TOTE’s conversion to LNG on track

Almost a year after announcing it would convert two of its vessels to liquefied natural gas, officials with Totem Ocean Trailer Express Inc., or TOTE, said the modifications are on schedule.

The 840-foot M/V Midnight Sun and M/V North Star, TOTE’s Orca Class containerships that operate between Anchorage and Tacoma, Wash., are expected to be running on LNG by the September 2016 deadline.

TOTE is making the $80 million fuel switch as part of an agreement it reached with the Environmental Protection Agency early last August to exempt the ships from increasingly stringent fuel requirements. The ships each run on four main engines.

An EPA mandate that went into effect Aug. 1, 2012, created an Emission Control Area within 200 miles of all U.S. West Coast waters and the Great Lakes. It requires all ships operating in the area to burn fuel with no more than 1 percent sulfur through 2015, when the sulfur limit decreases to 0.1 percent.

Companies in both the freight and cruise industries have vowed to fight the future EPA regulations saying they will drive up operating costs, which will be passed on to tourists and consumers. Alaska’s Congressional delegation and state officials have called for the EPA to relax the rules.

When TOTE President John Parrot announced the fuel conversion last August, he said an agreement had been reached with an LNG supplier in the Tacoma area, but did not provide further details. Christian wrote that a final decision is expected on a fuel supply by the end of the year.

At the time Parrott also said dispelled the notion that the ship modifications will automatically equate to rate increases. He said when TOTE spent $320 million on the two ships in 2003 there were no significant rate changes.

Switching to ultra-low sulfur diesel fuel would increase fuel costs by about 25 percent, Parrott said, translating to an 8 percent general rate increase.

TOTE recently won the Next Generation Shipping award for the design of its LNG-powered Marlin Class containerships that will be operating between Florida and Puerto Rico at the maritime industry’s Nor-Shipping convention in Norway.

When completed, the Marlin Class LNG vessels will reduce sulfur emissions by 98 percent, according to Christian. General Dynamics did the design work on these ships as well. 

The prospect of an LNG pipeline and increased access to the fuel in Alaska has prompted some in the trucking industry to look into using LNG-powered semis as a lower-cost fuel alternative to diesel. LNG is increasingly popular as a trucking fuel in the Lower 48. According to UPS, the shipping company currently operates 112 LNG trucks in 10 states and plans to expand its LNG fleet to 700 by the end of 2014.

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