The Future Use of Natural Gas as Vessel Fuel (Illustration by I.M. Skaugen)

1. The Future Use of Natural Gas as Vessel Fuel(Illustration by I.M. Skaugen) Ken Smith Marine Chemist Association's Asst. Division Chief - General Engineer 54th Annual Seminar Office of Vessel and Facility Operating Standards Chicago, IL U.S. Coast Guard Headquarters 14 August, 2012

2. Outline • LNG Marine Activity Past and Present • Driving Factors • LNG Interests • Delivery Options • Regulations and Standards • Gaps

3. 2003 - 2007 Outlook LNG Imports (BCF) Source: EIA - Annual Energy Outlook 2005

4. 1990-2011

5. EIA Annual Energy Outlook 2012

6. Driving Factors for use of LNG • Lower cost compared to ultra low sulpher marine diesel • ECA (Emission Control Area) requirements: • Maximum level of sulphur in fuel, all ships: • 10,000 ppm by 1st July 2010 • 1,000 ppm by 1st January 2015 • Nitrogen emission for newbuilds: • 80% reduction in NOx emission from 2016 on.

7. Current US Interests

8. LNG Future Interest

9. Vessel Supply Options

10. Shore Supply - Permanent • Fixed storage tanks • Hard piping to pier • Regulated 33 CFR Part 127 • Design • Equipment • Operations • Maintenance • Training • Firefighting • Security • Hot Work Permits • NFPA 59A - IBR

11. Shore Supply - Mobile • Tank Trucks • Hose connections • Area where transfer takes place - Regulated 33 CFR Part 127 - Same Requirements Apply • Tank Truck regulated by - DOT/PHMSA 33 CFR Part 177

12. Vessel Supply 46 CFR Subchapter “D” Tank Vessel Regs Classification Rules IMO IGC Code Vessel using LNG as fuelcovered by Policy

13. What’s Not Covered by US Regs LNG Fuel System Details • Operational Procedures for Bunkering • Personnel Training • Interface between supplier and receiver

14. What Exists Elsewhere? • IMO – IGC Code • Rules for Bunkering Vessel • IMO – IGF Code • Rules for Vessel using Gas as Fuel • SIGGTO • Guidelines for LNG Transfer • Classification Society Rules • ABS, DNV, LR, GL • Swedish Marine Technology Forum • LNG Ship to Ship Bunkering Procedures • ISO (Under Development) • Guidelines for Systems and Installations for Supply of LNG

15. USCG Current Approach Coast Guard analysis has been on a Case-By-Case Basis • Concepts have used IMO Interim Guidelines as a baseline standard • Additional requirements tailored to each specific review • Design Basis – framework of standards and requirements Equivalent level of safety to Title 46 CFR

16. Bridging Gaps • Design • Shore - 33 CFR Part 127 + Policy Ltr • Ship – IMO Guidelines + Policy Ltr pointing to 46 CFR cites • Policy (Until regs are developed) • CG-ENG 01-12 (Ship – published 4/19/2012) • CG-OES XX-12 (Ops & Trng – Under development)

17. CG-ENG 01-12 Policy Letter • Establishes design criteria for natural gas fuel systems that provides an equivalent level of safety compared to traditionally fueled vessels designed to US regulations • Outlined to align section by section with IMO Res. MSC.285(86) • Provides direction to specific US standards (e.g. ASME B31.3, ASME BPV Code, ANSI, NFPA, etc.) • Provides direction to specific US regulations (e.g. 46 CFR Part 56, 154) • Establishes requirements beyond those required by IMO in several areas (e.g. gas detection, testing of gas tanks and gas piping) • Rulemaking underway to establish regs based on current policy

18. CG-OES Policy Letter • Interim guidelines for fuel transfer operations and training for personnel working on vessels that use natural gas as fuel • Specifies acceptable fuel sources • Aligns with existing regs concerning fuel transfer procedures (33 CFR Part 154, 155, and 156) • Aligns with existing regs concerning LNG waterfront facilities (33 CFR Part 127) • Aligns with IMO Res. MSC Circ.285(86) & Swedish Marine Forum • Requires Operations, Maintenance, Training, and Emergency Manuals • Outlines requirements for personnel training & PIC quals • Policy is going through internal clearance • Concepts to be part of Rulemaking effort

19. References U.S. Energy Information Administration (EIA), http://www.eia.gov/ American Clean Skies Foundation, Natural Gas for Marine Vessels: U.S. Market Opportunities by M.J. Bradley & Associates, April 2012, http://www.cleanskies.org/wp-content/uploads/2012/04/Marine_Vessels_Final_forweb.pdf Swedish Marine Technology Forum, LNG ship to ship bunkering procedures, Linde Cryo AB | FKAB Marine Design, Det Norske Veritas AS, LNG GOT, and White Smoke AB, http://www.smtf.se/fileadmin/documents/LNG02_projektrapport_appendix_www.pdf Danish Maritime Authority, Full Report – Northern European LNG Infrastructure Project, A Feasibility Study for an LNG Filling Station Infrastructure and Test of Recommendations, www.dma.dk/News/Sider/FinalReport.aspx Marintek, Norweigian Marine Technology Research Institute, LNG as a Fuel for Ships in Short Sea Shipping,www.sintef.no/upload/MARINTEK/Review 2-2009/MR-2_2009.pdf DNV Presentation, The Age of LNG is Here, Most Cost Efficient Solution for ECAs, www.cleantech.cnss.no/wp-content/uploads/2011/06/2010-DNV-The-age-of-LNG-is-here.pdf DNV, Article, LNG Fuel Supply to the Ship Side, I.M. Skaugen’s vision for an ECA port in the near future, http://www.dnv.com/industry/maritime/publicationsanddownloads/publications/updates/ferry/2010/01_2010/lngfuelsupplytotheshipside.asp

20. Questions? (Illustration by I.M. Skaugen)