John E. Graykowski
Maritime Industry Consultants
July 18, 2013
Abundant Domestic Supplies
Consistent with National Energy Policy Objectives
LNG has the potential to transform the maritime and
2Maritime Industry Consultants
Domestic supplies of natural gas will continue to increase.
LNG will remain less costly as transportation fuel compared with
ultra-low sulfur diesel.
Environmental regulations of mobile source emissions will
increase, particularly in the maritime industry.
Marine and domestic transportation industries will continue
movement to LNG; creating high volume potential market for
International maritime operators will acquire LNG-fuel
capabilities and expect U.S. supplies to be available.
LNG/CNG will become common marine/transportation fuel in
next five years.
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Chicken and egg” problem; e.g. no available infrastructure to
support/signal investment in LNG conversion or new equipment; and
no certain demand to justify LNG infrastructure investment.
Lack of clear, uniform federal regulatory structures on siting,
permitting, operations of small-scale LNG fuel terminals.
Local permitting required; opportunities for intervention by
environmental community; NIMBY
Lack of familiarity, understanding, and relationships between
marine/transportation industries and gas distribution industry;
incompatible fuel pricing and purchasing models.
A catalyst is needed to provide credible signal to marine and
transportation industries and federal agencies that LNG infrastructure
will be available to the marine and transportation industries.
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Ports will be at center of LNG activity in marine industry and platform
for expansion to expansion to ferries, trucks, port infrastructure, etc.
Ports control property, have role in siting, permitting, cost and
operations of an LNG marine fuel terminal.
Ports have interest in working with regulatory agencies to ensure safe
operations. Goal: uniform safety and operational procedures for all
LNG marine fuel terminals in the United States.
Ports in best position to work with marine operators and gas suppliers
to build broad public support for LNG in transportation industries and
facilitate expansion of LNG/CNG use in and around port areas.
Ports can serve as the “anchor” for broad deployment of LNG
throughout United States!
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Significant and near term emissions reductions in port
Ports viewed as leaders in “Green” initiative and
leading expansion of domestic use of domestic natural
LNG infrastructure investment creates new market and
“First mover” advantages created for ports that lead
LNG effort; will be in position to compete for
international liner vessels as global LNG conversion
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7Maritime Industry Consultants
USCG 33 CFR Part 127 “Waterfront facilities handling
liquefied natural gas and liquefied hazardous gas”
PHMSA 49 CFR Part 193 “Liquefied Natural Gas Facilities:
Federal Safety Standards”
NFPA 59A NFPA 59A: Standard for the Production, Storage,
and Handling of Liquefied Natural Gas (LNG)
FERC Section 7 of the Natural Gas Act (15 USC § 717 et
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Existing regulations aimed at large import/export facilities
NOT small scale marine terminals
Regulations conflict or are silent on marine fuel terminals
Application of current regulations has potential of increasing
cost and regulatory burdens to point of infeasibility
Terminal property limitations
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33 CFR 127.001 Subparts A and B of this part apply to the
marine transfer area for LNG of each new waterfront facility
handling LNG and to new construction in the marine transfer
area for LNG of each existing waterfront facility handling LNG
§ 127.005 Waterfront facility handling LHG means any
structure on, in, or under the navigable waters of the United
States, or any structure on land or any area on shore immediately
adjacent to such waters, used or capable of being used to transfer
liquefied hazardous gas, in bulk, to or from a vessel.
Part 127.009 The Coast Guard is authorized by law to establish
water or waterfront safety zones, or other measures for limited,
controlled or conditional access and activity, when necessary for
the protection of any vessel, structure, waters or shore area.
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49 CFR 193.2001 This part does not apply to:
In the case of a marine cargo transfer system and associated
facilities, any matter other than siting pertaining to the system or
facilities between the marine vessel and the last manifold (or in
the absence of a manifold, the last valve) located immediately
before a storage tank.
§ 193.2007 Definitions.
Waterfront LNG plant means an LNG plant with docks,
wharves, piers, or other structures in, on, or immediately
adjacent to the navigable waters of the United States and any
shore area immediately adjacent to those waters to which vessels
may be secured and at which LNG cargo operations may be
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Part 127, “LNG loading flanges must be located at least
300 meters from “each bridge crossing on a navigable
NFPA 59A, “a pier or dock … shall be located so that any
marine vessel being loaded or unloaded is at least 30
meters from any bridge crossing a navigable waterway.
The loading or unloading manifold shall be at least 61
meters from such a bridge.
NFPA 59A, “General cargo, other than ships’ stores for the
LNG tank vessel, shall not be handled over a pier or dock
within 30 meters of the point of transfer connection while
LNG or flammable fluids are being transferred through
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LNG is new to transportation industries, government and
Opportunity to create public policies which:
◦ Provide uniform regulatory certainty
◦ Encourage development of LNG as a transportation fuel
◦ Provide incentives to industry for rapid expansion of
LNG infrastructure and uses of LNG
LNG is coming to the transportation industry for
reasons of cost, abundant supplies and environmental
compliance. The ports can and should play a central
role in this development.
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Need genuine public/private partnership among all
Led by transportation industries, gas suppliers and ports
Need clear policy commitment and action from
Administration and Congress to support LNG/CNG as
preferred transportation fuel.
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John E. Graykowski
Maritime Industry Consultants
Maritime Industry Consultants 16
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