The International Maritime Organization (IMO) and U.S. EPA have designated waters off North American coasts as Emission Control Areas (ECAs). These ECAs have resulted in accelerated adoption of LNG-fueled cargo vessels, tugboats, ferries, and cruise ships.
With natural gas being inherently clean as well as costing up to 50 percent less than marine fuels, the transition to LNG is an attractive choice. Since vessels remain in service for decades, operators have more time to recover the higher incremental cost of LNG engines and refrigerated storage.
Carnival Corporation has seven LNG powered next-generation cruise ships on order through 2022.
Harvey Gulf operates five LNG-fueled offshore supply vessels and has ordered a sixth. It has committed $400 million for this project, which includes two LNG refueling docks.
Today, most off-road NGV activity is occurring in mining applications. The largest mine trucks can typically burn between 150,000 and 400,000 gallons of fuel annually. There are more than 28,000 large mine trucks (>100 ton capacity) worldwide.
Shell/Caterpillar signed an agreement to test new LNG dual-fuel engines for oil sand mining trucks in Alberta, Canada, in 2016.
There are 561 freight railroads operating in the U.S. today. The top 7 Class 1 railroads (line-haul freight) consume over 3.6 billion gallons of diesel fuel per year, which translates to 10 million gallons per day, representing 7 percent of all diesel consumed in the U.S. It is estimated that an LNG locomotive costs $1 million more than its diesel counterpart. Because trains are kept in service for relatively long periods of time and consume huge amounts of fuel, the economics for LNG can be a good solution for this industry.
The price spread between the fuels allows for a relatively quick payback of the incremental cost to implement LNG locomotives, and it translates to tremendous long-term savings. These savings can seriously impact the bottom line of rail operators because the industry’s fuel costs represent an average of 23 percent of its total operating expenses.
Indiana Harbor (Chicago switch carrier) is converting 31 locomotives to CNG.
CSX and GE are pilot testing LNG technology for locomotives.