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Waterfront Shipping to Commission New Ships Built With Flex-Fuel Engines PDF Print E-mail

PRESS RELEASE

Dec. 9, 2013, 2:01 a.m. EST

 

VANCOUVER, BRITISH COLUMBIA, Dec 09, 2013 (Marketwired via COMTEX) -- Waterfront Shipping Company Ltd. has reached an agreement with Mitsui O.S.K. Lines, Ltd. (MOL), Westfal-Larsen & Co A/S (WL) and Marinvest/Skagerack Invest to build six new ships, with an option for building an additional three, all to be delivered during 2016. These 50,000 dead weight tonne vessels will be built with MAN ME-LGI flex fuel engines running on methanol, fuel oil, marine diesel oil, or gas oil.

Waterfront Shipping, a wholly owned subsidiary of Methanex Corporation, is a global marine transportation company specializing in the safe, responsible and reliable transport of bulk chemicals and clean petroleum products. With the growing demand for cleaner marine fuel to meet environmental regulations coming into effect in Northern Europe and other regions, methanol continues to be a promising alternative fuel for ships.

"We are very excited to continue investing in methanol-based marine fuel. This announcement reinforces our commitment to continue investing in sustainable technology. Methanol is a sulfur-free fuel that provides many environmental and clean burning benefits. With fuel prices increasing and upcoming shipping regulations requiring the use of cleaner marine fuel, methanol-based fuel is a promising alternative which reduces emissions and fuel costs," stated Jone Hognestad, President, Waterfront Shipping.

Waterfront Shipping will charter these vessels to replace older vessels in its fleet and to support increased demand from Methanex Corporation's growth initiatives, including the relocation of two methanol plants from Chile to Geismar, Louisiana.

Of the ships being built, MOL, Marinvest/ Skagerrak Invest and WL will each own two, plus one optional vessel. The ships will be built by Hyundai Mipo Dockyard and Minaminippon Shipbuilding Co., Ltd.

About Waterfront Shipping

Waterfront Shipping operates the largest methanol ocean tanker fleet in the world with its fleet comprising vessels from 3,000 to 49,000 dwt. Its fleet of 18 modern, deep sea tankers delivers products to major international markets in North America, Asia, Europe and Latin America. For more information, please visit http://www.wfs-cl.com/ .

About Methanex Corporation

Methanex Corporation is a Vancouver-based, publicly traded company and is the world's largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol "MX" and on the NASDAQ Global Market in the United States under the trading symbol "MEOH". For more information, please visit http://www.methanex.com/ .

About Mitsui O.S.K. Lines, Ltd.

Mitsui O.S.K. Lines, Ltd., founded in 1884, is one of the top shipping companies headquartered in Tokyo, Japan. The company operates more than 900 vessels, from containerships to tramp vessels and specialized carriers for cargoes including automobiles, iron ore, coal, wood chips, crude oil, liquefied natural gas (LNG) and chemicals. For more information, please visit http://www.mol.co.jp/en/ .

 
Why Don't Car Companies Make All Their Cars Flex Fuel? PDF Print E-mail
Posted: 28 Jan 2014 02:44 PM PST

 

Something strange, something counterintuitive is happening in the auto industry. Consider these facts:

1. Historically and reliably, when fuel prices drop, car sales rise.

2. If we had vigorous fuel competition in America, fuel prices would drop.

3. Any car that runs on gasoline can be turned into a GEM car (which can burn any combination of gasoline, ethanol, or methanol) for 41 cents, creating robust fuel competition in America.

4. Automakers deliberately disable the flex fuel capability of their cars.

Why? Why would the manufacturer of anything deliberately disable a capability that their customer might find useful? Even more curious, why would a manufacturer disable a feature that would greatly improve their bottom line? Dr. Robert Zubrin, the renowned engineer, in a recent article in The New Atlantis, writes:

One answer, and perhaps the most salient one, is that the automobile companies are not capable of pursuing their own independent interests. Rather, significant parts of these car companies are owned by entities that are much more heavily invested in oil. In some cases, it is safe to surmise that these investors are one of the obstacles preventing automakers from encouraging free energy competition.

For example, the automobile company with the highest revenues in the world is Volkswagen. Today, 17 percent of Volkswagen is owned by the Qatar Investment Authority, the sovereign wealth fund of OPEC member Qatar, which gets its money from Qatar’s state-owned oil industry. It is the third-largest shareholder in VW (after having sold 10 percent to Porsche in 2013). The vice chairman of the Qatar Investment Authority even has a seat on Volkswagen’s supervisory board.

