Journal of Scientific & Industrial Research Vol. 61, July 2002, pp 493-503

Technical Commentary

A Proposed Environmentally Friendly Petroleum Oil Industry

Commonly used abbreviations

CCR Cyclic catalytic reforming FCC Fluid catalytic cracking or cracker I-IDC Hydrocracking or hydrocracker HDS Hydrodesulfuri zation HDT Hydrotreating or hydrotreater

"Energy is a fundamental part of the global econ­omy . . . The election on November 7 [2000] is impor­tant because government policies, laws, and regula­tions affect all aspects of energy development. .. Over­regulation is one reason that no new refineries have been built in this country [the US] in more than 25 y" [Citizen Action Team, ExxolIMobil Campaign 2000 Brief, ExxonMobi l Public Affairs: Arlington VA. November 2000.

www.exxonmobil.com/CAT].

The oil industry has played an impOltant role in the global economy for many years. It provided the fuels that powered industrialization more than 100 y ago, in spite of the harmful effects its products had on the environment. The first oil refining process was in­vented to upgrade coal oil more than 150 y ago­before Edwin L Drake discovered oil in Pennsylvania [Young J, us Pal 8.833 (1852), Voorhees V, Oil Gas J, 34 (30) ( 1935) 36-

42]. As market demand expanded rapidly after World War I, the product line-up also changed . Many proc­esses were developed with safety and profitability as the chief objectives. The advances in new processing technologies actually slowed the growth rate of crude oil consumption since 1970 making investment in new refineries difficult to justify. The 1990 Clean Air Act related laws, each followed by many amendments were passed by the US Congress. The government policies, laws, and regul at ions forced the oil industry to seek economical solutions using existing facilities.

CUITently more than two-thirds of the crude oils re­fined in the US are burnt for energy and the rest is used to make petro-chemicals and for G~her applications. Fuel products enter the atmosphere through spills, vaporization losses, and incomplete combustion. The combustion products also contJibute to air pollution. Concerns about acid rain, ozone, and smog prompted the government and

the industry, leading to often-revised regulations (to the extent of over-regulation). For example, legislation order­ing the phasing out of lead additives in gasoline was en­acted in the late 1960s. In the early 1990s, the chemical composition of gasolines was regulated. The content of sulphur, benzene and other aromatics, and olefms was specified; and the addition of oxygen-containing compo­nents, such as methyl tert-butyl ether (MTBE) or ethanol (with subsidies to agricultural products) was mandated. Each oil company must meet these specifications by whatever technical approach it chooses to take.

Response to Overregulation-The petroleum re­fining industry is capital-intensive. More than sufficient capacity for the US national needs already exists world­wide. Economic considerations alone do not permit in­vestment for new capacity. However, when the entire industry is supposed to take action in response to exter­nal pressures, such as environmental regulations , then loss of competitive edge is not the paramount concern. Under these circumstances, the economic evaluation for certain projects becomes attractive, because there are no better or readily available alternatives. So far the refin­ing industry took the end-oj-pipe approach for fixing existing facilities, with the help of environmental engi­neering companies, to meet changing federal and local environmental regulations costing millions of dollars annually. The cost of refining may continue to increase when following conditions exist:

•

•

•

Metal-containing spent catalysts and coke are classified as toxic wastes Current isobutene alkylation technologies using hydrogen fluoride or suphuric acid are banned, and The chemical composition of transportation fuels is limited to hydrogen-rich paraffins and naphthenes.

494 J SCI IND RES VOL 61 JULY 2002

In a refinery, gasoline and distillate fuels suchas jet fuels, kerosene, diesel fuel, and home heatingoils are produced by a combination of fluid catalyticcracking (FCC) and high-pressure hydro cracking(HOC) of heavier oils, cyclic catalytic reforming(CCR) of naphthas, isobutene alkylation (HF cata-lyst) to produce the premium, high-octane alkylates,catalytic hydrosulphurisation (lIDS) of middle distil-lates, and finally coking of the bottom fraction of thecrude oil, known as resid, in a delayed coker (Figure1). As transportation fuels are much more profitablethan resids, there is a sufficient economic incentive toimprove the efficiency of coking the bottom fractionof a barrel to transportation grade. Advanced catalysttechnology must be developed to overcome the envi-ronmental problems associated with this process.FCC is the profit center of a refinery. The original

process has created numerous environmental prob-lems, including the emission of air toxics such asN02 and SOx from the catalyst regeneration and thedisposal of wastes, such as spent solid catalyst, syn-tower bottom (heavy fractions remaining in the bot-tom of a product distillation tower), and catalyst-containing sludge oil, and the used gas plant solvent.

