Two unrelated stories concerning the science of climate change caught my attention yesterday. The first was the announcement of a new report on solar variability, published in Nature, which appeared to upend established thinking about the impact of solar cycles on the earth's climate. The other was a discussion on Shell's climate blog of the potential impact of regulations affecting the sulfur content of marine fuel oil on an effect that has been partly mitigating climate change for decades. Both are interesting in their own right, while together providing a useful reminder that climate change is much more complex than the soundbites we typically hear from the media and advocacy groups, especially after we've had a run of unusually hot or cold weather.
As a less-than-fully reformed science nerd, I loved the simple elegance of the first sentence of the abstract of the Haigh, et al paper in Nature: "The thermal structure and composition of the atmosphere is determined fundamentally by the incoming solar irradiance." Paragraphs of exposition boiled down to 16 words that neatly frame the importance of the researchers' finding that for the last several years, and contrary to what we'd have expected from being in the low part of the solar cycle, featuring few or no sunspots for several years, the earth has been receiving more energy from the sun where it really counts--in the lower part of the atmosphere, or troposphere. If their interpretation of the satellite data is correct, then it pretty well torpedoes the notion from two years ago that a weak sun was about to flip global warming into global cooling. Of course it would also defuse some of the determined attempts to attribute this year's record temperatures entirely to humanity's greenhouse gas emissions.
While this finding isn't expected to alter the decade-to-decade view of climate change, it certainly suggests that we should be paying attention to a lot more than just CO2 and its sibling GHGs over shorter intervals, and in that respect it's a nice lead-in to the discussion of atmospheric cooling due to sulfur emissions from ships. That also applies to its implication that we still have a lot more to learn about the earth's atmosphere--where climate lives--and its dynamic interaction with the solar system.
In his blog on Shell's corporate website, Shell climate advisor David Hone shared his observations from a recent meeting exploring the impact of sulfur emissions on climate change. This apparently led to discussions of sulfur-based strategies for geoengineering the climate, but even without going that far it seems clear that this issue deserves a lot more attention that it has received. I was aware that such emissions tend to offset at least part of our greenhouse gas emissions, and that previous reductions in sulfur for onshore fuels--necessary for local air quality and modern vehicle anti-pollution equipment--might have given an unintended boost to warming. However, I think this is the first time I've seen the estimated climate forcing associated with marine fuels of -0.6 W/m2, which as Mr. Hone notes is not small relative to the total greenhouse gas forcing of around 2 W/m2. This situation surely justifies a serious re-think of the International Maritime Organization's decision to slash the sulfur content of all marine fuel burned globally, particularly since it is hardly the only alternative available to address the negative effects of these emissions on most human populations. It's also a much more expensive option for shippers--and thus anyone who benefits from international trade--than confining the low-sulfur rules to coastal waters. According to the analysis cited by Mr. Hone, the latter scenario would preserve nearly 80% of our sulfur sunshade, while the global low-sulfur rule would more than halve it.
When I was involved in marine fuel supply and distribution on the West Coast early in my career, it was already clear that the emissions from burning high-sulfur bunker fuel were a major source of pollution in port cities and coastal areas, and that the importance of addressing them would grow once most onshore emission sources, from power plants, trains and other mobile sources had been dealt with. Some of the sulfur was eliminated as large marine diesel engines replaced the old steam turbines, and much of the rest was addressed with restrictions on the quality of fuel that could be burned in port and along the coast. For now, vessel owners can comply with these rules by carrying two different fuels: enough of the more expensive low-sulfur fuel for use in US and other regulated coastal waters, and the rest consisting of much cheaper high-sulfur fuel for use on the high seas. That approach, which would no longer be an option after 2020 under the IMO rules, cleans up the air where it matters most but still puts enough SO2 into the atmosphere to scatter some of the incoming solar energy and offset part of the warming from CO2.
Using one form of pollution to offset another is hardly a perfect solution, but just as many scientists and environmentalists urge caution about introducing new geoengineering measures before we understand their consequences well enough, we should think long and hard about tampering with this long-standing, if inadvertent geoengineering process until we have something better in mind to replace it, or until we no longer need it.
