In the fourth quarter, the emphasis shifts to planning for next year. Many hydrocarbon processing industry (HPI) companies have completed third-quarter earnings report and are gauging how their performance measured up to their goals as well as their performance against last year metrics. Likewise, the think-tank agencies have reviewed third quarter earnings reports for HPI companies and are preparing their forecast for the industry, in some cases with a 30-year view.
Forecasts are difficult predictions to manage, especially after a substantial reorganization of wealth, markets, product demand and supplies along with profits as what occurred due to the 2008 economic crisis. In the HPI, the up cycle is too quickly followed by a downward trend. Soft economic landings are always appreciated several years after the rollercoaster economic event. There is no such period as steady-state in the HPI.
In recent times, change is often a byproduct of social and political forces. In 2012, the Arab Spring of 2011 continued as new democracies found their way to new government formations. Economic woes of Southern Europe even plague Chinas economy; Europe is a final destination for many Chinese goods. And, the political issue with Iran and its nuclear material research sets off shock waves in the future oil supplies and pricing.
Refining crude oil and converting natural gas into petrochemical products is the easy part. Managing fallout from social and political forces strains even the best HPI firms, as proven by this months Insight headlines.
The Valero refinery hoist new delay coker
drums into place along with a hydrocracker to
increase flexibility of the original 1901 Gulf Oil
Co. refinery in Port Arthur, Texas. Hydrocarbon
Processing, September 2012.
Headlines from Hydrocarbon Processing, November 2002:
IEAs World Energy Outlook 2002 indicates that fossil fuels will remain the primary energy source, meeting more than 90% of new demand. Global oil demand will rise by about 1.6%/yr, from 75 million bpd (MMbpd) in 2000 to 120 MMbpd in 2030. Demand for natural gas will increase more strongly than the other fossil fuels; primary gas consumption will nearly double from 2000 to 2030.
LNG demand and siting risks impact US development. The gap in US natural gas consumption and production is widening. The supply of stranded gas is increasing globally, and interest in liquefied natural gas (LNG) is growing in importance. Most LNG sources are remotely located from consumers. Vast reserves are found in South America, Africa, Former Soviet Union and Asia-Pacific. Since the 1990s, drilling costs have declined; improvements in the liquefaction process have reduced LNG processing costs. For terminals to be constructed in the US, siting is a major hurdle. The not-in-my-back-yard (NIMBY) attitude is hindering proposed new LNG project development. Technological advances in marine structures and offloading systems are fostering development of strategically located near-onshore infrastructures, thus muting NIMBY protests.
KBR reaches 85% completion milestone BP
Canadas Prairie Rose linear alpha olefins
(LAO) facility in Joffre, Alberta, Canada.
Hydrocarbon Processing, March 2001.
Headlines from Hydrocarbon Processing, November 1992:
Demand for HPI products remains flat. In a new report, demand for petrochemical and refined-products is flat, but it is robust compared to the upstream business. The present recession has repressed demand; forward gasoline sales will keep both crude and product prices under pressure as in 1991.
1993 price for WTI crude estimated at $20/bbl. The near-term outlook for the oil market is divided. One group believes that small but sustained price increases for crude oil will occur over the next 18 months. The second group believes that production increases by OPEC will soften prices in 1992 as supply out strips demand. New oil production expansion from Iraq and Kuwait are expected to soften oil prices to around $19.80/bbl in 1993.
Headlines from Hydrocarbon Processing, November 1982:
1983 HPI Market forecast. The oil glut is abating, and excess supplies of crude oil and refined products are firming up. Total world oil consumption peaked in 1979; but refining capacity continued to expand into 1982. Global refining capacity is about 83 million bpd (MMbpd), with the free world accounting for about 66 MMbpd. Capacity expansion continued in the US, Western Europe and Japan all exceeding domestic demand for refined products. The situation has resulted in a rash of refinery shut downs in all three areas. More capacity rationalization is needed to restore profitability to the refining industry. Industry experts predict that 25% to 44% of the Western Europe capacity and 20% to 25% of the US refining capacity should shut down.
Changes are occurring for the global petrochemical industry. Commodity petrochemicalsmethanol and ethyleneare witnessing a shift in capacity shares. Areas with cheap, abundant energy and resources see new capacity expansion programs. Canada, Mexico, Indonesia, Libya and Saudi Arabia are gearing up to be major producers and exporters of commodity petrochemicals.
Headlines from Hydrocarbon Processing, November 1972:
US pollution control will cost $281 billion in the 70s. Control of automobile emissions from 1976-1985 is expected to cost motorists $63 billion.
Pollution issues for Japans HPI. The Japanese HPI is facing a turning point. Environmental problems are central issues for Japan HPI companies. Over regulation by the government will unbalance Japans economy.
Bugs destroy oil wastes. A Shell Oil study indicates that refinery sludges can be efficiently disposed of by using naturally occurring biological processes found in soil without damaging the environment. The 18-month evaluation was conducted at Shells Houston, Texas, refinery. Refinery sludges were incorporated into soil using a roto-tiller. Hydrocarbons from the sludge became a food source for the micro-organisms, which converted the waste into carbon dioxide and water.
Headlines from Hydrocarbon Processing and Petroleum Refiner, November 1962:
Italy has become the fourth largest chemical producer in Western Europe since WWII thanks to aid from the Marshall Plan. Current strong demand coupled with low labor costs have made the Italian chemical industry grow faster than any other Free World country.