In 1987, the US domestic refineries consumed180,000 t cracking catalysts, which were disposed offin landfills. The catalyst in an FCC unit circulatescontinuously between the reactant and the coke-burning catalyst regenerator. A portion of the circu-lating catalyst, the co-called spent catalyst, is re-moved from the unit; and an equal amount of freshcatalyst is added to maintain the conversion targetand the product selectivity. The loss of catalytic se-lectivity is primarily caused by nickel and vanadium

Gases

Gases C3-C4

Fuel gasC3-G~

Fuel gasGasplant

GasesNaphtha fromdelayed coker

Naphthapretreater

HOTkerosene

Naphtha

HOTnaphtha

Pretreated naphtha

Alkylategasoline

Crudes ATMtower

Kerosene to CHO

Gas oilHydro-treater

Naphthareformer(CCR)(PRT) Hydrogen Reformate1-----1. gasoline

(HOT)

Coke burned

CHOkerosene

HOCgasoline

FCCgasoline

HOCgasoline

Vacuum Gas oiltower

Fuidcatalyticcracker

FCCgasOline

Platinum reformingAim towerkerosene

GasesSlurry oil(FCC)

Unsat.gases

Hydro-desulfur(CHO)

Unsat.gasplant Slurry oil

Coke

HF Alkylation

Figure 1 - Flow diagram of a typical fuel refinery using current technology. Process units that are not needed using the "clean"technology are crossed out.

NAGIN CHAND: PETROLEUM OIL INDUSTRY 495

deposited on the catalyst when the feedstocks contain a trace amount of heavy metal compounds. Without the development of ultrastable and metal-tolerant catalysts, the annual catalyst consumption rate could double or triple when processing the heavier resids. The spent catalyst may eventually be classified as toxic waste because of its metal contaminants. Proc­essing heavier feeds will also increase NOx and S02 emissions. The petroleum industry has so far taken two remedial approaches : regulatory compliance and fuel reformulation. Oil companies work extensively with environmental engineering companies to main­tain current compliance with government regulations. In fact , an environmental engineering industry spe­cializing in petroleum-related remedial technologies has ari sen in response to this demand .

Oil companies also reformulate gasoline and distillate fuels by modifying their existing processing units. Gasoline compositions are changing to derive more energy from hydrogen part of the fossil fuel [Chen N Y, Che//l //II /Ova t, 31 ( 1) (2001) 14-20]; reduce vapour pressure; and reduce concentrations of benzene, ole­fins , and sulphur. Gasoline octane ratings ar main­tained by adding high-octane ethers and alcohols. Both approaches are reactive actions. For example, instead of developing a method to recover sulphur as a valuable byproduct from the crude oil, actions are being taken to lower the sulphur concentrations of each fuel product stepwise to comply with changing sulphur specifications. In reaction to the safety con­cerns raised by the city of Torrance, CA, Mobil launched an R&D effort in 1989 to modify oil refin­ing facilities and catalyst formulations in the HF al­kylation process [www. rmpcorp.com/ri skcomm.htm]. HF is poisonous, and it is used as a liquid catalyst under pressure. It was necessary to assure the public that the modified HF process is safe to operate. The modi­fication was expensive, and the petroleum industry aniticipates additional pressure about other environ­mental issues in processes and products. It is unfortu­nate that the public pays more attention to transporta­tion fuel prices than to the inadequacies of the reme­dial approaches taken by the oil industry. The petro­leum industry is directing R&D programs to improve profitability without overstepping the environmental constraints.

Although the industry is an old one, it is always changing. For, during the last 30 y many innovative changes in the production of fuels , lubricants, and

petrochemicals that reduced consumption of crude oil by billions of barrels took place. Although Exxon­Mobil, the largest oil company in the world, believes that the US needs a national energy policy based on new technologies, it has a responsibility to its stock­holders to remain profitable. The incentive to develop and commercialise any new technology must be driven by its economic benefits, and therein lies the difficulty of promoting a significantly new approach to refining crude oil.

Currently, the petroleum industry can produce relatively low-cost fuels in fully depreciated facili­ties. In response to public demand , the automobile industry has expanded production of large, heavy automobiles with engines that have low compression ratios and consume more fuel than engines having higher compression ratios. Without the threat of an­other major oil crisis like that occurred in 1970s, the trend will continue. At present, there is no economic incentive for any oil company to change, in spite of the annual remedial expenditures to meet the official regulations. Consumers enjoy the low-cost fuels , and the industry can keep all the old refineries operating profitably at full capacity. ExxonMobil complained that overregulation was one reason behind the fact that no new refineries were built in the preceding 25 y in the US. However, there are no strong govern­mental regulations to urge the entire refining industry toward proactive efforts at energy conservation and environmental hazard elimjnation. Joint funding from federal agencies and industry, similar to that provided during the 1970s oil crisis [Kam A Y & Lee W, Fluid-bed process studie.v 0 11 selective cOll versioll oj //Iethall ol to high octall e gaso­lill e, Final report, DOE Contract EX-76-C-01-2490 (U S Department of Energy, U S Government Printing Office, Washington, DC) 1978: Kuo J C W, Slurry jisrheritropsch///Iobil two-stage process oj coll vertillg SY"­gas to high octalle gasoline, final report, DOE contract DE-AC22-80PC30022, US department of energy (US government printing offi ce, Washington, DC) 1983, Kuo J C W, Two-stage process Jor cOll versioll Jor ,vYllthesis gas to high quality transportatioll fuels, final report , DOE contract DE-AC22-83 PC600 19, US department of energy (US govern -

