Chemical Engineering April 2012 - 19

CH3
Newsfront
CHALLENGES FOR
U.S. PETROLEUM
REFINERS
Rive zeolite
Future hinges on heavy oil
pipelines, domestic rareearth
supply and more
T
he closure of several U.S. petroleum
refineries over the past few
months carries a simple message:
petroleum refining is a tough
business to be in these days. Paradoxical
as it may seem to consumers, the
recent rapid increase in fuel prices
does not represent higher profits for
refiners, which are generally operating
with low margins, but is simply
due to the higher cost of crude oil.
Sunoco, Inc. (Philadelphia, Pa.; www.
Sunoco.com) announced its intention
to exit the refining business last September
and focus instead on its profitable
logistics and retail businesses.
The company's two refineries, with a
combined crude capacity of 505,000
bbl/d, were put up for sale, but despite
rigorous efforts Sunoco has found no
buyers. The company stopped processing
crude at its Marcus Hook (Pa.) refinery
last December and plans to idle
the main processing units at its Philadelphia
refinery by July.
Also, ConocoPhillips (Houston;
www.conocophillips.com) shut down
its 185,000-bbl/d refinery in Trainer,
near Philadelphia, last fall and is
seeking a buyer for it. Hovensa, a
joint venture between Hess Corp.
(New York City; www.hess.com) and
Venezuela's state-owned oil company,
Petróleos de Venezuela (Caracas),
closed its 350,000-bbl/d refinery in St.
Croix, U.S. Virgin Islands in February.
The refinery sold most of its product
on the U.S. East Coast.
" Meso "
pores
FIGURE 1a. In conventional Y-type zeolites,
the pores are too small for large molecules
to enter and be cracked. Also, product diesel
and gasoline molecules have difficulty exiting
the zeolite micropores and are prone to " overcracking "
to coke and gases before escaping
Conventional zeolite
FIGURE 1b. Rive's
Molecular Highway
technology creates
a network of larger
mesopores to overcome
the limitations
of the small pore
sizes in conventional
zeolites (Figure 1a)
Catalytic micropores
The biggest issue for the U.S. refining
sector is a combination of poor profitability
and an expected ongoing weak
demand for fuels, both of which stem
from high crude-oil prices, says Blake
Eskew, vice president, downstream
industry consulting for IHS Purvin
& Gertz (Houston; www.purvingertz.
com). Most of the closures are on the
East Coast, he says, because this is
the most competitive area in the U.S.
for refiners. For one thing, the refineries
were designed to handle costly
light, sweet crude, and for another
they have to compete with gasoline
imports from Western Europe, which
has a surplus of gasoline because of a
growing demand for diesel fuel.
[U.S.] Gulf Coast refiners are more
profitable, says Eskew, because they
depend more on lower-cost heavy crude
from Mexico and Venezuela. However,
he notes that the production of heavy
oil in Mexico and Venezuela has been
dropping in recent years and continues
to decline. Thus, Gulf Coast refiners,
having made substantial investments
in heavy-oil upgrading equipment and
cokers, are having to use increasing
amounts of more costly light crude.
In contrast, refiners in Midwestern
and Rocky Mountain states are the
most profitable in the U.S. because
there is a regional surplus and growing
supply of low-priced domestic
crude, plus Canadian crude oil. The
reason for this situation is that much
of the oil is " trapped " in the region because
there is a lack of transportation
to move it elsewhere.
Despite its economic problems, the
refining industry has been operating
at roughly 90% of its approximately
17,736,000-bbl/d capacity, according to
the U.S. Energy Information Administration
(EIA; Washington D.C.; www.
eia.gov). Also, the U.S. is becoming
more and more self-sufficient in liquid
fuels, due to an increased use of ethanol,
higher domestic oil production,
and a growing volume of biofuels and
biofeedstocks that can be integrated
with conventional refinery feeds. Imports
as a share of total U.S. liquid
fuel use fell from a high of 60% in
2005-2006 to about 50% in 2010, and
are predicted to reach 36% in 2035, according
to an EIA report.
Gasoline use is in a long-term decline
for three basic reasons: the
Federal Government's promotion of
ethanol and other biofuels; a growing
demand for diesel fuel, and the
increasing fuel efficiency of autos. The
Renewable Fuels Standard (RFS) of
the U.S. Environmental Protection
Agency (EPA; Washington D.C.; www.
epa.gov) calls for the industry's use of
ethanol to increase from 13.8 billion
gal last year to 36 billion gal by 2025.
Heavy oil pipeline
Another preoccupation of refiners is a
dispute that has delayed the construction
of a 1,660-mile, 36-in.-dia pipeline
that would bring 1.3-million bbl/d
CHEMICAL ENGINEERING WWW.CHE.COM APRIL 2012 19
http://www.purvingertz http://www.eia.gov http://www.Sunoco.com http://www.conocophillips.com http://www.epa.gov http://www.hess.com http://WWW.CHE.COM
Chemical Engineering April 2012

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