We see similar situations with other European automakers. For example, the Kuwait sovereign wealth fund owns 6.9 percent of Daimler (which produces Mercedes-Benz cars). Aston Martin — famous for its James Bond cars — was purchased in 2007 by a group with majority funding from two Kuwaiti investment firms (although much of their share of the carmaker has since been sold off). In recent years, the government of Abu Dhabi (part of the United Arab Emirates, an OPEC member) has owned stakes in Daimler and Ferrari.

What about the two biggest American auto manufacturers, General Motors and Ford? The dominant shareholders in these companies — not counting the U.S. and Canadian governments, whose bailout of GM temporarily made the U.S. Treasury the company’s largest stockholder — are major Wall Street funds whose holdings in the energy sector, including major oil companies, typically far exceed their shares in the auto industry. Again, one suspects that their interest in protecting these oil investments might conflict with flex-fuel capabilities.

For instance, the largest institutional stockholder in GM, Capital Research Global Investors, owns $2.9 billion of GM stock, but has $19.1 billion invested in energy, including $3.0 billion in Schlumberger, the world’s largest provider of oilfields services. (All these figures are current as of September 2013.) GM’s second-largest stockholder is Harris Associates, which has $2.3 billion invested in GM and $3.7 billion invested in energy, including $1.6 billion in National Oilwell Varco, an equipment maker for oil and gas drilling, and $0.8 billion in Devon Energy, one of the biggest U.S. oil and natural gas producers. Third is JP Morgan Chase, with $1.7 billion in GM and $29.2 billion in energy, $4.9 billion of which is in Exxon Mobil, $3.0 billion in Chevron, $2.0 billion in Schlumberger, and $1.7 billion in ConocoPhillips. The fourth-largest GM stockholder, the Vanguard Group, owns only $1.6 billion in GM, but $93.5 billion in energy, including $22.2 billion in Exxon Mobil and $12.1 billion in Chevron. And the fifth largest, Berkshire Hathaway, owns $1.6 billion of GM stock, and $7.5 billion in energy, of which $4 billion is in Exxon Mobil. Another major investor in GM is Saudi Prince Al-Waleed bin Talal, who snapped up $500 million in shares when the revived company returned to the stock market in 2010.

Ford does have one major investor — its largest shareholder, Evercore Trust — whose Ford holdings ($3.7 billion) exceed its energy investments, which are minimal and not at all in oil. But otherwise Ford’s situation is similar to that of GM. After Evercore, the next four top owners of Ford include again the Vanguard Group ($3.0 billion in Ford, $93 billion in energy), State Street Corporation ($2.5 billion in Ford, $77.9 billion in energy, of which $18.2 billion is in Exxon Mobil and $12.5 billion in Chevron); Wellington Management ($1.7 billion in Ford, $36.2 billion in energy, of which $5.4 billion is in Exxon Mobil, $4.7 billion in Chevron, and $2.3 billion in BP); and Barclays Global Investors ($1.6 billion in Ford, $47.5 billion in energy, of which $6.1 billion is in Chevron, $3.1 billion in Schlumberger, and $2.3 billion in ConocoPhillips).

Now, it is true that some of these investors also have shares in alternative energy companies, and even in methanol companies. But these tiny holdings are dwarfed by their oil holdings. For example, Wellington Management invests in Methanex, the world’s leading methanol supplier. But Wellington’s $0.4 billion investment in Methanex is just one-fortieth the size of its investment in oil companies. JP Morgan Chase has $0.1 billion invested in Methanex, less than one-hundredth the size of investment in oil. Naturally, for these investors, protecting their financial interests means prioritizing oil over methanol.

In short, the owners of the biggest U.S. car companies have interests overwhelmingly aligned not with the automakers or their customers but with the oil cartel. At minimum, this represents a very serious conflict of interest. Barring a change in circumstances, it is unlikely the car companies will take actions that would imperil OPEC’s control of the market.

Automakers Disable Flex Fuel Capability

Posted: 28 Jan 2014 02:13 PM PST

Robert Zubrin, an accomplished engineer, did an experiment on his car, a 2007 Chevy Cobalt (a non-flex-fuel vehicle) and in the process discovered some interesting things. He wanted to run his car on methanol, which is legal to burn for fuel, but illegal to sell in America (at over a 5.4% concentration). To make his regular, non-flex-fuel car capable of burning methanol, he had to replace one part — a fuel pump seal. The seal that came with the car was made of Viton, which methanol would dissolve. The new seal he installed was made out of a material called “Buna-N.” The new part cost him 41 cents.

