HARNESS THE POWER
RENTECH engineers build unmatched power and performance into
every boiler we deliver.
Our 80-acre manufacturing facility—the industry’s mosttechnologically advanced—includes heavy bay and light bay areas with direct access to rail, cross-country trucking routes and shipping facilities. We master every detail to deliver elemental power for clients worldwide. Take an expanded tour of our facilities today at www.rentechboilers.com/facilities
HARNESS THE POWER WITH RENTECH.
OF MANUFACTURING INNOVATION
HEAT RECOVERY STEAM GENERATORS WASTE HEAT BOILERS
FIRED PACKAGED WATERTUBE BOILERS SPECIALTY BOILERS
HydrocarbonProcessing.com | NOVEMBER 2014
®
PETROCHEMICALS
FCC can be used to produce olefins and
aromatics on-purpose
MAINTENANCE
Process equipment may be vulnerable to brittle fractures
REFINING DEVELOPMENTS
Ultra-fine solids need aggressive treatment to protect
heat-transfer networks
SPECIAL REPORT:
Plant Safety and
Environment
HARNESS THE POWER
RENTECH engineers build unmatched power and performance into
every boiler we deliver.
Our 80-acre manufacturing facility—the industry’s mosttechnologically advanced—includes heavy bay and light bay areas with direct access to rail, cross-country trucking routes and shipping facilities. We master every detail to deliver elemental power for clients worldwide. Take an expanded tour of our facilities today at www.rentechboilers.com/facilities
HARNESS THE POWER WITH RENTECH.
OF MANUFACTURING INNOVATION
HEAT RECOVERY STEAM GENERATORS WASTE HEAT BOILERS
FIRED PACKAGED WATERTUBE BOILERS SPECIALTY BOILERS
WWW.RENTECHBOILERS.COM
NOVEMBER 2014 | Volume 93 Number 11
HydrocarbonProcessing.com
SPECIAL REPORT: PLANT SAFETY AND ENVIRONMENT 37 Heater training improves safety and operations
D. Basquez, M. Baker, C. Baukal and R. Luginbill
41 Environmental regulations: How much do they really cost? K. Allen
47 Consider true zero-emission packing for reciprocating compressors T. Lindner-Silwester
55 An examination of three recent accidents in the downstream industry J. C. Jones
59 Design a safe hazardous materials warehouse R. Benintendi and S. Round
MAINTENANCE AND RELIABILITY
67 Is your plant vulnerable to a brittle fracture? B. Macejko
PETROCHEMICALS
79 Optimize olefins and aromatics production W. Letzsch and C. Dean
REFINING DEVELOPMENTS
85 Manage the impacts of high-solids crude oil more effectively G. Hoffman and D. Longtin
Cover Image: In a turnaround, the 46-year-old coke drums at Chevron’s El Segundo, California refinery were replaced. This project involved 15 major lifts totaling 8.3 MM aggregate lb in just 15 days. Six old coke drums weighing 400,000 lb each were pulled and replaced by six improved 600,000-lb drums. Nooter Construction, the St. Louis company with a long history of coke drum turnarounds, installed the original coke drums in 1968 and was responsible for the removal and installation of the new coke drums. See the full article on the El Segundo refinery coke drum project in HP December 2014. Photo courtesy of Nooter Construction.
DEPARTMENTS 4 Industry Perspectives 10 News 19 Industry Metrics 91 Innovations 93 Events 94 Marketplace 96 Advertiser Index 98 People COLUMNS 9 Editorial Comment Wanted: Future leaders 21 Reliability
Can integrally geared compressors be successfully used with variable speeds? 23 Automation Strategies
Virtualization in process automation systems 25 Global
European refining—Cornered, with no way out?
29 Automation Safety It is easier to sit on the couch than go exercise
31 Boxscore Construction Analysis Vietnam: Reversing the tide of refined imports
36
4NOVEMBER 2014 | HydrocarbonProcessing.com
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Cyber bullies continue to be a menace
Cyber security is still a critical issue that the hydrocarbon pro-cessing industry (HPI) must address. Speaking at the American Fuel and Petrochemical Manufacturers Q&A and Technology forum in Denver, Colorado, Mark Bristow, chief of the Indus-trial Control System Cyber Emergency Response Team (ICS-CERT), US Department of Homeland Security, emphasized that cyber attacks are increasing and becoming more sophisti-cated. In short, the threat of a cyber breach to a plant control system is more likely than in past years. Industry data collected by ICS-CERT show that more incidents are occurring by outsid-ers probing for company information, including control systems.
While you were sleeping. Bristow stressed that such
breach-es will not be dramatic events with a total system/network meltdown. Staff members will most likely notice them as minor or “weird” blips in plant data. Furthermore, these breaches will require plant analysts to drill into the system in order to uncover the true extent of the breaches and to identify the damage.
Too often, victims of cyber attacks are not aware of the at-tacks on their systems, and they are often notified by ICS-CERT on the security breach. HPI facilities are relying on networks and data-collection systems to move information throughout the corporation. These systems must be open to be efficient.
The outlook. “Things will get worse before getting better,” says Bristow. Stuxnet, Heartbleed, Mariposa, Energetic Bear and Dragonfly are just a few of the highly publicized viruses used in cyber attacks. These attacks can occur outside, and within, the network. Disgruntled employees, UBS devices and vendor’s in-fected laptops are just a few ways that networks can be inin-fected.
You can’t fix stupid. There are steps that companies can set in
motion to protect themselves. Cyber risks should be part of the organization’s risk-management goals. Also, companies should get back to basics.
The best practices are 1) know who is on the system, 2) prepare a recovery program and have readily accessible backup resources and 3) practice the recovery programs.
FIG. 1. The HPI is still vulnerable to cyber attacks and must take precautions. Source: Hydrocarbon Processing, October 2013.
