March 2018

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Editorial Comment: The future of refining—sulfur need not apply

According to multiple industry reports, crude oil consumption will continue to increase over the short term.

Nichols, Lee, Hydrocarbon Processing Staff

According to multiple industry reports, crude oil consumption will continue to increase over the short term. The majority of this growth will be for the production of transportation fuels, while a sizable portion will be for the production of petrochemicals. Nearly all of the oil demand growth will come from emerging economies.

With the increase in demand for refined fuels, additional consumption equates to higher emissions rates. To combat these effects, dozens of countries around the world are increasing pressure on refiners to reduce the amount of sulfur in transportation fuels, primarily in diesel and gasoline. Some of the major policies governing the mandatory decrease in emissions and the allowable amount of sulfur in fuels include Tier 3 fuel regulations in the US, National 5 and Beijing 6 in China, Bharat Stage 6 in India, Euro 5 and Euro 6 and clean fuel production projects in the Middle East, as well as higher ethanol/biofuel blending rates in several countries and the adoption of electric, hybrid-electric and natural gas-powered vehicles.

Low-sulfur rules have also moved into the global shipping sector with the enactment of the IMO’s Global Sulfur Cap regulation. This new regulation, which will be enacted in 2020, will affect more than 50,000 ships worldwide, and has spawned a wave of questions on how refiners and shipowners will react to new low-sulfur fuels for marine shipping.

However, the move to reduce sulfur in refined products is not new to the downstream processing industry. Over the past several decades, Hydrocarbon Processing has followed the technologies surrounding the reduction of sulfur in refined fuels and the development of clean fuels around the world.

With the addition of new legislation restricting the amount of sulfur in transportation fuels, refiners will continue to invest billions of dollars to adhere to new fuel quality regulations.

Some of the most intense investment will be seen in the increase of desulfurization capacity. Approximately 6.6 MMbpd of new desulfurization capacity will be added by the early 2020s (FIG. 1). The majority of this capacity will be in non-OECD countries in the Asia-Pacific and Middle East regions.

Clean fuels production is the way of the future, and refiners will either have to get onboard or risk a future where their low-grade products are virtually unsellable. HP

FIG. 1. Desulfurization capacity additions by 2022, by region (MMbpd). Source: OPEC <i>World Oil Outlook 2017.</i>
FIG. 1. Desulfurization capacity additions by 2022, by region (MMbpd). Source: OPEC World Oil Outlook 2017.

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