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HPIn Brief

07.01.2011  |  Thinnes, Billy,  Hydrocarbon Processing Staff, Houston, TX


US biodiesel market

The US biodiesel industry will grow to support more than 74,000 jobs throughout the economy by 2015 while creating some $4 billion in household income, more than doubling current levels, according to an economic study released by the National Biodiesel Board (NBB). The report also found that the industry will grow to generate nearly $1.6 billion in local, state and federal tax revenues in 2015.

The study, conducted by Cardno ENTRIX, an international consulting firm that specializes in environment and natural resources economics, documents the difficulties the industry faced when the US Congress allowed a key tax incentive to expire in 2010. It found that the expiration of the tax credit and the accompanying 42% drop in production resulted in the loss of nearly 8,900 jobs, a drop in household income of $485 million, and a reduction in real GDP of $879 million.

But the industry is seeing a sharp turnaround in 2011 with the tax credit reinstated and the supporting regulatory framework of the EPA’s 2010 Renewable Fuel Standard, which designated biodiesel as an advanced biofuel. Production jumped 69% in January and has been steadily climbing since. The study predicts the industry will support more than 31,000 jobs in 2011, generate income of nearly $1.7 billion to be circulated throughout the economy, and create more than $3 billion in GDP.

Under projected expansion by 2015, that economic impact would grow even further to supporting more than 74,000 jobs, $4 billion in income, and some $7.3 billion in GDP.

However, the US Congress is still skeptical of the industry’s need for continued tax credits and subsidies. In mid-June, the US Senate voted to end the ethanol blender credit and ethanol import tariff set to expire at the end of the year. On the same day, the US House voted to prevent future allocation of funds for ethanol blender pumps and storage facilities. It will be interesting see how weakening government support for this industry will affect its future growth.

A storage tank explosion at Chevron’s Pembroke refinery in southwest Wales, UK, caused a fire, killing four contractors and seriously injuring another on June 2. The refinery itself remained fully operational following the blast, company officials said. Police representatives said the explosion occurred amid maintenance work at the refinery, and that an investigation was underway.

“We will take every step possible to determine the series of events that led to this tragic incident and ensure that any lessons learned from it will be integrated into the business and shared with our industry partners,” said Greg Hanggi, the refinery’s general manager.

Earlier this year, Chevron agreed to sell the 220,000-bpd Pembroke refinery as well as other marketing and logistics assets in the UK and Ireland to Valero for $1.73 billion. Valero officials said the explosion will not halt the company’s acquisition of the refinery.

Dow Water & Process Solutions has opened its Global Water Technology Development Center in Tarragona, Spain. The center is designed to accelerate the commercialization of Dow’s technologies that make possible the production of clean water, officials said. The center was funded through a $15 million Dow investment, along with grant subsidies from Spain’s Ministry of Science and Innovation for research programs in this area, which is in line with the Spanish government’s commitment to research and development in the field of sustainable water supplies, the company said. Dow said that initial research efforts will be directed to areas such as improving the quality of desalinated water, minimizing costs and reducing energy consumption.

LyondellBasell signed a deal to purchase approximately 200 miles of pipeline near Houston from BP. The pipelines and metering stations comprise a Houston-area olefins distribution system transporting ethylene and propylene from Channelview, Texas, to Equistar’s storage terminal at Mont Belvieu, Texas, and facilities in Deer Park, La Porte and the Bayport Industrial District in Pasadena, Texas. The purchase also includes a natural gas liquids (NGL) feedstock supply line into Channelview.

The US Department of Health and Human Services has added eight substances to its report on carcinogens, a document that identifies chemicals and biological agents that may put people at increased risk for cancer. The industrial chemical formaldehyde and a botanical known as aristolochic acids are listed as known human carcinogens. Six other substances—captafol, cobalt-tungsten carbide (in powder or hard-metal form), certain inhalable glass-wool fibers, o-nitrotoluene, riddelliine and styrene—are added as substances that are reasonably anticipated to be human carcinogens. With these additions, the carcinogens report now includes 240 listings.

AkzoNobel has opened a €7 million fire-protection laboratory at its Felling site in the UK, part of a €10 million investment in research, development and innovation (RD&I) that will create around 40 new jobs. The lab will be operated by the company’s Marine and Protective Coatings business, which supplies fire-protection coatings used to protect steel structures such as buildings and oil and gas installations. The global market is growing rapidly due to increasingly stringent fire-protection regulations worldwide, with forecasters expecting demand to double by 2018.

The world pipe market is projected to expand 5.8% per year to 31.5 billion meters in 2015, a mild deceleration relative to the 2005–2010 period. This slowdown can be almost entirely attributed to China, the world’s largest consumer of pipe. After increasing rapidly from 2000–2010, Chinese pipe demand is expected to rise at about the average worldwide rate through 2015. Advances in North America, Eastern Europe and Western Europe are expected to accelerate through 2015, as these regions recover from the global financial crisis. HP

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