ment printing offi ce, Washington. DC) 1985] could be a practical approach to achieving the objectives.

A Clean Fuels Refinery-Instead of fixing the existing facilities, a proactive approach is proposed that considers environmental issues during the design of the processing scheme. The result would be sul­phur-free, high-performance, clean-burning transpor­tation fuels. The new refining scheme will be cost­effective when compared with the combined cost of constructing a new refinery using the current tech-

496 J SC( IND RES VOL 61 JULY 2002

nology and the cost of environmental fix-ups. Theelimination or minimization of solid wastes, includ-ing spent catalysts, coke, and air or water toxics isinherent in the design. It is done by replacing currentfacilities with environmentally benign processes(Figure 2). In this example, it is proposed that lightolefins will be the major intermediates for synthesiz-ing liquid transportation fuels. Thus, sulphur can becompletely eliminated from the liquid fuel products,and the burning qualities of the fuels and their hydro-gen content will meet or exceed the anticipated prod-uct specifications. The following key technologiesare unique to the clean refinery:

• A distillation method that prevents metal(nickel and vanadium) contamination of allthe feed streams to the catalytic processingunits.

• A thermal process that handles metal-contaminated feed streams.

• A technology that converts coke to H2, CO,H2S, NH3, and nickel and vanadium oxides.

• A new hydrogenation catalyst that saturatesthe feed streams with hydrogen and removesall the sulphur and nitrogen impurities.

The new technology differs from the current fu-els refinery in several ways. FCC is till the workhorseof the new refinery, but the major products are lightolefins and small amounts of gasoline and distillate.The bottom fraction of the reactor effluent is recycledto the hydrotreater. To maximize olefin production, itis necessary to increase the hydrogen content of theFCC feed by hydrogenating it to a 1:1 H2/C mole ra-tio. Catalytic deep hydrotreating not only satisfies thestoichiometric H2/C balance, it minimizes air toxicproduction and gas plant solvent disposal. It alsohelps to reduce excessive catalyst deactivation inFCC, thereby reducing catalyst consumption andsolid waste production. The fluid-bed riser crackingtechnology will be modified to operate at high tem-peratures and short contact durations to eliminate theundesirable secondary hydrogen transfer reactionsthat lead to lower olefin production.

Instead of processing any of the metal-contaminated bottom fraction of the crude oil in thecatalytic units, the new refinery uses thermal upgrad-ing processes (Figure 2), thus eliminating solid cata-lyst wastes. Instead of discarding the metals presentin most crude oil as toxic wastes, these thermal proc-

Fuel gas'-__.-----~~-c..

SulfurAmmonia

Crudes ATMlower

Gas oil

Naphtha

Vae.tower

Gas oil

Naphthareformlno

DeeD Ii, HlIl'"(fid'l>- lernp.

PfOi::~fStlJ.w HTfeed FCC

R Ie

~ Unsalgases

Gas 011Naphlha

H2Ilk\$al_oases

Ol\]'Oen.steam H2

Ruid OIe"ncoker f.Rs;J:;)r ull\IliIdinO

~==~~~==~==~~---.•.Oistillate

I---------~~Gasoline

1----- •.Gasoline1------ •.Olstillate

Cot.

Premiumgasoline

Oistll\a1eCOt.H~ •

••••• __ "" Ni,V

_.'iIMo •• DU#OoJIIPW ••••••• iI!I. ~ ., .Figure 2 - A proposed new clean refinery

NAGIN CHAND: PETROLEUM OIL INDUSTRY 497

esses concentrate and remove them as a valuable metal oxide byproduct. The coke from the fluid coker is gasified with steam and oxygen to produce the hy­drogen needed by the hydroprocessing units.

