BC Ferries hopes to convert more than half its fleet from marine diesel oil to liquefied natural gas over the next decade.

“The long-term plan is to convert all of the ships,” said BC Ferries’ vice-president of engineering Mark Collins. “It makes economic sense.”

The use of LNG-fuelled ferries, which would be cheaper to operate because the fuel costs 40-per-cent less than diesel, was among the cost-cutting recommendations in a report to the government this week by independent ferry commissioner Gordon Macatee.

But Collins said BC Ferries is already moving in that direction and hopes to have 16 to 20 of its 35-vessel fleet converted to LNG over the next decade: eight to 10 conversions and eight to 10 newly built ships.

And the corporation is doing a feasibility study on converting the Queen of Capilano, an 85-vehicle ferry that links Horseshoe Bay and Bowen Island, into the fleet’s first test LNG-powered vessel.

Although Collins said Thursday that no final decision has been made on the conversion, in a letter to Bowen Island and Horseshoe Bay residents in December 2011, he sounded more definite, saying the newly converted vessel was expected to be fully operational in early 2013.

However, on Thursday, he said the industry is now signalling that schedule might be unrealistic.

Macatee’s report, which explored the high costs of providing ferry services and the resulting fares that he said have “reached the tipping point of affordability,” made a number of recommendations aimed at raising revenues and cutting costs.

“The best possibility is a shift to LNG fuel, with a potential saving of $28 million per year,” he said, noting BC Ferries had recently announced plans to convert one of its vessels to LNG.

“LNG-powered ferries is a growing trend in the industry as there are several vehicle ferries operating now in Norway using LNG gas and Washington state and the Staten Island Ferries are in various stages of introducing LNG ferries into their fleets.

“The commission is not qualified to judge the suitability of LNG technology on vessels. We simply note that if LNG gas can provide long-term savings and greater certainty about fuel costs, it merits serious consideration.”

Collins noted that costs to convert vessels to LNG are significant — about $10 million for smaller vessels and up to $30 million or more for the larger ships.

Smaller ships like the Queen of Capilano have smaller engines, which would likely be fully replaced, he said. The much bigger engines on large ships would likely be retained with emerging technology that allows LNG “kits” to be placed on existing engines to keep costs down.

Collins said all conversion work would be done in B.C., but companies from Europe are the top prospects for doing the work because they’re the industry leaders.

However, Vancouver-based natural gas engine giant Westport Innovations Inc. is interested as well.

Jonathan Burke, vice-president of global market development, said Westport has met several times with BC Ferries on the issue.

He said Westport is now developing an engine for CN Rail in Quebec to convert a transcontinental locomotive to LNG.

“They’re very similarly sized,” Burke noted of LNG engines for trains and large ships. “It’s very transferable technology.

“You’re changing one engine for another, but the majority of the expense is in the fuel storage on the vessel,” added Burke, who noted fuel storage is also part of his company’s expertise.

Burke, who said Rolls-Royce and Wartsila in Europe already convert diesel ferries to LNG, added that B.C. has abundant natural gas resources and that it’s “an opportunity to use a B.C. resource in B.C. vessels.”

Collins said Westport doesn’t have large enough engines for the job now, “but they’re on that road and we’re keeping our channels open.”

Earlier, Collins said in his December notice to Bowen Island and Horseshoe Bay residents regarding the possible conversion of the Queen of Capilano that “LNG-fuelled ships improve air quality and meet the most progressive environmental regulations.

“Second, natural gas is about 40 per cent of the cost of diesel fuel, reducing BC Ferries’ fuel costs (our second biggest cost) dramatically. Lower operating costs can help us contain future fare increases.”

BC Ferries noted the cost of fuel accounts for approximately 20 per cent of its total operating expenses.

Source: vancouversun.com; Brian Morton