Corbett Presentation4763 00

Marine Transportation Issues Related to Climate Change: 

Marine Transportation Issues Related to Climate Change James J. Corbett Transportation and Climate Change – IPIECA Workshop Baltimore, MD 12-13 October 2004

To move freight at lowest CO2: 

To move freight at lowest CO2 Move by water modes, low fuel-use and low cost Oceangoing ships, less than 20 knots Large bore diesel engines, possibly petroleum fueled 16-20 times the air freight distance for same CO2 4-6 times the truck distance for same CO2 Pursue environment goals at least fuel penalty Avoid most proven air pollution technologies Resist adopting new ballast water technologies Favor high-performance (if toxic) hull coatings Despite this, trade growth will increase CO2

To reduce freight transport CO2: 

To reduce freight transport CO2 Control trade growth, perhaps reduce trade Trade increasing CO2 between ~1%-2% per year Co-locate factories, resources, markets Ignore labor, raw materials, consumer economic constraints Avoid less-than-truck-load (LTL) shipments Transport fully loaded containers, vehicles, vessels Reconsider just-in-time (JIT) logistics Ship at economy speeds and routes

Unique aspects of marine transport and climate change : 

Unique aspects of marine transport and climate change Important part of global trade (less visible) Decades long service life for ships (changes slower) World average 26 years, longer for U.S. fleet Fewer vehicles, simpler fuel infrastructure 100,000 internationally registered ships Most fuel sales in major ports (5 nations account for ~54%) May be “market-optimized” for low CO2, but a significant source of air emissions Fuel costs ~20-50% of total cost (with capital, labor) May be modified uniquely by climate change

Energy used dominated by cargo vessels using 2-stroke (slow-speed) diesel engines: 

Energy used dominated by cargo vessels using 2-stroke (slow-speed) diesel engines About 67% of these ships are powered by four-stroke compression-ignition engines Some 26% are powered by two-stroke diesel engines 27,000 two-stroke marine prime movers account for almost 60% of the fleet’s total energy output and fuel consumption Approximately 84,000 four-stroke engines with total installed power of 109,000 MW; some 27,000 two-stroke engines with total installed powerof 164,000 MW.

Fuel Costs as Percent of Total Costs of Containerships and Tankers (note effect of U.S. capital subsidies and labor differences): 

Fuel Costs as Percent of Total Costs of Containerships and Tankers (note effect of U.S. capital subsidies and labor differences) US Army Corps of Engineers, Economic Guidance Memo #02-06: FY 2002 Deep Draft Vessel Operating Costs. 2002

Maritime Transportation is vital component of international trade : 

Maritime Transportation is vital component of international trade U.S. waterways move 2.1 Billion tonne-km Relative share of cargo by water is 22% to 24% Truck, rail account for 25% to 29% in U.S. 67% of consumer goods move by water 95% of all trade tonnage moves by ship Globally, more than 13 Billion tonne-km moved by 35,000 oceangoing ships Projected to double from 1998 to 2020 Current growth is on track to achieve this Second largest part of the U.S. service sector

Maritime Transportation Emissions:Evolving Global Consensus: 

Maritime Transportation Emissions: Evolving Global Consensus Previous views about ship emissions: 2% of CO2 therefore not significant Offshore, so no impact Pollution difficult to control Current understanding: 14-30% NOx, 5-10% SOx, 2-4% CO2 from fossil fuel Nearshore and long range impacts of pollution Feasible technologies at reasonable costs Policy needed

Global ship traffic density (2000-2002): 

Global ship traffic density (2000-2002) 85 percent in Northern Hemisphere 70 percent within 400 km of land

Trends in maritime use and emissions: 

Trends in maritime use and emissions Increased trade increases transport energy Seaborne trade trends, fleet trends Increasing trend in both trade and energy use Slightly less energy intensive as fleet modernizes Fuel change can take decades in best case First transition to alternative fuel: coal to oil What if logistics matters more than mode? Freight network has modal CO2 & cost tradeoffs

Increased seaborne trade and shipping tonnage related to invasive species, other marine impacts. Can climate change affect impacts of marine transportation system?: 

Increased seaborne trade and shipping tonnage related to invasive species, other marine impacts. Can climate change affect impacts of marine transportation system?

Technology shift during last centuryTransition by number of ships slower than by tonnage: 

Technology shift during last century Transition by number of ships slower than by tonnage

International marine fuel sales (OECD) nations andworld seaborne trade (IEA and UN)Annual growth rate: ~2% for marine residual fuel sold and ~ 3.5% in seaborne trade.: 

International marine fuel sales (OECD) nations and world seaborne trade (IEA and UN) Annual growth rate: ~2% for marine residual fuel sold and ~ 3.5% in seaborne trade.

