With the development of an ‘LNG Highway’ from Queensland to Victoria already well underway, LNG looks set to become a dominant player in heavy transport green fuel alternatives, writes Alex Dronoff.
The development of intelligent technologies that balance the need for environmental protection with advancing industrialisation and economic growth is one of the great challenges facing the world today.
In the heavy transport sector, major inroads are being made with gaseous fuels, such as LNG, playing an important role in meeting Australia’s growing appetite for cleaner, greener energy alternatives.
There are several road blockages to overcome in order for the fuel to reach its full potential, however there is little doubt LNG will be a crucial player in Australia’s future energy mix.
Firstly some important basics. What is LNG?
Not to be confused with LPG (liquefied petroleum gas) which is most commonly associated with barbeque bottles, LNG (liquefied natural gas) is natural gas, the same gas that we might have piped into our homes to power our stoves or gas heaters.
LNG is predominantly composed of methane whereas LPG is a petroleum derivative.
LNG is an odourless, colourless, non-toxic, noncorrosive substance. It becomes a liquid when cooled to approximately -160°C. As a liquid, it is 600 times denser than natural gas, therefore liquefying natural gas makes it much easier to transport as it takes up far less volume.
Natural gas, as the name suggests, is produced naturally and there is an abundant supply in Australia. Given the current demand projections, it is thought there may be 80 to 100 years of natural gas in reserve. Some of the sources of natural gas include natural gas fields, oil fields, coal seam methane, land fill, sewage and decomposing foodstuffs.
Widespread use of LNG is still in its infancy in Australia, however there are many uses for it, including generating electricity, fuel for buses and taxis, fuel for ferries and ships, a gas source when no pipeline gas is available and back-up supplies for the natural gas pipeline network.
The use of LNG as fuel for heavy duty vehicles is of course another important use and the focus of this article.
Australia has been using natural gas (LNG) for trucks in Australia since 2001. The majority of these vehicles were introduced under the auspices of the Commonwealth Government’s Alternative Fuels Conversion Program (AFCP) which operated between 1 January 2000 and 30 June 2008.
Much rests in the hands of today’s government in order for the full benefits of LNG to be properly realised.
Gas Energy Australia (GEA), in its 2013-2014 budget submission paper Building a more secure energy future through increased use of gaseous fuels, points to the following commercial barriers for LNG and other alternative fuels as identified by the Australian Government’s Energy White Paper.
- Severe constraints in the market availability of original equipment manufacturer (OEM) gas-powered vehicle products, including LPG-powered passenger cars and light commercial vehicles, CNG-powered cars and trucks, and LNG-powered trucks. The limited availability of these vehicles runs contrary to the experience of overseas jurisdictions where the range of OEM gas-powered vehicles is rapidly expanding (i.e. LPG passenger vehicles in Europe and natural gas–powered trucks and buses in North America).
- Limitations in existing gaseous fuels infrastructure, with specific reference to the absence of any substantive national infrastructure for natural gas vehicle refuelling (CNG and LNG).
- Substantial switching costs incurred by users in transitioning from conventional transport fuels to gaseous fuels, largely due to the higher capital cost of gas vehicle technologies.
- Regulatory barriers relating to the market adoption of gas–powered vehicles in terms of dimension and mass constraints for heavy vehicles.
GEA points out that despite acknowledging these barriers as well as the economic costs of delayed introduction of alternative transport fuels, the Australian Government has not instigated any measures to systematically address them since the release of the Strategic framework for alternative transport fuels in December 2011.
As the national peak body that consolidates the advocacy, policy and technical development profile of the downstream gas industry in Australia, GEA is seeking a range of commitments from the Government to enhance the viability of gaseous fuels.
GEA is urging government policy makers to work cooperatively with the industry in order to create greater incentives for the uptake of gaseous fuels including improved availability of OEM gas-powered vehicle products and greater assistance in the development of national gas refuelling operations across Australia.
Legislation passed by the Federal Government in 2011, extending the coverage of its fuel excise regime to include alternative fuels such as LNG, is seen as another significant barrier in providing the Australian trucking industry with a viable alternative to diesel.
