Americas News
Shipping Line President: LNG Bunkers "Most Logical Thing to Do"
Low natural gas prices and new environmental regulations are pushing U.S. ship operators to move toward the use of liquefied natural gas (LNG) bunkers, the Wall Street Journal reports.
The cap on sulfur in marine fuel in the North American Emissions Control Area (ECA) will fall to 0.1 percent in 2015, and other regulations starting in 2016 will require the reduction of nitrogen oxide emissions.
Meanwhile, LNG prices stand at just $1.70 per gallon, about half the cost of marine diesel as shale development floods the U.S with natural gas.
"We operate within [200-mile coastal zone] and in order to comply the most logical thing to do would be to move to LNG for our cargo ships," said Peter Keller, President of Sea Star Line LLC, a cargo ship subsidiary of Tote Inc that plans to begin running LNG-powered container ships between Florida and Puerto Rico in 2015.
"Environmentally it's the best way to go."
Harvey Gulf International Marine LLC (Harvey Gulf) has also ordered six new boats capable of running on LNG, and chief executive Shane Guidry said he expects to save 50 percent on fuel costs, allowing the company to attract new customers despite the higher up-front cost of the ships.
"They're more cost effective," he said.
Cliff Gladstein, president of fuel consulting firm Gladstein, Neandross & Associates, said making the fuel switch is "quite compelling" as long as LNG remains much cheaper than diesel.
"It is the only strategy for complying with the regulations that will save money for a marine operator," he said.
Harvey Gulf is building the first nation's first LNG bunkering facility in the Gulf of Mexico, and officials there said recently that they anticipate growing demand for the fuel.
