year lifetime of methane. A single nitrous oxide molecule is the equivalent of 206 carbon dioxide molecules in terms of its greenhouse gas effect. Biomass burning accounts for about 2-3 percent of the total amount of tropospheric nitrous oxide. Emissions of nitrous oxides and methane are further associated with the production of tropospheric ozone. Unlike "good" ozone in the stratosphere (upper atmosphere) that acts as a shield to screen out the sun's harmful ultraviolet rays, ozone in the troposphere is a pollutant that, when breathed, damages lung tissue and is also harmful to plants. Greenhouse gases—such as carbon dioxide, methane, and nitrous oxide—are mostly "transparent" to incoming solar radiation; that is, they rarely interact with sunlight. However, these gases are very efficient at trapping heat radiated from the Earth's surface by absorbing and re-emitting it. There is a wide margin of error in the estimates of biomass burning given above—significantly more error than in our estimates of industrial emissions. The accuracy of scientist's biomass burning emission estimates must be improved if they are to better understand, model and predict the impacts of the emissions on climate change. Sunlight destroys Methane in one year Read more: http://www.universetoday.com/20598/mars-methane-mystery-still-beckons/#ixzz32gWiOVYl Michael Mumma of NASA’s Goddard Space Flight Center in Greenbelt, Maryland was one of the original methane discoverers. Observations he and his team have made over the last four years show methane is not spread evenly around Mars, but concentrated in a few “hotspots.” They have seen that methane clouds spanning hundreds of kilometers form over these hotspots and dissipate within a year – much shorter than the 300 – 600 years it was thought to take for atmospheric methane to be destroyed by sunlight. |
| Natural Gas a Bridge to Nowhere--
Cornell Methane Expert Much-hyped industry in BC plagued by leaks of potent warmer. By Andrew Nikiforuk, Saturday, May 22, 2014, TheTyee.ca A new study by a Cornell University ecologist and expert on methane argues that "natural gas is a bridge to nowhere" in terms of arresting climate destabilization. Robert W. Howarth, an Earth systems scientist and biogeochemist, also contends that replacing diesel engines with those running on liquefied natural gas, as proposed by the government of British Columbia, is a bad idea due to energy inefficiencies and methane leakage. Moreover, his study finds the push to use more natural gas to heat homes and water may be wrongheaded because natural gas is "not a climate friendly fuel for these uses. The use of fossil fuels is the major cause of greenhouse gas emissions, and any genuine effort to reduce emissions must begin with fossil fuels," his study concludes. The new study, an update on a controversial 2011 paper, contradicts the basis for the B.C. government's much-hyped liquefied natural gas strategy. The B.C. government argues that natural gas is the "world's cleanest-burning fossil fuel," and that provincial exports of LNG "can significantly lower global greenhouse gas emissions by replacing coal-fired power plants and oil-based transportation fuels with a much cleaner alternative." But Howarth squarely challenges these claims by arguing that the greenhouse gas footprint of methane is so large in the short term, with leakage from natural gas extraction so significant, that ultimately "natural gas is a bridge to nowhere." A potent atmospheric warmer Citing a flurry of recent methane leakage studies, Howarth's report argues that natural gas found in shale formations, which requires hydraulic fracturing to extract, leaks and vents about 50 per cent more methane during production than conventional drilling. (In the Bakken oil fields alone, industry dumps into the atmosphere nearly $100-million worth of methane a month because it can't be bothered to conserve gas associated with oil production.) In addition, methane is a much more potent atmospheric warmer than carbon dioxide in the short term. Methane, which is 21 times more potent than CO2 and takes about 12 years to dissipate in the atmosphere, accounts for nearly 40 per cent of global atmospheric warming. Even if society eliminated CO2 emissions tomorrow but ignored methane, Howarth argues the planet would still warm to the dangerous 1.5 to 2 degree Celsius threshold within 15 to 35 years. "By reducing methane emissions, society buys some critical decades of lower temperatures," his study says. To properly evaluate the role of methane and the greenhouse gas footprint of the shale gas industry, a government needs to measure four things, the ecologist says. It must calculate the amount of CO2 emissions from energy burned to mine shale gas; accurately tally the real leakage methane rate from the natural gas system; estimate the global warming potential of methane in the short term, and figure out how efficiently methane is now burned for energy. Little of this accounting has been yet done by the B.C. government, an advocate for the LNG industry. Recent studies show that U.S. methane leakage from the natural gas industry is likely greater than the 1.8 per cent assumed by the U.S. Environmental Protection Agency and could range anywhere between 3.6 and 7.1 per cent. The B.C. government estimates that its natural gas fields leak about 0.3 per cent of production to atmosphere, but critics, including Howarth, argue that this number, among the lowest ever published by the industry, is not based on real measurements in the field. A study partly funded by the BC Oil and Gas Commission and published by the U.S. Environmental Protection Agency in 2004 found, for example, a startling discrepancy between estimated and real methane leaks reported by natural gas plants. In addition, recent U.S. studies have found leakage rates of four per cent in an unconventional gas field in Colorado, and nine per cent in a Utah shale gas field. Most of BC's natural gas comes from unconventional fields requiring extensive hydraulic fracturing. Diesel-to-natural gas transition makes no sense: Howarth Natural gas only has a lower footprint than coal in energy systems where the methane leakage rate from wells, pipelines, gas plants and infrastructure is 3.2 per cent or less. By Howarth's calculations, it makes no sense to use natural gas to replace "diesel fuel as a long-distance transportation fuel" because it would greatly increase greenhouse emissions. |
| APG reports growth in
dual-fuel vehicle conversions May 19, 2014 May 19, 2014 Wendy Leavitt | Fleet Owner American Power Group Corporation (OTCQB: APGI) recently announced that domestic vehicular revenues for the three months ending March 31, 2014 increased $272,000 or 312% to $359,000. The company noted that this is an indication of “continued growth in the early-adopter customer phase” for dual-fuel natural gas conversion of diesel engines, adding that over 200 vehicular dual-fuel conversion systems have been shipped in North America since 2012. Entering Q3, the company reported a backlog of more than $600,000 with nearly 80% relating to vehicular dual-fuel conversions. American Power Group’s alternative energy subsidiary, American Power Group, Inc. (APG) provides a patented, turbocharged, natural gas conversion technology for vehicular, stationary and off-road mobile diesel engines. The company’s dual-fuel technology converts existing diesel engines into engines that have the flexibility to run on: (1) diesel fuel and liquefied natural gas; (2) diesel fuel and compressed natural gas; (3) diesel fuel and pipeline or well-head gas; and (4) diesel fuel and bio-methane, with the flexibility to return to 100% diesel fuel operation at any time. Installation on a wide variety of engine models and end-market applications require no engine modifications. “APG has emerged as the dual-fuel market leader with the most EPA engine model approvals by a factor of 30X [some 453 engine family approvals for 2009 engines and older], an extensive and capable installation network, and flexible financing programs,” noted Lyle Jensen, APG’s CEO. “These attributes will allow fleets of all sizes to realize immediate fuel savings by converting their existing fleets to APG’s dual-fuel system or purchasing a new APG Dual Fuel Glider. “Since January, our WheelTime Dealer/Installer Network members have been adding three to four new early-adopter, dual-fuel customers per month and several have begun to order or request quotes for follow-on production quantities of ten to fifty trucks,” Jensen said. “This acceleration in dual-fuel adoption is expected to lead to a long and steady growth opportunity as fleets find a growing number of accessible on-route CNG and LNG filling stations to make natural gas fuel fueling as hassle free as diesel fuel is today.” APG recently displayed a 2014 Freightliner Columbia day cab APG Dual Fuel Glider with a rebuilt Detroit Diesel Series 60 12.7L engine at the Alternative Clean Transportation (ACT) Expo held in Long Beach, CA. Jensen, who spoke during ACT Expo, noted that APG’s dual-fuel conversions can cost “much, much less” than purchasing a new, dedicated natural gas vehicle and remanufactured older diesel engines don’t require particulate filters or DEF dosing systems either. What is more, since the engine is not actually modified, it can be changed back to diesel-only operation, offering current or subsequent owners freedom of choice. “As the heavy-duty trucking industry looks for every penny of fuel cost savings, the 2014 ACT Expo [provided] us a tremendous opportunity and platform to educate prospective fleets on the economic and environmental benefits of using APG’s dual-fuel solutions as an effective alternative to 100% diesel without any loss of power or torque,” Jensen observed. “The North American shale gas boom has generated retail natural gas fuel prices that are 30 to 50 percent lower than the equivalent cost of diesel,” he added. “Switching to lower-cost, domestically produced natural gas will lower America’s dependence on imported foreign oil and provide fleet operators a better hedge against future [diesel] fuel price fluctuations.” |
| Antarctic
ice sheet inevitable collapse raise sea levels more than a meter 5/2014 Decline of West Antarctic Glaciers Appears Irreversible May 16, 2014 Two studies published this week conclude that a section of the West Antarctic ice sheet has reached a point of inevitable collapse, an event that would eventually raise sea levels more than a meter (three-plus feet). The first study, led by Eric Rignot of the Jet Propulsion Laboratory, used NASA satellite and airborne observations to measure how glaciers have been retreating in the region. The other study, led by Ian Joughin of the University of Washington, used a computer model to compare observations of recent melting with projected melt scenarios to see which matches reality best so far. Both studies conclude that the Amundsen Sea segment of the ice sheet has begun an irreversible decline that will result in its loss, possibly as soon as the next few hundred years. Called the weak underbelly of the West Antarctic ice sheet, the Amundsen Sea region contains several fast-moving glaciers, including Pine Island, Thwaites, Haynes, Pope, Smith, and Kohler. Many Antarctic glaciers have offshore ice shelves that hold them in place like a dam. But there is very little fixed, offshore ice in the Amundsen Sea, so the glaciers flow freely. These rivers of ice drain one third of the West Antarctic ice sheet. In a separate study published in March 2014 in Geophysical Research Letters, Rignot and colleagues Jeremie Mouginot and Bernd Scheuchl found that these glaciers have been speeding up, as shown in the map above. Changes in ice flow between 1996 and 2008 are shown in red (accelerating) and blue (slowing). The changes were calculated from a variety of satellite observations, including visible light and radar observations that measure how fast the surface is moving, and satellite altimeter measurements of the height of the ice (for estimating thickness). Most of the glaciers have been flowing faster, and the changes extend far inland. |
| Truck-to-ship LNG bunkering
operation 19th May 2014 An Italian port has carried out a truck-to-ship liquefied natural gas (LNG) bunkering operation. Nick Jameson, London News Desk, 19th May 2014 The fuelling took place at Civitavecchia on the Italian west coast. The receiving vessel was the newbuild tug, Bokn. It was sailing from the Turkish yard where it was built to Norway, where it will be on long-term charter to the Norwegian state oil company Statoil. "This LNG bunkering operation is of the greatest importance to the port of Civitavecchia," said Calogero Giuseppe Burgio, Environmental and Technological Development Division, Director of Port of Civitavecchia. "Firstly, we show that we are in the fore front of developments and secondly we are proud to have the first LNG truck-to-ship bunkering in Italy." The LNG delivery was made by LNGEurope, a company specialising in supplying LNG to the transport sector on the European mainland. "This successful bunkering operation confirms the belief of LNGEurope that these safe bunkering operations will become routine for a steadily growing fleet of LNG fuelled ships, not only in Civitavecchia, but worldwide," said Koos Blaazer, General Manager of LNGEurope. LNGEurope said the delivery was prepared in cooperation with a number of players including the Civitavecchia Port Authority, the Harbour Master and the fire fighting department. The Bokn is scheduled to bunker with LNG at the Spainish ports of Cartagena and Vigo and in the Belgian port of Zeebrugge as it makes it way to Norway. The 75 metric tonne bollard pull tug Bokn is the sister ship of the Borgoy, which sailed from Turkey to Norway in February. |
| Applied Natural Gas Fuels 86,000
gallons/day of LNG Midlothian, TX Applied Natural Gas Fuels, Inc. has purchased 31 acres of land in the RailPort Business Park in Midlothian, TX to build a multi-liquefier LNG production platform previously announced in September 2013. The platform will consist of up to five liquefiers with a production capacity of 86,000 gallons/day of LNG liquefier and a total on-site storage of 1.5 million gallons of LNG. In addition to formally acquiring the land, the company has executed purchase orders for all long-lead items such as storage tanks, production skids and the electric motor and compressor unit. The Midlothian LNG Plant is expected to be operational in early 2015 and will focus on end users in the high-horsepower, trucking, E&P, rail, marine, remote power generation and mining markets that currently use diesel fuel and are interested in converting to a lower-cost, cleaner-burning alternative. |
| Building CNG fueling
stations faster May 20, 2014 Wendy Leavitt Fleet Owner Sister companies SSP Corp. (the parent corporation) and AFV Natural Gas Fuel Systems recently gave the trucking industry and members of the press a close up look at how they are helping to accelerate build-out of the compressed natural gas (CNG) fueling station network while also providing tube and hose assemblies for use in natural gas vehicle fuel systems. SSP has developed a solution the company calls “CNG Plus,” designed to help companies building CNG fueling stations get the job done faster without compromising safety. CNG Plus offers a three-part approach construction: • A line of existing products redesigned to meet the specific needs of the CNG fueling construction and maintenance business • New products specifically designed to reduce the cost and improve the speed, quality and safety of CNG station construction • Hands-on instruction for selecting, handling and installing coiled tubing and SSP fittings. SSP also offer training in how to measure layout, bend and install stainless steel tubing systems. One of the components central to this accelerated process is SSP’s seamless, stainless steel coiled tubing, made to the same restricted tolerance controls as the company’s straight length tubing. Shipped on wooden spools for all coils of 300 feet or more, the tubing is available in lengths up to 6,000 feet (Xtreme) without any longitudinal or orbital welds. The coiled tubing is intended to make it quicker and safer to run fuel lines over a distance from CNG storage tanks to fuel pumps, without having to link together sections of straight tubing. SSP application engineer, Gregg Lennon, noted that “CNG Plus is based on a philosophy about making the build-out [of CNG fueling stations] go faster and safer.” We have the methodology, materials and tools, he told Fleet Owner. We can even deliver it all in our construction trailer, which can be used for storage on-site. Jeff King, CEO of SSP, told Fleet Owner, “We are trying to help build an American energy success story.” Kevin W. Dickey is general manager of AFV Natural Gas Fuel Systems, a provider of tube and hose assemblies primarily used in natural gas vehicle fuel systems. Like parent corporation SSP, the company is focused on the emerging natural gas vehicle marketplace. Conversion companies make up about 80% of their business, according to Dickey. AFV’s forte is tight-flex, high-pressure hoses bent to fit the tight spaces tubing has to work around and through on CNG conversion vehicles. SSP provides AFV with fittings and valves. The two companies share an enthusiasm and vision for a natural gas-powered fleet future. There are only about 150,000 natural gas vehicles running in the U.S. Dickey and Lennon noted. That looks like a lot of potential. |
|
LNG bunkering ABS to help
usher in new era 22nd May 2014
Nick Jameson, London News Desk LNG America will use the American Bureau of Shipping (ABS) as the classification society for its first liquefied natural gas (LNG) bunker barges. "ABS has watched ship propulsion move from wind to coal, from coal to oil, and now from oil to natural gas," said Keith Meyer, president and CEO of LNG America on Thursday. He added that ABS was "well suited to help usher in "a new era" of clean fuel. In a joint press release, Jim Watson, President and COO of ABS Americas, said: "LNG is an exciting sector for us...We are looking forward to working with LNG America on North America’s first LNG bunker barges." Watson suggested the barges would "be the first of many" in the transition to LNG as a fuel for ships. Houston-based LNG America is developing an LNG bunker terminal in the US Gulf. It hopes to be supplying LNG bunkers by the end of next year. It has signed naval architect Jensen Maritime to design a bunker/shuttle barge for the company's US Gulf Coast operations. Meyer, speaking at the LNG bunker summit in Amsterdam this year, predicted that the North American LNG bunker market would see slow but steady growth. He told delegates that a lot of his company's attention was focused on finding the right type of vessel to make LNG bunker deliveries. |
| North Dakota LNG Big role seen
for natural gas bismarcktribune.com May 20, 2014 With a new liquefied natural gas plant in the works in Tioga, North Dakota LNG Chief Executive Officer Pat Hughes predicts 50 percent of North Dakota oil drilling rigs will run on natural gas in the next 12 months. Hughes is hopeful that 100 percent will use natural gas to supplement diesel fuel by the end of 2015, he said Tuesday during the Williston Basin Petroleum Conference. It was the first day of the conference that runs through Thursday. Organizers are expecting more than 4,000 people to attend. “When you have people like Nabors Drilling who embrace (natural gas), great things can happen,” Hughes said. Though most rigs run on a mixture of diesel and natural gas, Hughes told conference-goers Ensign Resource Service Group has some full liquefied natural gas. Those units tend to have less torque than their bi-fuel counterparts. Adding natural gas also makes the rigs’ engines last longer and lowers emissions. Sixty to 70 rigs in the U.S. now use liquefied natural gas, said Kirt Montague of North Dakota LNG parent company Prairie Companies. “There are bi-fuel rigs coming into North Dakota,” he said “There are more coming in all the time.” For those rigs that aren’t already bi-fuel, Williston-based ECO-AFS offers a conversion kit, which takes five days to install and doesn’t shut down production during the process. Liquefied natural gas can displace 50 percent of the diesel fuel needed on a rig. Hughes said using LNG reduces fuel costs by 20 percent compared to running just diesel. The liquefied natural gas produced by North Dakota LNG will be stored in 16,000- gallon tanks on well sites. Hughes said a rig that runs on 2,000 gallons of diesel fuel would take about 1,700 gallons of LNG per day. Embracing the use of value- added natural gas projects helps to ensure long-term viability of the Bakken and Three Forks formations, he said. The Tioga processing facility will be operational near the end of July and will produce 10,000 gallons of liquefied natural gas per day. A planned expansion of the plant will increase the capacity to 66,000 gallons by early 2015. More expansion could take place if necessary, Hughes said. The plant is near Hess Corp.’s Tioga gas plant and uses the plant’s methane for its LNG production. The company can’t put a plant on one well to reduce flaring; it needs a larger scale. What the plant does do is create a better market for natural gas, Hughes said. “The ultimate answer to reducing flaring is a use-based industry of natural gas products,” Hughes said. Chad Wocken, senior research manager for the Energy and Environmental Research Center in Grand Forks, said the LNG plant could stimulate more demand for compressed and liquefied natural gas in the Williston Basin. That may help smaller-scale companies providing compressed natural gas and liquefied natural gas on well sites, he said. “The broader distribution for fuel supply and customers willing to buy right now doesn’t really exist,” he said. Wocken said LNG, CNG and natural gas liquid capturing are the best near-term technologies for reducing flaring. Oil companies sometimes flare, or burn off, natural gas where it’s found rather than gathering it and processing it for the market. Nationwide, around 1 percent of natural gas is flared according to the U.S. Energy Department. Just 274 wells accounted for around 60 percent of all flaring of natural gas in North Dakota in December, Wocken said. In March, the latest month for which figures are available, North Dakota’s oil wells flared 33 percent of natural gas they produced. In December, North Dakota’s flaring rate matched an all-time high at 36 percent. Wocken said that while between 200 and 300 wells are responsible for the bulk of the state’s flaring every month, it’s not always the same wells producing the large amounts of gas. The amount of gas produced by a well can shift dramatically over the course of a well’s life. To make an impact on overall flaring, Wocken said, gas-capturing technology needs to be mobile so it can get to the wells that are producing the most gas. |
| Saudi gas reserves up as
Aramco taps shale to free oil 05/15/2014 WAEL MAHDI DHAHRAN, Saudi Arabia (Bloomberg) Saudi Arabia’s natural gas reserves rose last year as it explored for the fuel in the Red Sea and tapped shale gas to free more crude oil for export, according to the kingdom’s state-run oil company. Saudi reserves increased to 288 Tcf of gas last year from 285 trillion in 2012, Saudi Arabian Oil Co. said May 15 in its annual review. The company is ready to use shale gas to fuel a 1,000-megawatt plant that will feed electricity to a large phosphate mining project, the company known as Saudi Aramco said. “Saudi Arabia will be among the first countries outside North America to use shale gas for domestic power generation,” the company said. “We are actively exploring for unconventional gas resources,” which may be large in scale, it said. The shale gas drive will help the kingdom free more diesel and crude oil for export, the company said. Gas is needed because domestic demand for energy has increased to the point where oil volumes intended for export “may decline to unacceptably low levels in the coming two decades,” it said. Aramco said it is looking for unconventional gas in the northwest, the Empty Quarter desert, and near Ghawar, the world’s largest oil field. A “significant” gas field discovered in the Red Sea, called Shaur, is also “a potential game-changer in the future of the Kingdom’s energy mix,” the company said. Saudi Aramco increased gas production last year to 11 Bcf a day, compared with 10.72 billion in 2012, it said in the review. |
| TOTE: Investment in LNG-fuelled
ships 'the right thing' 'We knew we were in a unique position to create major change in the US transportation industry.' |
| Ice Stymies Ore Shipments
on Lakes in March Tuesday, May 20, 2014 CLEVELAND —Massive, thick ice formations on the Great Lakes limited iron ore shipments in March to 1.1 million tons, a decrease of 43 percent compared to a year ago. Shipments from U.S. Great Lakes ports fell even more, 52 percent. Some of the ore that was loaded in March did not reach its intended destination until well into April. Two vessels that departed Duluth/Superior at the western end of Lake Superior on March 26 did not arrive in Gary, Indiana, until April 7. Under normal circumstances, the 797-mile voyage takes about 62 hours. An iron ore cargo loaded in Escanaba, Michigan, on March 5 destined for Cleveland, Ohio, a voyage of 545 miles, was in transit for 12 days rather than the normal 50 hours. Through March, the Lakes ore trade stands at 3.5 million tons, a decrease of 33 percent. The decrease would be more, but in an effort to maintain steel production, 370,000 tons of iron ore moved in February, usually a month with no shipments. The ice on the Lakes was not the only challenge faced. The sub-zero temperatures nearly paralyzed the docks and one cargo took more than three days to load, The vessel should have been full in about 6 hours. Lake Carriers’ Association represents 17 American companies that operate 57 US-flag vessels on the Great Lakes and carry the raw materials that drive the nation’s economy: iron ore and fluxstone for the steel industry, aggregate and cement for the construction industry, coal for power generation, as well as salt, sand and grain. Collectively, these vessels can transport more than 115 million tons of cargo per year. More information is available at www.lcaships.com. Contact: Glen G. Nekvasil, Vice President (440-333-9996). |
| U.S. moves ahead on LNG