Warning on tariffs. High tariffs and taxes on oil, especially heating fuel taxes, may harm West Germanys oil industry according to Deutsche Shell A.G. Shell firmly attacked taxes on these grounds. Energy costs are an important factor in industrial costs; competitiveness of German industry will decrease; if present level taxes are maintained. Wage increases are seriously threatening Germanys industry and are noticed by the government.
Small cars sales are fading. A new survey reports that smaller cars are on the way out. The US public is turning attention to high-performance automobiles, as well as, bigger and more powerful compacts. Ethyl Corp. estimates that octane needs for both regular and premium gasoline will increase nearly half an (research) octane number.
Engineers review the 3-D of the new Sohio
Toledo refinery now under construction.
Petroleum Refiner 1960.
Advanced control room is the nerve center at
American Oil Co.s Yorktown, Virginia, refinery.
The operators can view temperatures,
pressures and flow rates for the entire refinery.
Petroleum Refiner 1960.
Headlines from Petroleum Refiner, November 1952:
New alkylate expansion being planned. A new alkylate expansion goal of 31,000 bpd is under development as a cushion for possible wartime demand by the Petroleum Administration for Defense. The proposed expansion will incorporate the unfilled balance of the present program. Of the 8,000-bpd alkylate expansion plans already announced, the balance, is believed, will be handled on an independent basis.
Oil exports to reach nearly 8 million bpd in 1953. The Independent Petroleum Association believes that total and domestic exports for all oils will average 7.97 million bpd.
Sohio to add new Platformer at Lima refinery. The Standard oil Co. (Ohio) will install a 12,000-bpd Platforming unit at its Lima, Ohio, refinery. The Platformer will assist increasing output of high-octane motor gasoline. Universal Oil Products (UOP) will design the new unit.
Kellogg gets contract for the worlds largest deasphalter. The Humble Oil and Refining Co. awarded a contract to The M.W. Kellogg Co. for the design and construction of a solvent deasphalting plant for Humbles Baytown, Texas, refinery. The new unit will be twice the capacity of any previous deasphalter. The new plant will charge 28,000 bpd of vacuum residual crude as feed.
The Pontiac Eastern Corp. hoists a new
11,000-bpd fluid coker into place. Petroleum
Headlines from Petroleum Refiner, September 1942:
New catalytic cracking process available. The Thermofor Catalytic Cracking (TCC) Process is a major new development. The process was demonstrated on a 500-bpd unit to develop design data for a commercial-scale facility. This process uses a continuous circulating catalyst flow through the reaction zone. The separate reactor and catalyst regenerators are designed for efficient usage of cheap catalyst along with operating flexibility. In the post-war period, TCC will provide manufacturing capability for high-quality motor gasoline. The Socony-Vacuum Oil Co, Inc. developed the TCC Process.
Natural gas: Basis for new chemicals. Enormous effort is being applied in the research and development of using natural gas as a base for new products. Natural gas has great promise; it is composed of methane, ethane, propane, hexanes, heptanes, etc. The higher carbon compounds are useful for motor gasoline blending. Isobutane and isopentane show great promise as feed for alkylation units. More research is needed regarding the processing of natural gas compounds into solvents, plastics, synthetic rubber and so forth.
Conocos Billings, Montana, refinery.
Petroleum Refiner, April 1949.
This Chicago-based modernization project
included construction of a delayed coking unit,
shown at the left. Each of the two coke drums
has a capacity of 326 tons of coke are among
the largest operating by any US refiner.
Petroleum Refiner 1949.
Headlines from The Refiner and Natural Gasoline Manufacturer, November 1932:
Improved solvent refining of lubrication oils. Using liquid sulfur dioxide (SO2) and benzol, the Edeleanu Process is a pretreatment for lubrication oils. The SO2 works as a selective solvent to remove various hydrocarbons such as aromatics from the lubricating oil.
Japan to construct modern refinery. Mitsubishi Oil Co. is constructing a modern refinery at Kawasaki, Japan. The refinery is built on reclaimed land near Tokyo Bay. Two refining units were designed for maximum efficiency. The combination of topping-cracking unit will handle light crude to produce straight-run gasoline, distillate, gasoil and fuel oil. The other processing unit has the flexibility to process lubrication oils from heavier crudes or rerunning of distillate materials. The topping unit will have a capacity of 3,000 bpsd. The facility came online in December 1931.
Headlines from The Refiner and Natural Gasoline Manufacturer, June 1923:
British Agwi doubles plant capacity. The Agwi Petroleum Corp., Ltd. of England will double capacity of its refinery from 5,000 tons/wk to 10,000 tons/wk.
Lone Star to build the largest gasoline plant in Texas. The Lone Star Gas Co. will construct the largest natural gasoline facility in Palo Pinto County. The facility will use a combination absorption and compression process; it will have a charge rate of 60 million cfpd. The planned facility will operate 16 absorbers and two compressors. The gas will be supplied to customers in northern and central Texas.
New Sinclair Refinery almost complete. The new refinery of Sinclair at Marcus Hook, Pennsylvania, is nearing completion and should be online in autumn. The refinery has the latest equipment for extracting gasoline from crude oil. Company-wide processing improvements will increase refined product yields three times the rates over last year. HP