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Select 93 at www.HydrocarbonProcessing.com/RSHPI Market Data 2015 is the hydrocarbon processing industry’s
most trusted forecast of capital, maintenance and operating
expenditures for the petrochemical, refi ning and natural gas/
LNG industries. Produced annually by the editors of Hydrocarbon
Processing and the Construction Boxscore Database, and
featuring data provided by governments and private organizations,
this comprehensive resource provides comprehensive and
top-level insight into HPI market trends, spending and activity.
HPI Market Data 2015 features:
• Global spending in the refi ning, petrochemical and gas processing sectors • Capital, maintenance and operating spending broken out by region • An exploration of the Impact of local and national trends on spending and activity
• An exploration of changing markets and demand within the global HPI, with discussion of emerging markets
• More than 40 tables and 100 fi gures, including information and data collected from governments and private organizations
• Expanded editorial analysis of worldwide economic, social and political trends driving HPI activity across all sectors
Obtain HPI Market Data 2015 to:
• Plan strategically for 2015 and beyond • Recognize global and regional market trends • Locate new business opportunities
• Discover how spending trends by sector will impact your company
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We invite you to utilize this market analysis and insight to optimize your budgeting and strategic planning.
Expenditures are Broken out for the Local and Global HPI by the Following Categories:
• HPI economics • Natural gas/LNG • Petrochemicals • Refi ning
Highlights include:
• The HPI’s capital, maintenance and operating budgets are expected to exceed $324 B in 2015, representing an all-time high.
• Global announced project spending continues to surge.
• New and existing refi neries will be designed to handle unconventional feedstocks, such as NGLs, bitumen, heavy oil, and shale, and more than 53% of the new capacity will be constructed in developing nations.
• The most signifi cant expansions in the petrochemical sector will be in developing countries in Asia-Pacifi c, Latin America and the Middle East.
• Growth on both the supply and demand sides of the gas processing plants has resulted in the announcement of billions of dollars of capital investments across the world.
• Investments include the construction of LNG export and receiving terminals, cryogenic and gas processing plants, fractionators, pipelines and storage facilities
Included in the Book are Answers to such Critical Questions as:
• Where are the global hot spots of construction activity?
• What are the latest developments in the petrochemical industry? • What types of fuels will become increasingly part of everyday use? • Where is project spending ongoing for the downstream sectors?
• What are the future feedstock trends for refi neries and petrochemical plants? • How will environmental rules change future transportation fuel production slates?
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“
The hydrocarbon processing industry is undergoing an incredible expansion wave and new
business opportunities; all are supported by new crude oil and natural gas resources,” said
Stephany Romanow, editor of Hydrocarbon Processing. “In particular, the petrochemical industry is
experiencing a renaissance period as shale gas and continued economic growth result in significant
new project announcements globally.
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Comment
STEPHANY ROMANOW, EDITOR
Hydrocarbon Processing | NOVEMBER 20149
The hydrocarbon processing industry (HPI) has known for some time that a great shift change is eminent. The expe-rienced engineers, chemists and crafts hired in the 1970s and 1980s are reach-ing retirement age very soon, and they are ready to start their well-earned second chapters. Besides the loss of the experi-ence that seasoned technical experts will take with them upon retirement, the HPI will also be short on future leaders.
Where do you find new engineers, operators, and skilled craft workers? The choices for employment have dramatically changed since the 1970s. Young talented workers have more employment choices. The HPI will also be in direct competition with other industries to attract staff.
Who could be leaders for your organization? Some choices include:
• The individuals with the most education
• The most charismatic individuals of the organization
• The individuals at the highest job levels of the organization or group • The individuals who use control
and manipulation to get results. Actually, this list is just a myth. Lead-ers can be developed within the organiza-tion. They do not need to have the high-est level of education or the top job within the group. They do not have to be the most charismatic. Manipulation/control tactics can gain some short-term results, but they will not lead to fruitful achieve-ments over the long term.
Todd Monette, plant manager for Ly-ondellBasell’s facility in Houston, Texas, recently addressed the AFPM’s Q&A and Technology Forum in Denver, Colorado. Monette emphasized that HPI organiza-tions must create their own leadership within their facilities and they must be-gin now. The future leaders of the HPI are the new workers now entering the workforce. These young people have dif-ferent needs and expectations than the
seasoned veterans. Thus, new training/ mentoring programs for young leaders must be developed.
All employees can contribute leader-ship to the organization. In the areas of safety and environment, all employees can, and must, contribute effectively to health, safety and environmental (HSE) goals in various ways, such as managing themselves, supporting their co-workers and embracing their job responsibilities to meet the company’s goals.
Empowerment. As leaders, employees must be empowered to identify and re-port problems. Even more imre-portant, they must know that corrective actions will take place to remedy the situation. Open dialogue is particularly important. It is great to have monthly safety meet-ings. However, it is more important that the staff believes that all members of the plant and company share, and work to-ward, the same goals daily.
An energized employee is more valu-able than any innovative device. Technol-ogy has a very special place in the HPI,
but people will be responsible on how
well that plant operates or how well that process equipment is operated and main-tained.
INSIDE THIS ISSUE
36
Plant safety and environment. Maintaining proper safety and environmental performance is a multi-faceted endeavor. Numerous government regulations drive standards for improved operations of HPIfacilities. Environmental performance, just like safety, is a 24/7 task; there is no single solution. While improved training and adherence to safety and operating practices can enhance plant performance, more improvement is needed.
