Powering the U.S. Coast Guard with LNG

By Lieutenant (junior grade) Joe DiRenzo IV, U.S. Coast Guard

U.S. maritime services should seriously consider liquefied natural gas (LNG) as an alternative energy system for future vessels.

As Jeff Rubin, former chief economist for Canadian Imperial Bank of Commerce World Markets, explained more than two years ago, “We’ve exhausted our supply of easy-access conventional oil and now we’re turning to unconventional sources in shale, tar sands, and deep water. It’s unconventional sources of oil and the prices required to facilitate extraction that are problematic for us” (L. de Franco, “Headspace: Economist
Discusses Peak Oil,” Spacing, 7 April 2011).

A number of solutions such as LNG are gaining traction in other countries and in the civilian industrial sector, especially in Scandinavia. The Coast Guard can build on that success.

Through its Energy Coordination Office, the U.S. Navy has taken an aggressive posture regarding energy. This will support the service’s Task Force Energy, coordinator of the overall strategy. The Navy has also deployed a “great green fleet” that uses biofuels, infused high-efficiency heating, ventilation, air conditioning, and hybrid electric drive for Arleigh Burke–class ships. These are significant initiatives, but LNG could be a strategic game changer.

Not Just a Domestic Fuel

Switching to LNG will lead to greater energy security for the Coast Guard. Currently, almost all natural gas used in the United States is produced domestically (89 percent), imported from Canada through pipelines, or shipped from Trinidad and Tobago as LNG. Several sources, including the U.S. Energy Information Administration (EIA), predict that natural-gas production will outpace demand, causing the United States to export LNG by 2016.

Specifically, the EIA believes the Gulf of Mexico coast and Alaska will become major shipping hubs. By 2027, the United States may be shipping as much as 4.5 billion cubic feet per day of LNG. Even i these predictions are wrong, a number of LNG-exporting countries are U.S. allies, including Norway, Trinidad and Tobago, and Australia. They could easily satisfy additional demand.

The recent boom in the production of natural gas from shale and tight formations has driven down the cost to approximately $13 per million British Thermal Unit (13$/mmBTU) including small-scale LNG distribution costs, compared with 21.2$/mmBTU for marine-grade oil based on 2010 prices. According to the initial draft of the EIA’s 2013 annual energy overview, natural gas used in the industrial sector will increase from 6.8 trillion cubic feet in 2011 to 7.8 by 2025, a 16 percent increase from 2011 to 2025.

Since the marine transportation sector is generally included in the industrial category when predicting the future use of fuels, it is likely that more commercial shipping companies will make the transition to natural gas from standard marine-grade oils. According to projections from the American Clean Skies Foundation, in ten years LNG will cost at least 41 percent less than certain marine distillate fuels for equal energy equivalence. The EIA also predicts natural gas will expand to other markets, such as heavy-duty freight transportation in the trucking industry.

Economic Considerations

To definitively decide whether LNG is viable for future cutter classes, the Coast Guard should conduct a feasibility study. The actual effectiveness of switching from marine oil to natural gas needs to be gauged, which means considering the actual payback period of the cutter, available fueling facilities around the world, and money saved over that lifetime in fuel costs. The Coast Guard has an impressive track record of maintaining cutters two to three times past their designed life-cycle, as is the case with the medium-endurance cutter. An extensive cost-benefit analysis should be conducted to determine if LNG would be an appropriate fuel source. Additionally, the feasibility study’s theoretical framework should account for the following variables:

• A vessel’s average annual fuel usage
• The “delivered” future LNG price
• Whether the Coast Guard can lock in a price to ensure the costs do not go up at homeport
• Whether multiple fuel options are needed (the ability to switch between LNG and marine-grade oil)
• The distance the LNG must travel from production site to the vessel’s homeport, as well as the number of other vessels in the area that use LNG (if high, this would result in savings from bulk shipments)

Coast Guard–fueled LNG cutters must be able to maintain long endurance and receive LNG from commercially available refueling sources, specifically in ports overseas. Forward locations to refuel in the Coast Guard’s patrol area must be considered in the cost-benefit evaluation.

