Is Tacoma, Washington, LNG the Future of Shipping or an Impediment to Greener Solutions?
by Christina Nagy-McKenna, Enerdynamics Facilitator
The global maritime industry is undergoing a monumental transition as it works to meet clean fuel regulations from the International Marine Organization (IMO). For decades this industry has used heavy sulfur residual fuels that are highly polluting. While the industry is researching and testing several fuel alternatives including hydrogen, ammonia, and blended fuels with lower sulfur contents, the current consensus is that liquified natural gas (LNG) is the best transitional fuel for the maritime market as it strives to meet the current environmental mandates. Outside of the industry, challengers are asking if this is enough.
Ships powered by LNG will get their fuel at ports that store the LNG on site and via bunkering ships that refuel vessels offshore. One of the first new LNG port facilities was commissioned earlier this year at the Port of Tacoma, Wash., where Puget LNG and Puget Sound Energy (PSE) operate the first shore-side, direct-loading LNG facility on the West Coast. The Tacoma project includes the ability to liquify up to 225,000 gallons of LNG per day plus 8 million gallons of LNG storage. PSE will use the LNG for fuel for maritime ships and trucks, as a peaking plant during high natural gas demand by its customers, and as an alternative to flowing gas supplies if needed during emergencies or system maintenance. The facility will not be used to export LNG.
The project initially faced mixed reviews as local environmental groups and the Puyallup Tribe opposed the project. In 2019, Governor Jay Inslee withdrew support for the project due to increased concern about climate change and the environmental impact of natural gas. The apprehensions surrounding the project mirror the overarching questions about the transition of maritime fuel: should the industry invest in LNG and choose to reduce its environmental footprint sooner, or should it wait for a zero-emission alternative that does not yet exist?
The IMO stated that by 2050 the industry must slash its carbon emissions by 50% from 2008 levels. It already tightened regulations in January 2020 when it reduced the sulfur content of marine fuels to 0.5% by weight, down from the 3.5% that was set in 2012. Puget LNG states that LNG reduces particulate matter produced by ships by more than 85%, reduces greenhouse gas emissions by 15%, sulfur dioxide (SOx) emissions by more than 99%, and nitrogen oxide (NOx) emissions by almost 85%.  Unlike diesel, if LNG leaks it simply dissipates and does not contaminate the water around it. Though methane leaks would result in greenhouse gas emissions.
Some of the largest shipping companies in the world are also in disagreement as to which direction the industry should take. For example, Hapag Lloyd AG of Germany and CMA CGM SA of France are moving forward with LNG container ships, while A.P. Moller-Maersk of Denmark is moving in the direction of green methanol. In March 2022 the company announced a partnership with six international companies to source at least 730,000 tonnes/year of green methanol by the end of 2025.
The transition to the next generation of maritime fuel will likely have several waypoints, and, in the current global Covid climate, some unforeseen issues. The new Port of Tacoma LNG facility is a possible template for future ports that serve LNG-powered ships. There is little disagreement that the project provides maritime customers with a better alternative to diesel and bunker fuel. Rather, the question remains whether it will delay better solutions because the industry will not wish to pivot again so soon.
For more background on LNG in natural gas markets, read our previous blog article The Role of Small-scale LNG in Gas Markets.
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