LNG Primer

Natural Gas: A Transportation Fuel for the Future?

Wisconsin Freight Rail DayOctober 26, 2012

The Plaza Hotel & Suites, 1202 West Clairemont AvenueEau Claire, Wisconsin Richard D. Stewart, Ph.D., CTL

October 17, 2012 Opinion PollDo you foresee a day in the not-too-distant future when railroads will run trains on natural gas?

Oil: The fuel of the future!From 1860s until the 1950s coal was the principal fuel for Great Lakes vessels and rail locomotives.In the 1940s and 50s A fuel oil supply chain had to be developed to provide oil to the vessels and locomotives.

MARAD five year funding with Lake Carriers and industry supportA feasibility study to look at fuel alternatives (natural gas primarily LNG, with considerations for CNG) for repowering the Great Lakes vessels.A demonstration project to consider engineering design implications for a selected ship. (S.S. Badger car and passenger ferry with service between Manitowoc, WI and Ludington, MI)

Supply Chain Study of regional gas availability, and accessibility, liquefaction facilities and capacity, transportation and routing of gas supplies in the Great Lakes region. Research into the regulatory requirements for fueling vessels with LNG and CNG at terminals, docks and midstream. Education and Outreach with Industry- Great Lakes Waterways Conference, hosted an LNG studies panel Society of Naval Architects and Marine Engineers meeting, 2-day agendaTwin Cities Transportation ClubInstitute of Supply ManagementMN Environmental Initiative Norway Technological visit

Initial studies in support of the listed projects: Literature review of studies related to natural gas fueling of transportation assets in general and specifically the marine mode.Study (with GLMRI affiliate University of Michigan) to look at converting the ten existing Great Lakes steam-powered ships to reduce air emissions and fuel consumption. (Initial report in draft under review)Engineering study contract with Bay Engineering, Inc. in Sturgeon Bay, WI to assess the tradeoff between a CNG and a LNG conversion for the S.S. Badger, assuming that the current boilers and main engines will be maintained. (Report in draft under review)Pending study (with GLMRI affiliate Rochester Institute of Technology to utilize their Geospatial Intermodal Freight Transportation Model to look at the transportation modeling of the S.S. Badger route to evaluate fuel usage, air emissions, and other environmental factors to weigh transportation alternatives. (Contract Pending)Supply Chain Study. University of Wisconsin-Superior with support from University of Minnesota Duluth, is preparing an analysis of regional gas availability, and accessibility, liquefaction facilities and capacity, transportation and routing of gas supplies in the Great Lakes region. (Data gathering underway)Planning/Pending: Research into the regulatory requirements for fueling vessels with LNG and CNG at terminals, docks and midstream. The fueling options for the S.S. Badger will be explored first with findings applied to fueling locations for other Great Lakes Vessels.Education and Outreach with Industry: Cleveland, OH (22-24 February 2012). - Great Lakes Waterways Conference, hosting an LNG studies panel - Society of Naval Architects and Marine Engineers Section meeting, 2-day agenda themed on LNG commencing on Thursday, 23 Feb at the Hyatt Hotel.Agenda and Registration: http://www.sname.org/GreatLakesGreatRiversSection/Meetings/

5Emissions reductions: A driver of change

Vessels need to reduce air emissions

Carrier Options to meet Emissions Regulations

Europe has been using LNG fueled ships for a decade! $15 Million US for LNG Supply Chain Study

US Flag LNG Powered Offshore Supply Vessels

Building four U.S. flag vessels: 2- 2,700KW Internal Combustion Engines: Total LNG fueled engines 7,500 KW LOA 302, Draft 20 4.5Beam 64Some of the New LNG vessels

Fueling an LNG vessel: http://www.youtube.com/watch?v=hQ3tqifW9nA&feature=related Canada Marine Ferries to use LNGIn another Canadian first, Gaz Mtro Transport Solutions will be supplying liquefied natural gas (LNG) to three new ferries ordered by the Socit des traversiers du Qubec. The ferry operator is abandoning fuel oil for two of its crossings in favor of liquefied natural gas, a cleaner and more economical fuel.

By the end of 2013, the crossings between Tadoussac / Baie-Sainte-Catherine and Matane / Baie-Comeau will be served by the new LNG ships. Gaz Mtro Transport Solutions will use its tankers to supply the ferries.WI Truck Conversions to CNG or LNG

La Crosse, WICanada Trucking LNG Truck Supply Chain"Blue Road" projectGaz Mtro Transport Solutions is currently engaged in the first liquefied natural gas (LNG) fuelling project in Canada: the "Blue Road."This important commercial fuelling project will include three LNG fuelling stations. They will be strung along the heavily travelled corridor linking Highway 20 in Qubec to Highway 401 in Ontario.

