US DOE calls for refinery study

I just got the June 21, 2004, edition of OGJ and read with interest the story that US DOE is concerned about refinery capacity in coming years. This topic is somewhat ironic, as I am an employee (for a little while) of a refinery that will close its gates on Oct. 1, 2004. As most of your readers know, the government and the people of the US have put together a regime that is very efficient at preventing new refineries from being built, and worse yet, discouraging projects for new units or debottlenecking. Until we the people and the legislature deal with these root causes, worrying about oil production and refining capacity will be futile: It ain't gonna happen.

I'll mention only one aspect. Years ago, the refinery I refer to used to publish a list of "Unit Throughput Records," showing the largest monthly throughput for each of the major process units. Employees who contributed to these records were valued. Now management and employees hardly remember the list. I believe there are two principal causes, both due to environmental regulations. The first cause is low-NOx burners on heaters, legislated over the last 15 years to bring heater NOx from the 100-150 ppm range down to 30 ppm, and still heading downward. The law of diminishing returns definitely applies here; reducing the next increment to 9 ppm is much more expensive than past modifications, and an honest air quality scientist would question if it has any effect in this area.

Reducing NOx is a good thing for air pollution, but it has a cost beyond the hardware: The fired heaters in each unit actually lose around 10% firing capacity when these burners are installed. The reason is kinetic: Low NOx flames are cooler and longer, achieved by mixing air and fuel in different zones. As the firing rate increases, the flame temperature rises, and so does NOx. The heater box is limited in size, so the firing rate is also.

The second cause, also environmental, is that each new project must go through an environmental review, which asks among other things if the throughput will increase. The agencies are very much aware that "creep" in unit charge rates may lead to more emissions, and thus costly new pollution control hardware is required. This is enough to "kill" many new projects. Therefore, no new capacity.

I am not a person who thinks we should dispense with environmental regulations. They are essential to, and should be based on, public health. But the proponents of these regulations have to finally realize that there is a conflict between pollution control on one hand, and manufacturing cost and security of supply on the other hand. Intelligent rule-makers will balance these issues and develop a sensible compromise. The trend now is that extremists will continually be raising the standards irregardless of economics and science, and congressmen will be afraid of the repercussions of relaxing them (I do sympathize, a truly no-win situation). Meanwhile, jobs and refining capacity go overseas and energy security dwindles each passing year.

Tom Creswell
Shell Bakersfield Refinery