as marine fuel MAY 16, 2015 — Though, as yet, there's not one LNG fueled vessel actually operational in the U.S., the adoption of LNG as fuel by U.S. operators is proceeding at a pace that has taken many observers by surprise. Federal Maritime Commissioner William P. Doyle gave an excellent summary of what's been happening at this month's LNG as a Marine Fuel Conference in Calgary, Canada. Following is taken from the text of his prepared remarks: Liquefied Natural Gas (LNG) as a marine fuel is taking hold in the United States. The Obama Administration strongly supports LNG as a marine fuel and is investing in the utilization of the fuel on ocean going ships. The Obama Administration is also embracing LNG's potential on vessels working on the inland waterways. There is an abundant supply of natural gas in America. Natural gas has some positive environmental benefits when compared to traditional marine fuels. Considering the economics, natural gas is a more cost effective fuel source than marine residual and distillate fuels. The maritime industry is in the process of developing, converting and constructing LNG powered vessels. Bunkering for LNG vessels is an important component that is being explored and examined. U.S. Supporting LNG as a Marine Fuel Yesterday, Totem Ocean Trailer Express (TOTE) President & CEO Anthony Chiarello was honored at the White House as a 2014 transportation industry "Champion of Change." He was chosen for his role in leading the U.S. maritime industry toward natural gas as fuel. Under the Obama Administration, the United States Department of Transportation's Maritime Administration is sponsoring a $1.4 million program for two projects supporting the increased use of alternative fuels and technology in the maritime industry. The first project is a public-private partnership between the Maritime Administration and U.S.-flag carrier Horizon Lines for the conversion and monitoring of one of its vessels to operate on LNG fuel. The second project includes a study being conducted by the U.S. subsidiary of Det Norske Veritas Inc. (DNV) to analyze the issues and challenges associated with bunkering of LNG powered vessels. With respect to the inland waterways, there is an ongoing Pittsburgh Marine Corridor Natural Gas Feasibility Assessment which is examining whether realistic opportunities exist for converting inland waterways vessels from diesel to natural gas propulsion. This Assessment is being conducted through collaboration between Life Cycle Engineering, 3 Rivers Clean Energy, Marshall University Rahall Transportation Institute, and the Shearer Group, LLC. Next, the Port of Pittsburgh is funding the assessment and requirements of potential fueling sites as well as a cost benefit analysis for the conversion of vessels to LNG. According to U.S. Army Corps of Engineers, Pittsburgh is the third busiest inland port in the United States. About 34 million tons of cargo move through the Port of Pittsburg each year. Approximately 45,000 jobs are dependent upon this inland waterway transportation system. The U.S. Department of Energy and the U.S. Maritime Administration are involved in these projects along with the Pittsburgh Region Clean Cities non-profit organization, the Richard King Mellon Foundation, the Benedum Foundation, and other industry companies. The Pittsburgh Region Clean Cities is the designated regional organization for all U.S. Department of Energy Clean Cities initiatives. Clean Fuels/Clean Rivers is an initiative to build a natural gas marine corridor that includes the Pittsburgh river systems. Importantly, the private sector has expressed strong interest and there are ongoing discussions regarding a demonstration project to convert an existing towboat to LNG power. Environmental Benefits of Natural Gas The use of LNG reduces sulfur oxide (SOx) emissions by between 90% and 99%. SOx is the major contributor to acid deposition otherwise known as acid rain. This reduction in emissions brings SOx emissions within limits mandated by the Emission Control Areas designated by the IMO. Using LNG reduces nitrous oxide (NOx) emissions by approximately 90%. NOx is a major contributor to smog. Finally, LNG has a lower carbon content than traditional bunker fuels, giving off up to 25% less CO2 emissions. Under MARPOL's Annex VI, progressively more limits for NOx and SOx emissions are being placed on the global shipping industry over the next decade. Within U.S. waters, these requirements are implemented through the Act to Prevent Pollution from Ships (APPS). NOx emission limits are being imposed in a tiered approach, based on engine speed, while SOx is being limited primarily by regulating sulfur content in fuel. Economic Benefits of LNG as a Marine Fuel Based on the current forecasts, natural gas delivered for production of LNG in the U.S. is now more than 50% less expensive on an energy equivalent basis than marine residual fuel and marine distillate fuel. It is projected that this relative price advantage will continue, and even increase, through 2035. This has opened up an opportunity for significant annual fuel cost savings when converting marine vessels that use petroleum fuel to natural gas operation. About 70% of domestic shipping relies on distillate fuel oil and the remaining 30% relies on residual fuel oil. By contrast, over 90% of international shipping is fueled by residual fuel oil. In comparison to distillate fuel, residual fuel is much more viscous – and is essentially a solid at room temperature. Residual fuel must be heated to keep it in liquid form for transport and storage as a marine fuel. Residual fuel also has significantly higher sulfur content than distillate fuel – 1% sulfur or more – and much higher heavy metal content. Residual fuel is less expensive than distillate fuel. Examples of Projects in the United States Moving Forward on LNG as a Marine Fuel In February, General Dynamics NASSCO shipyard
in San Diego, California held a ceremony marking the first cut of steel
for the construction of TOTE's new Marlin Class container ship. It is
expected to be the first LNG-powered containership in the world. TOTE
expects to build two of these LNG powered vessels and homeport them in
Jacksonville, Florida and operate them in the U.S. mainland to Puerto
Rico trade. The new Marlin Class vessels will create a reduction of sulfur
dioxide (SOx) emissions by 98 percent, particulate matter (PM) by 99 percent,
nitrous oxide (NOx) and carbon dioxide (CO2) by 71 percent over TOTE's ships
currently operating in Puerto Rico.
TOTE intends to strategically locate LNG fueling stations that will be an integral part of its operations. To this end, in February, TOTE announced an agreement with Pivotal LNG and WesPac Midstream to provide LNG to the ships by developing a new LNG fueling facility in Jacksonville, Fla. TOTE is also currently in the process of converting its two 839-foot, MAN-powered Orca-class Ro/Ro vessels to mostly LNG operation. These vessels operate in the Tacoma, Washington to Anchorage, Alaska trade. In 2012, the U.S. Coast Guard granted TOTE the waiver it needs to convert the vessels while they remain in service. TOTE said that its conversion program is the product of a public-private partnership among TOTE, the U.S. Environmental Protection Agency, and the U.S. Coast Guard. TOTE has selected Wärtsilä to supply the main engines, generators and integrated LNG storage and fuel gas handling systems for the conversion project. In November 2013, Crowley announced it had executed agreements with shipbuilder VT Halter Marine Inc., of Pascagoula, Miss., to build two of the world's first LNG-powered combination container – Roll-On/Roll-Off (ConRo) ships. The ships will operate in the United States mainland to Puerto Rico trade. The vessel design is the work product of Wärtsilä Ship Design in conjunction with Crowley subsidiary Jensen Maritime, a Seattle-based naval architecture and marine engineering firm. Additionally, in September 2013, Aker Philadelphia Shipyard and Crowley announced a partnership to build up to eight (8) tankers. Citing the monumental shale related activity in the United States, the parties are securing their respective positions due to the increased demand for U.S.-built tankers. These tankers are designed to allow the ships to convert to LNG power. In November 2013, Aker Philadelphia Shipyard announced it had been selected by Matson Navigation Company (Matson) to construct two 3,600 TEU containerships. The containerships will be utilized in Matson's service from the U.S. West Coast to Hawaii. The vessels will be built with dual fuel engines and will be ready for conversion to LNG propulsion. General Dynamics NASSCO shipyard currently has contracts and options to construct seven (7) LNG conversion ready U.S.-Flag tankers. NASSCO has agreements with Seabulk Tankers and American Petroleum Tankers (now Kinder Morgan Tankers). At the beginning of 2014, Zeus Development
Corporation identified approximately 42 vessels in North America
under development or evaluation for conversion to LNG fuel. LNG Bunkering in North America: LNG powered ships will need to refuel. In February, the U.S. Coast Guard issued a notice seeking public comment on two draft policy letters regarding safety measures for LNG as a marine fuel. The first draft policy letter provides voluntary guidance for LNG fuel transfer operations on vessels using natural gas as a fuel and for the training of personnel. The second draft policy letter discusses voluntary guidance and existing regulations applicable to vessels and land based facilities conducting LNG marine fuel bunkering operations, and provides voluntary guidance on safety, security, and risk assessment measures for these operations. In March, the American Bureau of Shipping (ABS) released a report entitled Bunkering of Liquefied Natural Gas-Fueled Marine Vessels in North America. The objective of the report is to provide guidance to potential owners and operators of gas-fueled vessels, as well as LNG bunkering vessels and facilities, to help them obtain regulatory approval for projects. Last month, the West Coast Marine LNG Joint Industry Project Steering Committee in Canada issued a report stating that Vancouver is positioned to be North America's preferred LNG bunkering destination. In February, Harvey Gulf International Marine broke ground for its $25 million LNG fueling facility at Port Fourchon, La. In January, Gulf Coast Shipyard Group (GCSG) launched the first of six Harvey Gulf International Marine Dual Fuel (LNG) Offshore Supply Vessels. Last year, Texas-based Waller Marine announced it would build a small-scale LNG facility at the Port of Greater Baton Rouge, Louisiana, to fuel vessels. I hope that I have presented you with some meaningful insight on LNG marine fuel projects and developments. This sector is new but growing-- and there appears to be many opportunities available for those looking to operate LNG fueled vessels and/or enter into the LNG bunkering and fueling sectors. |
| Colorado Approves New
Clean Trucks Bill May 15, 2014 zeusintel.com The Bill provides both sales tax exemptions and tax credits for purchasers of trucks using alternative fuels. Colorado Bill HB-14-1326 has received final approval from state lawmakers, Trucking Info reported May 5. The so-called “Clean Trucks Bill” provides sales tax exemptions and tax credits for trucks over 10,001 pounds (Class 3) using LNG, CNG, propane, electricity, and hydrogen. In terms of tax credits, the bill provides a credit ranging from US$7,500 to US$20,000 per vehicle depending on size. It also includes a tax credit of 25 percent of the cost (up to US$6,000) for any EPA certified SmartWay technologies for aerodynamics and idle reduction. Finally, the bill also includes a state sales tax exemption on vehicles meeting the bill’s criteria. |
| Chart Launches New Compact
LNG Fuel Tank May 15, 2014 zeusintel.com Tank length will be reduced by roughly 5 percent with the new offering. Chart Industries has unveiled a new, more compact LNG fuel tank system for heavy-duty trucks, Heavy Duty Trucking reported May 7. The new tank system reduced overall length by 4.5 percent for the 2015 model year, while retaining internal capacity. In addition to being more compact, the tanks are also expected to be slightly cheaper as well. |
| Mining-Focused Educational
Opportunities Expand in Northern Minnesota info@twin-metals.com Tuesday, May 13, 2014 Minnesota students interested in pursuing a career in mining or mining-related fields now have more high quality education opportunities to choose from. Last month, the Mesabi Range College in Virginia dedicated its newest building, the “Tom Rukavina Engineering Center,” named after the former Iron Range legislator who was a strong advocate for higher education, and was instrumental in securing additional annual funding from taconite taxes to be used for rebuilding and improving Iron Range schools. The new building will be used as part of the Iron Range Engineering education model which began in January 2010. The program utilizes a project-based teaching method where students get hands-on real industry experience in their third and fourth years of their engineering education. The program is a collaborative effort between the Itasca Community College and Minnesota State University. In addition, the University of Minnesota Duluth (UMD) recently announced their forthcoming Mineral Resources Center (MRC), their new educational program. The MRC is being created to help meet the growing demand for skilled mining workers in the state. The MRC will provide students with a full understanding of the mining cycle, no matter which area they specialize in. Students will be trained in exploration, processing, reclamation and other core mining disciplines so that they graduate with a holistic understanding of mining. UMD has been planning the new center for five years and it will open within the next year or two. With a variety of proposed mining projects in northern Minnesota, the demand for well-paying mining jobs will increase. Twin Metals’ proposed underground copper-nickel mining project alone is estimated to create thousands of direct and spin-off jobs once it becomes operational. These education programs are essential to creating the future workforce necessary for the many mining-related jobs that will become available in the coming years. |
| Development of LNG carriers and
