By Ryan Skinner (email)
Norwegians love gas. I mean, they really, really love gas. Norway invested around 6 billion euro to develop its Snøhvit field in the Barents Sea, and another 8+ billion euro for Troll. Feel that love.
But, that wasn't enough. Norwegians also trekked over to America to help the Yanks extract gas from shale. As a result, America, which was going all soft on Putin to get cheap Russian gas, will probably be a net gas exporter in ten years.
The phenomenon of shale gas extraction has led more than one energy expert to exclaim "this will change the geopolitics of natural gas."
Into this turmoil comes shipping, which - according to a recent Lloyd's List poll - believes gas to be the biggest game-changer looking ten years ahead.
This year's SMM was positively enamored with the concept - a charm that certainly rubbed off on the poll. Norwegian officials have certainly been pushing gas hard. And a gaggle of Master's students spent their summer at DNV confirming the viability of LNG as a fuel for shipping (was there really ever any doubt regarding the outcome of THAT study?).
Before we get too excited about gas, however, we should consider a few things:
2) Shipping's cyclical; LNG delivery isn't. LNG is produced and delivered on multi-decade contracts to big market buyers. Shipping's bouncy needs are not going to command attention from this industry.
3) LNG operations are going to put a fat addition on newbuilding tabs. Gas as a fuel isn't the innovation in shipping; the real innovation must come from ways to make gas-fuelled shipping more profitable.
4) Gas prices and delivery are linked to global politics in a way that bunker fuel really isn't. Even with shale extraction and big Norwegian projects, the biggest gas producers will likely remain countries like Russia, Iran and Kazakhstan - not the most reliable of bedfellows.
I seldom scorn new development - any kind of development - in shipping. But I fear shipping will spend too much time clapping itself on the shoulder for a non-innovation, instead of focusing on real game-changers.
All this, even when I would love the sight of a captain turning to his first-mate to ask: Got gas?