Building 0 11 the Present Technologies-Each step uses a known technology, but increasing accep­tance of a proactive approach will provide many op­portunities to generate innovative concepts, resulting in advances in the so-called mature technologies. The proactive approach calls for developing environmen­tally compatible olefin upgrading technologies, in­cluding isomerisation,oligomeri sation, hydration , and etherification. The potential of revolutionizing the refining industry by producing truly premium­quality clean fuel products springs from years of ole­fin research, coupled with the availability of a large variety of new catalytic materials . To protect the en­vironment, catalytic processing of resids, delayed coking processes, and HF isobutene alkylation proc­esses are excluded in the clean refinery . The naphtha hydro cracker is eliminated, and the naphtha reform­ing capacity is sharply reduced in response to the an­ticipated specification that gasoline be richer in hy­drogen, with fewer olefins and aromatics. Because hydrogen will be produced by the coke gasification process, the size of the conventional hydrogen plant will be less that one-fourth of that in the current refinery.

R&D Needs of the Alternative Approach

Olefin Prodllctioll -The production of light olefins depends on coupling catalytic hydrotreating with high-temperature catalytic cracking. To achieve the objective, it is necessary to challenge the tradi­tional strategy for developing new catalysts and pro­cesses to remove heterocyclics while min imizing hydrogen consumption in hydrotreating. Deep hydrotreating not only satisfies the stoichiometric balance of hydrogen to carbon, it could eventua lly lead to the deve lopment of a non regenerat ive cata­lytic cracking process, as indicated by laboratory ex­perimental studies [Chen N Y & Luck i S. J Ind Ellg Gem Proc

Des Del'el , 25 (1986) 8 14-820]. In fact, the feed hydrotreat­ing step will enter a new technol ogical arena. Further developments in refi nery technology would enable all the aroma ti cs from the FCC products to hydrogenated to extinction by recycling the aromatics fraction back to the hydrotreater. The gasoline and di still ate prod­ucts from the FCC unit shown in Figure 2 cou ld

eventually be eliminated. The process calls for deve l­oping advanced hydrotreating catalysts. New FCC technology will also need advanced catalysts that promote the selective production of light olefins. The technology can have an enormous effect on the pro­duction of components foe environmentally accept­able gasolines and distillate fuels . Again, innovati ve concepts will make stepwise changes, creating dis­continuities in this mature technology.

Gas Separation -Aside from catalysts, a large increase in light olefin production brings about the need to invest in additional gas separation facilities. It offers an attractive opportunity for R&D in envi­ronmentally friendly advanced gas separation tech­nology, e g, the development of a separation process using molecular sieves of selective membranes to separate the light olefins from the light paraffins could economically replace the solvent processes used in the current refineries .

Resid Upgrading - Neither thermal process ing nor hydrogen production using high-temperature py­rolysis coupled with coke gasification is avai lab le commercially. Instead of the delayed coking process, a new fluid-bed pyrolysis process is envisaged , simi­lar to fluid coking, coupled with coke gasification . The new process will operate at much higher tem­peratures than fluid coking, to maximize yield of light olefins. It is a variation of the Flexicoking proc­ess, developed in the 1970s by Exxon during the Middle East oil crisis to produce a low-Btu fuel gas from resids [Massenzio S F, In halldbook oj sYIIJllels fechllology

edi ted by R A Meyers (McGraw-Hili , New York) 1984 , pp 6.3-6 .18].

Other studies in upgrading coal bu liquefaction , pyro­lysis, or gasification were done during the same pe­riod [Chang C D & Han S, In Kirk-of/lll1er ewyciopedia oj chemical

fec/llwlogy. 41h ed (Wiley & Sons, New York) 1994, vol 12. pp 155-2031.

Unfortunately none of these processes is now in commercial operation in the US. SOuth Africa is the only country that commercially converts coal to syn­gas and syngas to liquid products. To accompli sh the goal of producing hydrogen or syngas from resids, additional R&D is needed to finalise design of the process.

Olefin Upgrading -The heart of the new scheme res ides in olefin upgrading technologies. Many new resea rch leads have been di scovered , bu t a concerted R&D effort is needed to develop the m. Among the technologica l leads are:

498 J SCIINO RES VOL 61 JULY 2002

• Olefin Isomersiation and Skeletallsomerisa­tion. Double-bond shift and skeletal isomeri­sation of linear olefins to isoolefins have been catalysed selectively by zeolites such as ZSM-22, ZSM-23, and SAPO-II [Chen N

Y, In Shape·selective catalysis edited by C Song, J M Garces and Y Sugi (American Chemica l Society, Washinton . DC)

1999. pp 39.65]. Dimerisation of isoolefins fol­lowed by double-bond saturation provides high-octane components for gasoline blend­Ing.