Ice Breakers akerarctic.fi/passion_4.pdf In the FEED AARC has been working directly with Yamal LNG in further development and optimisation of the LNG carriers for the challenging Arctic route from Sabetta in the Ob Bay over the Kara Sea to the markets. First a generic 200.000 m³ vessel was created and model tested. The first iteration showed that the size of the first option had to be modified and in July the tests verified the good performance and capabilities of the upgraded 170.000 m³ vessel concept, powered by the newly developed Aker Arctic Hybrid DAS™ propulsion solution with one large centre propeller and twin azimuthing pulling thrusters. This will give the vessels a performance securing independent operation with a minimum 5 knots scheduled speed. AARC now continues with adaptation of LNG driven machinery for ice operation together with Wärtsilä and ABB, creating practices and equipment for the ice management in the terminal area, performing the conceptual development of the LNG fuelled channel management and terminal icebreakers and assisting Yamal LNG in preparations for the forthcoming shipbuilding and ship operation international tenders. Tendering phase will take place later. Aker Arctic participates in the design of the Canadian Coast Guard's new polar icebreaker. The Honourable Jame sMoore, Minister of Canadian Heritage, Official Languages and Regional Minister for British Columbia announced on behalf of Minister of Fisheries and Oceans, and Minister of Public Works and Government Services and Minister for Status of Women an important step forward for Canada's Northern Strategy: selection of the designers for the Canadian Coast Guard's future Flagship, the Polar Icebreaker, commitment to support jobs and growth, and we look forward to seeing the, designed and built in CCGS John G. Diefenbaker. The new vessel will replace the CCGS Louis S St-Laurent as the CCG Flagship. The polar icebreaker will be designed to accommodate 100 personnel with space for 25 additional people and have the ability to break through 2.5 meters of ice at 3 knots. STX CanadaMarine will be supported in the Polar Icebreaker Design project by a team of highly experienced partners including Aker Arctic Technology (AARC), SNC-Lavalin, INDAL Technologies and Noise Control Engineering. Aker Arctic will provide their world leading icebreaker design and construction expertise to the project. Aker Arctic's main roles will be assessment of the ice loads, development of the hull form and structure, propulsion conceptual design and descriptions on winterization principles. |
| Wyoming and industry on
LNG mining and railroads May 12, 2014 CHEYENNE, Wyo. (AP) Wyoming could benefit from private development of a liquefied natural gas production and distribution system to supply mining operations, railroads and other heavy industrial users, according to a new report. Gov. Matt Mead on Monday released the report commissioned by the state and a number of private energy companies. It states that investing up to $400 million to develop a liquefied natural gas system primarily serving the state's coal-producing Powder River Basin region could result in $166 million annual fuel savings versus continued use of diesel fuel. The report states industrial users including on-road semitrailers are now burning over 630 million gallons a year of diesel in Wyoming. Mead announced the report in a news conference at the state Capitol in Cheyenne. He said it fits into his administration's development of a state energy policy. Wyoming is the nation's leading coal-producing state and also a top producer of natural gas and other resources. "It's a great opportunity for coal companies to lower their costs and also use a product that we have in abundance in Wyoming," Mead said. The investment would create thousands of high-paying jobs in Wyoming, Mead said. "We recognize also, that in doing this — finding high-horsepower applications for LNG — we can create another sector for the energy sector that builds new jobs, builds manufacturing, maintenance," Mead said. Richard H. Oates, vice president of the Wyoming Machinery Company, which sells Caterpillar heavy equipment, said liquefied natural gas offers a chance for customers who currently use diesel a chance to reduce their ownership costs. "Abundant domestically produced natural gas offers lower fuel costs and reduced emissions," Oates said. "Today, there are proven technologies available for using natural gas and liquefied natural gas to burn in engines." Work is underway to develop ways to retrofit existing diesel engines in machinery such as heavy haul trucks at coal mines and locomotives with new technology that would allow them to burn either a blend of diesel and liquefied natural gas or pure liquefied natural gas, Oates said. Renny MacKay, spokesman for Mead, said the state worked with a dozen private companies, including Encana and Anadarko Petroleum, on the study. |
| Natural Gas workshops return
across Canada DAILY NEWS May 12, 2014 By: solidwastemag.com Staff GO WITH NATURAL GAS Information Hubs are returning in June 2014. Originally launched in November 2014 to deliver fact-based information, education materials, access to resources, and fleet workshops across the country, the Hubs are back again. The Hubs are jointly financed by the government of Canada ecoENERGY for Alternative Fuels Program and by the Canadian Natural Gas Vehicle Alliance and provide a single point of contact for fleets. The next workshop will take place in Moncton, New Brunswick on June 11, 2014. There will be nine additional workshops: two workshops will take place in Ontario in the fall, one in Hamilton and another in Oshawa. On those occasions, the theme and agenda will revolve around understanding the economics of natural gas vehicles. The workshops look at why to use natural gas instead of diesel, how natural gas engine technologies have improved, what are the engines available today and coming to the market soon, what are the requirements for fuel storage, what the refueling options are and what the economic and environmental benefits of switching to natural gas are, among several others. The Hubs provide information and connects fleet managers with their peers who are already using natural gas vehicles to offer real world experiences and lessons learned. For additional information, the Hubs can be reached by phone at a unique number (1-844-242-8485) or by email at easternNGVhub@marcon.qc.ca, westernNGVhub@marcon.qc.ca or at carrefourVGN@marcon.qc.ca . |
| Containerships Oy opts
for LNG for two newbuilds May 13, 2014 Finland's Containerships Ltd Oy and Germany's GNS Shipping/Nordic Hamburg, and Arkon Shipping say they have ordered two LNG burning dual-fuel containerships with options for two more. Containerships Ltd Oy will be chartering the ships over the long term, the owner and technical manager will be GNS Shipping/Nordic Hamburg, while Arkon will be the commercial manager and the charter broker. The 170m, 1,368 TEU ships, both of which will be delivered in the course of 2016, will use liquefied natural gas (LNG) as their primary fuel and will also be able to burn conventional marine diesel oil/heavy fuel. |
| Dual-Fuel Vessels Ordered
for Short Sea Shipping May 12, 2014 shipandbunker.com The vessels will operate on Containerships' Baltic and North Sea routes Two dual-fuel containerships will begin serving European short-sea routes in 2016, according to Containerships Ltd Oy (Containerships), GNS Shipping/Nordic Hamburg (GNS), and Arkon Shipping. The ships will be capable of running on either liquefied natural gas (LNG) or heavy fuel oil (HFO). The 45-foot vessels, which will operate in the North and Baltic Seas, will have a total capacity of 1,400 twenty-foot equivalent units (TEUs) with room for up to 300 refrigerated units (reefers). The ships' generators, as well as its engines, will use the dual-fuel technology, providing environmentally friendly power for the reefers and other electrical uses. GNS will be the ships' owner and technical manager, while containerships will charter the ships for the long term, and Akron will be the commercial manager and charter broker. "Every crisis creates opportunities," said Ole Gabs of Arkon Shipping. Energy-efficient, eco-friendly ships are the future of shipping Ole Gabs, Arkon Shipping "Today, after 100 years of using IFO fuel as the main product for running ship engines, and with the upcoming introduction of new SECA regulations, we are facing a paradigm shift. "Energy-efficient, eco-friendly ships are the future of shipping." With the delivery of the ships, Containerships says, it will be the first short-sea operator in Europe to run ships on LNG. While most operators in the European SECA plan to switch fuels to marine gas oil (MGO), at least in the short run, Containerships said its strategy is to "stay ahead of the curve when it comes to environmental regulations, and to be a pioneer in eco-friendly shipping while continuing to offer its customers the best value for money." In addition to essentially eliminating sulfur dioxide (SOx) and particulate matter (PM) emissions, the companies said, using LNG will cut carbon dioxide (CO2) emissions by 25 percent. Aside from using MGO or LNG, some European ship owners are choosing to install emissions scrubbers, a route Finnlines has just announced it is taking. |
| Chart agreement to provide
LNG fuel station equipment in China 12 May 2014 07:24 Chart Industries announced today that its Distribution & Storage Asia business has entered into a strategic supply agreement to provide Shandong Hanas New Energy Co. Ltd. equipment for 50 permanent liquefied natural gas fuel stations, including installation and commissioning of this equipment, over the next 30 months. Chart noted they will be the exclusive supplier of permanent LNG fuel stations to Hanas during the agreement period, and expects one-third of the total number of stations will be ordered in 2014. Nanjing Xinye, a Chart company in China, will provide the fuel station dispensers incorporating Chart's latest proprietary flow metering technology. "The total value of this supply agreement could exceed $35 million and it continues the LNG equipment success we have had in China. We recently received $7 million in orders related to this agreement. Chart shares Hanas' commitment to promote energy transformation and provide diversified solutions for new energy development in China, including LNG build-out. We are pleased that Hanas has chosen Chart D&S Asia in recognition of our commitment to quality, safety, and product capabilities," stated Tom Carey, President of Chart's D&S Group. |
| TruStar Energy adding CNG fueling
capacity for two fleets May 12, 2014 http://fleetowner.com Two fleets are expanding their compressed natural gas fueling capacity thanks to TruStar Energy, a designer and builder of CNG fueling infrastructure. TruStar, which initially built stations for both Cincinnati-based Rumpke Consolidated Companies and Lewiston, NY-based Modern Disposal Services, will add additional capacity at each location to meet growing CNG needs, it said. “It’s proof positive that CNG continues to gain in acceptance with fleets – and the value proposition is real,” said TruStar Energy vice president Scott Edelbach. “Both Rumpke and Modern were early adopters of CNG – and as savvy fleet owners – they understand the dynamics of the fuel and the savings associated with domestic natural gas.” Rumpke is adding fueling posts for an additional 28 trucks and Modern Disposal is adding a third 250 hp. compressor and fueling posts to fuel an additional 20 new garbage trucks. At full build out, Modern will have 90 CNG garbage trucks while Rumpke will have several hundred. “Converting from diesel to CNG is a game changer for enhancing the profitability of transportation operations,” said TruStar Energy President Adam Comora. “Significant fuel savings create added value for fleet operators and their partners. Natural gas is better for the environment, better for domestic energy independence and better for the bottom line – truly a win-win-win solution.” |
| Omnitek’s diesel-to-NG engine
pilot program May 12, 2014 May 12, 2014 http://fleetowner.com The city of Little Rock, AR, has selected Omnitek’s diesel-to-natural gas engine for use in a pilot program to establish the economic and environmental benefits of the powerplant. “Arkansas is committed to supporting technologies that reduce environmental pollution and utilize inexpensive natural gas, and we are gratified to have been selected. This project is an opportunity to further showcase and demonstrate the economical and effective utilization of the company's diesel-to-natural gas engine conversion technology. We look forward to working with the city of Little Rock and associated state officials,” said Werner Funk, president and CEO of Omnitek Engineering Corp. Funk noted that the converted natural gas trucks will utilize Little Rock's new CNG fueling station resulting in an estimated savings to the city of $2.50-$3.00 per gallon equivalent compared with the retail price of diesel fuel. “Our partnership with Glover’s Truck, a highly respected full-service truck center and newest Omnitek Authorized Installation Center (AIC), played a critical role in our selection. Glover’s will provide numerous additional opportunities to leverage the organization's broad truck engine experience as more fleets transition to natural gas. We appreciate the responsiveness and commitment of the Glover’s Truck team and look forward to a successful program,” Funk said. |
| Natural gas on the road What
