With infrastructure investment being discussed in US, the President and Congress should consider a grant programme supporting LNG bunkering, says John Snyder
One of the priorities discussed by President Trump during his 2016 presidential campaign was rebuilding America’s crumbling infrastructure. While details were in short supply, he suggested investing as much as US$1Tn into rebuilding roads, bridges, tunnels, railways, airports, ports, locks and dams. It was a promise that seemed to die on the campaign trail.
Now, two years after Mr Trump’s election, discussions about infrastructure investment have resurfaced and are starting to heat up. During a recent “productive” meeting with bipartisan leaders in Congress, the President, Democrats and Republicans discussed a spending package of US$2Tn for infrastructure projects.
While the talks are a welcome sign, no real specifics were revealed, including how such a spending package would be funded, and the President and Democrats are expected to meet again in June.
If an agreement is managed, one thing that should be included in any infrastructure investment package is support for developing LNG small-scale terminals, fuelling stations and bunkering vessels in the US.
That support could take the shape of a grant programme, which would align well with a policy of promoting a clean, efficient, sustainable transportation system using an abundant US energy resource. It would increase US LNG use domestically and promote the switch to LNG, a lower carbon-intensive fossil fuel, cutting CO2 emissions, SOx, NOx and particulate matter as compared with marine diesel or heavy fuel oil. The programme could be based on public-private partnerships, with grants covering up to 50% of the project funding and private investors holding the remaining stake.
Up to this point, private investment has funded all of the LNG bunkering infrastructure in the US and development has been exceedingly slow. In turn, the uptake of LNG as a marine fuel has been limited. The US seems locked into the classic 'chicken and egg' dilemma.
If the President and Congress need a model on how to quickly build and develop LNG infrastructure, they only need to look to the European Union’s efforts in the Baltic Sea and Europe. European LNG bunkering infrastructure is substantially better developed than that of the US, as the EU has enacted several policies and initiatives around facilitating the commercial adoption and penetration of LNG as a marine fuel.
Two EU programmes that have been instrumental in growing LNG infrastructure in Europe are the Trans-European Transport Network and Connecting Europe Facility. The programmes have supported the EU’s cofinancing of LNG infrastructure projects worth over US$735M.
As a result, 24 of Europe’s 25 major ports have LNG bunkering infrastructure in place, supporting the switch to LNG as a fuel and helping Europe meet its greenhouse gas emissions regulations. Additionally, constructing LNG import terminals has allowed Europe to diversify its supply of LNG, reinforcing its policy of energy security.
By contrast, LNG bunkering in the US is limited to Fourchon, Louisiana and Jacksonville, Florida, with another site under development on the US West Coast at Tacoma, Washington. LNG-fuelled cruise ships will also be bunkered using an articulated tug barge unit planned for Port Canaveral, Florida.
Now is the time for the President and Congress to consider supporting LNG bunkering. When building their infrastructure spending package, the President and Congress should tear a page from the European Union’s playbook and consider creating a grant programme for small-scale LNG terminals and bunkering stations in the US. The grants would provide the impetus needed for a more rapid adoption of LNG as a marine fuel, putting the US on a path for a more sustainable marine transportation system.