67
Maintenance and reliability. Much of the process equipment operating today was designed to construction codes that did not require a formal evaluation for low-temperature considerations. Metal temperature highly influences the fracture toughness of construction materials of plant equipment. At low temperatures, some materials are more susceptible to fracture. Methods to identify potential brittle-fracture conditions in process equipment are discussed.79
Petrochemicals. The fluid catalytic cracking (FCC) process can produce a wide range of products. FCC technology was introduced almost 72 years ago to facilitate the production of high-octane fuels, and many units are still operated for that purpose. However, the FCC process can also be used to produce petrochemicals. The authors discuss the various FCC operational changes that can enhance propylene yield.Wanted: Future leaders
Maintenance, crafts and operators
Plant manager Process unit/shift foreman Craft foreman Process/project engineers Superintendent operations and maintenance Managers of engineering and technical service
FIG. 1. Leadership profile for HPI facility.
An expanded version of Editorial Comment can be found online at HydrocarbonProcessing.com.
| News
EPA: GHG emissions from refineries
increase 1.6% in 2013
The US Environmental Protection Agency (EPA) has released its fourth year of GHG data, with over 8,000 large facilities reporting 2013 emissions. The report data is broken down by industrial sector, geographical region and individual facilities. According to the EPA, reported emissions from large industrial facilities were 20 metric MMt higher (or 0.6%) than in the previous year, mainly driven by the coal and power plant industries. Power plants (1,550 facilities) emitted more than 2 B metric tons of GHG, an increase of more than 13 MMt compared to 2012. Petroleum and natural gas systems reported 224 metric MMt of GHG emissions, a decrease of 1% from the previous year. Refineries were the third-largest stationary source, with 177 metric MMt of GHG emissions, a 1.6% increase from the previous year.
Hydrocarbon Processing | NOVEMBER 201411
HP STAFF
News
Cellulosic ethanol
enters the laundry
detergent market
DuPont and Procter & Gamble are collaborating to use cellulosic ethanol in North American laundry detergent. Tide will be the first brand in the world to blend cellulosic ethanol in a scalable and commercial way. Ethanol has long been a key ingredient in the detergent formulation, allowing for stability of the detergent formula and better washing performance. The substitution of corn-based ethanol with cellulosic ethanol is the latest innovation in the companies’ 30-year partnership.
DuPont will produce the cellulosic ethanol at the company’s new biorefinery, which is under construction in Nevada, Iowa. Once completed, the plant will pro-duce 30 MMgpy of cellulosic ethanol, a process that DuPont claims has zero net carbon emissions.
The detergent, combined with cel-lulosic ethanol, will allow for the repur-posing of over 7,000 tons of agricultural waste a year. This is the equivalent to the power needed to do all the washing in homes across California for over a month.
Dow Chemical unveils
apprenticeship program
Dow Chemical will launch a US ap-prenticeship pilot program at various Dow sites across the nation in 2015. This pilot program supports a major initiative of the Advanced Manufacturing Partner-ship (AMP), an effort to secure US lead-ership in emerging technologies, create high-quality manufacturing jobs, and en-hance the US’ global competitiveness.
The launch advances the goals and national workforce development efforts of the AMP Steering Committee 2.0, a re-newed, cross-sector, public/private part-nership. As part of AMP 2.0, Dow, Alcoa and Siemens have formed a coalition to build regional apprenticeship models and create an instructional playbook for other
US-based companies seeking to develop apprenticeship programs.
In addition to sharing best practices gained from over 40 years of experience of-fering apprenticeship programs in Europe, Dow joined the coalition in committing to pilot key playbook concepts at company fa-cilities in the US. Within the next five years, through its US Apprenticeship Program, Dow says it aims to develop a highly skilled technical workforce that will support busi-ness growth and advance skill develop-ment in manufacturing and engineering.
Dow’s US program will offer partici-pants two to four years of training and on-the-job experience in some of the most sought-after and highest-earning technical specialties in the industry. Through part-nerships between Dow and local commu-nity colleges, the program will combine classroom training and hands-on learning to build in-depth skills and experience. Upon completion of the program, appren-tices will be evaluated for employment op-portunities at Dow.
Dow says it will pilot its US Appren-ticeship Program at five of its manufac-turing sites in Texas (Freeport, Bayport, Deer Park, Seadrift and Texas City), as well as at its manufacturing sites in Cali-fornia; Pittsburgh, Pennsylvania; and Chicago, Illinois area. The company ex-pects to hire approximately 60 apprentic-es for the pilot program in 2015, training them for roles as chemical process op-erators, instrumentation and equipment technicians and analyzer technicians.
Fueled by cost-advantaged energy and raw materials, Dow and other US-based manufacturers have, in recent years, an-nounced plans to expand their US opera-tions and create new jobs. A recent IHS Global Insight study estimates the creation of 630,000 new jobs in US manufacturing as a result of the US shale gas boom, with 2,800 to 3,500 indirect jobs also created due to natural gas and shale exploration.
However, one of the greatest challeng-es facing industry today is a shortage of candidates with the technical skills neces-sary to qualify for key roles now available
in the manufacturing sector. According to the study, today more than 600,000 jobs, most of them technical, are unfilled de-spite high US unemployment statistics.
New chemical plants
to boost natural gas
demand by 4% in 2015
Industrial natural gas consumption has grown steadily since 2009, as low prices have been attractive to customers who use natural gas as a feedstock for chemical pro-duction. Methanol plants and ammonia- or urea-based fertilizer plants are among the most natural gas-intensive industrial end users, with many using 100 MMcfd or more. Low gas prices and proximity to shale resources have led to proposals for several new industrial facilities, the details of which were included in a US Energy In-formation Administration (EIA) report.
Two methanol plants are set to begin service this year: a small facility in Pampa, Texas and one in Geismar, Louisiana. A handful of fertilizer plants have begun ser-vice, and an expansion is planned at a plant near Beaumont, Texas later this year.
