Propane’s Port Play: From Terminal Equipment to the Tug Cheyenne

Ports and terminals have no shortage of choices as they look to reduce emissions, control operating costs and gradually move away from diesel. Battery electric equipment attracts much of the attention, but Jim Bunsey of the Propane Education & Research Council (PERC) argues that propane offers something particularly valuable to working waterfront operators: equipment and fueling infrastructure that can be deployed today.

That proposition extends from forklifts and terminal tractors to power generation. Soon, it will extend onto the water with the conversion of the Great Lakes tug Cheyenne.

“The thing I want everybody to know is it’s not going to be just one energy source in the ports,” Bunsey said. “They need affordable energy, reliable equipment, lower emissions. Propane checks a lot of those boxes.”

The Cost and Complexity Equation

A realist, Bunsey does not dismiss diesel, as it remains an effective source of energy with approximately 72 billion gallons used annually in the U.S. The issue for port operators increasingly centers what’s required to make modern diesel engines comply with emissions regulations. Tier 4 engines can meet stringent emissions requirements, but aftertreatment systems, regeneration cycles and diesel exhaust fluid add complexity and cost.

Bunsey recalled watching a terminal tractor at the Port of Los Angeles sit through a 35-minute regeneration cycle. That is particularly problematic for port machinery, which frequently operates at low speeds while doing high-load work.

Propane, he argues, can meet Tier 4 emissions requirements with a comparatively simple catalyst.

“We don’t have regen systems, we’re not using DEF fluid, there’s not aftertreatment,” Bunsey said. “So the operating costs really start to show the difference between propane and diesel applications.”

The available equipment is also expanding. Bunsey points to propane terminal tractors and forklifts ranging from smaller Class 3 and 4 machines to larger material handlers. PERC highlighted that range recently at Breakbulk Americas in Houston, including a propane-powered Capacity Trucks terminal tractor using an 8.8-liter PSI engine, a Caterpillar 12,000-pound-capacity forklift powered by a 4.3-liter propane engine and a 100-kW propane generator.

Fuel infrastructure is another part of the equation. Bunsey said the U.S. produces about 32 billion gallons of propane annually while consuming less than 10 billion gallons domestically. He also argues that propane pricing has remained comparatively stable and that operators can enter three-to-five-year fueling contracts.

“There isn’t a city in the United States right now that doesn’t have access to propane,” he said.

That existing distribution network can be particularly relevant for ports evaluating electrification, particularly given the investment in time and money to effectively upgrade a port’s power grid to accommodate equipment charging. Rather than viewing propane and batteries as competing technologies, Bunsey sees opportunities to combine them. Propane generators can provide on-site electricity where grid capacity is constrained, including power for electric equipment and refrigerated containers.

Tug Cheyenne: Hybrid Propane-Electric Conversion

Perhaps the most interesting test of that argument is the tug Cheyenne, an older Erie-class diesel tug preparing for an 18-month conversion that will transform it into a hybrid propane-electric vessel.

“They’re taking this Erie-class tugboat that has the pilot house that can lower down,” Bunsey said. “It’s a true old-school Erie-class diesel tugboat.”

The conversion represents considerably more than an engine swap. According to Bunsey, the tug will use propane-fueled generators to produce electricity for electric propulsion motors. The vessel will also move from a single-drive configuration to twin drives. Onboard propane storage is planned to provide sufficient range for the tug to operate between Chicago and Buffalo.

The naval architecture work has been underway and the project has been working with the U.S. Coast Guard. Bunsey said Cheyenne was scheduled to enter dry dock at the end of September 2026 to start an approximately 18-month conversion.

Just as importantly, he said the economics are helping drive the project without waiting for grant funding.

“This group has decided to even move forward even before using the grants because just on the value of the fuel savings alone for the work that this boat does, it makes economic sense to even do this to the boat right now,” Bunsey said.

If the conversion performs as expected, Cheyenne might not remain a one-off demonstration. Bunsey said organizations involved in financing the project are examining the possibility of converting as many as 10 vessels on the Great Lakes.

That makes Cheyenne worth watching. Much of maritime decarbonization is necessarily focused on new vessels designed around alternative fuels from the keel up. The U.S. workboat fleet, however, contains thousands of durable vessels whose hulls could remain commercially useful for years or decades.

A successful propane-electric repower could provide another pathway for extracting more useful life from existing tonnage while lowering emissions and fuel costs.

For Bunsey, that fits the larger argument PERC is making to ports. There is no single fuel or propulsion technology likely to satisfy every piece of equipment in a modern terminal. Propane does not have to be the entire solution to earn a place in the mix.