The market drivers behind natural gas becoming the fuel of choice throughout the world is; environmental concern, and cost.
Although renewable energy capacity is advancing fast, it is intermittent and insufficient to handle base load in most areas of the world. Until renewable energy storage becomes mainstream, an immense demand will remain for natural gas to fuel electrical generation as mainstream, and as supplemental in the pockets of renewable energy growth. This trend is expected to continue for another 10 to 20 years. Even then, the low-cost of natural gas will continue to keep it as a contender for supplemental supply.
Although the environmental benefits of using natural gas to displace gasoline or diesel are significant, it is the cost benefit that has been the primary driver for switching to natural gas. Diesel is about $25 to $30 per GJ whereas natural gas (where available) is $3 to $10 per GJ.
It is also the cost spread that is driving the commercial transportation industry to use more natural gas for the transportation of goods (and people) by road, rail, and by sea. The most recent sulphur cap by the IMO and more stringent restrictions by Emission Control Areas (ECAs) are contributing to the drive of many new ship owners to switch to natural gas as fuel (stored mostly as LNG). A comprehensive study recently published by DNV-GL shows the significant cost advantages of using natural gas over scrubbers using both types of fuel oil on various types of ships.
Notwithstanding, the lack of LNG bunkering creates a dilemma for many ship owners planning to build a new ship. Most would prefer to go with cleaner and lower cost natural gas; however, the lack of bunkering facilities in the planned loading ports makes that impossible. That said, an increasing number of new ship owners are hedging their bets by installing duel fuel engines, but for now, without the gas storage system.
Most large marine engine manufacturers now supply duel fuel/ multi-fuel engines. These very large marine engines require between 1 to 3 percent fuel oil to ignite the natural gas in the cylinder. However, some ferries and cruise ships use gas turbines or smaller engines that run on 100% natural gas. It is worth noting that several engine manufacturers have also converted the engine of an existing ship to burn natural gas. However, the cost of a conversion is rather expensive.
To date, ECAs have been established in: the Baltic Sea; the North East Atlantic, including the North Sea and waters to the Northwest adjacent to Southern Norway, and, in a 200 mile zone adjacent to Canada and the United States, including Hawaii. An ECA also exists for selected waters in the Caribbean, adjacent to Puerto Rico and the U.S. Virgin Islands. China has also established several ECAs with marine sulphur limits. In 2018, a sulphur limit will apply to the Pearl River Delta Area, the Yangtze River Delta Area, and the Bohai Sea Area.
ECA nations have also implemented restrictions on nitrous oxides (NOx) being emitted from ships. – NOx creates smog and is very harmful to human health. – In one form or another, the ECAs, have adopted the MARPOL Tier III Standard for NOx emissions. In the North American and U.S. Caribbean ECAs, the Tier III NOx standards apply to new ships (built after January 1, 2016). For ships operating in the Baltic and North Sea ECAs, Tier III NOx controls will apply on January 1, 2021. As expected, NOx removal equipment has additional capital and operating costs. At low power, NOx removal is a most difficult challenge for operators.
In North America, most of the rail industry has already experimented with natural gas to fuel locomotives (stored in LNG tender cars). Though only a few operators currently use natural gas (stored as LNG or CNG) to fuel their locomotives, most engine manufacturers now offer kits to convert their respective engines to duel fuel. Often, a small amount of diesel (1% to 4%) is still required as a pilot fuel to ignite the natural gas inside the engine. That said, the drawback to uptake by the rail industry is limited access to LNG, the complexity to load it, and the long loading time.
With such a large and increasing demand for natural gas, the lack of access to natural gas for many commercial and industrial entities, creates the market driver for CanaGas PLNG containers.
Using PLNG containers, fuel gas can easily and cost-effectively be made available to mines, drill sites, fracking sites, and remote communities. The same containers can also be used as a virtual pipeline. This open a vast number of business opportunities. Then there is the potential of fuel for bulk transportation by road, rail, or by sea. The same system can also be used to produce and transport stranded gas reserves; on-shore and off-shore. And, due to the low cost to liquefy gas the CanaGas way, the same containerized system can also be used to eliminate flaring or the venting of natural gas.