The Feasibility, Issues, and Benefits Associated with Expanded Use of Natural Gas at Seaports and Other High Horsepower Applications

This report assesses the feasibility, issues, and potential benefits associated with the expanded use of natural gas in California high-horse-power (HHP) seaport applications. Using natural gas in HHP seaport applications can provide strong societal benefits, especially in high-impact sectors like marine vessels and locomotives. It can significantly reduce key harmful air pollutants, thereby improving ambient air quality. By switching to natural gas, HHP end users at California’s seaports have the opportunity to simultaneously comply with challenging regulatory requirements while potentially reducing life-cycle costs. Moreover, if these fleets can gain affordable access to growing volumes of renewable natural gas (RNG) in California, they will be able to realize deep reductions of greenhouse gas (GHG) emissions.

The focus of this report is on using natural gas in California’s three major ports (Los Angeles, Long Beach, and Oakland). These large seaports act as the anchors of California’s world-class goods movement system. To date, the actual use of natural gas to power HHP vehicles, vessels, and equipment at these and other North American ports has essentially been limited to proof-of-concept tests and a few early market commercial deployments. Moreover, very low oil prices over the last several years have inhibited further growth of demonstrations and deployments. However, the predicted return of higher oil prices, combined with recent phasing-in of stricter emission regulations, has stimulated new interest in switching to clean-burning natural gas engines at California ports and across the U.S. LNG fuel systems are receiving the most interest for these large HHP applications, but CNG fuel systems may also play a role in future niche applications. Gradually, RNG can be phased in to displace fossil-based natural gas, to sharply reduce GHG emissions, and maximize the climate change benefits.

As summarized in this report, there are important technical, policy, institutional, and economic challenges that must be addressed before California can realize the major benefits of using natural gas in seaport HHP applications. Recommendations are provided for actions that can be helpful to enable fuel switching in marine and locomotive applications serving California seaports. The recommendations generally fall within the jurisdictions of key California state agencies and state funding programs. However, they also broadly apply to federal and local agencies, industry groups, and academic institutions that seek to reduce criteria pollutant and/or GHG emissions from marine vessels and locomotives.

Specific recommendations regarding how to help advance natural gas engines and vessels/locomotives include:

• Conduct research, development, and deployment demonstrations to improve the feasibility, emissions, and efficiency of dual-fuel and dedicated natural gas engines designed for marine vessels and locomotives. The focus should be on engine technologies with the best potential to achieve emission levels well below the current cleanest standards. These applications have significant potential to displace conventional marine and rail fuels and reduce emissions.
• Support research, development, and demonstration (RD&D) efforts to apply novel fuel injection strategies for large-bore, low-speed direct injection natural gas engines that can fall back on 100 percent diesel while maintaining low methane slip and high efficiency.
• Explore the most promising applications for RD&D funding that fall under State and local control, such as switcher and intrastate locomotives, commercial harbor craft, and cargo-handling equipment.
• Review potential for similar locomotive RD&D efforts involving intrastate commuter rail and locomotives (e.g., Amtrak Capitol Corridor, Pacific Surfliner, San Joaquin Valley routes).
• Transfer technologies that are already being commercially used to achieve near-zero-emission levels in on-road heavy-duty natural gas engines to smaller marine and locomotive applications (e.g., ferries and switcher locomotives). Special areas of focus could include better control of methane slip, improved durability of emission control systems, and increased fuel efficiency; details will depend on the specific application and engine technology.
• Support activities to help manufacturers reduce the incremental subsystem costs of natural gas marine vessels and locomotives, including onboard fuel storage systems. Once beneficial technologies have been demonstrated, HHP deployment may not need further funding support due to their potential to achieve good fuel cost savings and compelling payback on investments. Incentives designed specifically to help deployments in lower-fuel-use, high-visibility applications like switcher locomotives, ferries/passenger boats, commercial harbor craft, and cargo-handling equipment may help establish visible progress.
• Provide support to facilitate and accelerate best practices and emerging codes and standards. For example, California agencies can support the ongoing development of federal standards for natural gas tender cars for locomotives.

To help support and expand fuel production, infrastructure development, and bunker supply chains, recommendations include:

• Identify and facilitating strategic opportunities to develop LNG bunkering projects that specifically will serve multiple high-fuel-use applications, including marine, rail, CHE, and peak shaving facilities. For example, the Jacksonville LNG plant has been designed to serve multiple transportation end uses.
• Develop a standardized LNG specification that ship and rail operators can use when they procure fuel. To reduce potential risks and help streamline fuel purchasing, this should be based on a common framework and terminology that describe key LNG fuel composition and conditioning requirements across the full LNG supply chain.

To specifically help increase in-state RNG production and its use in HHP port applications such as marine vessels and locomotives, recommendations include:

• Provide focused outreach and education that can provide important information about the emerging production of RNG and its key end uses as an ultra-low-GHG-emission transportation fuel. This includes highlighting benefits from using RNG in existing applications (e.g., heavy-duty near-zero-emission on-road NGVs), but also in potential off-road applications like OGVs and interstate locomotives.
• Study the potential future dynamics between the supply, demand, and cost/price for RNG as a transportation fuel in California, especially if high-fuel-use applications like OGVs and interstate freight locomotives are to use RNG instead of fossil natural gas. This should include evaluating the potential role of removing current exemptions in the LCFS program of RNG used in these applications.
• Evaluate the status of and potential support for facilities and products providing low-cost small-scale biogas liquefaction.
• Develop a broad-based working group among agencies, utilities, and stakeholders to establish policies and programs that specifically support RNG production as a transportation fuel and address barriers to the utilization of RNG into common carrier natural gas pipelines.
• Consider a study on the viability and efficacy of producing renewable LNG near railheads and transporting it by rail, particularly where gas pipelines are not readily available.