The effects of low natural gas prices are spreading to marine transportation and other potential industrial expansion in the Pacific Northwest, according to officials in the Oregon-based Northwest Gas Association (NWGA) and local media reports.
While there are no reports the once robust and energy-intensive aluminum smelting business would return to its former prominence in the region, NWGA Executive Director Dan Kirschner told NGI that there is “intense interest” in natural gas applications in the marine transportation sector and the forest products industry. Kirschner also has picked up “whispers” about some growth in fertilizer projects in the region.
At least two large Puget Sound-area ship operators — Washington State Ferries and cargo operator Totem Ocean Trailer Express (TOTE) — are planning to tap into low-cost natural gas supplies in place of diesel, each planning to make $100 million bets on converted vessels to run on liquefied natural gas (LNG). TOTE CEO John Parrot told the Puget Sound Business Journal recently that he is “becoming a big fan” of LNG.
For the Northwest region, gas prices are about half of what they were a year ago, causing other industries, such as forest products, to consider switching to natural gas. The region has no local gas supplies, but through increased interstate gas pipelines it can tap burgeoning shale gas sources in both western Canada and the western United States.
Kirschner said he has not heard of any new reindustrialization plans by aluminum smelters, such as Alcoa, which operates the two remaining facilities in the region, which at one time boasted 10 aluminum facilities. “Neither of the plants is operating at full capacity, so I’m guessing there is some room to spin up [the two plants],” he said.
The state’s ferry boat operator is looking to be able to seek approval from lawmakers next year to retrofit its six boats. The proposal has been cleared by the U.S. Coast Guard, but some state officials are raising concerns about mounting LNG tanks above passenger cabins.
Plans call for two pressurized LNG tanks to be mounted on the roofs of cabins on the Washington State Department of Transportation’s six Issaquah-class ferries for a total estimated cost of $103 million. Annual savings would be about $7.6 million when compared with the cost of running diesel-powered boats, the ferry operator told the Business Journal.
TOTE would require LNG tanks to replace six diesel-fired engines on each of its ships, which move between Tacoma, WA, and Anchorage, AK.
TOTE is challenged to minimize its emissions because none of its routes run outside of the 200-mile coastal limit, meaning the cargo ships are always required to operate under the North American Emissions Control Area standards, which are stricter than those in international waters.
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