Mining Industry Conversion of TrucksGaseous Fuel Systems Corporation (GFS) announced today that it will be converting Three Alpha Coal West Caterpillar 793 mine haul trucks to operate on a LNG / diesel combination, resulting in a substantial fuel savings for Alphas Belle Ayr Coal Mine outside Gillette, Wyoming. September 2011 http://www.gfs-corp.net.

Converts CAT 777C to 60% Liquefied Natural Gas 2010Bi-Fuel conversion systemOperates in coal mines Harlan County, KYPreparing to convert fleet for KY and WV

Rail Industry Considering OptionsDoug Longman, a researcher at the Argonne National Laboratory, said that the railroads would really like to be able to use natural gas in their locomotives. Its a cost issue. Last year, the rising diesel prices led to the annual fuel bill for Union Pacific Railroad to reach $3.6 billion, accounting for 26 percent of overall expenses; up from 13 percent of total costs back in 2001.Christian Science Monitor, By James Burgess, Guest blogger / October 14, 2012BNSF Main Line LNG Powered Engines 1991-1996

Conversions worked 1600 mile coal route - 800 mile range EconomicalBN determined that natural gas to provide a 10% to 20% cost savings over Diesel Estimated it could save $200 million a year in fuel if it converted its entire locomotive fleet of enginesUsing natural gas reduces engine maintenance costsIt is estimated that engine life cycle can be improved by as much as 40 percentEngines can go 2 to 3 times as long between lubrications, oil, and filter changes.Not adopted because LNG supply chain not matureExperiments done prior to current discovery of natural gas reserves

Short Haul LocomotivePacific Harbor Line Inc. Long Beach/LAWhy it worked wellLNG locomotive cost approximately 23% less to fuel on an energy-equivalent basisLNG burned 72 diesel-equivalent gallons compared to 65 gallons of diesel burned by diesel locomotive (per day)Emitted an estimated 81% less oxides of nitrogen (NOx) & 57% less particulate matter (PM) compared to new Tier 2 locomotive

Why it didnt work so wellLogistics & mechanical issues associated with fueling negatively impacted the locomotives service capabilityNeeded to be refueled every 3 days compared to once a weekLacked a reliable fuel gaugeDifficult requirements imposed by the local fire departmentExtra labor during fuelingFee paid to LAPD for fire inspectorFuel slowly boil off over timeLess reliable than dieselOut of service approximately 15-20% more often than the diesel fleetLow main air pressure, failed spark plug transformer

Experiments on 1200 HP Switch Engine 2008-2009CN Testing Natural Gas Locomotives

CN Rail is experimenting with some locomotives in Northern Alberta. They're exploring the use of natural gas as an alternative to diesel in the Oilsands town of Fort McMurray. The Class I retrofitted diesel engines in two 3,000-horsepower, Electro-Motive Diesel (EMD) SD40-2 locomotives to run on natural gas, using conversion kits supplied by Energy Conversions Inc. (ECI). The hybrid-fuel locomotive can reduce carbon dioxide emissions by 30 percent and cut nitrogen oxide emissions by 70 percent over a locomotive duty cycle, according to ECI.

The retrofitted locomotives use 90 percent natural gas and 10 percent diesel fuel for ignition, and are paired with a natural gas fuel tender between them.

Do I use CNG or LNG????Compressed natural gas Unlikely for vesselsMust be compressed cost initial and long termHigh pressure containment 4500 PSILower BTU content for same volumeHigh pressure, asphyxiant and flammability safety issuesLiquefied natural gas Must be liquefied cost- initial and long termCryogenic Stored at Minus 160 degrees centigradeStored at low pressureHigher BTU content for same volumeCryogenic, asphyxiant, however non toxic not flammable as a liquidThe selection of CNG or LNG is very case specific!

LNG Cost Breakdown (February 2012)

LiquefactionTransportationCommodityThese percentages can vary depending on location and volume . What is an LNG supply chain like?

Clean Energy Investing $150 Million in LNG stations in the US.Fueling a truck http://www.youtube.com/watch?v=s-8zCUPoxu0&feature=related LNG Truck station Seville, OHPartially funded by OH grantsBaltic using marine LNG supply chain

Intermodal LNG System

Containerized LNG supply chain

Liquefaction Plant in the Twin PortsCommunity open to industryExisting Peakshaving liquefaction plant within 40 miles in Wrenshall, MN Natural gas pipelines in placeTransportation hub 4 class 1 railroads, largest dry bulk port in US, truckingSkilled workforce and industrial baseMarket of 4.3 million people within 250 mile dray by truck.Twin Ports LNG Terminal Marketing Region

250-Mile Radius of Duluth and Chicago

4.3 Million People MiningMarine TransportationTransitRail TruckingPipelineLiquefaction Plant in the Twin PortsPotential customer base:Marine fuelingRail yards switch engines main lineCity TransitMining industryTrucking industry long haul, local, regionalAgricultureDelivery to other communities by truck, rail or waterJune 19, 2012 Conference

Thank You Questions?www.glmri.org

Photo by Chris J. Benson