LNG Bunker Summit: Regulations, Public Opinion are the Biggest Barriers to Adopting LNG as a Marine Fuel

Monday June 9, 2014

Regulations and public opinion are currently the two biggest barriers to the adoption of liquified natural gas (LNG) as a marine fuel, delegates were told last week who had gathered in Vancouver, Canada for the North American LNG Bunkering Summit.

Those looking to adopt the technology in North America were faced with rules that were said to be either outdated or still under development.

John E. Graykowski, Principal, Maritime Industry Consultants explained that in the U.S. the regulatory picture was complicated by overlapping, and often differing requirements from local, state-wide, and federal bodies, while in Canada, Alicia Milner, President of the Canadian Natural Gas Vehicle Alliance (CNGVA), noted that under current rules the country did not even permit the use of LNG as a marine fuel.

A number of delegates also questioned whether developing regulations and standards would lead to Class Societies differing on what they would each approve, further complicating the adoption of LNG bunkers.

But while they may take some time to fully address, the overall message from those speaking was that the regulatory issues were not only far from being insurmountable, people were dealing with the uncertainty.

"Virtually all those barriers are solved with a pen and paper, so it's an effort that has to be done, but it's an effort that can get done," said Keith Meyer, CEO, LNG America and LNG Central.

"There are no codes and standards on LNG bunkering so it's sort of new, meanwhile you've got an LNG fuelled work boat that's hitting the water in a month's time. They've had to deal with the lack of that but nevertheless have managed to persevere."

William P. Doyle, Commissioner, U.S. Federal Maritime Administration (FMA), and Ken Smith, Asst. Division Chief & General Engineer, Commandant, U.S. Coast Guard, were amongst those who said industry stakeholders need to get involved and comment as the regulations are being developed, something Graykowski noted was perhaps lacking.

He said just 24 comments had been received on the U.S. Coast Guard's recently issued draft guidelines for LNG bunkering.

Public Acceptance

The impression that LNG had a negative image in the eyes of the general public was raised several times throughout the three day event, but this was largely attributed to a lack of understanding rather than any fundamental problem with the technology.

"People don't know [what LNG really is] and of course any time you say gas, the first thing they think is 'boom'. And that's just not the case," said Peter Keller, Executive Vice President, Tote Inc.

Renee Moilanen, Environmental Planning Division, Port of Long Beach said that public reaction to an earlier attempt at development of LNG infrastructure at the port had been met with a public opposition that was "swift and intense", while one delegate commented that a notable cruise ship operator had recently decided against pursuing LNG after concerns were raised by potential passengers.

But Keller, whose company has a number of projects for LNG powered vessels already under way, said he had found public reaction to be surprisingly positive.

"Like everyone else we're concerned about public perception and we've been very active with our partners on working those issues," he said.

"But what we have found, and I guess it's because of all the environmental discussions that have gone on in the last many years, at least in the jurisdictions that we operate, is that people understand that change is coming.

"They understand that positive environmental change, even though you're not 100 percent sure about it, needs to be embraced, and we have seen very little push back.

"We've done, and our partners have done, some very interesting surveys on the subject and it's very positive - much more positive that I would have thought."

The North American LNG Bunkering Summit took place on June 2-4, 2014 in Vancouver, Canada. The next LNG Bunkering Summit will be held in Amsterdam, January 26-28, 2015.