Many within the industry believe the new tax disadvantages a ‘cleaner and greener’ LNG as an emergent transport fuel when compared with diesel and other alternate fuels. The new tax has the potential to curtail an embryonic industry which has such enormous potential in providing energy security for Australia and genuinely reducing carbon emissions.
Despite the hurdles, LNG is changing the face of the Australian heavy transport industry due to a number of unique advantages.
Because LNG is a locally produced Australian indigenous fuel in plentiful supply, it has the benefit of not being exposed to international crude oil prices, or lack of availability caused by European demand cycles or fluctuations in the Australian Dollar.
As a result, customers receive a higher degree of operating cost certainty, compared to imported LPG or diesel, allowing them to plan and budget for their predetermined energy operating costs throughout the year.
Despite the lower energy content of LNG when compared to diesel (1.65 litres of LNG is required to substitute a litre of diesel), the lower price of LNG means it delivers considerable annual fuel savings.
LNG also has significant environmental benefits. It produces up to 20 per cent less greenhouse gas emissions when compared with diesel, and reduces noise pollution as engines run quieter.
Also, compared to other fuels and industrial gases, LNG is regarded as being very safe. Consisting mainly of methane, LNG is more than half the specific gravity of water and lighter than air when in gaseous form.
LNG’s combustibility in air is between 5% and 15%. Outside of this range ignition is not possible and in its liquid state, LNG will not combust.
As the world grows more and more environmentally aware, LNG, the cleanest burning fossil fuel available, will play an increasingly important role in delivering an economical low-emissions fuel alternative.
Important work is being done with heavy vehicle manufacturers and engine builders to develop ‘LNG Highways’ to refuel transport fleets throughout Australia.
Proposed LNG fleet refuelling networks would include transport company depot refuellers located at the transport company yard and public refuellers, located at selected truck focused service stations and roadhouses around Australia.
“More than 18 months in construction, the plant represents a vital link in the planned $200 million LNG highway being built along Australia’s eastern seaboard comprising a network of refuelling stations on major routes.”
CASE STUDY
BOC
“Designed and built in Australia, the refueller allows drivers to refuel the same quantity in half the time when compared with diesel.”
As an example of what can be achieved when stakeholder groups including the government work together collaboratively, BOC opened Australia’s first Micro-LNG plant in Westbury, Tasmania, in early 2011.
The $150 million project comprised the construction and operation of the Micro- LNG plant and supplying six refuelling stations to trucking consortium LNG Refuellers Pty Ltd across Tasmania. It was jointly funded by BOC, LNG Refuellers and government grants.
The Westbury plant was a forerunner to similar technology being rolled out across mainland Australia in a long-term commitment to supporting the domestic gas industry and reducing greenhouse emissions.
The Westbury Micro-LNG facility has the capacity to produce 50 tonnes a day of LNG which is the equivalent of 70,000 litres of conventional diesel. Its refuelling network, located on strategic trucking routes around the island state, is available to any transport company equipped for LNG and ready to capitalise on its commercial, economic and environmental benefits.
A year later in February 2012 a $65 million LNG project was launched in Dandenong, Victoria, signifying another important milestone in the development of safe, efficient, simple and eco-friendly application of alternative fuels for trucking and local gas grids.
More than 18 months in construction, the plant represents a vital link in the planned $200 million LNG highway being built along Australia’s eastern seaboard comprising a network of refuelling stations on major routes.
With a capacity to produce up to 100 tonnes of LNG per day, the project comprised a major expansion and refurbishment of the existing Air Separation Unit (ASU) and LNG facilities at Dandenong.
Additionally a Micro-LNG plant is currently being developed near the Queensland township of Chinchilla which will also be dedicated to providing the trucking industry with the cleaner alternative fuel.
Expected to come online in 2014, the process plant will purify natural gas fed into the Roma-Brisbane pipeline by project partner QGC. It is the same gas Queenslanders use every day for a variety of industrial purposes and to cook meals and heat their homes.
The natural gas is liquefied in a refrigeration process and the resulting LNG will be transported in specially designed vacuum tankers to a network of approximately nine refuelling stations creating an LNG highway from Queensland to Victoria.