Other than that, the only thing he had to do to his car was adjust the Engine Control Unit software. The computer onboard his car was the same computer used in flex fuel cars, although his car was not flex fuel. But the software that would allow the car to be a flex fuel car was disabled. Zubrin wrote, “Currently, all new gasoline-powered cars sold in the U.S. are flex-fuel cars, but only about 5 percent are being sold as such. The rest are being marketed with their flex-fuel capability disabled by their manufacturers.”

- Excerpted from the book, Fill Your Tank With Freedom.

Higher Fuel Prices = Lower Car Sales

Posted: 28 Jan 2014 01:55 PM PST

"Other than the airline industry, no industry suffers from high oil prices more than the auto industry," Anne Korin and Gal Luft say in their book, Petropoly. "When oil prices rise the economy slows down and Americans have less disposable income with which to purchase new vehicles. The cars they do buy tend to be smaller and cheaper. Since Detroit makes most of its profits on light trucks and SUVs, its profits take a hit when oil prices soar.

"In the long run sustained high gasoline prices have a lasting effect on the automakers' bottom lines. When fuel prices are high, people drive fewer miles and that means less wear and tear, less replacement parts and fewer road accidents. All of these mean slower vehicle replacement and hence less profit for Detroit.

"Expensive fuel is therefore a drag on the autos' financial well-being. By any yardstick the industry would be better off when fuel prices are low."

 
Synthetic fuels could eliminate entire U.S. need for crude oil, create 'new economy' PDF Print E-mail

The United States could eliminate the need for crude oil by using a combination of coal, natural gas and non-food crops to make synthetic fuel, a team of Princeton researchers has found. 

Besides economic and national security benefits, the plan has potential environmental advantages. Because plants absorb carbon dioxide to grow, the United States could cut vehicle greenhouse emissions by as much as 50 percent in the next several decades using non-food crops to create liquid fuels, the researchers said. 

Synthetic fuels would be an easy fit for the transportation system because they could be used directly in automobile engines and are almost identical to fuels refined from crude oil. That sets them apart from currently available biofuels, such as ethanol, which have to be mixed with gas or require special engines.

Floudas

Professor Christodoulos Floudas (center), along with graduate student Josephine Elia and Richard Baliban, who received his Ph.D. from Princeton in 2012, developed a comprehensive system for optimizing the production of synthetic liquid fuels as an economical replacement for petroleum-based fuels. (Photo by Frank Wojciechowski)

In a series of scholarly articles over the past year, a team led by Christodoulos Floudas, a professor of chemical and biological engineering at Princeton, evaluated scenarios in which the United States could power its vehicles with synthetic fuels rather than relying on oil. Floudas' team also analyzed the impact that synthetic fuel plants were likely to have on local areas and identified locations that would not overtax regional electric grids or water supplies.

"The goal is to produce sufficient fuel and also to cut CO2 emissions, or the equivalent, by 50 percent," said Floudas, the Stephen C. Macaleer '63 Professor in Engineering and Applied Science. "The question was not only can it be done, but also can it be done in an economically attractive way. The answer is affirmative in both cases."

Accomplishing this would not be easy or quick, Floudas said. A realistic approach would call for a gradual implementation of synthetic fuel technology, and Floudas estimated it would take 30 to 40 years for the United States to fully adopt synthetic fuel. It also would not be cheap. He estimates the price tag at roughly $1.1 trillion for the entire system.

The research makes up an important part of a white paper recently produced by the American Institute of Chemical Engineers (AIChE), the nation's largest chemical engineering association. In the paper, the chemical engineers call for a greater integration of energy sources and urge policymakers to consider chemical conversion processes as a potential method to produce cleaner and cheaper fuels. 

"Right now we are going down so many energy paths," said June Wispelwey, the institute's director and a 1981 Princeton alumna. "There are ways for the system to be more integrated and much more efficient."

The paper was written by Vern Weekman, one of Floudas' co-researchers. Weekman, a lecturer at Princeton, is the former director of the Mobil Central Research Laboratories and a past president of AIChE.

Weekman said the main reason the industry has not embraced synthetic fuels has been cost. Although he said the economics are "still on the edge," Weekman noted that rising prices for crude oil and improvements in the efficiency of synthetic fuel production have made the process far more viable than before.

"The main reason we wrote the paper was to get the planning agencies — the national academies, the Department of Energy, the Environmental Protection Agency, the Defense Department — thinking about this," Weekman said. He added that it was important that the agencies consider "this key link of using chemical processes to produce conventional fuels."