comes first—the trucks or the fuel stations May 12, 2014 David Cullen http://fleetowner.com It’s clear as a cloudless blue sky that the prospects are excellent for natural gas—in its compressed (CNG) and liquefied (LNG) forms—to blossom into trucking’s ultimate alternative vehicle fuel for the foreseeable future. What’s not so obvious right now for over-the-road fleets is exactly how they can go green while saving greenbacks if they can’t find CNG or LNG fuel stations where their trucks must roll. At present, there seems to be a classic chicken-or-egg scenario in place. Not surprisingly, fleets are unwilling to invest in natural gas-fueled trucks to run routes lacking fuel stations. On the other hand, why would fuel infrastructure tailored to commercial vehicles be built where no such trucks are rolling on nearby roads? The answer to this seeming paradox, say experts in the field, is deceptively simple: A fleet that wants the benefits of switching to CNG or LNG should investigate the requisite trucks and the necessary access to fueling at the same time. “A common carrier can operate point to point on natural gas, but not easily just yet,” is how Erik Neandross, CEO of Gladstein, Neandross & Associates (GNA), a clean-transportation consultancy, views the present reality. “Running on natural gas is really most feasible for fleets operating dedicated routes,” he continues. “Yet there still must be thought and considerable planning put into it right now.” In the long run, Neandross expects fueling infrastructure to “grow organically, especially in states that provide incentives to the industry. The infrastructure will expand geographically as more fleets realize how they can save money with natural gas and that have customers interested in seeing them switch” to what’s regarded as a greener fuel. “The infrastructure itself,” he points out, “will be built by fuel suppliers that recognize fleets are running in a given market—or the fleets will build it themselves.” As for fleets opting to set up fuel stations, Neandross advises that a trucking company that becomes the “anchor fleet”—the one that elects to have one or more fuel stations built for it at its terminals or at roadside sites it controls—will “get the best price from the supplier on the fuel dispensed” vs. the subsequent fleets that elect to fuel up at those stations that offer public access. “That is the model that will drive the expansion of the fuel infrastructure for natural gas trucks,” he adds. “Ultimately, it will be the long-haul fleets that will make the widespread availability of CNG and LNG on the road happen.” Offering a fleet perspective, Scott Perry, Ryder System’s vice president of supply management, reasons that “if the question is can it be done, then, yes, it can be done. But it now requires quite a bit of planning to run long routes on natural gas.” On the other hand, he allows that “the network is becoming more efficient every month with each new station that opens. The CNG infrastructure is more mature, but there is quite a bit of LNG infrastructure that is being put into place and is ‘ready to open’ as the demand for it grows.” Perry regards fuel infrastructure as “an area of opportunity as there’s a misconception that there are more than 1,300 active natural gas fuel stations that will support heavy commercial vehicles. “The reality,” he elaborates, “is that there are likely less than 300 stations that are truly capable of accommodating a combination tractor-trailer and delivering natural gas at a pressure and volume required by today’s modern fuel-storage systems. “The stations must also be able to dispense through a system that’s capable of accepting a fleet fuel card—as that allows for the capture of all of the elements of the transaction (unit number, odometer, gallons, and total transaction value) required to support the integrated back-office systems that have been integrated into fleet operations across the industry,” Perry adds. Challenges While he says many of the most recent station builds have taken these needs into consideration—and they’re a given at truckstops dispensing natural gas—“most of the older, existing stations are often challenged to meet all of these critical requirements to make the overall refueling process as efficient as possible.” “There are examples of companies that have taken natural gas tractors across the country,” says Drew Cullen, vice president of fuels & environmental affairs for Penske Truck Leasing. “But the number of open and operating fueling stations on a route, out-of-route miles needed to obtain fuel, and distances between fueling stations can make the effort challenging.” Cullen forecasts that the fueling infrastructure will “grow proportional to the adoption of natural gas vehicles by fleets.” What’s more, he says what fleets decide about CNG and LNG will be “driven primarily by the economic and environmental benefits natural gas vehicles provide along with operational considerations (e.g., range, weight, etc.). “The infrastructure improvements will continue,” he adds, “as long as the price difference between diesel fuel and natural gas is sufficient to provide enough savings to overcome the incremental costs of the vehicles for fleets.” Clean Energy Fuels, which operates CNG and LNG fuel stations, “and other natural gas fuel providers have together made it possible for heavy-duty truck fleets to travel virtually every major corridor across the country,” states public relations manager Patric Rayburn. “Eighty-five percent of over-the-road trucking takes place over such regional corridors and our network is fueling many of those trucks today.” Rayburn points out that Clean Energy “partnered with Pilot Flying J, the largest truckstop operator in the country, to co-locate our natural gas fueling stations at their existing truckstops to make the transition to natural gas as convenient as possible for truckers.” And he says there is ample evidence that, with forethought and planning, fleets can run cross-country on either CNG or LNG. “For example,” Rayburn relates, “our long-time customer Saddle Creek Logistics Services recently ran on CNG from Florida to California and back, making deliveries for Procter & Gamble and Lowe’s along the way. The truck had no issue finding stations along the routes.” Rayburn also notes that another fleet customer, El Paso-based EJ Madison, is now fueling its LNG-powered tractors for coast-to-coast runs via Clean Energy stations. “We solved the chicken/egg conundrum by building a nationwide network and by helping our customers at the various stages of their natural gas transition—from truck orders to deployment to fueling,” he remarks. “The infrastructure is in place and will be expanded as demand increases,” adds Rayburn. “Our approach is to listen to our customers and provide the fueling solution that best meets their fleet needs, whether that’s CNG or LNG.” Developing pattern Bill Zobel, vice president of market development & strategy for Trillium CNG, characterizes the current status of over-the-road fueling infrastructure as “an ongoing question—and not one that will be answered soon. Right now, there are 110,000 fueling stations out there, but less than 1% is equipped for CNG or LNG. “On the other hand,” he continues, “an uptick in activity has occurred in the last year or so. Market projections we’ve seen indicate that some 200 natural gas stations aimed at over-the-road operators will be installed this year and from 200 to 400 will be built in subsequent years. Most of these will be for CNG, with LNG accounting for a fraction.” What Zobel describes as “the developing pattern” finds the fueling market moving beyond serving domiciled fleets, which are centrally fueled, to providing access to natural gas on or near major highways for longer-haul operations. He says Trillium will either build fuel stations for fleets to own or will contract with fleets to build ones that Trillium will own. In either case, the stations are located at sites selected by the fleets. In the latter case, notes Zobel, the contracts fleets ink with Trillium will give them “a great price on the fuel as well as fuel discounts offered nationally wherever our [public] stations are.” As for dealing with that chicken and egg, Zobel advises that fleet owners “consider taking an integrated approach as it won’t be a one-stop-shopping process. They will need to look into the vehicles and, at the same time, analyze what fueling infrastructure they will need, including whether they will access public sites or have stations installed for them. “Fleets should be aware that a lot of the fuel stations now being built are designed to address the Class 8 over-the-road market,” he continues. “These stations can accommodate tractor-trailers in several lanes, accept fuel cards for payment, and have equipment that can fuel at the fast rate of 10-plus gal./min.” “Think about this,” says Michael Hosfeld, Midwest sales director for TruStar Energy, which specializes in CNG fueling equipment, “in 2007, virtually no regional or long-haul operation of CNG-powered tractors was feasible. But, today, regional hauling is extremely feasible in many markets.” Hosfeld sees CNG “continuing to grow as the primary alternative fuel choice nationwide. In markets where no pipeline gas is available, LCNG [liquefied compressed natural gas] will likely be the favored option over LNG.” As to why CNG will dominate, Hosfeld maintains that “the natural gas supply for CNG is an open and competitive market regionally and nationally. LNG is far more monopolized, has processing cost, the cryogenic factor, expense of transport, added equipment and infrastructure, and specialized handling resulting in a considerably less green footprint.” He says those factors will keep CNG “30% to 50% cheaper per gallon for the foreseeable future. At expos, regional shows and in discussions with major fleets nationwide, [we have found] very few are focused on LNG as their primary choice of natural gas fuel. “Trucks designed to run on CNG are already fueling nationwide at stations using pipeline gas for about $2/gal.,” he continues. “In remote locations liquid gas will be dispensed. Like LNG, LCNG cost 60¢ to $1 more in these remote locations. Fleets will do all they can to purchase CNG at $2 from stations tethered to the pipeline. However, when they have no alternative, they will use LCNG and pay $2.60 to $3/gal. That is still significantly better than $4/gal. diesel.” Partnering Growth in public-access fuel stations—at a rate of a “few hundred locations a year”—will be pushed by “a multifaceted approach,” predicts Hosfeld. “Stations will be built through partnerships with fleets as well as by traditional retailers [such as at truckstops] along with ones put up by private fleets and public entities.” As one example of how the infrastructure will be built out, he points to the partnership CNG station TruStar is currently building in Ft. Myers, FL, that will be open to the public. “Our anchor partner is J.J. Taylor, a major beverage distributor in the Florida and Minnesota markets,” he explains. “Their CNG trucks will fuel at this station. They agree to use the station and we capitalize, design, build, own and operate the station. The bonus is the station will be open to the public. Everyone will benefit from a station that would not have been built otherwise. “Our approach to the market is to partner with fleets willing to purchase their CNG fuel from us,” says Bill Renz, general manager of Gain Clean Fuels. “For our part, we put in turnkey stations that we own, operate and maintain to fuel their trucks,” he continues. “A fleet will typically sign a 10-year agreement with Gain to purchase a minimum amount of CNG fuel from us at our stations. Each fleet that signs with us shares in the profitability at the site, as each one we build is open to the public as well.” The Gain-built stations are located at sites offering easy on/off Interstate access and are designed to accommodate tractors with 55-ft. trailers. They are open 24/7/365 and accept national fleet cards for payment. Renz relates that the firm has inked such deals with several over-the-road fleets that he cannot name at this point. “One fleet is starting out with five locations and is planning to add five after that to map out the fueling infrastructure for the route network they run.” GNA’s Neandross advises that there are various highway corridors along which CNG and/or LNG fuel stations are being developed at fairly steady paces. These include I-15 from Los Angeles to Salt Lake City for both CNG and LNG, in part because of UPS natural gas trucks running that stretch; I-5, particularly in California; and I-75 from Chicago to Florida. In addition, he regards the I-40/I-10 corridor from Southern California into Texas as “perhaps the next to develop” and notes that corridors in the “Texas Triangle” will see “infrastructure come together nicely this year resulting in thousands of trucks being deployed.” Along the way According to TruStar’s Hosfeld, CNG infrastructure is already well represented in many markets. “These include the...entire states of Wisconsin, Minnesota and Iowa as well as in the Chicago, Pittsburgh, and Akron and Columbus, OH, areas,” he relates. “There are also numerous locations in Georgia and Florida as well as in Salt Lake City, Oklahoma City, Kansas City, and Omaha and Lincoln, NE, among others. These markets all have large public access stations,” he continues. “It is not yet feasible to efficiently travel nationwide [on CNG] as there remain many station gaps to be filled.” Trillium’s Zobel says the most robust CNG infrastructure for Class 8 trucks currently can be found in the upper Midwest and Texas, followed by the Southeast as well as the lower Midwest to the West Coast and also on the Los Angeles/Salt Lake City run. “Currently,” he adds, “we operate 65 CNG stations. Of those, 35 provide public access to fueling and the other 30 are private ‘behind-the-fence’ stations. And we have another 26 locations under contract. Our stations can be found around the country.” Gain’s Renz says that the supplier aims to be active in the CNG fueling market through fuel stations located along major highways near such key cities as Chicago, Indianapolis, Gary (IN), Des Moines, Columbus (OH), Dallas, St. Louis and Denver. “In the field, we have nine business-development managers to cover the entire country, as our mission is to create a nationwide CNG network for truck fleets to access,” he points out. “We have nine sites in place so far and plan to build another 30 sites over the next year,” Reinz adds. “And each of these will be guaranteed to be operating for at least 10 years [via the contracts the firm signs with anchor fleets].” “Companies that build and operate natural gas fueling infrastructure need a sufficient volume commitment to justify their investment,” observes Penske’s Cullen. He says that “fleets looking to adopt natural gas vehicles need to be convinced that the economic, environmental, and operational benefits are sufficient to replace their current fleet with natural gas vehicles. In order for an accelerated adoption of natural gas vehicles to take place, both the fueling infrastructure companies and the fleets must work together to ensure these benefits will be realized. “And fleets that have done sufficient analysis to ensure they will realize the economic and environmental benefits of natural gas vehicles must work with companies building the fueling infrastructure to ensure sufficient coverage along highway corridors,” Cullen continues. He adds that ideally both the trucking and fueling infrastructure should be in place at the same time “to ensure the economic benefits are being maximized for both parties.” “We haven’t seen a shortage of players willing to invest in the fueling infrastructure, but they do want to make sure that they are planting this infrastructure in markets and corridors that will have the greatest possible potential for generating throughput,” says Ryder’s Perry. “Most station developers are looking for an anchor fleet or fleets to help consume some portion of the initial capacity. “The best way for the market to grow as efficiently as possible is for the parties—fleets and fuel infrastructure providers—to meet and talk realistically about needs and expectations for the long term, meaning their needs over the next 48 to 72 months as their fleets grow,” he advises. Perry contends that “giving station providers a much better understanding of the demands of the market allows them to properly size stations on the front end of the equation, as opposed to finding out their station is ‘tapped out’ 12 months after it was commissioned. Compression capacity is not infinite.” As to whether the long-haul trend will ultimately swing heaviest in favor of CNG or LNG, Trillium’s Zobel contends that “it’s anybody’s guess which will ultimately pull head.” However, he does suggest glancing in the rearview mirror at what happened with transit buses and refuse trucks, whose owners first went with LNG due to its appeal as a liquid fuel. “When the engine and other technology evolved, those bus and truck operators switched to CNG because it is more efficient, easier to fuel with, and its supply line is simpler,” says Zobel. “Over time, I expect over-the-road trucking will move to CNG as well.” |