Major investment is occurring at all points of the supply chain with a strong focus in recent times on the refuellers.
The soon-to-be-opened public LNG refueller at Tarcutta NSW is an example of the next-generation refuellers which replicate the traditional bowser experience for drivers in terms of ease of use but offers distinct advantages.
Designed and built in Australia, the refueller allows drivers to refuel the same quantity in half the time when compared with diesel. Also, the system greatly reduces fuel losses by utilising patented liquid nitrogen technology to keep the LNG cold.
Other advantages over traditional LNG refuellers include a simplified design reducing the number of automatically activated valves from eight to three to cut costs and improve reliability, and greatly reducing the ‘footprint’ size of the refeuller to approximately 5m x 8m, down from 5m x 15m.
These innovations are helping to mainstream the use of LNG and create greater efficiencies for transport operators while contributing positive health and environmental outcomes for future generations.
PROTECTION FOR THE FUTURE
Climate protection is a huge challenge for society and one which calls for innovative breakthroughs.
The issues of energy security and climate protection are closely intertwined. If we wish to leave an intact environment so that future generations can enjoy a high standard of living, we need to shift our thinking.
In its Building a More Secure Energy Future paper, GEA makes the following points about improving energy security for the transport sector.
- The 2011 National Energy Security Assessment (NESA) (DRET 2011b) highlights a dramatic decline in Australia’s oil self-sufficiency over the next 20 years, forecasting that Australia’s self-sufficiency will decline from 50% in 2007–08 to 24% in 2029–30.
- While this decline in self-sufficiency is not a major concern if sufficient imports are available in the global marketplace, the increasing uncertainty about the global price and supply outlook for liquid transport fuels signals a need to future-proof Australia’s transport industry through diversification of the current transport energy mix. The 2011 NESA pointed to a decline in liquid fuel security from 2016.
- The abundant supplies of indigenous gaseous fuels (both LPG and natural gas), coupled with their ability to be used in conventional internal combustion engines, highlights a significant opportunity to cushion the Australian economy from possible substantial rises in the price of liquid transport fuels in the near future.
A broad range of clean technologies that effectively tackles the challenges of energy security, climate change and sustainability need to be encouraged. It is vital that governments and industry diversify and broaden the current energy mix, increasing in particular the share of renewable sources.
There is no single technology or resource that will work for all regions and needs. The answer lies in a balanced energy mix that makes both economic and ecological sense.
Despite efforts to promote renewable energies, fossil fuels will continue to meet the lion’s share of the world’s energy needs for decades to come. In the near future, therefore, we need an end-to-end, efficient and reliable carbon dioxide (CO2) management system.
Thankfully, vast contributions are being made towards minimising the climate impact as the world transitions to new forms of energy sourcing and consumption by delivering innovative, clean technologies and solutions targeted specifically at CO2 management.
Natural gas will play a key role alongside coal in the energy mix of the future. Not only does it rank as one of the most eco-friendly fossil fuels, it will continue, unlike oil, to be available in large quantities as we move forward.
To recover and deliver natural gas reserves in an eco and climate-friendly manner, engineers are busy building natural gas treatment and liquefaction plants in Australia and around the world.
Clean, clever technologies can turn the costs involved in climate protection into wise investments securing our future.
PROFILE
Alex Dronoff
General Manager LNG
BOC, a member of the Linde Group
Alex is an honours graduate in Chemical Engineering from the University of NSW.
He is a General Manager with BOC, a member of the Linde Group – one of the leading global industrial gases and engineering companies. BOC is actively pursuing opportunities in the energy and transportation industries and Alex is responsible for developing the LNG business for BOC. This includes the production, and the entire supply chain infrastructure for supplying LNG directly to customers for the domestic market.
Prior to joining BOC in 2003, Alex had 20 years experience in the oil and gas industries. The majority of his experience was with Shell in Australia and The Netherlands where he held various senior management roles in oil refining supply, economics and operations management. He also worked for Elgas (now owned by BOC) where he was responsible for the commissioning and the ongoing business management of the greenfield Sydney Underground LPG storage Cavern and shipping import and export facility, the largest in the Southern hemisphere.
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