- Apart from CO2 emissions, critics are concerned about the sulfur oxides that come from burning high-sulfur fuel by ships.
- One gallon of high-sulfur fuel contains 3,500 gallons of gasoline and is deemed to be harmful to humans and as well for the environment.
- The new fuels are expected to be much pricier, adding to shipping expenses and, as such, the cost of global trade.
According to an article published in Bloomberg Quint, critics of the oil industry tend to fixate on carbon emissions, with good reason, but CO2 isn’t the only undesirable byproduct of hydrocarbons.
Emissions from noxious fuels
There are also the sulfur oxides, emissions from the noxious fuel that’s fed into most of the world’s ship engines. Just one gallon of this high-sulfur fuel contains as much of the element as about 3,500 gallons of gasoline. Its emissions have been blamed for acid rain and linked to a range of health conditions, including lung cancer.
Three years ago, the International Maritime Organization (IMO) issued rules designed to cut sulfur oxides emissions from ships by as much as 77%. The move, which takes effect in January, is expected to prevent legions of premature deaths, but it’s proven anything but simple for the energy and maritime industries.
Dedicated process and equipment
Creating millions of more barrels of lower-sulfur fuel will require refiners to adapt processes and equipment to the task or to buy different types of crude. (They’ll also have to find new ways to dispose of waste fuel.) Some shipowners will comply with the rules by continuing to buy the old fuel and installing onboard scrubbers to remove sulfur oxides from the exhaust, but such ships are expected to account for little more than 10% of marine fuel consumption next year.
Cost prediction for diesel and gasoline
The new fuels will be pricier, adding to shipping expenses and, as such, the cost of global trade. Analysts have said the cost of diesel will rise and that gasoline and jet fuel could also jump because the new marine fuels will be competing for some of the same molecules. The economies of oil-producing countries will also be affected. Those whose crude yields relatively large percentages of high-sulfur fuel, such as Saudi Arabia, will suffer; those selling lighter, low-sulfur crudes, such as the U.S., will likely benefit.
Modern technology to impose rules
Most shipowners are expected to comply with the rules, but there’s significant incentive to cheat. A rough approximation based on future prices suggests that an owner sending a supertanker filled with crude from Saudi Arabia to Houston would save $1 million by not complying. Flouting the rules can lead to fines and jail time, but enforcement will be up to local authorities. While the Netherlands, for example, plans to use drones to sniff out wrongdoers, poorer countries might find it hard to be so scrupulous.
For all this trouble, the best case is indeed good—and indicates why the IMO is going to trouble. A Finnish study in 2016 estimated that, by 2025, lower sulfur emissions will prevent more than half a million premature deaths from lung cancer and heart disease alone.
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Source: BloombergQuint