• Oligomerisation. MOGD (Mobi l olefin to gasoline and distillate) process yi e lds pre­mium distillate fuels [Chen N Y, Garwood W E & Dwyer F G. Shape selecti ve ('{I talysis in industrial appli('{l'

tions (Marce l dekker. New York) 1996. pp 168· 172]. Fur­ther improvement in yield , product qua lity, and cost may be possible by developing new zeolite catalysts and an engineering ap­proach to handle highly exothermic reac­tions.

• Hydration or Etherification. Adding metha­nol to light olefins or hydrating them also provides octane-boosting agents for gasoline blending.

Economic Analysis of the Proactive Ap­proach - It is important to understand the method used prior to the discussion on the economics of the refining industry:

• To maintain a material balance, a ll the val­ues used in the analysis are stated on a mass basis.

• A normalized scale has been created (Table 1) based on the ratio of the value or cost of an item at a given time to the price of gasoline at the same time. The value of gasoline was arbitrarily set to 100 on the scale.

On the mass basis, fuel gas and natural gas (light gases in Table 1) are valued about 30 per cent lower than liquid fuels. Premium high-octane alky­late, being lighter than regular gasoline, is valued about 30 per cent higher than regular gasoline. Coke has very little va lue. Using such a mormalised scale provides a time-independent evaluation method which was established by observing the historical constancy of the spread between the price of the vari­ous products and raw materials , in spite of the changed rates of inflation or deflation. Various raw materia ls and products and the cost of capital invest-

ment can be ranked on a scale that is independent of time, such as the one g iven in Table 1. Heavier low­quality crudes such as most of those from California are cheaper than lighter crudes such as those from Saudi Arabia. The price of crude oil is largely de­pendent on the API (American Petroleum Institute) gravity (calculated from the densi ty of oils). Thus, API gravity was used to classify crude oil in the eco­nomic analysis presented.

The process, or operating, cost of a unit depends on the size of the unit, the capi tal investment, the method of depreciating the capital investment, and the cost of labour, utilities , caltalysts , and chemicals used by the specific process . The process cost, calcu­lated on a mass basis , was divided by the price of regu lar gasoline at the same rime to its normalized value. The fraction of the process cost, in normalized uni ts, of a grass roots (newly built) refinery that can be attributed to capital expenses are presented in Table 2. For a new refinery, 47-86 per cent of the process cost is related to its capi tal investment. Be-

Table I-Product value in normali zed units

Product

Clean fuel

HF alkylates

Regular gasoline

Distillates

Isobutane

Light gases

Crude oil

Slurry oi l

Coke

Value, normaJi zed to regular ga oline

134

134

100

86

83

67

41

40

12

Table 2- Process cost of a con ventional refinery in terns o f capital investment

Process Fraction of the capital , per cent

Atmospheric di still ation 50

Vacuum di stillation 52

HOT FCC feed 74

FCC 86

Catalytic HOS of distillates 71

High-pressure HOC 66

Naphtha pretreati ng 50

NaphthaCCR 75

Delayed coker 67

Saturated gas plant 62

Unsaturated gas plant 62

HF alkyl ation 72

H2 plant 47

NAGIN CHAND: PETROLEUM OIL INDUSTRY 499

cause the cost of a larger unit will be lower, the val­ues used in the calculation were further corrected by the square root correlation , that was determined as follows. The process cost shown in Table 2 is the cost of each unit of a specific size. The size of each process unit for either the current or the clean refin­ery was determined by using the material balance calculations. The size of the calculated process unit is different from that shown in Table 2, so the process cost of each unit is adjusted using the ratio of its size to the size as shown in Table 2. The process cost of the new facilities in the clean refinery were estimated by assuming that a startup unit converting light ole­fins to clean fuels will cost as much as a medium pressure hydrocracker. The cost of the fluid coker plus coke gasifier could either be similar to the cost of a Flexicoking process or the more conservative estimate shown in Table 3. The process cost of a fluid coker plus a coal gasifier is estimated to be more than 6-times higher than a Flexicoker.

Most persons involved in the exploration and development of new and improved refining technolo­gies have frequently found that their technologies are uneconomical by conventional standards. It is very difficult for a new process to compete with paid-up units on this basis.

Comparison of Unit Size and Product Distribu­tion - For a fair economic analysis of the clean re­finery, it has been compared with a lypical medium size (-120,000 bbl/d) West Coast startup refinery processing California crude oils with facilities de­scribed in Figure 2. California is a progressive state, with a long history of actively protecting its environ­ment. The economic analysis was started with the maSf balance and the carbon/hydrogen balance calcu­lated from the inputs and outputs of each interlinked processing unit for each refinery. From these calcula­tions , the size of required processing units were ob­tained and the slate of final products from the refiner­ies (Table 5) .