| TruStar Energy CNG fueling
for two fleets May 12, 2014 Fleet Owner Two fleets are expanding their compressed natural gas fueling capacity thanks to TruStar Energy, a designer and builder of CNG fueling infrastructure. TruStar, which initially built stations for both Cincinnati-based Rumpke Consolidated Companies and Lewiston, NY-based Modern Disposal Services, will add additional capacity at each location to meet growing CNG needs, it said. “It’s proof positive that CNG continues to gain in acceptance with fleets – and the value proposition is real,” said TruStar Energy vice president Scott Edelbach. “Both Rumpke and Modern were early adopters of CNG – and as savvy fleet owners – they understand the dynamics of the fuel and the savings associated with domestic natural gas.” Rumpke is adding fueling posts for an additional 28 trucks and Modern Disposal is adding a third 250 hp. compressor and fueling posts to fuel an additional 20 new garbage trucks. At full build out, Modern will have 90 CNG garbage trucks while Rumpke will have several hundred. “Converting from diesel to CNG is a game changer for enhancing the profitability of transportation operations,” said TruStar Energy President Adam Comora. “Significant fuel savings create added value for fleet operators and their partners. Natural gas is better for the environment, better for domestic energy independence and better for the bottom line – truly a win-win-win solution.” |
|
Kenan Group Transports LNG
for Shell 06 May 2014
06 May 2014 http://www.lngglobal.com The Kenan Advantage Group’s Merchant Gas Group announced that its subsidiary, Jack B. Kelley, has completed a transportation agreement with Shell to deliver liquefied natural gas to its LNG fuelling lanes in the U.S. Kenan Advantage Group is North America’s largest tank truck transporter and logistics provider. The company specializes in the logistics and transportation of fuels, chemicals and merchant gases. Subsidiaries in its Merchant Gas Group include Jack B. Kelley and Cryogenic Transportation – making it the largest transporter of gases in the U.S. Gases transported include LNG, CNG, nitrogen, hydrogen, oxygen, helium, etc. Their combined fleet includes more than 500 power units and 40 LNG trailers. Mark Davis, President of Jack B. Kelley, said, "This is a tremendous opportunity for us to provide additional services to our longtime and valued customer. KAG has had a successful business relationship with Shell for more than 30 years. We intend to fully utilize our North American footprint, experienced drivers and specialized equipment to support Shell in this exciting new venture.” The Kenan Advantage Group operates through its five groups consisting of the Fuels Delivery Group, Specialty Products Group, Merchant Gas Group, Logistics Group and KAG Canada Group. KAG’s fleet consists of approximately 6,200 power units and 9,700 trailers. KAG also provides specialized supply chain logistics services through KAG Logistics. |
| Upending the U.S. Energy Sector As the shale-gas boom enters its second decade, can the growth be sustained? http://news.morningstar.com May 10, 2014 Basili Alukos, CPA, CFA, is a credit analyst with Morningstar. In the 1990s, developing a way to economically
extract shale gas in the United States was but a pet science project
of a few geologists, engineers, and one visionary. Shale gas was very
difficult to obtain and expensive to get, after all. It's in low permeability
rock formations deep underground. Gas and oil molecules have a very hard
time traveling through the rock into the wellbore. But when Texas oilman
George Mitchell and company figured out how to combine two old technologies--horizontal
drilling and hydraulic fracturing--the key to shale gas was unlocked.
They ignited a shale-gas boom that has transformed the industry in the
United States.
To understand how shale gas is affecting the U.S. energy sector, I sat down with Morningstar energy analysts Jason Stevens, David McColl, and Mark Hanson. Our discussion took place Feb. 11 and has been edited for clarity and length. Basili Alukos: Take us through the past decade and the changes the shale-gas industry has experienced. Jason Stevens: Shale gas has upended everyone's expectations. Ten years ago, the industry was racing to build as many liquefied natural gas (LNG) import terminals as possible, because we feared that conventional gas in the United States was in terminal decline. It was dropping off by close to 3% a year, and gas from the Gulf of Mexico was not ramping up at the rate everyone expected. We were plugging much of the gap with imports from Canada, but that had begun to flatten out as well. Folks were looking at demand growth of 2% a year and seeing a huge supply gap. The thinking was that we're going to need to import lots of gas from overseas, which by the way is difficult and expensive to do. But then came George Mitchell, the father of fracking, who owned a firm called Chief Oil & Gas. The company was experimenting in a formation called the Barnett Shale basin near Dallas-Ft. Worth. They finally "cracked the code" by combining hydraulic fracturing, which uses water pressure to crack open the rock formation to allow gas molecules to flow from the rock strata into the wellbore, with horizontal drilling. To illustrate why this technology has had such a huge impact, let's look at an example. Say a rock strata is 200 feet thick. If you have a wellbore dropping through it vertically, you have 200 feet of what we call "net pay of contact" with that formation. But if you can turn the drill bit and go horizontally through that 200 foot strata and run that for a mile, then all of a sudden instead of 200 feet you have 5,280 feet of contact with the reservoir rock. So, by turning the drill bit and drilling a horizontal well and then fracking the whole length, you tremendously increase the volume fed by a well. As soon as the shale-gas code was cracked,
exploration and production companies (E&Ps) began re-evaluating
all of the productive regions in the United States. Capital flowed to
exploration programs, and in short order, the Haynesville Shale in
Louisiana, the Marcellus Shale in Pennsylvania, and the Bakken Shale
in North Dakota and Montana were explored and developed--from science
project to commerciality.
Alukos: We've seen a massive increase in shale-gas production because of technologies. Can technology be used to help natural gas and shale gas supplant other forms of energy? Can we use this natural gas to benefit the rest of the economy? Mark Hanson: There are not a lot of opportunities for substitution. One idea that has been bandied about is converting petroleum-based engines into natural-gas-based engines. That is unlikely to take place in the near term, at least on a large scale. We have more than 100,000 gasoline stations across the U.S. that would have to convert to natural gas. Creating the needed infrastructure would be expensive. More likely, consumption growth of natural gas will come from new sources of demand, such as exporting natural gas in the form of LNG. That's likely to start happening in significant amounts beginning in 2015. It will start modestly but grow from there. Additionally, we've seen a resurgence in chemicals-manufacturing facilities, which either had been mothballed or moved overseas. We also have the potential to export excess supply via transnational pipeline to Mexico. There's a litany of proposed pipelines. Kinder Morgan (KMI) is a company that's leading the charge there, with potential to install up to $2.8 billion in new infrastructure over the next 15 years that will export meaningful amounts of natural gas to Mexico. Next year, the U.S. will likely export 2 billion to 2.5 billion cubic feet of natural gas a day to Mexico. To put that in context, the United States consumes about 70 billion cubic feet a day. The big point here is that there are emerging
sources of demand beyond just what we presently consume for heating.
But on the whole, if you look across commerce, residential, and power
generation, sources of demand will stay at a fairly steady baseline.
The incremental sources of gain will be export, either dry gas via pipeline
or LNG, and power generation, because of environmental concerns and likely
regulatory impacts of shutting down coal plants, which would increase
the natural-gas use for power generation.
Stevens: A lot of people in the United States point to this idea of using natural gas to power cars and trucks. But these people should keep in mind that the U.S. auto fleet stock is roughly 12 years old on average. Even if you were to introduce a natural-gas-compatible engine in every car manufacturer's model lineup tomorrow, it would take a long time before it would gain any real critical mass. Look at the adoption rates of hybrids and battery-powered cars. Sure, the hybrid model works, but it's been more than a decade since its introduction. It's nowhere near double-digit penetration into the auto market. The infrastructure problems are quite complex. There are local and interstate distribution pipelines that move gas all over the country, but to source gas to filling stations in quantity in order to be put into an engine on demand would require many tens of billions of capital spending--just to build that infrastructure out. The third big knock against natural-gas vehicles is energy density. Natural gas is a less-dense fuel source than oil-derived gasoline or diesel. Natural gas is methane. It's CH4. There's only one carbon molecule. Gasoline is long chains of carbon molecules. There's a lot more stored energy in gasoline; the energy equivalence is a 6:1 ratio. You've got to load up a lot of volume of natural gas to get the same distance traveled as a gasoline-fired engine. These are big knocks against the natural-gas vehicle dreams of many folks out there. So, new engine technology is not going to be a silver bullet for natural gas. We don't see it as likely that you're going to get the demand pull side of the equation for natural-gas vehicles anytime soon, absent effectively, a congressional mandate. |
|
Chart E&C LNG plant
for Louisiana LNG Energy
HOUSTON, May 9, 2014 /PRNewswire Louisiana LNG Energy, LLC ("LLNGE") has secured funding from an affiliate of ArcLight Capital Partners, LLC ("ArcLight") for LLNGE's mid-scale LNG export terminal currently under development in Louisiana along the Mississippi River (the "Project"). The Project, expected on-line in late 2017, has export capacity of 2.0 million tonnes per annum ("MTPA"), possesses deep water access for very large gas carriers (VLGC) and utilizes modular construction for speed to market. "The ArcLight funding agreement is a significant step in advancing the LLNGE Project. The addition of their team provides LLNGE additional experienced resources to continue moving the project forward with all phases of the project scheduled for completion in late 2017," said Jim Lindsay, Chief Executive Officer of LLNGE. "ArcLight is pleased to be partnering with LLNGE's management team to facilitate the development of the premier mid-scale LNG facility in the Gulf Coast," said Carter Ward, Partner of ArcLight. LLNGE has selected Chart Energy & Chemicals,
Inc. ("Chart E&C") to perform advanced engineering for the Project.
LLNGE has selected Chart's 0.5 MTPA standard LNG liquefaction plant
design. The plants will feature Chart's proprietary liquefaction
technology with in-house design and manufacture of all mission critical
equipment. Advanced engineering will commence immediately.
The Project also has procured four manufacturing space reservations with
Chart, to ensure that the 2.0 MTPA LNG plant can be online in the 4th
quarter of 2017. Tom Burgess, Vice-President of Marketing for LLNGE,
commented, "By securing the slot reservations for the liquefaction trains,
LLNGE has completed another important step in maintaining its timeline
for production in 2017."