Showing posts with label marine fuel. Show all posts
Showing posts with label marine fuel. Show all posts
Wednesday, October 13, 2010
Friday, August 08, 2008
Alternative Energy for Shipping
Last Sunday's New York Times carried an interesting article on the implications of high energy prices for the sustained globalization of supply chains. The reporter described how rising shipping costs were forcing manufacturers and retailers to rethink fundamental aspects of their business models, ultimately threatening the continuing expansion of world trade. Higher oil prices are responsible for much of the rise in freight rates, particularly for products carried by sea and air. Marine and aviation fuels are taxed very lightly, so they are more sensitive to changes in oil prices than motor fuels. But while airlines are hoping--perhaps in vain--for long-term fuel price relief from biofuels, cargo ship operators are likely to experience more competition from other uses for bunker fuel, and may need to seek solutions involving more exotic energy sources.
Earlier this year, I mentioned an idea for deploying small, high-tech sails to reduce the fuel consumption of cargo ships. But if world oil supplies fall seriously short of meeting potential demand in the years ahead--an easy prospect to imagine, given the rate at which Chinese and Indian consumers are buying automobiles--ocean freight lines may need to look elsewhere for their primary energy source, not just for ways to supplement it. In 2004, the residual fuel burned by ships and power plants accounted for 1 out of every 8 barrels of global oil demand. If competition for crude oil increases, refiners may be more interested in turning the long, complex molecules in fuel oil into higher-value products such as diesel and jet fuel, rather than selling them as-is. Thanks to heavy investment in upgrading hardware, US refineries produce less than a quarter of the "resid" volumes they did in the late 1970s, and their scope for further "resid destruction" is limited. Globally, however, upgrading 10 million barrels per day of resid output could ultimately prove more attractive than producing the same quantity of hydrocarbons from oil sands, shale, or coal-to-liquids. Where would that leave the shipping industry?
Two large-scale alternatives come to mind, assuming that biofuels will remain focused on the highest-value fuels segments, substituting for gasoline, diesel and jet fuel. Between the late 1970s and early 1990s, nuclear power and coal displaced most petroleum liquids from the US power generation sector. Either could provide a long-term substitute for residual fuel in ocean-going vessels. Nuclear power has obvious advantages in terms of its low emissions and extensive experience in naval fleets, plus a few civilian icebreakers. Unfortunately, the disadvantages will appear equally obvious to nuclear critics, in terms of the risks of proliferation and terrorism, which at sea may be less manageable than onshore. However, if it proved cost-effective, this is one way that nuclear power could directly displace more oil, and it might be achieved faster than we could build a new generation of land-based nuclear power plants.
A return to coal for ships' fuel might seem an odd and untimely suggestion, in light of concerns about greenhouse gases and the other emissions from burning coal. However, if this were done using small onboard gasification units fueling efficient gas turbines, rather than coal-fired boilers, the CO2 output from such a system might be no worse than from today's ships. And with the right equipment, sulfate and nitrate emissions that contribute significantly to urban air pollution in busy ports could also be scrubbed, at least for limited durations. The practicality of such an approach would have to be demonstrated, but the underlying driving force is clear. Despite the recent spike in coal prices, the BTUs in thermal coal still cost less than half as much as those in bunker fuel, at current prices.
A global retrenchment in trade due to the impact of high energy costs on freight rates would affect shipowners as much as their customers. A generation ago, the world's cargo fleets converted from steam turbines burning the lowest-quality bunker fuel available to the powerful, reliable marine diesel engines that dominate today's commercial shipping. The cost of operating these engines--and thus global shipping rates--depends on the price of the heavy fuel oils they consume. Although shipping firms lack a practical alternative fuel today, there's no reason the next generation of ships couldn't be built around entirely different energy sources. That would be on a par with the shift from coal to oil early last century, and far less dramatic than the switch from sail to steam.
