Friday, 3 October 2014

LNG - THE BRIDGE TO WHERE?



Recently there’s been a good deal of noise about LNG becoming the fuel to bridge the gap to renewables. 

Several reports underline burgeoning demand for LNG in the maritime sector. It is seen as an attractive option to address upcoming sulphur emission control legislation. 

According to a study by the international association for natural gas, Cedigaz, demand for LNG bunkers is expected to more than triple by 2025. The study estimated demand of the gas within the marine sector to grow to 35.7 million tonnes per year (mpta) in the next 11 years, up from the current 10 mpta. By 2035, this demand is forecast to increase further to 77 mpta. Energy consultants Wood MacKenzie predict demand for LNG will grow to be one tenth of marine fuel by 2030. 

Accordingly infrastructure is being enthusiastically developed with organisations like Mitsui and Kawasaki investing heavily in LNG carriers. The recently formed Baltic Ports Organization (BPO) has identified a number of port areas for possible development of "common small scale LNG bunkering facilities".

However, before we all heave a sigh of relief and settle back on the ‘business-as-usual’ bus we need to look a little further ahead. The expectation of LNG being able to deliver cheap, clean fuel is predicated on the fracking process which is heavily opposed by large swathes of the population. It’s a risk to underestimate the stubborn determination of a middle class homeowner whose house will be devalued. The extraction process also causes methane leakage, a more potent greenhouse gas than carbon dioxide, which ultimately makes the emission burden of LNG more or less equal to that of HFO. We’d be wise to question the supply side. 

Dr Paul Gilbert from the University of Manchester’s Tyndall Centre for Climate Change advocates a bolder initiative. He’s suggesting shipping is taking a short-sighted approach to addressing sulphur emissions and should consider postponing current sulphur regulations. He recommends a coordinated suite of policies to tackle CO2 and SOx emissions in tandem ensuring more radical, step-change forms of propulsion are initiated from the outset to reduce the risk of infrastructure lock-in which, in turn, is more likely to cause lock-out of lower carbon technologies. Dr Gilbert argues the greater challenge for all sectors is climate change and the looming sulphur regulations do little to address that. He proposes an opportunity to address the co-benefits of reducing both sulphur and carbon.

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