Last week I had the opportunity to attend and participate in LNG17, the largest global gas event of 2013. Liquefied natural gas (LNG) is a rapidly growing part of the larger natural gas industry and is especially relevant today because of the increasing global demand for transportation fuels. At the conference, it was clear to me that LNG is a priority for not only Shell, but also the entire industry because of its potential to provide real economic and environmental benefits to the transportation industry in trucks, trains and ships.
For around 50 years, LNG has been used as a source of energy for power generation in cities but new technology and increasing demand has inspired Shell to invest in LNG for transport. Resources around the world, especially in North America, are abundant but supply is growing far faster than demand. It is the industry’s responsibility to build the infrastructure and develop innovative technology to utilize this energy source to its fullest potential.
One of the key benefits of LNG for transport is its impact on the environment. When compared to conventional diesel, LNG used in transport has the potential to reduce emissions. Shell LNG fuel adheres to stringent International Marine Organization (IMO) guidelines for lower local emissions in the Sulphur Emission Control areas and can help address a broader range of environmental compliance requirements, such as reducing particulate matter and reducing nitrogen oxides (NOx). The overall carbon emissions reduction possible with LNG fuel offers improved performance of trucks and helps companies comply with environmental legislation.
LNG as a transportation fuel also has the potential to provide significant fuel cost savings to commercial fleet owners. During the last decade, the price of diesel in the U.S. increased on average by 12 percent per year, placing economic burden on the companies that rely heavily on long haul trucking fleets. For these truck operators facing a challenging economic climate, using LNG rather than diesel can reduce fuel costs by almost a third. LNG-fueled engines also help reduce noise up to 50 percent, which can contribute to improved driver well-being and increased fleet utilization in noise restricted zones.
Because of the economic and environmental benefits, we are working to expand our North American LNG refueling network in the Great Lakes, Gulf Coast and Canadian Green Corridor. Additionally, we are partnering with TravelCenters of America to provide LNG for truck operators across the U.S. and working with select Shell Flying J stations to develop the LNG truck stops in Canada.
We are also working with partners to develop new equipment and vehicle technology that can operate on LNG. For example, Shell is working with Mack and Volvo to develop LNG as a fuel option for trucks. The collaboration is built to support wider adoption of LNG trucks and is part of our larger LNG for transport strategy.
In marine transport, LNG has also gained momentum in the last couple of years with several ports in Europe supplying LNG for maritime use. Shell recently launched a barge powered entirely on LNG on the Rhine River in Rotterdam. The Green Stream, which will travel along the Rhine through The Netherlands and Germany during the next few months, is a first for Shell and for the inland marine industry. We are investing heavily in LNG fuel in the marine industry because we believe demand will grow rapidly as strict regulatory emission guidelines or emission control areas (ECA) continue to be implemented in North America and Western Europe.
An abundant supply of natural gas makes LNG for transport an affordable and cost-competitive fuel that has significant opportunities for emission reductions. However, the industry needs to work together to utilize available natural gas supplies and develop LNG for transport for trucks, ships barges and trains.
LNG is a fuel of the future – and it’s available now.
Maarten Wetselaar is the Executive Vice President of Integrated Gas for Shell. He is accountable for Shell’s global LNG and GTL businesses and is based in Singapore. Previously, his positions included Executive Vice President of Finance for Shell’s Upstream International business, Vice President Finance in Middle East, and Vice President Finance and Commercial for Russia/CIS. Maarten joined Shell in 1995 as the Europe, Brazil and Africa where he became Vice President of Finance & IT. Maarten is Dutch with an Economics degree from Groningen University and a post-doctorate degree in Controlling from VU University Amsterdam.