Earlier this year, I mentioned an idea for deploying small, high-tech sails to reduce the fuel consumption of cargo ships. But if world oil supplies fall seriously short of meeting potential demand in the years ahead--an easy prospect to imagine, given the rate at which Chinese and Indian consumers are buying automobiles--ocean freight lines may need to look elsewhere for their primary energy source, not just for ways to supplement it. In 2004, the residual fuel burned by ships and power plants accounted for 1 out of every 8 barrels of global oil demand. If competition for crude oil increases, refiners may be more interested in turning the long, complex molecules in fuel oil into higher-value products such as diesel and jet fuel, rather than selling them as-is. Thanks to heavy investment in upgrading hardware, US refineries produce less than a quarter of the "resid" volumes they did in the late 1970s, and their scope for further "resid destruction" is limited. Globally, however, upgrading 10 million barrels per day of resid output could ultimately prove more attractive than producing the same quantity of hydrocarbons from oil sands, shale, or coal-to-liquids. Where would that leave the shipping industry?
Two large-scale alternatives come to mind, assuming that biofuels will remain focused on the highest-value fuels segments, substituting for gasoline, diesel and jet fuel. Between the late 1970s and early 1990s, nuclear power and coal displaced most petroleum liquids from the US power generation sector. Either could provide a long-term substitute for residual fuel in ocean-going vessels. Nuclear power has obvious advantages in terms of its low emissions and extensive experience in naval fleets, plus a few civilian icebreakers. Unfortunately, the disadvantages will appear equally obvious to nuclear critics, in terms of the risks of proliferation and terrorism, which at sea may be less manageable than onshore. However, if it proved cost-effective, this is one way that nuclear power could directly displace more oil, and it might be achieved faster than we could build a new generation of land-based nuclear power plants.
A return to coal for ships' fuel might seem an odd and untimely suggestion, in light of concerns about greenhouse gases and the other emissions from burning coal. However, if this were done using small onboard gasification units fueling efficient gas turbines, rather than coal-fired boilers, the CO2 output from such a system might be no worse than from today's ships. And with the right equipment, sulfate and nitrate emissions that contribute significantly to urban air pollution in busy ports could also be scrubbed, at least for limited durations. The practicality of such an approach would have to be demonstrated, but the underlying driving force is clear. Despite the recent spike in coal prices, the BTUs in thermal coal still cost less than half as much as those in bunker fuel, at current prices.
A global retrenchment in trade due to the impact of high energy costs on freight rates would affect shipowners as much as their customers. A generation ago, the world's cargo fleets converted from steam turbines burning the lowest-quality bunker fuel available to the powerful, reliable marine diesel engines that dominate today's commercial shipping. The cost of operating these engines--and thus global shipping rates--depends on the price of the heavy fuel oils they consume. Although shipping firms lack a practical alternative fuel today, there's no reason the next generation of ships couldn't be built around entirely different energy sources. That would be on a par with the shift from coal to oil early last century, and far less dramatic than the switch from sail to steam.
Thursday, January 24, 2008
Sailing Ships and Resid Conversion
The romance of the Age of Sail, with iconic "tall ships" like the Cutty Sark, stands in stark contrast to the dull container ships and tankers that carry the world's trade, today. However, with fuel costs rising and wind turbines gaining market share for electric power, it shouldn't be surprising that entrepreneurs are looking at ways to enable cargo vessels to derive some of their motive power from the ocean breezes. Yesterday's Wall Street Journal described one such effort, by SkySails AG. In the long run, this could have implications beyond just reducing operating costs and emissions for ship owners. The tighter global crude oil supplies become, the more attractive the fuel that powers these ships today will look as a feedstock for making gasoline, diesel and jet fuel.
Although most of the world's warships employ either nuclear energy or powerful and efficient gas turbines, cargo vessels still generally run on heavy fuel oil that is the residue of the oil refining process. A major technology shift occurred in the 1980s, when the cargo fleet converted from boilers and steam turbines to enormous diesel engines requiring fuel oil with a lower viscosity than that burned in the old steamships. While somewhat higher in quality than bunker fuel, this oil is still made up mostly of refinery leftovers, and it normally sells at a significant discount to crude oil. For example, the current price of IFO380, a common grade of marine fuel, equates to about $70 per barrel in Los Angeles, or about $6.50 per barrel less than the posted price of the San Joaquin Valley heavy crude (plus freight) from which it is most likely derived.
