Sailing Solo: The Coming Shipping Revolution And LNG
This is not your father’s shipping anymore. The future is coming, and fast, to a port near you.
The Prism Courage, the Hyundai Group’s 134,000-ton natural gas tanker, made history as the first large ship to make an autonomous voyage of over 10,000 kilometers. While many vessels are equipped with autopilot, the ship’s autonomous navigation system HiNAS 2.0 utilized artificial intelligence to steer and select optimal routes and speeds. It navigated the latter part of its 33 days with its liquified natural gas (LNG) cargo from Freeport, Texas, to the Boryeong LNG Terminal in South Korea without human assistance.
It cannot be overstated how technology like HiNAS 2.0 will revolutionize global energy and transportation. Truly autonomous ships make choices without human input accounting for weather, other ships, economic demands, pollution, and all types of contingencies. The results of faster, cheaper, and more efficient transportation amidst a global energy crisis will revolutionize the shipping industry for better or worse. Autonomous shipping (AS) will drastically increase fuel efficiency, lower transportation costs, reduce worldwide naval personnel demands, and reduce the carbon footprint of shipping.
What is less obvious is how AS will change what we ship, and where we ship it to. This latest technological innovation is not merely an economic force multiplier but also an economic conditioner. The inaugural voyage of the Prism Courage helps reveal a huge part of the future of AS: increasingly globalized LNG transportation, production, and consumption. AS will drastically increase the physical fungibility of LNG, driving down its price variability, destined to unlock new markets and upend the calculations of energy policymakers.
One hopes that the safety and security of AS will be provided by shippers, as this new and exciting technology will be tested — from piracy to extreme weather conditions. Companies will find solutions, from long-range security to systems redundancies to improved all-weather satellite communications.
AS is working in conjunction with shipping bottlenecks, COVID restrictions, and the Russian invasion of Ukraine, which is pushing Europe to reject the Kremlin’s gas in accelerating the proliferation of LNG as an energy source. While AS can partially alleviate shipping bottlenecks, most will subside with time or land-based infrastructural expansion. The political will to punish Russia and wean Europe off Russian natural gas is also not in short supply. The main impediment to the desirable proliferation of LNG remains the lack of available gas supply and LNG infrastructure. It may take years to address.
Current LNG infrastructural shortfalls are being rectified as Germany announces the construction of its own LNG terminals and East Asian consumers announce plans for LNG infrastructural expansion. LNG deals with the USA, Sub-Saharan Africa, and the Middle East appear poised to replace Russian gas, but only with time. American LNG exports have already increased as producers see the combination of urgent decoupling from Russia and AS as forecasting a bright future for LNG. Demand for on-shore liquification equipment, tankers, and regasification facilities, both floating and on-shore, will remain high for years to come.
Even though optimism toward LNG is warranted, we should also be aware of the short-term challenges it faces. AS is still in its infancy and will take years to manifest at scale. Despite desire, distribution and storage infrastructure still hampers the widespread adoption of LNG. Policymakers must facilitate investment in AS shipping technology to aid the widespread adoption of LNG. Doing so will not only strengthen American natural gas producers, but also help realize the vital clean energy and energy independence political projects. AS and LNG may not be panaceas, but they will go a long way in solving the world’s energy crisis.
Beyond LNG, autonomous shipping will facilitate international trade, likely make trade routes safer, and simultaneously reduce labor demand, potentially rerouting available human resources to other industries that badly need skilled labor currently employed in shipping.