Hydrocarbon Processing Copying and distributing are prohibited without permission of the publisher
Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.

The last word

12.01.2012  |  Romanow, Stephany,  Hydrocarbon Processing Staff, Houston, TX

Keywords: [refining] [petrochemical] [natural gas] [economics] [technology]

Throughout this year, Hydrocarbon Processing (HP) has investigated the last 90 years of the hydrocarbon processing industry (HPI) through its monthly editorial, Insight. The HPI has a rich history; this industry is completely ingrained into our daily lives. This month, we will publish the final Insight editorial for this series. Before we leave this project, there are a few final observations that may provide value to HP readers over the next 10 years as we prepare to celebrate HP’s centennial milestone in 2022.

Survival in the HPI requires flexibility

It may be considered a Darwinian idea, but longevity in the HPI belongs not to the strongest or the most intellectual organizations. Instead, survival hinges on flexibility and long-term planning. Through the years, we have witnessed numerous mega-companies defeated due to unintended consequences stemming from behemoth organizational structures and protocols, and the inability to quickly adapt to market and industrial changes. Change is a constant for the energy industry. Too often, the sources of these changes are beyond the control of HPI organizations.

Politics of energy

The energy industry has always had a contentious relationship with government at all levels. From the beginning, the HPI has protested taxes levied on oil, natural gas and refined products. In looking ahead, the politics of hydrocarbons will continue and, in some cases, become a bitter contest on sustaining jobs vs. environmental agendas. No nation is immune from this debate; even developing nations must address energy policies in constructing their emerging energy infrastructure. Unfortunately for the HPI, elected politicians operate on “political” time while the HPI functions under energy time. Depending on the office and nation, political time can be as little as a two-year office cycle. Energy time is the service life of the HPI facility (60 to 80 years) and is much longer than political time.

Politics can disrupt the energy market. In several developed nations, politics have villianized coal and crude oil as energy resources. Coal is an excellent resource for power generation; yet, permitting barriers are driving power companies to natural gas to avoid the bureaucratic “red tape” on coal-fired facilities. In addition, reactionary politics nearly banned nuclear energy after the 2011 Fukushima nuclear event.

Far-left environmental groups continue to impede drilling efforts and pipeline developments around the world. Such politics ignore the well-paying jobs from drilling, pipelines and, ultimately, the downstream business that are made possible with the exploration and development of all hydrocarbon resources. The pettiness of politics regarding energy sources hobbles economic growth for many nations.

Same problems, different discomfort levels

Interruptions of crude oil sources or refined product supplies pose both concerns and opportunities, depending on the condition and position of the HPI facility. Transportation costs have decreased for crude oil and its refined products. Crude oil and clean transportation fuels are commodity products. This condition will not change much over the next 10 years.

How HPI companies view their business opportunities will evolve. More HPI companies are leaving the refining and marketing/distribution businesses. New independent, nonintegrated refiners own and operate a greater share of refineries. Many of the new owners are financial groups; this is a major change for the refining industry.

These new entrepreneurs must handle the same problems as the previous owner/operating company. The difference now will be the ability to leverage different assets by the new owner. Over the past 90 years, there have been periods in which small and agile groups trump large, integrated organizations. Also, mergers of great companies have failed to overcome the tests and hardships generated by the global economy. Such mergers again divide in hopes that the surviving parts will prevail.

Innovation will continue. Developments will focus on conserving energy and producing desired refined products and petrochemicals. Over the next 10 years, the HPI will continue to rely on new equipment, catalysts and so forth to increase production, eliminate waste, reduce emissions, and increase the safety and reliability of facilities.

Communication continues to impact the modern HPI

Communication/automation/monitoring systems are the latest round of innovative advancements creating economic opportunities. Information from the processing unit is captured, recorded and presented to stakeholders, who can then make informed business decisions. Likewise, the Internet and social media now quickly relay news about fires, releases and other negative events. The HPI is interconnected to the global economy, no matter its location or size.

The HPI has adapted to the numerous changes from its past. Likewise, this industry continues to introduce changes that improve the quality of life for all nations. It will be interesting to see what the next years will hold for the HPI and the global economy.

The final word

HP itself is making changes for the new year. Beginning in January 2013, HP will launch a daily newsletter entitled News Brief. Knowledge is power. With the interconnectivity of the global HPI, events across the world have a ripple effect on other economies. The availability of energy supplies is a critical reality. HP

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.


As an environmental scientist, I wholly agree with the part about the energy needing to continuously adapt, both to societal as well technical/economic changes. Unfortunately, even in oil and gas capitols such as Houston, the vast majority of the populace remains grossly ignorant of what is required in order to get energy out of the ground and into their fuel tanks and/or fuse boxes. Worse, our detractors love to use that ignorance to spread half-truths and outright lies in order to advance their self-serving agendae. Increased outreach to the media and youth education is sorely needed to counter this situation.

Related articles


Sign-up for the Free Daily HP Enewsletter!

Boxscore Database

A searchable database of project activity in the global hydrocarbon processing industry


Is 2016 the peak for US gasoline demand?




View previous results

Popular Searches

Please read our Term and Conditions and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2016 Hydrocarbon Processing. © 2016 Gulf Publishing Company.