American Innovation, Resolve, and Persistence Wanted

Alternative Energy

The United States faces innumerable challenges. Policy experts could write entire treatises on all of these, but clear solutions may get lost in complicated or trivial details. As the Pareto principle reminds us, 80% of our results can be achieved by focusing 20% of our efforts on the most important activities. So, what if we concentrated our labors on two pivotal problems that American resolve, innovation, and persistence can, and must, successfully tackle – transportation and energy.

Let’s start with transportation. The US transportation system of highways, bridges, tunnels, and railroads is stressed, strained, and badly in need of repairs and upgrades. 7 of the 10 most congested cities are on the East Coast and West Coast. In fact, if you travel along the I-5 or I-95 corridors, you probably think that the 3 million large trucks in the US are directly in front of you. You may wonder why we don’t repair and expand the transportation system.

There are many reasons but consider the biggest, money. At least $2.6 trillion is necessary to bring our transportation and infrastructure system up to our expectations for efficiency and safety. Then, along the coast, such as the I-95 corridor on the East Coast, there is precious little land available for expansion and the rest is environmentally sensitive.

Of course, even if we had the $2.6 trillion dollars and the land was available, very soon we will reach the tipping point because, as the US and global economies grow, the total cargo tonnage carried on trucks alone will increase by 30% to about 16 billion tons in the next decade.

So, is the problem too big to solve? I don’t think so, but we need to start. In Europe, about 40% of non-bulk cargo is transported on water compared to only about 3% in the US. Would we simply introduce a new problem, port congestion? Maybe in some cases, but consider that expansion of a port is much cheaper than $30 million required for each highway mile and $100 million for each intersection and overpass. We need to find ways to solve our global warming problems!

I am not advocating coastal shipping over trucks or rail. In fact, we need all of them. My point is that the entire transportation system must be expanded as the US grows, but we are close to the saturation point along the coasts and short sea shipping should be considered when there is a water transportation alternative. In fact, short sea shipping has been considered. There is no shortage of studies, reports and transportation statistics, but we do come up short on actions.

If we avoid taking the first step, we won’t be able to also reduce various capital and operating expenses with technology, efficiency, productivity and innovation of developing a world-class coast shipping industry.
Perhaps the economic benefits of the ships over an assumed operating life of 25 years have not been considered, however, Jim Lawrence of Marine Money has done so for international ships. Jim estimates that a single ship sailing internationally provides a total economic benefit of about $1.8 billion over a period of 25 years.

On the energy side, many industries have reduced their emissions. Trucks manufactured today, for example, produce 50% less smog-forming NOx emissions and about 10% of the particulate matter emissions than a truck manufactured three years ago. Now, the shipping industry has long enjoyed a reputation as being the most environmentally friendly form of shipping, but it is not excused from the public expectations to continuously do better.

The US/Canada emissions control area, covering 200 miles from the US and Canadian coastlines, have taken effect in August 2012 and required ships to reduce the sulfur content of fuel below 1% and below 0.1% in January 2015. Today, there are 3 ways that a shipowner can meet these new requirements – buy cleaner, low-sulfur fuel; use scrubbers, or order new ships using LNG fuel for propulsion.

LNG-powered ships can reduce nitrous oxide emissions by 85-90% and sulfur oxide and particulate matter emissions by almost 100%. Unfortunately, our technology innovations haven’t come up with solar solutions for our shipping industry, but I guess that’s just a matter of time.

Unlike previous advancements, such as the shift from oars to sail to steam and then diesel fuel, LNG powered ships are operating successfully today in Europe, where there about 24 LNG-powered ships sailing each day. In addition to the environmental benefits, LNG fuel fits in nicely with the US energy security goals – it is plentiful in North America.

But back to the environmental aspect for a moment. For ships to meet the new emission control area standards, over a 20 year period LNG fueled ships will cost $4 million less than the scrubber option and $12 million less than burning low-sulfur fuel to operate.

LNG is a proven and safe technology. Today, compressed natural gas or LNG fuels 19.5% of US transit buses. Since 2014, the use of natural gas for transit buses has increased 27%. And now, solar-powered machines have gotten to a level that’s almost applicable everywhere and for everything.

Now, maybe Noah built the first ship and Standard Oil Company of California built the first gasoline station. Will the US complete its transportation mix with short sea shipping using clean, low-emission and abundant LNG? I hope so. Then, we’ll still be burning fossil fuels, which in itself is a bad thing, but it will be a huge improvement as compared to where we stand now. But now, with Mr. Trump’s ideas, my doubts are getting stronger and stronger again. What a waste!