Sea Port Group Securities, LLC acted as lead financial advisor and Galway Capital L.P. acted as financial advisor to LLNGE. Separately, Galway Energy Advisors LLC has been retained to assist LLNGE in securing LNG off take arrangements and with other commercial operations. About Louisiana LNG Energy LLNGE is developing an LNG Natural Gas Liquefaction Facility south of New Orleans at Mile Marker 46 LDB, on the Mississippi River. The facility will be developed in Plaquemines Parish, Louisiana and designed to produce approximately 2.0 MPTA. The mid-scale LNG export facility will serve export markets with low cost power generation fuels, and domestic markets delivering emissions compliant fuels as an alternative to diesel fuel. Visit www.louisianaLNGenergy.com for more information. About ArcLight Capital Partners, LLC ArcLight is one of the leading private equity firms focused on North American energy infrastructure assets. Since its establishment in 2001, ArcLight has invested over $10 billion across multiple energy cycles in more than 100 power, midstream and production assets. Headquartered in Boston, Massachusetts with an additional office in Luxembourg, the firm's investment team brings extensive energy expertise, industry relationships, and specialized value creation capabilities to its portfolio. Visit www.arclightcapital.com for more information. |
| ND 76,000 LNG
gallons equivalent to 44,000 of diesel fuel
By: Mike Nowatzki, Grand Forks Herald May 07, 2014 A North Dakota company announced plans Wednesday for the state’s first production facility for liquefied natural gas, some of which will be used to supplement diesel fuel burned by oil drilling rigs and fracking operations. The plant near Tioga will start producing 10,000 gallons of liquefied natural gas this summer, said Patrick Hughes, CEO of North Dakota LNG and Prairie Companies LLC. A second phase will boost production to 76,000 gallons daily by Jan. 1. Tioga-based North Dakota LNG has contracted to buy methane from Hess Corp.’s natural gas processing plant at Tioga.Gov. Jack Dalrymple called the LNG plant a “perfect example” of the value-added energy projects that are the focus of a Department of Commerce initiative. North Dakota’s vast supplies of natural gas and crude oil give the state the opportunity “to create industry after industry,” he said. “That means one thing: good paying jobs,” he said. Hughes said the plant will create 25 to 30 jobs in the Tioga area by the end of the year. He wouldn’t disclose the project’s cost. The 76,000 gallons of LNG that the plant will produce is equivalent to about 44,000 gallons of diesel fuel, Hughes said. A drilling rig burns up to 2,500 gallons of diesel fuel a day, and about 1,000 gallons of that could be supplemented with LNG, he said. The plant’s first customer will be Slawson Exploration Co., which operates six drilling rigs in the Williston basin, Hughes said. President Todd Slawson said in a news release that his company supports the development of alternative fuel solutions such as LNG “that will provide immediate cost relief for rig operations.” Hughes said using LNG to supplement diesel fuel will have a net effect of taking trucks off the road because of the closer fuel source and bigger delivery trucks. North Dakota LNG also is working with companies such as Montana-Dakota Utilities to identify potential industrial users, he said. Dalrymple said a “tremendous opportunity” exists to expand the use of LNG for purposes such as heating homes and drying grain. North Dakota LNG plans to offer its product to the agricultural industry as an alternative fuel choice to propane, which is often used by grain dryers. North Dakota LNG is part of Watford City-based Prairie Companies, whose portfolio of oil and gas service businesses includes housing, trucking and disposal companies. The LNG plant is the second major natural gas plant project to make news in as many weeks. Last week, the North Dakota Public Service Commission scheduled a June 18 public hearing for ONEOK’s proposed $280 million natural gas processing plant near Watford City. The Lonesome Creek Plant would be the state’s second largest gas processing plant behind Hess Corp.’s plant at Tioga, which was recently expanded. |
| Shippers want carriers
with natural gas trucks May 9, 2014 Jim Mele, editor-in-chief LONG BEACH, CA There's a movement afoot as some major shippers are actively encouraging carriers to embrace natural gas (NG) as a way to help them meet corporate sustainability goals or lower transportation costs. And in some cases, they are offering inducements such as larger contracts, rate premiums and even on-site NG fueling sites to speed up the transition, according to a panel of shippers at the Alternative Clean Transportation (ACT) Expo. Honda, for example, has set a 30% reduction in CO2 emissions by 2020 as a global goal for the company. At American Honda Motor Co., its parts division is working to contribute to that goal by focusing on CO2 reductions in its extensive transportation network, according to Adam Bishop, sr. logistics analyst for domestic transportation. Moving some freight from truck to rail and employing newer, more fuel efficient trucks are helping to move the parts group in the right direction, but either LNG- or CNG-powered trucks also figure in its strategy, he said during the ACT Expo panel. Two contract carriers operate 220 tractors that provide overnight parts delivery to 97% of Honda’s U.S. dealers, running 106,000 mi. a night, Bishop said. While Honda can’t require its carriers to make a switch to NG, the carriers’ lease costs for the tractors are passed through to Honda, “so we have some skin in the game,” he said. “We also have a good enough relationship with them that we can tell them we’d really like to move forward on this.” In general, the fleets have also been interested in the cost advantages of NG, and have put half a dozen CNG tractors into service on the Honda parts routes in California on a test basis. With fueling infrastructure often the largest barrier to CNG use for trucks, Honda Parts is making sure CNG fueling is available to expand the pilot program to its distribution facilities in Georgia and Ohio. The company’s largest automotive assembly plant in Marysville, OH, is also building an onsite CNG fuel station for its trucking providers, and that station will be able to service the parts carriers as well. “We could have up to 50 NG tractors on the road within the next 18 to 24 months running about 30,000 mi. a night,” said Bishop. “As additional fueling locations are developed around the country, we’ll utilize this partnership to build more [NG] stations and we’re pushing that these stations will be open to the public so it’s not just our trucks that are going to benefit.” Under pressure to reduce transportation costs, shippers are in position to accelerate the transition to less expensive NG, according to David Uncapher, transportation operations leader for Owens Corning. “Shippers have to be willing to share the cost [of converting to NG],” he said. “If you’re a shipper, and your greedy about it and want all the fuel savings, at least initially, with all the additional costs there [for carriers], you’ll be challenged to grow [NG use].” As shippers, companies can also work collaboratively to build lanes or routes with enough demand to justify development of NG fueling location. “Shippers will create the demand that grows the infrastructure,” Uncapher said. There also needs to be incentives for carriers to make the substantial capital investments required to transition to NG. “The majority of carriers we work with were initially standoffish until they saw one particular carrier grow sevenfold in our network,” said Uncapher. “There aren’t a lot of carriers coming to me saying they want run the same lane with the same volume and buy new trucks to do it, but continue to make the same money. So we really have to offer incentives like longer contracts, because the carriers have to see the opportunity for a gain to go out and make that investment.” |
| Cleaner trucks are risky
business May 8, 2014 Jim Mele Fleet Owner LONG BEACH, CA. Calling current efforts to promote cleaner transportation fuels and technologies “scattered and fragmented,” Denny Slagle, executive vice president of Volvo Group, said “it is risky for a manufacturer to bring new technology. “With all the excitement around natural gas, one would have to ask why none of the major North American truck manufacturers except Volvo are planning to introduce their own natural gas engines,” Slagle said during the keynote address at the 2014 Alternative Clean Technology (ACT) Expo. The answer to speeding up development and adoption of alternative fuels, he told the group “is a clearer path on technology and at least the promise of scale and return on investment. We need a runway to more easily bring technologies that will reduce the burden of low-volume introductions for all OEMs.” Offering examples of well-intentioned rules that could stifle progress, Slagle pointed to requirements for onboard diagnostics (OBDs) for all new heavy duty engines. “OBDs are not emissions reduction components,” he said. “They just monitor engine emissions.” With testing and certification of new OBD systems approaching half the cost of developing a new technology like a heavy-duty natural gas engine, that requirement “could sink a new idea before it leaves the drawing board,” Slagle said. Volvo is currently working with government officials on a proposal that would allow low-volume production of trucks using new technology before OBDs would be required, he said. Slagle also suggested that tax incentives could help both producers and truck users explore the feasibility of alternative fuels. “And we need to straighten out federal excise taxes (FET) by reducing them on expensive new technologies like CNG tanks,” he said. “We should not be penalizing the pioneers.” Similarly, fuel taxes also need to be updated to acknowledge new options, moving from a tax on volumes to a tax on energy density, he said. For any solution to be sustainable,”it must be economically sustainable,” he said. Calling it “an exciting time for clean transportation,” Slagle ended on an upbeat note. “The business world has never been more ready to find sustainable solutions and accept changes that improve the economy.” |
| Nabors Drilling orders CAT
Dual Fuel Engines May 08, 2014 The 34 engines are equipped with the company’s Dynamic Gas Blending technology. Caterpillar announced May 6 that it has received an order for 34 of its dual fuel Cat 3512 engines from drilling contractor Nabors. The engines will be used in Nabors’ pressure pumping projects across the United States. Each engine is rated at 2,500 horsepower at 1,900 revolution per minute. In its announcement, Caterpillar did not specify if the engines will use LNG, CNG, or field gas in their operations. |
| INEOS expands plan to ship
US ethane feedstocks to Norway, Scotland 05.08.2014 www.hydrocarbonprocessing.com The carriers are expected to provide INEOS with a flexible solution for their ethane supplies with the option of transporting LNG, LPG as well as petrochemical gases, including ethylene. “The advanced design of these vessels offers very high efficiency and unparalleled flexibility to INEOS securing the longevity and strong position of their business," said Martin Ackermann, CEO of Evergas. The dual-fuelled vessels will use clean LNG in state of the art engines securing high efficiency, low emissions and reduced fuel cost. INEOS and Evergas have now expanded the agreement to secure additional capacity for long-term shipping of cheaper US ethane for INEOS’ European crackers at Rafnes and Grangemouth. INEOS has reached an agreement with Evergas to expand its contract for a series of ethane vessels, currently under construction in China, to six vessels. In January 2013, INEOS agreed a 15-year shipping agreement with Evergas for the transportation of ethane into Europe from the US Mariner East project, as the world’s first US ethane export contract. INEOS and Evergas have now expanded the agreement to secure additional capacity for long-term shipping of advantageously priced US ethane for INEOS’ European crackers at Rafnes and Grangemouth. INEOS will be the first company to establish seaborne intercontinental ethane transportation, having earlier announced agreements with Sunoco Logistics for capacity in the Mariner East pipeline and terminal system and with Range Resources and CONSOL Energy for the purchase of ethane. Evergas will provide customized vessels for the transportation. INEOS also confirmed that it has reached an agreement with Enterprise Products for ethane capacity at their recently-reported ethane export facility on the Texas Gulf coast. The design and build of highly advanced, sustainable vessels has been an important consideration in supporting INEOS’ competitive business model. "Having worked successfully with Evergas for more than a decade, we are very confident that these vessels will provide long term security and competitiveness of our feedstock supplies," said David Thompson, CEO of INEOS Trading & Shipping. The new vessels will enter into service in 2015. They are tailored to meet the specific needs of the project and will be built to the latest specifications matching highest environmental and efficiency performance measures. They are the largest, most flexible and advanced multigas carriers yet to be built, according to INEOS officials. The carriers are expected to provide INEOS with a flexible solution for their ethane supplies with the option of transporting LNG, LPG as well as petrochemical gases, including ethylene. “The advanced design of these vessels offers very high efficiency and unparalleled flexibility to INEOS securing the longevity and strong position of their business," said Martin Ackermann, CEO of Evergas. The dual-fuelled vessels will use clean LNG in state of the art engines securing high efficiency, low emissions and reduced fuel cost. |
|
Reality check for natural
gas fleet vehicles
May 7, 2014 LONG BEACH, CA. While some applications, like refuse hauling and port drayage, have already moved to natural gas power for their trucks, long-haul operations, which are responsible for the majority of heavy-truck sales, have not moved much beyond testing and trials. However predictions that long-haul fleets are now about to ramp up adoption of NG were voiced by a number of speakers during the first day of ACT Expo 2014, a conference and show focused on alternative clean transportation. So it was no surprise that a panel promising “a reality check” on HD NG trucks was standing room only. While 60% of all new refuse trucks sold in the U.S. last year carried NG engines, the long-haul segment is responsible for consuming some 25 billion gals. of fuel annually, according to Andrew Littlefair, president and CEO of NG provider Clean Energy Fuels. “That’s the opportunity [for NG], and I believe the tipping point has arrived,” he said. One reason has been the successful introduction of a 12L NG engine by Cummins Westport, according to the HD panel. “We’re hearing good reports from the field and the trucks are being very well accepted,” said Charles Cook, vocational marketing manager at Peterbilt Motors. Kenworth has four truckload carriers that have accumulated almost 3 million mi. on the new 12L NG engine, according to Andy Douglas, national sales manager. Those fleets are seeing a 9% to 11% degradation in fuel consumption and a $0.01 to $0.02/mi. increase in maintenance costs, he said, but that doesn’t take into account any longer term savings that may accrue from not having to maintain diesel after-treatment systems or the consumption of diesel emissions fluid (DEF). Some fleets did experience performance problems
with the new engines related to cold weather, “but hats off to Cummins
Westport for going out and making that right,” said Frank Bio, director
of sales development for alternative fuels at Volvo Trucks.