In the Princeton research, Floudas' team found that synthetic fuel plants could produce gasoline, diesel and aviation fuels at competitive prices, depending on the price of crude oil and the type of feedstock used to create the synthetic fuel. About two-thirds of crude oil consumed by the United States is used for transportation fuel, according to the federal Energy Information Administration (EIA). The EIA said the United States imports about 45 percent of its annual crude oil consumption.

"Even including the capital costs, synthetic fuels can still be profitable," said Richard Baliban, a chemical and biological engineering graduate student who graduated in 2012 and was the lead author on several of the team's papers. "As long as crude oil is between $60 and $100 per barrel, these processes are competitive depending on the feedstock," he said.

The core of the plan is a technique that uses heat and chemistry to create gasoline and other liquid fuels from high-carbon feedstock ranging from coal to switchgrass, a native North American grass common to the Great Plains. The method, called the Fischer-Tropsch process, was developed in Germany in the 1920s as a way to convert coal to liquid fuels. 

The chemistry is complicated, but it basically takes the carbon and hydrogen from the feedstock and reassembles them into the complex chains that make up fuels like gasoline and diesel. Essentially, the feedstock material is heated to 1,000 to 1,300 degrees Celsius and converted to gas, and using the Fischer-Tropsch process, the gas is converted to chains of hydrocarbon molecules. These hydrocarbon chains are then processed over catalysts such as nickel or iron. The end products include fuels, waxes and lubricants normally made from crude oil.

The Princeton team's method adds a step to recycle CO2 through the process to reduce the amount of the gas vented by the plants. Baliban said there is a limit to how much CO2 can be economically recycled, although plants could also trap unused CO2 emissions for later storage.

Over the years, engineers have refined the original Fischer-Tropsch method to increase efficiency. But the high cost of building new synthetic fuel plants, coupled with the low price of crude oil, has made synthetic fuels too expensive for widespread acceptance.

As the price of oil has increased, however, synthetic fuels have become more practical. The U.S. government has undertaken a number of projects to look into the process; in particular, the Defense Department has studied synthetic fuels as a way to supply transportation fuel without depending on overseas suppliers.

In its work, the Princeton team looked at a broader picture. In a July article in the AIChE Journal, the team found that the United States could meet its entire demand for transportation fuel by building 130 synthetic fuel plants across the country. The article, with Josephine Elia, a graduate student in chemical and biological engineering as the lead author, made its assessment using three feedstocks: coal, natural gas and biomass. To avoid switching farmland from food production to crops used for fuel production — which would hurt the food supply — the researchers only included non-edible crops such as perennial grasses, agricultural residue and forest residue. 

The plants modeled in their scenario were placed in proximity to both feedstock supplies and markets for fuels. The analysis factored in external costs such as water supplies and electricity to power the plants' machinery.

Ultimately, the team recommended construction of nine small, 74 medium and 47 large plants producing 1 percent, 28 percent and 71 percent of the fuel, respectively. Most of the plants would be clustered in the central part of the country and in the Southeast. The state with the highest level of fuel production would be Kansas, which would have 11 large synthetic fuel plants. Texas would have the largest number of plants, but because of the scattered nature of feedstock in that state, most of those plants would be medium-sized.

The researchers found that the largest contributor to the price of synthetic fuel would be the cost of building the plants, followed by the purchase of biomass and then electricity. They estimated that the nationwide average cost of producing the synthetic equivalent of a barrel of crude oil would be $95.11, although the cost varies regionally. The cost in Kansas, where most production would occur, would average $83.58 for the equivalent of a barrel of crude oil.

The cost could be much lower if plants eliminated biomass and used only coal and natural gas to run the process, Floudas said, but that would eliminate most of the environmental benefit.

"If you want to have a 50 percent reduction in emissions, you need to have the biomass," he said.

In many ways, synthetic fuels are cleaner than petroleum fuels. The heavy metal and sulfur contaminants of petroleum fuels can be captured in the synthetic plants before the fuel is shipped out. Synthetic fuels also can be used in gasoline and diesel engines with no need for modifications, unlike many biofuels. The biofuel ethanol, for example, is commonly mixed with gasoline, but high levels of ethanol require modifications to car engines and pose special challenges for starting at low temperatures. 

Floudas said that synthetic fuels also would allow carbon reduction with the fleet of cars currently on the road. Even if the country immediately converted to zero-emitting electric or fuel cell vehicles, millions of internal combustion vehicles would still be driving. By switching to synthetic fuels, he said, the country would have the opportunity to reduce those emissions, even if it they would not be completely eliminated.

"This is an opportunity to create a new economy," Floudas said. "The amount of petroleum the U.S. imports is very high. What is the price of that? What other resources to do we have? And what can we do about it?"

 
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