Many plants are on the Gulf Coast, but proximity to shale development in the Marcellus, Bakken and Niobrara areas have led to proposals for facilities outside of Texas and Louisiana. Two large facili-ties coming online in 2015—a methanol plant in Clear Lake, Texas and a fertilizer/ urea plant in Wever, Iowa—will support continued growth in industrial demand. The EIA projects that growth in industrial demand will continue through 2015, with consumption averaging 21.3 Bcfd in 2014 and 22.1 Bcfd in 2015, a 4% increase.
Developers hope to take advantage of abundant natural gas in North Dakota’s Bakken shale. Two ammonia-based fertil-izer plants are proposed for North Dakota for 2018. Farm-owned cooperative CHS Inc.’s proposed plant in Spiritwood and Northern Plains Nitrogen’s proposed plant for Grand Forks are both in the permitting stage. Both have expected production of 2,400 tpd of ammonia and would use
near-News
12
ly 100 MMcfd of natural gas each, accord-ing to Bentek Energy estimates.
While most of the proposed methanol plants are on the Gulf Coast, two are pro-posed for 2018 in the Pacific Northwest. Northwest Innovation Works, a Chinese company, is planning two methanol facili-ties on the Columbia River in Washing-ton and Oregon. The company hopes to export methanol produced in the US to Asian markets.
ISA100 wireless standard
gains final IEC approval
The International Society of Auto-mation (ISA) announced that ANSI/ ISA-100.11a-2011, “Wireless Systems for Industrial Automation: Process Control and Related Applications,” has been unani-mously approved by the International Electrotechnical Commission (IEC) as an international standard and will be
pub-lished by year’s end with the designation IEC 62734. Since its initial approval by the American National Standards Institute (ANSI) in 2011, ISA-100.11a-compliant devices have found wide global use, with more than 130,000 connected devices re-ported in 2012 and over 1 B hours of op-erational service at customer sites.
ISA-100.11a was originally developed with international collaboration following ISA’s open consensus process as accredited by ANSI, which requires participation and voting by experts from multiple stakehold-er groups, including end usstakehold-ers in addition to suppliers—ensuring that all views and needs are taken into account. ISA100 vot-ing members, includvot-ing those from end-user companies deploying wireless systems in real-world industrial applications, over-whelmingly voted to approve ISA-100.11a. ISA-100.11a/IEC 62734 provides re-liable and secure wireless operation for monitoring, alerting, supervisory control and open-loop and closed-loop control applications. The standard defines the protocol suite, system management, gate-ways and security specifications for wire-less connectivity with devices supporting limited power consumption requirements. The focus is to address the performance needs of process manufacturing applica-tions, which include monitoring and pro-cess control where latencies on the order of 100 ms can be tolerated, with optional behavior for shorter latencies.
IEC 62734 utilizes Internet Proto-col version 6 (IPv6), adheres to the OSI model and uses object technology—all necessary to support the Industrial In-ternet of Things (IIOT). In addition, the standard fully supports the ETSI EN 300 328 v1.8.1 EU specification taking effect in 2015. Industrial wireless products, branded as ISA100 Wireless, already meet this requirement.
US fuel economy
reaches all-time high
New vehicles achieved an all-time-high fuel economy in 2013, according to data released from the US EPA. Model-year 2013 vehicles achieved an average of 24.1 miles per gallon (mpg), a 0.5-mpg increase over the previous year and an increase of nearly 5 mpg since 2004. Fuel economy has now increased in eight of the last nine years. Average carbon diox-ide emissions are also at a record low of
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News
14
369 g/mi in model-year 2013. Some ad-ditional findings from the report:
• The recent fuel economy improve-ment is a result of automakers’ rapid adoption of more efficient tech-nologies, such as gasoline direct-injection engines, turbochargers and advanced transmissions • Mazda vehicles averaged the
highest fuel economy and lowest greenhouse gas (GHG) emissions
• Nissan achieved the greatest improvement in average fuel economy and GHG reductions • SUVs achieved the greatest
improvement in all classes of new personal vehicles.
The EPA and the US Department of Transportation have implemented stan-dards projected to double fuel economy by 2025 and cut vehicle GHG emissions by half. The EPA estimates these standards
will save US families more than $8,000 in fuel costs per vehicle by 2025. The stan-dards are projected to reduce US oil con-sumption by more than 2 MMbpd by 2025.
The Major Economies
Forum meets in New York
The Major Economies Forum on En-ergy and Climate met in New York City at the end of September. The meeting was chaired by US Deputy National Se-curity Advisor Caroline Atkinson and attended by ministers and officials from the 17 major economies, with ministers and officials from Denmark, Grenada, the Marshall Islands, New Zealand, Norway, Peru, Poland, Saudi Arabia, Singapore and Tanzania. The executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC) and the co-chairs of the Durban Platform for En-hanced Action also attended.
In her opening remarks, Ms. Atkinson highlighted the need to stay on track for a robust climate agreement in Paris in 2015. Participants then received a read-out on the third Climate Finance Minis-terial meeting from Norwegian Minister of the Environment Kristine Sundtoft.
For the first time, the meeting includ-ed a foreign minister’s session, hostinclud-ed by US Secretary of State John Kerry. For-eign ministers stressed the urgency of addressing climate change and noted the links between climate change and glob-al, national and energy security. They exchanged views on how best to build upon the momentum regarding climate change and how best to harness politi-cal will. They also stressed the need to approach the Paris agreement construc-tively and cooperaconstruc-tively.
Impact of fuel price
increases on the
aviation industry
A recently commissioned US General Accounting Office (GAO) report found that commercial passenger airlines have taken a number of steps aimed at mitigat-ing the financial impact of the increases in fuel prices since 2002, according to aviation associations and government officials. Some airlines restrained the growth of their domestic seat capac-ity, while others have reconfigured their fleets to make them more fuel efficient,
23180.02 © A.W. Chesterton Company, 2014. All rights reserved.
