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Shipping LNG In One Direction & CO2 In The Other Won’t Work

In the past three years, another nonsensical idea has sprung up to somehow allow shipping of molecules for energy. The premise is that liquified natural gas (LNG) goes in one direction and liquified CO2 (l-CO2) gets put in the same tanks and goes the other way. It sounds so obvious!

The premise is that CO2 from natural gas has to be captured, and then has to go somewhere. And the ships that bring natural gas in liquid form from its origin to its destination would have to sail home empty, which has no economic merit. And the gas fields love to put CO2 underground, even if only to get more oil.

This is, of course, being proposed by faculty members at the University of Houston, and solely for methane extracted from underground with CO2 returned to the oil fields for enhanced oil recovery. Given the high upstream and downstream methane leakages in the US system, and enhanced oil recovery’s premise of injecting CO2 underground to get more crude oil out which when used as directed creates more CO2 than injected, this is a remarkable idea in any event. It’s part and parcel of the shell game that is carbon capture and sequestration in the fossil fuel industry, where CO2 is extracted from underground in one place and put back underground in another for enhanced oil recovery and claimed as a win while still remaining a tiny fraction of ExxonMobil’s annual emissions.

But Fortescue, an Australian resource extraction company trying to make exported Australian green hydrogen an energy source for the world despite the realities of economics and thermodynamics, is considering going much further down the entropic rabbit hole. They are proposing converting green hydrogen to more manageable but high global warming potential methane, then liquify the methane into LNG, then ship the LNG to energy markets, and then re-use the LNG tankers to return the CO2 for reuse in the green methane manufacturing process.

Let’s start with whether this is even possible, and the answer is yes. Economically feasible? Deeply unlikely. A climate solution? Clearly not.

Let’s start with just making methane from green hydrogen. As I and many others have pointed out, hydrogen can be green, but it can’t be cheap. There are capex and opex parts to the argument. The capex part is that scaled electrolysis plants are major capital assets and electrolyzers are only one of perhaps 28 major components. The rest of the components are already commoditized, so the total capex isn’t going to collapse to nothing. That means that the plant will have to be operated as close to 24/7/365 as possible to pay for the capital costs. That means it requires firmed electricity 24/7/365, and firmed always on electricity is grid electricity, or more expensive than grid electricity.

Table showing costs of CO2, hydrogen and processing them into methanol.

Table showing costs of CO2, hydrogen and processing them into methanol by Michael Barnard, Chief Strategist, TFIE Strategy Inc.

Hydrogen is the most expensive input to any synthetic fuel like green methane, as I published in my assessment of the thermodynamically illiterate Carbon Engineering a few years ago. No cheap hydrogen, no cheap methane. But you have to source CO2 and hydrogen and push them together in another energy intensive process to get methane. The table above provides a pathway to cheap methanol, another alternative, and gives a sense of the energy and cost balances. Methane won’t be far off.

Throw away a bunch of green electricity while making hydrogen and getting rid of excess moisture in it. That loses about 30%. Get rid of more energy getting the CO2, especially if you tanker it across the world. Get rid of more energy by combining the two into methane. You might be lucky to be seeing 50% of the energy embodied in the methane, and we aren’t done yet.

After that, you have to liquify the methane, which takes a lot less energy than hydrogen, but still a lot. Then you have to ship it across an ocean and get it to the place where it burns. Perhaps 40% of the energy arrives?

Then you burn it in a modern natural gas combined cycle plant with an efficiency of 50%, so only 20% of the green electricity in Australia turns into electricity in Germany, for example.

Then you have capture the CO2 from burning it, something that causes parasitic loads in the range of 20-30% even according to the always CCS-positive Global Carbon Capture and Storage Institute, a fossil fuel lobbying organization that loves to give CCS every benefit of the doubt imaginable. So you are actually looking at perhaps 15% of the solar and wind from Australia actually getting into the destination grid.

As noted, the electrolysis plant will require firmed grid-quality electricity, so that means probably $100 / MWh, so it’s probably in the range of $600 / MWh wholesale delivered electricity in Europe or Asia. Meanwhile, new wind and solar onshore are $30 / MWh, or 20 times cheaper. Who exactly is going to pay for this deeply expensive energy?

Oh, but wait, there’s more silliness to this idea. One of many provisos to Fortescue Future Industries‘ plan is that the mass of CO2 generated from burning methane results in 20% greater volume in liquified CO2 than LNG, so a bunch of it would have to be left behind where it was burned.

That CO2 would be 2.1 times as heavy for the same volume in the ship. CO2 will not liquefy unless it is compressed to a minimum of 5.18 bar. LNG is transported at ambient pressure. It will be much warmer for the CO2 cargo than the LNG cargo and need to go through a ~100C thermal cycle at each end of the voyage. So that’s a bunch more capital cost at each end for thermal management.

Of course, most methane-powered ships are LNG tankers using boil-off from the LNG, and if you are transporting l-CO2, you have no LNG to boil off, so you have to specially stock methane to drive the ship, or more likely just use a completely different fuel.

No existing LNG ship is capable of this use case, in other words. They would have to be specially built for it, with significant design and economic compromises. To do this, you need to engineer an entire ship from the keel up for this purpose.

All so that high global warming potential gases can be manufactured and put into a supply chain that leaks them to the atmosphere along the way.

The premise that LNG facilities and ships can be reused to ship CO2 in the other direction doesn’t stand up to the slightest engineering scrutiny. The end-to-end cost of delivering energy as green LNG doesn’t stand up to the slightest economic scrutiny. It’s remarkable that people who can do simple math give any of this credence, which is a testament to the combined power of lobbying and hope.

 
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Written By

is a member of the Advisory Boards of electric aviation startup FLIMAX, Chief Strategist at TFIE Strategy and co-founder of distnc technologies. He spends his time projecting scenarios for decarbonization 40-80 years into the future, and assisting executives, Boards and investors to pick wisely today. Whether it's refueling aviation, grid storage, vehicle-to-grid, or hydrogen demand, his work is based on fundamentals of physics, economics and human nature, and informed by the decarbonization requirements and innovations of multiple domains. His leadership positions in North America, Asia and Latin America enhanced his global point of view. He publishes regularly in multiple outlets on innovation, business, technology and policy. He is available for Board, strategy advisor and speaking engagements.

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