For many years, the refining industry has had the technology to convert this low-quality material into higher-value fuels, limited mainly by the economic return available on the large capital investments involved. With the steady growth of US "resid destruction" capacity since the 1970s, more than 2 million barrels per day of this material finds its way into delayed coking units, resid hydrocrackers, and residuum fluid catalytic crackers, reducing the amount of crude oil required to produce a given slate of gasoline, diesel and jet fuel, and leaving only about 700,000 bpd for the marine and other heavy fuel oil markets.
A recent report from Cambridge Energy Research Associates (CERA,) a sister company of my sponsor John S. Herold, Inc., suggests that the rate of decline in production from the world's existing oil fields is 4.5% per year. This is somewhat less than has been feared but still substantial, requiring the replacement of essentially an Iran each year. Given the risk of project delays and the relatively flat recent non-OPEC output, this figure seems unlikely to allay fears of an impending peak in global oil production. Whenever Peak Oil occurs, the incentive to convert more residual fuel should increase, perhaps rendering it too valuable as a feedstock to continue burning in large quantities onboard ships. If it makes sense to spend $100 billion on the hardware to exploit remote oil sands deposits and convert them into synthetic crude oil, how much sense does it make to sell large volumes of comparable hydrocarbons that are already inside existing refineries?
Although the amount of marine fuel freed up by the application of high-tech sails to cargo ships appears to be modest, it looks too important to ignore, as crude oil output struggles to keep pace with demand. It's timely for the shipping industry to explore its options for higher efficiency and alternative propulsion now, before they are forced to do so by further shifts in the global oil supply and demand balance.
Although most of the world's warships employ either nuclear energy or powerful and efficient gas turbines, cargo vessels still generally run on heavy fuel oil that is the residue of the oil refining process. A major technology shift occurred in the 1980s, when the cargo fleet converted from boilers and steam turbines to enormous diesel engines requiring fuel oil with a lower viscosity than that burned in the old steamships. While somewhat higher in quality than bunker fuel, this oil is still made up mostly of refinery leftovers, and it normally sells at a significant discount to crude oil. For example, the current price of IFO380, a common grade of marine fuel, equates to about $70 per barrel in Los Angeles, or about $6.50 per barrel less than the posted price of the San Joaquin Valley heavy crude (plus freight) from which it is most likely derived.
For many years, the refining industry has had the technology to convert this low-quality material into higher-value fuels, limited mainly by the economic return available on the large capital investments involved. With the steady growth of US "resid destruction" capacity since the 1970s, more than 2 million barrels per day of this material finds its way into delayed coking units, resid hydrocrackers, and residuum fluid catalytic crackers, reducing the amount of crude oil required to produce a given slate of gasoline, diesel and jet fuel, and leaving only about 700,000 bpd for the marine and other heavy fuel oil markets.
A recent report from Cambridge Energy Research Associates (CERA,) a sister company of my sponsor John S. Herold, Inc., suggests that the rate of decline in production from the world's existing oil fields is 4.5% per year. This is somewhat less than has been feared but still substantial, requiring the replacement of essentially an Iran each year. Given the risk of project delays and the relatively flat recent non-OPEC output, this figure seems unlikely to allay fears of an impending peak in global oil production. Whenever Peak Oil occurs, the incentive to convert more residual fuel should increase, perhaps rendering it too valuable as a feedstock to continue burning in large quantities onboard ships. If it makes sense to spend $100 billion on the hardware to exploit remote oil sands deposits and convert them into synthetic crude oil, how much sense does it make to sell large volumes of comparable hydrocarbons that are already inside existing refineries?
Although the amount of marine fuel freed up by the application of high-tech sails to cargo ships appears to be modest, it looks too important to ignore, as crude oil output struggles to keep pace with demand. It's timely for the shipping industry to explore its options for higher efficiency and alternative propulsion now, before they are forced to do so by further shifts in the global oil supply and demand balance.
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