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16
conducted flight and ground operations more efficiently, improved aerodynamics and reduced the weight of items onboard. Airlines have also used fuel hedging, in which they enter into contracts that are designed to provide more certainty over the future price of fuel. Partly in response to financial pressures from increases in fuel prices, some airlines have merged or entered into route-sharing deals with other airlines. While these efforts
coin-cided with increased fuel prices, an air-line trade association identified other factors that contributed to these changes, such as a weak economy.
The GAO report cited aviation as-sociations and government officials that said fuel price increases have con-tributed to a decline in general aviation activity (which is all non-scheduled air service), including the hours flown in general aviation aircraft. This decline in
activity adversely affected general avia-tion airports and the services provided at these airports (such as reductions in flight training and refueling). For these activities and services, the price of fuel is not the only factor that contributed to this decline. According to associations that represent general aviation interests, a weak economy and other factors, such as increased security requirements, also contributed to the decline.
The GAO’s analysis shows that US Airport and Airway Trust Fund revenues would grow marginally higher if fuel pric-es increased 200% from 2010–2024, when compared to the growth under present forecast fuel price increases, because the projected increase in per-ticket revenue would outweigh the projected decrease in the number of tickets sold. However, the models for this analysis are limited and have greater uncertainty for later years.
The GAO contracted with IHS Global Insight to produce a model of macroeco-nomic variables, such as real gross domes-tic product (GDP), if fuel prices increased by 200% from 2010–2024 and the GAO provided these outputs to the US Fed-eral Aviation Administration (FAA). The FAA used the results and the rise in fuel prices to produce an alternative forecast of passenger traffic, which the GAO then used to simulate annual trust fund revenues from 2010–2024 if fuel prices increased by 200% over that time. While this analysis allowed the GAO to estimate how a hypothetical increase in fuel prices may affect growth in the trust fund, it is not a prediction of how the trust fund will actually grow in the next 10 years.
Study explanation. The aviation
indus-try is vital to the US economy. Passenger airlines directly generate billions of dol-lars in revenues each year, and communi-ties depend on passenger airlines to help connect them to the national transporta-tion system. Between 2002 and 2013, jet fuel prices more than quadrupled from $0.72/gal to $2.98/gal, and general avia-tion gasoline prices more than tripled from $1.29/gal to $3.93/gal in nominal terms. The Airport and Airway Trust Fund is funded principally by excise taxes on ticket purchases, aviation fuel and car-go shipments as well as interest revenue. Section 808 of the FAA Modernization and Reform Act of 2012 required the GAO to study the impact of increases in
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Hydrocarbon Processing | NOVEMBER 201417
News
aviation fuel prices on the trust fund andon the aviation industry in general.
Booming Chinese
market for flue gas
desulfurization and pumps
China will add more megawatts (MW) of flue gas desulfurization (FGD) between 2014 and 2020 than exist in the US. By 2020, China will have 50% of all the FGD systems in the world (TABLE 1). This prediction was released in a recent forecast by McIlvaine Co.
China plans to install FGD on new power plants and to retrofit older power plants without FGD. There are 96,000 MW of power plants targeted for the five-year period.
Some of this new power plant capacity is to meet the rising energy needs of the country. Some will replace existing coal-fired boilers in residences, commercial buildings and industry. More than 600,000 small coal-fired boilers will be retired.
Most new FGD systems will produce wallboard-quality gypsum, using
lime-stone reagents. Dry scrubbing using lime is becoming more popular in the arid areas where water is scarce.
McIlvaine is recommending that Chi-nese utilities consider two-stage limestone scrubbing systems in which the first-stage creates hydrochloric acid (HCl). This acid can be used to leach gallium and other rare earths from the fly ash. Since China is spending billions on technologies to leach metals from fly ash, the one-step scrubbing and leaching process is vital.
On a related note, McIvaine is also re-porting that industrial pump sales in China will exceed $9 B in 2015. The exports will exceed imports by approximately $1 B, so total industrial pump production is over $10 B. Higher technology pumps are produced by international JVs and obtained by im-ports. There are 20 large domestic produc-ers accounting for sales of just under $2 B.
Some of the JV international companies are exporting pumps from China. As a re-sult, the sales by this group are several bil-lion dollars per year.
The energy sector will contribute much of the growth in the coming years. China
has embarked on a huge coal-to-chemicals and fuels program. If all planned projects are completed, China would be convert-ing 10% of the coal produced in the world into synthetic natural gas, gasoline and chemicals. The larger plants will use more than 20,000 pumps each.
China continues to build new coal-fired power plants at the rate of 50,000 MW/yr. Existing power plants are being retrofitted with NOx control. These
retro-fits require pumps for ammonia injection. Expenditures for FGD are larger than the expenditures at all the countries of Europe combined. These systems require both water and slurry pumps.
TABLE 1. China’s FGD, MW Classifi cation 2014 2020 Existing FGD 659,971 896,555 FGD retirements –1,000 –1,000 New construction FGD 42,500 25,500 Retrofi ts 13,004 11,316 Total new FGD 55,504 36,816
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Industry Metrics
HP STAFF
Hydrocarbon Processing | NOVEMBER 201419
Mid–October crude oil prices slumped as the International Energy Agen-cy (IEA) announced a slight increase in global oil demand by 700 Mbpd. In contrast, oil production is forecast to increase by 900 Mbpd bolstered by OPEC and non–OPEC countries. The shift in demand is occurring at the same time as several mega–refineries in the Middle East come online.
