Thousands of miles of rail, inland waterways and coastal routes crisscross America moving products, energy and people. A new study, released by America’s Natural gas Alliance (ANGA), confirms that thanks to its cleaner profile and low cost, greater use of natural gas as a marine and rail fuel is becoming a welcome reality.
The study, performed by Gladstein, Neandross & Associates (GNA) and commissioned by ANGA, sought to identify locations across three key areas – the Great Lakes, the Gulf of Mexico and the Mississippi River and its tributaries – with the best potential for demand growth to support liquefied natural gas (LNG) infrastructure investment.
The study reveals that with continued coordination between end-users, suppliers, and stakeholders, potential U.S. LNG demand from high horsepower users—in just these three regions—could reach one billion gallons annually by 2029, approximately seven times all current domestic LNG use for transportation.
Much like power generation, manufacturing and on-road transportation, use of natural gas for marine and rail is being driven by abundant supplies, low cost and a cleaner profile. A 2014 MARAD study finds that LNG as a marine fuel has clear environmental advantages: next to established ship fuels, it emits 85 percent less NOx and SOx, 90 percent less particulate matter and 30 percent less carbon dioxide.
Already, LNG-powered marine vessels are underway or under construction at many of our nation’s shipyards. From Harvey Gulf’s LNG-powered offshore service vessels to the world’s first LNG-powered container ship being built for TOTE in San Diego, there are currently 19 confirmed orders for LNG or LNG-conversion-ready vessels in North America. GNA estimates that within 15 years, 363 U.S.-flagged vessels could generate 380 million gallons of LNG demand annually.
Of the three key areas studies in this report, GNA projects that the Gulf of Mexico will feature the largest amount of LNG vessel activity. This presents a unique opportunity to develop the region into the world’s leading bunkering—or refueling—destination for LNG.
Not far behind LNG adoption in the marine space, major railroads across the country are in various stages of testing LNG as a locomotive fuel, with the study estimating that commercial locomotive adoption is likely to begin later this decade. Again, fuel cost is driving innovation. Class I railroads in North America consume approximately four billion gallons of diesel each year. If the railroads converted even one third of their operations to natural gas, they would be able to save approximately $2.6 million each day.
With so much to gain from the adoption of LNG as a high horsepower fuel for marine and rail, producers, pipeline operators and end users all have a stake in working together to make the most of this incredible opportunity.
Read the full report by clicking here.