Oil saved ~78% in fuel costs, gained ~30% in cargo space, and reduced crews Yergin, The Prize, 1991: 

Oil saved ~78% in fuel costs, gained ~30% in cargo space, and reduced crews Yergin, The Prize, 1991 Source: Lloyd’s Register of Shipping Statistical Tables for 1914, 1935–1939, 1947, 1958, and 1963. With these strong economic motivations, it still took 5 decades to transition

Slide15: 

Does freight logistics matter more than mode? Interdependence of Multi-modal Freight Transportation System Potential Substitutes Modal Complements

Truck, Rail and Water Segments of 1 Million Tons or More: 

Truck, Rail and Water Segments of 1 Million Tons or More

Waterway network connects global logistics: 

Waterway network connects global logistics Source: GeoFreight 2003, U.S. Dept of Transportation

Maritime Gateways:  International Shipping Affects All Modes (Maritime Cargo by Truck, in tons): 

Maritime Gateways: International Shipping Affects All Modes (Maritime Cargo by Truck, in tons) http://www.ops.fhwa.dot.gov/freight/index.cfm http://www.ops.fhwa.dot.gov/freight/index.cfm

Illustration of the logistics supply chain emissions model a) Freight Origin Zones b) Freight Destination Zones in the U.S. : 

Illustration of the logistics supply chain emissions model a) Freight Origin Zones b) Freight Destination Zones in the U.S.

Cargo transport is most fuel efficient by Ship, then Rail, then Truck: 

Cargo transport is most fuel efficient by Ship, then Rail, then Truck Source: IMO Study on Greenhouse Gas Emissions from Ships, MEPC 45(8), 2000.

Consider logistics supply chain:One retail shipper’s CO2 footprint for 2003: 

Consider logistics supply chain: One retail shipper’s CO2 footprint for 2003 The question may be which supply-chain alternatives achieve greatest CO2 reduction at least cost

Relationship between CO2 and shipping cost: 

Relationship between CO2 and shipping cost Considering only freight rate (not transport time), a low-CO2 supply chain may cost less

Options for action in maritime transport: 

Options for action in maritime transport Technology fixes No silver bullets among competing goals Potential CO2↓ limited in range of 1-20%, w/ combos Operational changes Greater opportunity, but economic barriers Potential CO2↓ in range of 1-40% Involves shipper, carrier, technology provider, fuel provider Policy drivers may create incentives

Reduction potential less than fleet growth: 

Reduction potential less than fleet growth Source: IMO Study on Greenhouse Gas Emissions from Ships, MEPC 45(8), 2000.

Comparison: Automobile potential CO2↓ appears significant Fuel Economy & Price Increase Estimates for Moderate Improvements Achievable by 2010-2015 : 

Comparison: Automobile potential CO2↓ appears significant Fuel Economy & Price Increase Estimates for Moderate Improvements Achievable by 2010-2015 Source: DeCicco, et al, ACEEE, June 2001, http://www.aceee.org/pubs/t012.htm

Technology as a silver bullet policy?: 

Technology as a silver bullet policy? Cars may achieve more reduction, sooner “Innovations would include better air conditioners, more efficient transmissions and smaller engines.” “Regulators estimate they would cut exhaust emissions By 25 percent in cars and light trucks and By 18 percent in larger trucks and SUVs.” Calif. Regulators Weigh Smog Restrictions, By TIM MOLLOY, Associated Press Writer, 24 Sept 2004, http://story.news.yahoo.com/news?tmpl=story&cid=1894&e=1&u=/ap/20040924/ap_on_sc/greenhouse_emissions Achieving GHG reductions in the freight system may include ships both in-mode and as low-CO2 substitute … but ship air pollution remains the dominant issue…

Slide27: 

Speed control has a much greater effect on reducing CO2 emissions than fewer ships -- and reduces NOx Source: IMO Study on Greenhouse Gas Emissions from Ships, MEPC 45(8), 2000.

Of course, if we can improve port turn-around time, then speed control may not affect supply chain: 

Of course, if we can improve port turn-around time, then speed control may not affect supply chain

Slide29: 

NOx and CO2 Reduction Trade-Off for Marine Engines Decrease both NOx and CO2 Decrease NOx Increase CO2 Increase NOx Decrease CO2 Increase both NOx and CO2 Hydrogen fuel and Advanced propulsion Other fuels and prime movers Operational Measures Traditional Control Technologies Source: Corbett, Marine Transportation and Energy Use, Encyclopedia of Energy, 2004.

Introducing New Transportation Fuels: Systemic Challenges: 

Introducing New Transportation Fuels: Systemic Challenges Synergistic reduction of CO2, conventional pollutants Network effects and economies of scale Centralized fueling is favored Power plant technology and efficiency gains Fuel storage, space and weight trade-offs User considerations: where to manage change? Professional crews can better manage transition risks Source: Farrell, Keith, Corbett, Energy Policy, 2003.

Navigating the Way Ahead: Policy Mechanisms: 

Navigating the Way Ahead: Policy Mechanisms Traditional policy picture Complex, multi-jurisdictional, international U.S. focus is on autos, trucks and highways, not freight system Trade-offs will matter Market-based opportunities Win-win potential more rapid than regulation Supports modernization, sustainable growth goals Possible Kyoto Protocol connections Clean Development Mechanism (CDM) Emissions trading

Concluding thoughts: 

Concluding thoughts Climate change, air quality issues connected Transportation technologies promise a lot Technology may not keep up with growth Operational strategies may offer more Meeting near-term goals: barriers or guides? Solutions must consider the market place Effective policies consider shipper, global context

Slide33: 

http://www.riverbarges.com/riverfun/riverpics/picsintro.htm A modern fleet of ships does not so much make use of the sea as exploit a highway. -- Joseph Conrad The Mirror of the Sea, Ch. 22, 1906 Discussion welcome