As can be seen in the data in Table 4, the clean refinery required much bigger unsaturated gas plant to recover the light olefins. In addition , a new fluid coker, a coke gasifier, and an olefin-upgrading unit will be added to this refinery. However, the conven­tional high-pressure hydrocracker, the isobutene HF alkylation unit , one of the two naphtha catalytic re­formers , the delayed coker, and one of the two hy­drogen plants will not be needed.

To product the hydrogen-rich premium liquid fuels, the new refinery consumes a great deal of hy­drogen, which is produced by processing the envi­ronmentally undesirable coke via gasification with steam and oxygen in the coke gasifier. The clean re­finery consumes more than twice the amount of hy­drogen consumed in the current refinery (Table 6).

It is expected that the total weight of products from the clean refinery will be less than for the con­ventional refinery because hydrogen is so much lighter than carbon . As shown in Table 5, the clean refinery produces 2503 tid less total products than the conventional refinery, but more butanes and lighter gaseous products in place of the alkylate, FCC gaso-

Table 3-Process cost of additional facilities in new clean refinery

Process Size, tid Cost, normalized units

Olefins to clean fuel

Flexicoking

Fluid coker

Coal gasifier

362 1

3681

3681

2000

11.16

10.50

7 .62

62.52

Table 4 - Comparison of unit sizes in a clean refinery and a conventional retinery

Process

Atmospheric distillation

Vacuum distillation

HOT FCC feed

FCC

HOC

Naphtha pretreating

Naphtha CCR

HF alkylation

Clean fuels (olefin upgrading)

Catalytic HDS

Delayed coker

Fluid coker-gasifier

Saturated gas plant

Unsaturated gas plant

H2 plant

Size ratio, clean refinery! con-ventional refinery

1.00

1.00

1.97

1.76

NA

1.17

0.54

NA

NA

1.00

NA

NA

1.15

3.48

0.25

Comparison made for a refinery processing 13,500 barrelld crude oils, weighing 20,927 tid, which contains 20,895 tid of C4 and higher liquids. NA-not applicable. These units are only used in the proposed clean refinery

•

500 J SCI INO RES VOL 61 JULY 2002

line, slurry oil, and coke. In the conventional refinery,in this case, it is more profitable to purchase isobu-tene to use all the light olefins and maximize theyield of alkylate.

Costs and Profits -The calculated process costfor the two startup refineries is shown in Table 7,obtained by multiplying the throughput in tJd with thestandard normalized unit costs of each unit correctedby any difference in size, as explained earlier. Theprocess cost of the clean refinery will be 11 per centhigher than a startup refinery based on the currenttechnology. In arriving at these values, very conser-vative values in the estimate of clean refinery havebeen used. The process cost of the coke gasifier wasestimated on the basis of a very expensive coal gasi-fier instead of an improved Flexicoking process be-cause the data could not be obtained for a relativelylower cost Flexicoking process (Table 3) using oxy-gen instead of air in its original design.

According to the economic analysis presented,the clean refinery would be more profitable whencompared with a startup refinery using the currenttechnology even without considering the cost of envi-ronmental fixups. The conventional refinery wouldneed additional isobutene to process in its HF alkyla-tion unit to maximize production of the premium al-kylate product to meet gasoline specifications. Theclean refinery, for environmental reasons, does nothave this unit. As shown in Table 8, the same valuehas been assigned to the clean fuels as the alkylateproduced in the current refinery. To be more conser-vative, the value of clean fuel could be reduced from134 to < 130, and still match the profit margin of thebase case. Based on the figures presented, one mayask being a global enterprise, why does not the petro-leum industry develop these new technologies for therest of the world where they still need to expand theirrefining capacity? One answer is the difference be-tween profit margins of an old refinery and a startuprefinery based on the same technology.

Comparison of a Startup Refiner With an OlderOne - The capital-related process cost accountsfor 47-86 per cent of total process costs (Table 2).Thus, using old units to reduce overall capital-relatedprocess cost can raise the profit marginlt crude oilrefined appreciably in an older refinery. The annualexpense of meeting environmental regulations ofcourse will reduce the profit margin. A profit-makingenterprise would likely choose to fix up an old refin-

-

ery, rather than build a new clean one, at least fornow. Although, it is generally uneconomical to builda startup unit to displace a depreciated old unit, thesituation changes when the entire industry must dosomething in response to legislative mandates thathave arisen in recent years:

• Require oxygenates in gasoline,• Gasoline reformulation regulations, and• Sulphur reduction in diesel and other fuels.Integrating Fuel Refining and Petrochemi-

cals- One day there will be an environmentallycompatible refining industry that integrates its

Table 5-Product output, clean refinery vs conventional refineries

Product Clean - conventional, t/d

Regular gasoline -8413

Alkylates -2374

Regular distillates +1760

Isobutane +778

Light gases +1289

Slurry oil -526

Coke -2772

Clean fuels from light olefins +7490

Total gasoline + distillate -1537

Total of all products -2768

Isobutane purchase -265

Net products -2503

Isobutane purchase is only necessary for the conventionalrefinery. Thus the clean refinery amount is zero.

