March 31, 2014

...AND CHEAPER...:

How Liquid Natural Gas May Revolutionize Shipping, And Make Goods Cheaper (Stephen Starr, March 29 2014, IBD)

Fuel typically amounts to 70 percent of the overall cost of moving a container ship from A to B; most ships today run on cheap, dirty bunker fuel. It's a dense oil residue said to contain 2,700 times more toxic sulfur than vehicular fuels. According to studies cited by the watchdog group Transport & Environment, air pollution from shipping causes 50,000 deaths in Europe alone every year. Regulations to be introduced by the International Maritime Organization next year and in 2020 will make high-sulfur fuels, such as bunker fuel, illegal for use in ships sailing in numerous emission-control zones around the world.

Enter LNG, which, unlike bunker fuel, contains no harmful sulfur dioxide, emits 26 percent less carbon dioxide, and produces almost zero smoke.

And it's cheaper than bunker fuel too.

According to Tim Delay, vice president of fuels for liquid natural gas distributor Pivotal LNG, a unit of AGL Resources Inc. (NYSE:GAS), gas contains more energy than bunker fuel. In the U.S., he said, this works out to around $100 per metric ton cheaper than bunker fuel.

"The relative low price of natural gas and LNG compared to current high residual bunker and distillate fuel prices in the U.S and Europe has added to the attractiveness of LNG," wrote Frederick Adamchak, an adviser at New York-based brokerage Poten & Partners, in an industry publication last year.

America is also flush with gas: the U.S. Energy Information Administration estimates there's enough of it underground to last 92 years at expected demand.
Posted by at March 31, 2014 4:12 PM
  
blog comments powered by Disqus
« THE CITY OF NO LOVE: | Main | "JUST SILLINESS": »