Several import and export LNG terminals already exist in the United States. Based on their density, LNG peak shaving facilities (plants that supply additional power to the grid during periods of high demand) and satellite LNG peak shaving facilities, the best location in the United States to start an LNG pilot program would be the central Atlantic Coast and Gulf Coast.

Between the conception and use of LNG on Coast Guard cutters, a large gap remains.

Possible solutions include building ships that can be powered on multiple fuel sources and a localized proof of concept (in this case, a smaller vessel built to demonstrate that all these different fuel sources can be used) if LNG is considered for future cutters. Coastal patrol boats and small boats would be ideal for this, since they operate in defined areas.

Other Countries Use LNG

Private companies and governments throughout the world are turning to LNG to fuel everything from coastal patrol boats to large car carriers. In 2012, STX Finland Oy’s Rauma Shipyard started production of a next-generation offshore patrol vessel to be built for the Finnish Border Guard; it will begin service in November 2013.

The Norwegian Coast Guard has three different coastal patrol vessels that use natural gas: KV Barentshav, KV Bergen, and KV Sortland can switch between LNG and diesel for different operations.

A number of private companies have also made the move. Totem Ocean Trailer Express plans to convert two Orca-class vessels to service the Anchorage, Alaska–Tacoma, Washington trade, and is building two LNG-fueled freight vessels to operate between Jacksonville, Florida, and San Juan, Puerto Rico. Companies that produce standard marine LNG engines include Wartsilla, Rolls-Royce, and Mitsubishi. Major ports in Europe such as Hamburg, Germany, are beginning to put in place required LNG facilities to accommodate vessels fueled by it.

Regulations are in place in several countries for the safe operation of these engines in the marine environment. Det Norske Veritas, an independent Norwegian classification society that creates safety guidelines for the shipping industry, has produced the most specific regulations.

Others overseeing safe operations at sea—the International Maritime Organization, Lloyd’s Register, Germanischer Lloyd, and the American Bureau of Shipping—have adopted similar ones. With these numerous guidelines in the private sector for natural-gas use, the Coast Guard needs to do little to create similar procedures for its future cutter classes.

Complementing the Mission

No regulations are aimed at carbon dioxide (CO2) emissions, but many expect new standards to pass in the future, as has happened in other industrial areas over the past three decades. Natural gas is better positioned than marine diesel to meet these standards because it produces less harmful emissions than marine oil.

According to Germanischer Lloyd, switching to natural gas will reduce CO2 emissions in marine vessels by 20–25 percent, and sulfur dioxide emissions by 90–95 percent, as well as reducing almost all particulate matter. Additionally, LNG allows a vessel to be Tier 4 compliant under Environmental Protection Agency regulations.

An LNG-powered cutter will assert the Coast Guard’s position as an LNG expert.

In exercising its authority on various marine-safety engineering issues, the service must review and approve all LNGdesigned vessels built in the United States. With an increasing number of private LNG ship designs in development, the Coast Guard Marine Safety Center will be able to apply to its consideration of commercial-vessel LNG designs internal lessons on this type of fueling.

Low-sulfur diesel fuels are becoming more expensive, and biodiesel programs remain in their infancy. Hydrogen technology is in the prototype stage. The Coast Guard must turn to developed energy sources as it continues to re-evaluate what fuels it should use as different technologies become more available and feasible. As it carries out this spiral development of its strategies and requirements, thorough attention should be given to liquid natural gas–powered propulsion systems. This gas is clean, abundant, and already being used effectively.

After graduating from the U.S. Coast Guard Academy in 2010, Lieutenant (j.g.) DiRenzo served his initial deck-watch officer tour on the USCGC Vigilant (WMEC-617) as assistant navigator, then first lieutenant. He has now received a Fulbright scholarship to study natural-gas technology at the Norwegian University of Science and Technology, Trondheim.

Reprinted from Proceedings with permission; Copyright © 2013 U.S. Naval Institute/www.usni.org.