Pr oduction, Bcfd Gas pric es, $/Mcf 0 10 20 30 40 50 60 70 80 0 1 2 3 4 5 6 7
Monthly price (Henry Hub) 12-month price avg. Production A J J M A M F J D N O S A J J M A M F J D N O S A
Production equals US marketed production, wet gas. Source: EIA.2012 2013 2014
Monthly price (Henry Hub) 12-month price avg. Production
US gas production (Bcfd) and prices ($/Mcf)
Oil pric es, $/bbl 45 60 75 90 105 120 135 Dubai Fateh W. Texas Inter. Brent Blend A J J M A M F J D N O S A J J M A M F J D N O S A 2013 2014 2012 Source: DOE
Selected world oil prices, $/bbl
Global refining margins, 2013–2014*
WTI, US Gulf Arab Heavy, US Gulf Brent, Rotterdam Dubai, Singapore LLS, US Gulf
-5 0 5 10 15 20 Margins, US$/bbl
Sept 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 April 14 May 14 June 14 July 14 Aug 14 Sept 14
Global refining utilization rates, 2013–2014*
50 60 70 80 90 100 Utilization rates, % US EU 16 JapanSingapore
Sept 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 April 14 May 14 June 14 July 14 Aug 14 Sept 14
US Gulf cracking spread vs. WTI, 2013–2014*
-10 0 10 20 30 40 50 60
Cracking spread, US$/bbl
Prem. gasoline unl. 93
Jet/kero Gasoil/diesel, 0.05% SFuel oil, 180c
Sept 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 April 14 May 14 June 14 July 14 Aug 14 Sept 14
Rotterdam cracking spread vs. Dubai, 2013–2014* Prem. gasoline unl., 98
Jet/kero Gasoil, 10 ppm S Fuel oil, 1% S -20 -10 10 20 30 40
Cracking spread, US$/bbl
0
Sept 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 April 14 May 14 June 14 July 14 Aug 14 Sept 14
Singapore cracking spread vs. Brent, 2013–2014*
-20 -10 0 10 20 30
Cracking spread, US$/bbl
Prem. gasoline unl. 92 Jet/kero
Gasoil, 50 ppm S Fuel oil, 180 CST, 2% S
Sept 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 April 14 May 14 June 14 July 14 Aug 14 Sept 14
78 80 82 84 86 88 90 92 94 96 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 Stock change and balance
World demand World supply 2015-Q1 2014-Q1 2013-Q1 2012-Q1 2011-Q1 2010-Q1 2009-Q1
Supply and demand, MMbpd
St
ock change and balanc
e, MMbpd
Source: EIA Short-Term Energy Outlook, October 2014.
Forecast
World liquid fuel supply and demand, MMbpd
* Material published permission of the OPEC Secretariat; copyright 2014; all rights reserved; OPEC Monthly Oil Market Report, October 2014.
Brent Dated vs. sour crudes (Urals and Dubai) spread, 2013–2014*
Light sweet/medium sour crude spread, US$/bbl
Dubai Urals -4 -2 0 2 4 6
01 May 08 May 15 May 22 May 29 May 05 June 12 June 19 June 26 June 03 July 10 July 17 July 24 July 31 July 07 Aug 14 Aug 21 Aug 28 Aug 04 Sep 11 Sept 18 Sept 25 Sept 02 Oct
An expanded version of Industry Metrics can be found online at HydrocarbonProcessing.com.
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Hydrocarbon Processing | NOVEMBER 201421
Reliability
HEINZ P. BLOCH, RELIABILITY/EQUIPMENT EDITOR
[email protected]Can integrally geared compressors be
successfully used with variable speeds?
A recent HP webinar answered a number of compressor-relat-ed questions. This same webinar also generatcompressor-relat-ed a few additional ones. A viewer thought that two statements from this presenta-tion were in contradicpresenta-tion, as proven by his correspondence.
Question 1. One slide from the webinar used the heading: “Sin-gle-shaft multi-impeller technology vs. integrally geared speed-optimized technology.” It was followed by a slide stating that in-tegrally geared technology allows speed, impeller diameter and contour optimizations (3D). The viewer sought clarification if the use of variable-speed drivers (VSDs) was implied.
Actually, the intent of this slide was to convey that the total ar-rangement of integrally geared air and/or process gas compres-sors (IGCs) allows the use of the most efficient impeller for each stage. There is a limit of 10 stages that can be accommodated on IGCs. These different impellers (each called a “stage”) are typi-cally 3D and semi-open style, as shown in FIG. 1.
Impeller design. Impellers are designed and then machined
on multi-axis machines to optimize the blade contours, angles of twist, overlap, number of blades, and more. Engineers can, by de-sign, optimize the efficiency of any of the three to 10 impellers, attached with two per pinion, as shown in FIG. 2.
As illustrated in FIG. 2, a single bull gear engages several
pin-ions, and each pinion can have a number of teeth that differs
from the number of teeth in the other pinions. Therefore, up to five different impeller speeds can be found in a single IGC.
Question 2. Another webinar slide compared single-shaft con-ventional centrifugal/axial vs. IGC technology. Constant input speeds derived from 2- or 4-pole electric motors in 50/60 cps power systems were mentioned. The viewer asked if there are any particular concerns when configuring an integrally geared compressor to be driven with VFD input.
Answer: Variable-input speeds could conceivably create an
infinite number of different lateral and torsional critical speeds. Caution is warranted when applying VFDs on a compressor with many resonant frequencies; it is a complex task. Also, there would likely be an infinite number of critical speeds.
Review. While a fixed input speed can be handled and
un-desirable frequencies avoided by design, the same is not true at VFD speeds. With infinitely variable input speeds, there would be an infinite number of torsionals and their harmonics. Also, each free-standing impeller blade resonates at a particular fre-quency, and these could be excited if VFDs were used.
