Sulfur glut

Maureen Lorenzetti

Reducing fuel sulfur is a clear industry priority. Figuring out what to do with that extra sulfur once refiners remove it isn't. Yet. But some chemical marketers think it should be an industry concern.

According to the Sulfur Institute (TSI), unless new markets are developed or existing ones are expanded quickly, global sulfur supplies could exceed demand by about 5 million tons by 2010, more than doubling current oversupply levels.

"With less income from by-product sulfur, oil and gas companies will be looking at higher net costs of production—a cost that could trickle down to consumers," said TSI Pres. Bob Morris.

"Practically speaking, the leading manufacturers in any industry need to take a proactive role in market development. We need the energy companies to step forward and get more involved with sulfur," he said.

Possible markets
Traditionally, the phosphate fertilizer industry has been the world's biggest sulfur consumer, accounting for about 50% of demand. Sulfur is also used extensively in the metal and fiber industries, as well as for chemicals, paints, plastics, rubber products, paper, medicines, and some detergents. Asphalt, concrete, and sulfur fertilizers are emerging high-volume markets, according to TSI.

As yet, industry response to the sulfur glut has been underwhelming. But sulfur marketers caution that even if US policy-makers opt to stall impending low-sulfur rules, the issue will not go away. They point to the higher-sulfur crudes multinational companies are now producing outside the US.

The US Geological Survey says that sulfur is being recovered at a growing rate from refineries that are being reconfigured to handle high-sulfur crudes from Mexico and Venezuela. Canadian production is also expected to grow significantly, particularly with new production from oil sands projects.

Even an international incident of sorts occurred because of high-sulfur crude, TSI says. To gain leverage in a contract dispute, Kazakhstan government officials threatened to impose up to $70 million in environmental fines against ChevronTexaco Corp. for storing sulfur near the company's Tengiz oil field.

Regulatory considerations
The US Environmental Protection Agency repeatedly has pledged to maintain its low-sulfur highway diesel rules, which require 80% of highway diesel to meet new standards by mid-2006. EPA is also planning to back an oil industry-sought, phased-in approach to desulfurizing nonroad diesel fuel and will promote an as-yet-unspecified trading program. But sulfur experts say that possible action will not solve the problem. Outside of EPA, regulators within and outside the US are taking steps to reduce sulfur in fuel.

The European Union says motor fuels must be nearly sulfur-free after 2009. Regulators there are counting on an emissions-credit trading system and tax incentives to encourage the sale of the more-expensive lower-sulfur gasoline and diesel.

And in the US, New York is one of several states considering a plan to lower sulfur in both highway fuel and heating oil.

Related Articles

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

Analyst urges broader look at Amazon oil resources’ local impacts

03/21/2014 Increasingly disruptive protests are likely if oil, gas, and mining companies and national governments don’t pay closer attention to indigenous pop...

BOEM extends proposed higher offshore liability limit comment period

03/20/2014 The US Bureau of Ocean Energy Management added 30 days to the public comment period for its proposed higher liability limit for offshore oil and ga...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected