Research and development (R&D) has been the platform to support new methods to process transportation fuels and petrochemical products from hydrocarbons. So, how much of the R&D was just straight research vs. finding a solution to a critical issue confronting the industry or the market? Another viewpoint would be: Did history shape the hydrocarbon processing industry (HPI) or did the HPI transform history? In surveying the events and developments over the past 90 years, it is a little of both.
Crisis is of the seed that forces innovation to solve vexing problems. Often, new products are the fruits of R&D effort directed to solve another task. The HPI continues to reinvest in new technologies to weather uncertain market conditions and unforeseen incidents. Too often, uncontrollable eventsnatural or manmadeadversely impact the global HPI. The increased interconnection of energy and petrochemical markets magnifies the amplitude and reach from such events on regional and global markets. Consider how the 2011 Fukushima earthquake and tsunami in Japan changed the global view on nuclear power. A single event has raised a firestorm of anti-nuclear sentiment among many nations.
Likewise, political and social agendas have reshaped the global HPI. Dramatic events force change, sometimes ahead of the natural progression. Under dire conditions, HPI companies mustered resources and talent to resolve overwhelming problems. The headlines of this month show the numerous changes that have occurred due to events beyond the control of HPI companies.
Headlines from Hydrocarbon Processing, May 2002:
World energy consumption is projected to increase 60% from 1999 to 2020. According to a recent report by the US Energy Information Administration (EIA), global energy usage is forecast to grow from 382 quadrillion Btu in 1999 to 612 quadrillion Btu in 2010. The fastest growing energy source is natural gas (NG). Over the 21-year forecast period, NG usage is expected to double, reaching 162 Tcf and surpassing coal consumption levels.
Market for auto exterior plastics to reach 1.4 billion pounds by 2006. Many of the best-selling vehicles in the US, such as the sport utility vehicles (SUVs), fall short of present gas standards as measured by their combined average highway and city miles per gallon. Automotive original equipment manufacturers (OEMs) have pledged voluntary mileage gains for SUVs and plan to launch more efficient models. These efforts will require increased usage of plastics. The automotive exterior plastics market is presently estimated at almost 1.2 billion pounds, and is expected to grow 3%/yr through 2006. The estimate includes five major resin/elastomers, thermosets, thermoplastic, elastomers, engineered resins, commodity thermoplastics, and alloys and blends.
Change coming for the petrochemical industry. The global polyethylene (PE) industry has recently seen a tremendous change. Consolidation and rationalization continue in the industry players against a backdrop of economic uncertainty and volatile energy prices. The last time the industry endured such conditions was in the early 1980s. There has been a sizable buildup of PE capacity between 2000 and 2002. Global PE demand has not necessarily declined as it has leveled off. The combination of weak economies and depletion of excess inventories has dampened PE demand growth.
Ethylene. Can this industry overbuild again as it did in the 1970s? Ethylene demand continues to increase by 4.5%/yr. There will be a need for new capacity over the long term. The Middle East is shaping to be the dominant region for new-cracker builds over the next 10 years.
Polyolefins and China. The present per capita consumption of polyolefins (PO) in China is around 5 kg for all PE types and 4.5 kg for polypropylene (PP). World averages are 8 kg and 5 kg, respectively. PE consumption is 37 kg for North America and about 32 kg for Western Europe and South Korea. China accounts for 22% of the worlds population and only 4% of the global gross domestic product (GDP). However, Chinas GDP is growing about eight times as fast as the population.
| One of the largest LNG tanks is being |
constructed for the Dabhol Power Co.,
India. Because of the tank roofs size,
cranes could not be used to lift it into
place. The contractor, Kvaerner
Construction used two giant fans to blow
the roof into position. Hydrocarbon
Processing, May 2000.
| Aerial view of the West Shelf natural gas |
project developed by Chevron.
Hydrocarbon Processing, May 2001.
| Early construction of SHARQs 1.3-million |
tpy ethylene plant in Al-Jubail, Saudi
Arabia. Hydrocarbon Processing, April
Headlines from Hydrocarbon Processing, May 1992:
US oil industry continues to seek regional alliances that will assure a flow of imported oil under all world-condition scenarios. The US, nearing dependence of 50% imports, is looking to Mexico and Venezuela, in particular, for resources.
Methanol as a fuel? Going, going, gone. That is the emerging picture as methanols constraints as a fuel become apparent. Chevron has suspended adding methanol pumps at California service stations due to low demand, environmental concerns and competition from other fuels, especially reformulated gasoline. Chevron had invested $4.5 million on its methanol program, including fuel research.
Value of Western Europes chemicals market is huge. For ethylene, propylene, butadiene and primary aromatics, Western Europes market is valued at $16 billion. Of this, Enichem and its subsidiaries account for 10.1% of the production capacity, followed by Shell, Elf and Dow. The worth of the polyethylene, polypropylene, PVC and polystyrene market was $17 billion. Again, Enichem leads capacity with 9.7%. Elf has 9.1%, Shell, 8.2% and Neste, 6.6%.
Headlines from Hydrocarbon Processing, May 1982:
Environment. Hazardous waste regulations from the US Environment Protection Agency (EPA) will be out this summer and will state its responsibility for issuing permits and enforcement. The EPA will deal extensively with land disposal problems. The agency is encouraging using new technologies to manage hazardous waste. Companies will require higher liability coverage under the new rules. Industry is claiming that EPA is using flawed, out of dated data in its rule making, especially on chemical releases to air.
New one-step process liquefies brown coal. A single-step hydrogenation process has been developed to convert and liquefy brown coal into fuels. This is a great improvement over the two-step process hydrogenation and gasification methods used on other coals. Nippon Brown Coal Liquefaction is operating a pilot plant with the new process.
Solar energy: When and what technology? Of the alternative energy resources, solar appears to have a future and should have the least impact on the hydrocarbon processing industry. To be fully cost-effective, solar energy will require massive industrial applications. Progress has been made on the hardware development. However, tax credits, accelerated depreciation schedules and low-cost loans will be needed to launch solar-energy development and deployment. A report claims that a 10% market penetration by the solar-thermal-system industry can make a substantial dent in the industrial sectors energy consumption. According to 1980 figures, industry consumes a third of the US total annual energy supply; almost 40% is used for process heating.
Headlines from Hydrocarbon Processing, May 1972:
New HPI plants to double in cost. The cost of new HPI plants and equipment in the 1970s will more than double the amount spent in the 1960s. The total bill: more than $150 billion predicted Harry Bridges, president of Shell Oil. Bridges also predicted that, by 1980, the US will need additional refining capacity equivalent to 58 medium-sized refineries.
Low-sulfur fuels can be processed from crude oil containing significant levels of metal and ash. Sulfur content as low as 0.3% is possible. Hydrocarbon Research Inc.s process involves a separate demetalization step, added ahead of the H-Oil hydrocracker. The new process is forecast to handle a combination of feedstocks previously deemed uneconomicalmostly from Venezuela, Iran, California and Canada.
HPI companies still lead as US giants. According to Standard & Poor Corp.s list of 1971 top manufacturing companiesranked by sales11 firms have large hydrocarbon processing operations. The rankings: Standard (New Jersey), 2; Mobil, 6; Texaco, 8; Gulf, 11; Standard (California), 12; Standard (Indiana), 15; Shell, 16; DuPont, 17; Goodyear, 19; Atlantic-Richfield, 23; Continental, 24. Sales ranged from $3 billion to $18.7 Billion, and profits from 4.6% to 8.1%.
Three-day work week used by Canadian refinery. The 40-hour work week has been replaced at Imperial Oil Enterprises Winnipeg refinery. The new schedule is based on 12-hour shifts. The move was unanimously approved by refinery employees. In the rotation, employees would work three consecutive 12-hour days, then have three days offfollowed by three consecutive nights, followed by four days off. The change is an effort to improve family and social lives of rotating shift personnel.
Ethylene makers face profit squeeze. Due to changing feedstock prices, producers will be squeezed on prices. Feedstock for olefin units remains 60% to 75% of the manufacturing costs. In the 1970s, ethylene demand is forecast to have an annual increase of 10% and demand is forecast to exceed capacity by 1975. Several ethylene projects were canceled due to economic uncertainties. About 90% of the proposed US capacity and 100% of the Canadian capacity are expected to use liquid feedstocks. Fortunately, new processing technology allows large olefin units to handle gases through heavy gasoil feeds. New builds should consider product demand flexibility in the project.
| Four reactors produce vinyl acetate |
monomer at the US Industrial Chemicals
Co.s facility at La Porte, Texas. The
process uses a vapor-phase reaction of
ethylene with acetic acid and oxygen over
a fixed-bed, supported noble metal
catalyst. Hydrocarbon Processing 1972.
Headlines from Hydrocarbon Processing and Petroleum Refiner, May 1962:
Global car, bus and truck registrations are estimated at 135.2 million as of January 1962. This is a 5.6% gain (7.2 million vehicles) over 1961 figures. Western Europe has the largest surge (3.09 million), a 10.7% increase; the US was second, with 1.98 million units1.6% increase.
New process for hydrogen recovery. Universal Oil Products has developed a new catalytic process, Hypro; it can convert light refinery gases into hydrogen and carbon. The drive for the new technology is the growing hydrogen demand to support catalytic reforming units. Demand for quality gasoline, heating oil, diesel and jet fuels requires great use of hydrogen treatment.
Progress on smog fight. The California State Motor Vehicle Pollution Control Board expects to certify two or more vehicle exhaust control devices by the end of 1962. Eight devices have been reviewed by the board; six are catalytic and two are direct-flame afterburners. Private industry, led by chemical companies, is spending $1 million/month to resolve the auto-smog problem.
| Standard Oil technical computing |
specialists review a card punch to start the
process monitoring system. This design
will automatically scan 196 process
instruments in 77 seconds and then feed
the data to the computer. To the right is the
conversion unit that prepares the
instrument signals for entry into the
computer. Petroleum Refiner 1960.
Headlines from Petroleum Refiner, May 1952:
Post-war refinery construction hits fast pace. Since 1945, refining capacity in countries outside the US increased by 150% from 2.02 million bpd (MMbpd) to 5.04 MMbpd. Much of the new construction is supported by US investments to build refining capacity in Europe, especially in the UK, France, Germany and Italy. Fourteen refineries are being modernized, expanded or constructed in Western Europe with the aid of Marshall Plan financing. The estimated cost for the projects is $234 million.
90-octane gasoline produced with Houdriflow unit. Tide Waters Houdriflow unit at the Drumright refinery is the second catalytic cracking unit using this process technology. The unit will crack virgin gasoil from the crude distillation unit to yield 90-octane gasoline. A moving-bed catalyst uses a synthetic catalyst bead.
Shale oil part of US energy future. The US Bureau of Mines announced construction of a larger plant for the production and refining of shale oil in response to political events unfolding in Iran. The ultimate goal of cracking shale oil is producing a marketable gasoline; however, shale oil is a challenging hydrocarbon to crack. It also yields coke residuum oil. Hydrogenation may be the solution to raise the yield and quality of gasoline from shale oil.
| General view of the new catalytic |
polymerization unit at BPs Grangemouth
refinery. Petroleum Refiner 1954.
| A complex control panel serves as the |
nerve center for Creole Petroleums new
gas plant located on Lake Maracaibo,
Venezuela. Designed by General Electric,
the 40-ft long control panel operates in a
totally enclosed air-conditioned control
room. Petroleum Refiner 1955.
Headlines from Refiner and Natural Gasoline Manufacturer, May 1942:
Substitute fuels necessity due to war. With the United Nations controlling 90% of the worlds crude oil resources, the Axis-controlled nations are involved in pursuing substitute motor fuels. Hydrogenation of coal by the Bergius process and carbon monoxide by the Fischer-Tropsch process is responsible for 43% of the oil used by Germany. Other substitute fuels include compressed gases and alcohol.
Thirty years of petroleum research. When comparing 1940 to 1914, the US produces five times as much crude oil, 13 times more gasoline, and has 19 times the tonnage of tankers and 20 times the number of research workers. The great change is in the background of the research efforts; more scientists are involved in present R&D efforts, according to the American Petroleum Institute. The vast changes from 1914 to 1940 are related to the technical development of cracking processes, the effects from the First World War on the refining industry, and greater investment on research.
| Construction of a 25,000-metric tpy |
ethylene facility at Port Neches, Texas.
Refiner and Natural Gasoline Manufacturer
Headlines from Refiner and Natural Gasoline Manufacturer, May 1932:
Integrated units controlling more refining capacity. Refining capacity continues its shift to integrated company control. More refining companies are engaged in the marketing of petroleum product, and more refineries are being constructed by integrated refining companies. Oil companies are now selling their produced oil-based products through their own outlets. This trend began five years ago. About 87% of the outlets for refined products are held by integrated-refining companies.
Natural gasolines place in future refining operations. Since the beginning, natural gasoline manufacturers have sold their product to refineries. Natural gasoline was used to raise product gravity and improve front-end and finishing operations. Pricing issues cloud the future of natural gasoline.
Headlines from Refiner and Natural Gasoline Manufacturer, January 1923:
Absorption process favorable. Approximately 115 natural gasoline plants operate in California and produce 450,000 gpd of gas condensate. Two-thirds of production plants are using absorption processes. The absorption process is favored over compression due to unit capital cost and faster installation time. Also, absorption processes are simpler to operate than mechanical extraction processes.
Jenkins cracking process found profitable. The Jenkins process is an advancement over skimmer/topping refining operations. The Jenkins process uses artificial circulation to keep the oil in contact with heating surfaces to allow breaking compounds into desired products. The gravity of gasoline manufactured by the Jenkins process averages 60° Baumé and meets Navy specifications. The produced product is a straight gasolineno blending is necessary. HP