HEINZ P. BLOCH resides in Westminster, Colorado. His professional career commenced in 1962 and included long-term assignments as Exxon Chemical’s regional machinery specialist for the US. He has authored over 600 publications, among them 18 comprehensive books on practical machinery management, failure analysis, failure avoidance, compressors, steam turbines, pumps, oil-mist lubrication and practical lubrication for industry. Mr. Bloch holds BS and MS degrees in mechanical engineering. He is an ASME Life Fellow and maintains registration as a Professional Engineer in New Jersey and Texas. FIG. 1. Machining a semi-open 3D impeller. Source: Cameron
Compression, Buffalo, New York.
FIG. 2. Semi-open impellers are attached two per pinion; a bull gear engages up to five pinions (= 10 stages) in modern integrally geared compressors; two pinions are shown in this image. Source: Cameron Compression, Buffalo, New York.
“Beneficial reuse” is defined by the EPA as reusing a material in a manner that makes it a valuable commodity. Spent caustics are generally byproducts of a refinery or chemical process that would ordinarily be treated as wastes. When beneficially reused without reclamation, the spent caustics are exempt from the solid waste definition and are categorized as a product (or valuable commodity) under the EPA regulations.
Merichem’s beneficial reuse of spent caustic, without reclamation, is more environmentally friendly than disposing of the material as a waste. As such, these materials are no longer a part of your waste generation statistics.
At Merichem Company, we bring to the petroleum refining and petrochemical industries more than 50 years of experience in the handling of caustic effluent streams. Our technical expertise allows us to recommend the right caustic treating needs for your specific processes and, if needed, handle most resulting caustic solutions.
Our beneficial reuse of caustic streams helps our customers achieve waste minimization goals and eliminates labor intensive waste handling protocols such as manifesting, hazardous waste record keeping, etc. Your spent caustic is used as a substitute for other commercially available products or as a feedstock in manufacturing processes. In either case, Merichem will utilize your spent materials in a non-waste, environmentally responsible manner.
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Hydrocarbon Processing | NOVEMBER 201423
Automation
Strategies
HARRY FORBES
ARC Advisory Group, Burlington, Massachusetts
Virtualization in process automation systems
Virtualization involves separating an information technol-ogy (IT) resource from specific physical hardware. This is usually managed by a specialized software layer called a hyper-visor, which provides another abstraction layer. Virtualization can be applied to any IT resource, including servers, storage, desktops and networks. For example, server virtualization en-ables multiple virtual servers, or guests, to run on one physical host server. Virtualization can improve IT resource utilization and security and ease system administration.
Virtualization has been well proven in IT environments and is foundational for all cloud architectures. Today, many process automation system suppliers offer products and solu-tions that use virtualization.
Benefits. Since virtualization can only be applied to some parts of process automation systems, it can be difficult to as-sign specific economic value to the technology. Virtualization plays an important role wherever server hardware is used in the automation system. This is at Levels 2 to 4 of the ISA-95 manufacturing model. Today’s automation suppliers offer sys-tem configurations that feature server consolidation. Multiple human machine interface (HMI) machines and other applica-tion servers are replaced by virtual machines. A small number (usually one or two) of more powerful hosts support these virtual machines. Besides being more powerful, the new serv-ers incorporate levels of redundancy with respect to power, storage, computing and network resources.
Server consolidation benefits include removal of physical equipment and freeing rack or panel space in congested con-trol areas. Power requirements and system administration bur-den are also reduced (though the remaining administration work is technically more complex).
The largest benefit to end users of server consolidation in process automation systems is the decoupling of the automa-tion software from specific configuraautoma-tions of PC or server hardware. For years, many HMI and other automation sys-tem functions have been implemented on PC hardware. Plant owner-operators and automation suppliers have struggled to support these systems due to the short lifecycle of PC prod-ucts. By virtualizing such a system, it can be more easily sup-ported once replacement hardware is no longer available. This higher degree of hardware independence helps extend auto-mation system life and reduces production interruptions due to automation system upgrades.
At lower levels (1–2) in the ISA-95 model, automation functions are implemented in embedded systems (like pro-cess controllers or field devices) that are managed by a real-time operating system (OS). These devices can be simulated or emulated, but, strictly speaking, they cannot be virtualized
as is. Instead, their embedded software must be modified and/ or ported to some degree to operate in a virtual machine en-vironment. Most automation suppliers have developed prod-ucts that now provide this functionality.
Plant asset lifecycle. For process manufacturers, virtualiza-tion technology can bring significant value to their installed base of automation systems, as well as to automation projects for new plants. For installed systems, the benefits come from replacing dedicated servers with virtual ones. In new instal-lations, the benefits come from compressing schedules by developing the system configurations and applications in a virtualized environment.
Benefits during the design and build phase center around two major areas. First, is the reduced space and utility re-quirements of an automation system incorporating server virtualization. These reductions can be dramatic and result in substantial savings in high-cost installation areas. To take advantage of such savings, the reduced requirements must be known during the early stages of project engineering so that the project’s civil and mechanical engineering designs can take advantage of the reduced system power and space re-quirements. Without a main automation contractor (MAC) structure, projects are not likely to realize these benefits.
Second is the ability to engineer the automation system in a virtual environment without access to the target hardware. This enables the virtualization user to:
• Apply a geographically distributed project team working from different locations on the same virtualized automation system
• Reduce project dependencies between system hardware deliveries and system configuration and engineering deliverables
• Conduct a factory acceptance test for the automation system using a virtualized system
• Late bind the system software and configuration with the target hardware
• Have concurrent development of operator training simulators and automation system engineering.
HARRY FORBES is a senior analyst at ARC Advisory Group. His research focuses on the impact of industrial networking and wireless technologies on today’s manufacturing. He also covers smart grid and electric power vertical industries. His research topics include the smart-grid, smart-metering and smart-energy technologies. Mr. Forbes is a graduate of Tufts University with a BS in electrical engineering and has an MBA from the Ross School of Business at the University of Michigan.