Table 6- Production and consumption of hydrogen

Conventional Clean refinery, t/drefinery, t/d

H2consumed

Pretreating 10 12

HOT 163 752

HOC 204 0

Catalytic HOS 1 1

Total 379 766

H2 produced

CCR unit 1 54 39

CCR unit 2 25 0

H2 plant I 122 74

H2 plant 2 177 0

Coke gasifier 0 652

Total 379 766

NAGIN CHAND: PETROLEUM OIL INDUSTRY 501

Heavy oil. tar sand oil.

coal

! Thermal cracker

Flu id coker

Oxygen

Light oleftns from

catalytic cracker

Olefin upgraders

Aromatics from

Syngas complex'

(gas to liquid)

reformer Methar.cl Hzto hydrotreater / V-T prcducts

Gasifier

Oxygenates. premium luels

Synthetic lubes. pe\rochclnicals

Fuelgas.-+ natural gas '-----'

Figure 3 - Facilities in an integrated refining complex

production of largely olefin-based premium clean fuels with the production of synthetic lube oil bas­estocks and petrochemicals. The fuels production sector of the industry will incorporate a new isobu­tene alkylation process using heterogeneous catalysts and a process to hydroisomerise alkanes to multi­branched isomers. The integrated refining complex (Figure 3) will have a process to produce synthetic lube oil basestocks from light olefins and aromatics and a syngas complex for converting gas to liquids. The gas-to-liquid (GTL) system converts available synthesis gas to premium products and other inter­mediaries. These liquids are used as feedstocks to a petrochemical complex that processes the aromatics from the naphtha reformers and the products of the olefin upgrading system.

Isobutene Alkylation - Because olefins are ex­pensive, achieving a yield of 1 mole alkylate/mole olefin fed is a critical criterion for a satisfactory iso­butene alkylation process, within the realm of current technology. At present, only HF or H2S0 4 alkylation

Table 7- Normalised process costs of two startup refineries

Item Conventional refinery Clean refinery

Unit size, Ud Unit cost Process cost Unit size, Ud Unit cost Process cost

Atmospheric distill ation 20895 2.94 61446 20895 2.94 61446

Vacuum distillation 19525 1.71 33396 19525 1.71 33396

FCC HOT 12897 13.32 17 1844 25462 9.48 241456

FCC 12 155 7.61 92545 21446 5.73 122926

HOC 3530 24.70 87501 NA NA 0

Naphtha pretreater 1966 3.14 12079 2294 5.69 13045

CCR unit I 2675 11 .40 30503 2197 12.58 27641

CCR unit 2 141 8 15 .66 22209 NA NA 0

HF alkylation 2374 15.39 36547 NA NA 0

Olefin upgrading NA NA 0 7490 7.76 58116

HDS 969 7.84 7603 969 7.84 7603

Delayed coker 8274 6.26 51835 NA NA 0

Fluid. coker NA 0.00 0 9078 4.85 44027

Saturated gas plar.lt 35 16 2.75 9674 4037 2.57 10367

Unsaturated gas plant 3202 2.88 9232 11142 1.55 17221

H2 plant I 122 494.81 60502 74 634.82 47159

H2 plant 2 177 411.47 72756 NA NA 0

Coke gasifier NA NA 0 3238 49.14 1591 28

Total 93696 759671 127847 843530

NA-not applicable

502 J SCIIND RES VOL 61 JULY 2002

Table 8- Comparison of product values and operating margins in a conventional refinery and clean refinery

Product Conventional refinery

Unit value tid Total value

Light gases 67 1815 121782

Isobutane 83 0 0

Gasoline pool 100 10754 1075335

Clean fuels 134 0 0

Alkylates 134 2374 318161

Distillates 86 1922 165092

Slurry oil 40 526 20854

Coke 12 2772 32485

Total 20162 1733709

Crude oil 41 20972 855231

Isobutane purchase 83 265 22115

Total feed cost 877346

Margin 856363

Process cost 759671

Final margin 96692

Final margin , based on total feed cost, per cent

can ac hieve this target. In the new refining complex, however, a large amount of light olefins is available from the FCC, so the alkylate yield of 1 mole liquid fuel/mole of light olefins is no longer necessary. Laboratory-scale experiments have shown that. a combination of isobutene alkylation and olefin dimer­isation reactions, resulting in a lower alkylate yield per mole of olefins, is already achievable with solid catalysts [Chu C T W, Husain A, Kevuillc K M & Lissy D N, US Pat

5,354,718 (1993), Chu C T W, Husain A, Huss A, Kresge C T & Roth w J, US patellt 5,258,569 (1993), Degnan T F, Del Ross i K J & Huss A, US

pat 5.191,148 (1993)]. Thus the liquid acid processes, which raise public safety concerns, can be replaced by a new clean isobutene alkylation process.