And as fleets accumulate more real-world data and experience with NG trucks in different applications, their comfort level with the new technology is increasing, according to Roy Horton, powertrain marketing manager at Mack Trucks. And with more volume will come lower prices, further increasing market penetration, he pointed out. Asked if earlier forecasts that NG would account for 10% of HD truck sales by 2020 were too low, Douglas said that timeframe might be too conservative. “I think we could hit 10% in two to three years,” he said. Citing the rapid expansion of the natural gas fueling infrastructure over the last year, Cook echoed that optimism, pointing out that “with CNG stations expanding, it’s turning up the volume and I could see us ramping sales up to 20% [by 2020].” For long-haul fleets, fueling will be the one key factor going forward, according to Bob Carrick, natural gas sales manager for Freightliner Truck. “They need [NG] forward fueling everywhere they want to go,” he said. Refuse and regional fleets that have had success with NG “almost all have own fueling stations, but long-haul fleets don’t want to turn down loads so they’ll wait until there’s a true regional network.” As for choosing compressed natural gas (CNG) over liquified natural gas (LNG), the panel’s consensus was that the broader availability of CNG fueling locations argues in favor of CNG for the immediate future, but that LNG would gain share as more fueling options are developed. Fleets will have to do their homework on their particular range and chassis packaging requirements, said Horton. Given LNG’s advantages for longer haul applications, he predicted that the CNG/LNG mix would grow from 90/10 today to 50/50 by 2020, and the other panelists generally agreed. Closing out the session, the panelists were
asked to name the one thing they would change that might accelerate
a transition to NG for heavy trucks.
For Cook, it was better training for service techs, drivers and the person spec’ing the trucks. “Our next big hurdle is education the industry and dealers and technicians,” said. Education not only for customers, but also for aftermarket support providers and the people responsible for building the trucks on the assembly lines was Horton’s suggestion. And Bio added “we also need to educate those outside the industry.” More NG engine choices like the planned 6.7L and 15L under development by Cummins was on Douglas’s wish list, as was greater appreciation by shippers of the cost and sustainability benefits they could reap from carriers moving to NG. And finally, Carrick agreed with them all, adding that the only other thing he might like to see is some small legislative relief such as waivers in federal excise and sales tax for NG equipment, as well as some relaxation of weight and length restrictions that could offset the addition of NG fuel systems and tanks. |
| NDLNG Announces First LNG
Production Facility in North Dakota by North Dakota LNG, LLC Press Release Wednesday, May 07, 2014 North Dakota LNG, LLC (NDLNG), the newest member of Prairie Companies, LLC’s, portfolio of oil and gas service businesses, joined North Dakota Governor Jack Dalrymple and other state officials at an event Wednesday in the State Capitol Building to announce the arrival of a liquefied natural gas (LNG) production facility. Located in Tioga, North Dakota, the plant will be the first-to-market in the state to produce 10,000 gallons per day (GPD) starting in Summer 2014. A phase two facility is scheduled to be operational in the fourth quarter of 2014 and capable of producing 66,000 GPD. NDLNG targets the drilling, fracking and transportation sectors of the unconventional oil and gas industry and will help meet the need for a cost-effective power source by converting natural gas feedstock into value-added liquid fuels. “North Dakota LNG is proud to announce it will be the first LNG liquefaction plant in operation for North Dakota,” said Patrick Hughes, chief executive officer at North Dakota LNG. “This historic venture will allow NDLNG to quickly provide oil and gas operators in the Bakken and across North Dakota with a cost-effective and reliable source of alternative fuel, thereby reducing operating expenses, while also creating new markets for value-added natural gas fuel produced in the State.” “This is an exciting day for North Dakota. NDLNG’s state-of-the-art processing facility will play an important role in efforts to convert natural gas feedstock into value-added liquid fuels, foster more cost-effective unconventional shale development operations and support our nation’s desire to reduce its dependence on foreign fuel sources,” said Jack Dalrymple, governor of North Dakota. “We appreciate NDLNG’s investment in our state’s energy industry and support them in their venture to move North Dakota’s rich natural gas resources to market”. Growing Demand and Market Opportunity Currently, operators producing oil and gas from unconventional reservoirs in the Bakken face high fuel costs and environmental scrutiny from their use of diesel-powered equipment and flaring of natural gas generated by their drilling activities. Therefore, significant demand exists for locally produced LNG derived from North Dakota’s abundant natural gas reserves that will help operators not only reduce energy costs but also lower carbon emissions. NDLNG will also offer North Dakota’s agricultural industry an alternative fuel choice to propane. Leveraging LNG will garner farmers and ranchers lower operating costs, reduced emissions, and the ability to use a 100 percent locally produced fuel. “Speaking on behalf of the operator community in North Dakota, this is the type of innovative, entrepreneurial thinking we need to help meet our flaring capture goals in the Bakken … it’s a great idea," said Ron Ness, president of the North Dakota Petroleum Council. Turnkey Fuel Solution NDLNG has positioned itself as the first-in-the-market to provide a quick and cost-effective end-to-end solution to meet the demand for LNG. NDLNG will deliver significant benefits to its customers due to the company’s ability to: •Provide a local alternative fuel source to customers in the Bakken; •Employ a proven process able to produce a cost-effective and environmentally-friendly LNG fuel product; and •Leverage its relationship with Prairie Companies’ three growth-oriented businesses that support the oil and gas industry, including housing, hauling, and water and fluids processing, giving NDLNG customers access to a completely integrated logistical system and further reducing transportation costs. “Slawson Exploration Company supports the development of alternative fuel solutions such as LNG that will provide immediate cost relief for rig operations,” said Todd Slawson, president at Slawson Exploration Company, Inc. “We support NDLNG in this vital initiative and look forward to converting our rigs to utilize their LNG product.” Project Management Contracts Plum Energy, a pioneer and leader in the development of small-scale LNG value chains for industrial and transportation markets, will manage development of the project as well as initial operations of the LNG production facility. SST Process Solutions, led by a highly experienced management team, has been selected as the technology provider for the liquefaction equipment. “We are delighted to assist in bringing cleaner burning, lower cost and locally produced LNG into the North Dakota market,” said Kirt Montague, Chief Executive Officer, Plum Energy. “Not only will this project materially reduce fuel costs for operators and other businesses in the State, but it also will meaningfully lower levels of harmful emissions, while providing long-term, wage-scale jobs and employment opportunities in the region.” |
| The Kroger Co to deploy
40 LNG trucks replace 40 diesel SOURCE The Kroger Co May 6, 2014 The Kroger Co today announced that it will be the first in Oregon to deploy a fleet of heavy-duty trucks that run on Liquid Natural Gas (LNG). The 40 trucks will replace 40 diesel trucks currently in use, and are expected to start making store deliveries in the Portland metropolitan area by the end of 2014. The use of natural gas fuel not only reduces operating costs for vehicles, but also reduces greenhouse gas emissions up to 23 percent in medium- to heavy-duty vehicles. "This is the first step in Kroger's effort to transition our fleet to alternative fuels," said Kevin Dougherty, Kroger's group vice president and chief supply chain officer. "Converting to LNG trucks will allow us to reinvest savings into lower prices for our customers while also benefitting the environment." The trucks will make deliveries to about 50 Fred Meyer and QFC stores as far south as Corvallis, OR and as far north as Longview, WA., averaging approximately 175 miles per day, six days a week, 52 weeks a year. They are expected to reduce greenhouse gas emissions by approximately 755 metric tons per year, which equates to removing approximately 159 passenger cars from the road annually. The fleet will be fueled at a new, private LNG fueling station at Kroger's Clackamas Distribution Center, which will be designed and engineered by Clean Energy Fuels Corp . CLNE -0.22% . "These trucks are nearly identical to our diesel fleet, which allows us to have minimal impact on operations and still achieve the same caliber and standard of performance," said Matt Hoffman, Kroger regional logistics director, based in Portland. "They are truly the prototype truck of the future – the safest, cleanest and quietest way for our hard-working drivers to deliver product to the stores." More information about Kroger's transportation sustainability efforts can be found at http://sustainability.kroger.com . Kroger, one of the world's largest retailers, employs more than 375,000 associates who serve customers in 2,640 supermarkets and multi-department stores in 34 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith's. The company also operates 786 convenience stores, 320 fine jewelry stores, 1,240 supermarket fuel centers and 38 food processing plants in the U.S. Recognized by Forbes as the most generous company in America, Kroger supports hunger relief, breast cancer awareness, the military and their families, and more than 30,000 schools and grassroots organizations. Kroger contributes food and funds equal to 200 million meals a year through more than 80 Feeding America food bank partners. A leader in supplier diversity, Kroger is a proud member of the Billion Dollar Roundtable and the U.S. Hispanic Chamber's Million Dollar Club. |
| Eni unveils Italy's
first LNG fuelling station for heavy duty vehicles Tuesday, 29 April 2014 07:58 Eni announced today they have opened Italy’s first liquefied natural gas fuelling station for heavy duty vehicles, located in Piacenza. Eni noted the Piacenza LNG fuelling station is the first in a series that Eni intends to open over the next four years along major Italian roads and is part of the company’s commitment to promoting the use of environmentally friendly fuels. Eni is an active participant of the European "LNG Blue Corridors" project, which is focused on the construction of environmentally friendly fuelling stations along four major European trade routes, which cross the continent from north to south. Eni stated that the Piacenza facility opened today represents the high standard Eni intends to meet in fulfilling its commitment to promoting LNG. |
| Westport Launches Nat-Gas
Engine in China Thursday, May 01, 2014 Westport Innovations said its joint venture with Chinese engine maker Weichai Power Co. has launched a new natural-gas engine to serve China’s rapidly growing market for trucks powered by the alternative fuel. Weichai Westport has begun shipping a new version of its 12-liter WP12 engine featuring Westport’s high-pressure, direct-injection technology, complementing the joint venture’s existing lineup of spark-ignited natural-gas products. The company plans to ship 30 of its WP12 HPDI engines this year for final customer testing, with factory production expected to start in 2015. “We are entering the largest market for natural-gas trucks demonstrated by our joint venture with over 60,000 natural-gas engines sold by Weichai Westport in the last two years,” with about 100% growth year-over-year,” Westport CEO David Demers said in an April 28 announcement. |