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Hydrocarbon Processing | NOVEMBER 201425
Global
ALAN GELDER
Global Practice Lead for Refining & Marketing for Wood MackenzieEuropean refining—Cornered, with no way out?
2013 was a dismal year for European refining in terms of re-cord low crude runs, which reflect weaked demand outlook and increasing competition from other regions. Out to 2020, we en-visage European refining to remain challenged by low demand growth and increasingly competitive exports from regions such as North America, Russia and the Middle East (ME). Commer-cially, Europe is cornered by exports from these markets, with no apparent exit route.
Historical perspective. The historical oil product demand for Greater Europe (Northwest Europe, Scandinavia and the Baltics, Central and Eastern Europe and the Mediterranean) is illustrated in FIG. 1. This figure also shows the crude runs
through its refining system. Key factors being:
• Crude runs peaked in 2005, although demand continued to rise until 2007. Prior to 2005, higher demand was typically associated with higher regional crude runs. • From 2005 to 2007, demand grew modestly while
crude runs shrank by 500 Mbpd, so the global context of European refining industry was changing.
• The 2008 financial crisis started the decline of refined products, while demand has dropped almost 2 MMbpd from its peak, crude runs have dropped further (by 2.5 MMbpd).
The traditional relationship of European refineries primarily running to satisfy local demand is under threat.
Competition is gaining strength. The phenomenon of North American unconventional oil and gas supplies is well known, which provides advantaged feedstock and utilities to its refining system. The positive impact on the competitive advan-tage of US refiners is dramatic, as shown in FIG. 2, comparing net
cash margins for USGC refiners against those in coastal NWE (on a volume weighted aggregate basis) for 2009, 2013 and also our outlook for 2018.
This clearly shows the growing disparity between USGC re-finers and those coastal NWE sites. US rere-finers are increasingly capable of pushing surplus refined products into other regions.
FIG. 3 shows the change in net trade US balance for gasoline and
diesel. The US is now a net exporter of both gasoline and diesel/ gasoil (GO). This poses a direct threat to European refiners, as:
• The US has been traditionally a major market for Europe’s gasoline exports
• US diesel exports to Europe can satisfy regional demand while EU refineries operate at lower utilization rates, thus reflecting the challenges in gasoline exports.
Europe’s refiners are trapped by developments in both Rus-sia and the ME. FIG. 4 shows net trade changes for gasoline and
diesel in the ME. The threat to Europe is its declining gasoline deficit, reducing gasoline exports. Conversely, the higher die-sel/GO surplus is likely to target European markets.
Result: Europe needs to consider its options, we forecast
that “business as usual” will result in Greater European crude
Demand Crude run 0 5,000 10,000 15,000 20,000 25,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Demand and crude runs, Mbpd
Source: Wood Mackenzie
FIG. 1. Historical greater European demand and crude runs.
-2 0 2 4 6 8 10 12 2009 2013 2018
Weighted average cash margin, US $/bbl
Coastal NWE comprises of refineries in Belgium, France, The Netherlands and the UK Source: Wood Mackenzie
USGC Coastal NWE
FIG. 2. USGC vs. NWE weighted average net cash margin (US$/bbl).
-1,000 -750 -500 -250 0 250 500 750 1,000 2005 2010 2015 2020
Gasoline and diesel trade balance, Mbpd
Source: Wood Mackenzie
Exports
Imports GasolineDiesel/GO
26NOVEMBER 2014 | HydrocarbonProcessing.com
Global
runs declining by a further 1 MMbpd (2014 to 2020). We fore-cast average refinery utilization to drop from 74% in 2013 to ap-proximately 65% in 2020. Given highly competitive assets typi-cally operate at over 90% utilization levels, this average requires many weaker sites to operate at unsustainably low throughputs.
Options for European refiners. The range of options for Eu-ropean refiners spans:
• Invest to secure a sustainable asset (which is the position adopted by Repsol and GALP in their recently completed investment programs)
• Continue a focus on ongoing cost and efficiency improvements
• Close refining operations.
However, this is more complex than the identification of the weakest sites, as poor financial performance is a necessary, but not sufficient, condition. Various other factors come into play regarding potential closures:
• Refinery location and regional product balances, as closure of an adjacent competitor site could transform the outlook for a given asset • Ownership structure, which introduces social
and energy security considerations for national oil companies or those public companies with the government as a key stakeholder
• Investment requirements, including forthcoming major turnarounds, which could prompt a closure decision • Integration along the value chain (upstream production
and petrochemicals)
Further major upgrades and capacity rationalizations will be limited, condemning the region to a “lost decade” of weak com-mercial performance. -1,000 -750 -500 -250 0 250 500 750 1,000 2005 2010 2015 2020
ME gasoline and diesel trade balance, Mbpd
Source: Wood Mackenzie
Exports
Imports GasolineDiesel/GO
FIG. 4. ME gasoline and diesel trade balances.
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ALAN GELDER is the global practice lead for refining and marketing for Wood Mackenzie. He is responsible for formulating Wood Mackenzie’s research outlook and perspectives on this global sector. Mr. Gelder joined Wood Mackenzie in 2005. Prior to joining Wood Mackenzie, he had 10 years of industry consulting after working for ExxonMobil in a variety of project planning and technical process design roles. Mr. Gelder has a first class MS degree in chemical engineering from Imperial College, London, supplemented by an MBA from Henley Management College.
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From: Plant Manager
Sent: Tuesday, May 13, 2014 To: Process Engineer
Subject: Constant process trips
I know we’re wasting money on our process energy consumption,
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From: Process Engineer Sent: Tuesday, May 13, 2014 To: Plant Manager
Subject: Energy Savings Guarantee from CCC
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