Fuels - Gasoline specifications are expected to move away from olefins and aromatics, which are the major constituents of gasolines produced by ca talytic reforming of naphthas and FCC of heavy gas oils.

ew gasolines will also be free of sulphur, nitrogen, and particulate-forming compounds (e g, polynuclear aromatics). As new refinery will have a much more flexible slate of products than current refineries , it cou ld even provide time ly responses to major market changes, such as the displacement of gasoline engines

II

Clean refinery Change in total value, $

tid Total value

3104 208258 +86476

778 64561 +64561

2340 234042 -841294

7490 1003668 +1003668

0 0 -318161

3682 316320 +151228

0 0 -20854

o. 0 -32485

17394 1826848 +93139

20972 855231 0

0 0 -22315

855231 -22115

971617 +115254

843530 +83859

128087 +31395

15

by fuel cells. If there is a shift in the mode of trans­port, the market demand of transportation fuels will not have a high growth rate . The new refineries will be able to enter the petrochemical market with supe­rior, cost effective nonfuel products.

Light Olefins - The large-scale production of light olefins by catalytic cracking will affect the cost of ethylene and propylene because it is one of the cheapest processes in refining. The amount of ethyl­ene and excess propylene produced by FCC may be sufficient to supply the needs of the olefin-based polymer industry at a lower cost, replacing the cur­rent method of producing light o lefins by thermal cracking of naphthas and pyrolysis of ethane and propane.

Feedstocks - The new thermal cracker and gasi­fi er facilities will be able to refine crude oils and other carbonaceous resources as well, including coal, tar sand oil , and oil from oil shales. The industry will be able to face the threat Of any o il crisis. However, one should examine the energy economics in the face of an oil crisis. For the purpose , a similar economic analysis was done on the profit potential of upgrading

NAGIN CHAND: PETROLEUM OIL INDUSTRY 503

a bituminous Wyoming coal via several GTL proc­esses, including Fischer-Tropsch synthesis and Mo­bil's methanol-to-gasoline processes. Starting with coal gasification, followed by water shift reaction to produce a typical syngas having a 2: 1 H2/C mole ratio. The quality of the coal, as indicated by its ef­fective HlC ratio, is poorer than that of petroleum coke, but it costs about 23 normalised units, com­pared with 12 for coke (Table 1). The effective HlC ratio for compounds containing oxygen can be calcu­lated as:

H-2eO

C

where H, C, and 0 are the number of atoms in the empirical formula of the feed, assuming all the oxygen is rejected as water.

As an alternative resource, the coal is even more expensive than petroleum coke entering the gasifica­tion unit. However, the normalized scale used in the analysis will likely be invalid when there is a real shortfall in the supply of conventional crude oils. When under compulsion to process alternative re­sources, the higher processing cost must be compen­sated for by raising the price of the liquid fuels. The increased margin will bring windfall profits to those companies rich in conventional oil reserves, but will change the economics of refining. Of course, no one is anticipating the occurrence of an oil shortage in the near future, as long as all the crude oils in the world

are accessible. Converting natural gas to liquid prod­ucts is a hot topic. The 106th Congress designated domestically produced GTL fuels made from natural gas as alternative fuels, as defined under the Energy Policy Act of 1992, which could lead to the reduction or elimination of the federal fuels excise tax and toad taxes on the purchase of GTL fuels .

Natural Gas - An economic analysis of natural gas, which is a light gas, is complicated by transpor­tation factors and is discussed somewhere else. Nev­ertheless, it makes no sense to convert pipelined do­mestic natural gas to liquid fuels without a federal mandate or governmental subsidy similar to that for using ethanol produced from corn as a gasoline addi­tive. Sufficient technological leads have been discov­ered in recent years to undertake a proactive ap­proach to producing transportation fuels in a way that is friendly to the environment. However, the deve­lopment and commercialization of these leads require a concerted R&D effort in catalysis, processes, and products. The economic analysis shows favourably the overall process and product value of the clean refinery compared with a startup refinery based on the current technologies. The new clean refinery will be able to meet any major shift in market demands of transportation fuels or any crude oil shortage. The proactive approach could also lead to the coproduc­tion of clean synthetic lube oil basestocks, petro­chemicals, and syngas-to-liquid products [Chen N Y, An environmentally friendly oil industry? Chem Innovat, 31 (No.4) (2001) 11-21].

NAGIN CHAND