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Publication 21 A Strategic Review of the Petroleum Refinery Industry Sector R&D Publication 21 Research Contractor: Foster Wheeler Energy Ltd i R&D Publication 21 Publishing Organisation Environment Agency Rio House Waterside Drive Aztec West Almondsbury BRISTOL BS32 4UD. Tel: 01454 624400 Fax: 01454 624409 ISBN: 1 85705 213 7 © Environment Agency 1999 All rights reserved. No part of this document may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the Environment Agency. The views expressed in this document are not necessarily those of the Environment agency. Its officers, servants or agents accept not liability whatsoever for any loss or damage arising from the interpretation or use of the information, or reliance upon the views contained herein. Dissemination Status Internal: Released to Regions External: Released to Public Domain Statement of Use This report reviews the environmental performance of the UK petroleum refinery industry sector in the context of world-wide best practice. Five practical options for reducing emissions are examined. The report will be used both externally and internally, by policy and operational staff, in the development of policies for the regulation of the petroleum refinery industry sector. Research Contractor This document was produced under Environment Agency R&D Project P4-035 by: Foster Wheeler Ltd Foster Wheeler House Station Road Reading Berkshire RG1 1LX Environment Agency Project Manager The Environment Agency’s Project Manager for R&D Project P4-035 was: Mr Colin Foan, Environment Agency, National Centre for Risk Analysis and Options Appraisal. Further copies of this report are available from: Environment Agency R&D Dissemination Centre, c/o WRc, Frankland Road, Swindon, Wilts SN5 8YF tel: 01793-865138 fax: 01793-514562 e-mail: [email protected] ii R&D Publication 21 CONTENTS Page Executive Summary 1 1. Introduction 5 2. Key Factors Affecting UK Refineries up to 2005 7 2.1 Crude Supply and Quality 7 2.2 Product Quality Changes 13 2.3 The Future for Fuel Oil 15 2.4 UK Refinery Capacity and Economics 17 2.5 Discussions with Operators 20 2.6 Legislation for Releases to Air 22 2.7 Legislation for Releases to Water and Land 24 3. UK Refineries 26 3.1 Types of UK Refinery 26 3.2 Sources of Polluting Emissions on Refineries 28 3.3 Discussions with Local Inspectors 31 3.4 Inventory of UK Refinery Sector Releases 33 4. World-Wide Refinery Best Practice 40 4.1 Introduction 40 4.2 USA 40 4.3 Scandinavia 43 4.4 Japan 43 4.5 The Netherlands 44 4.6 Summary and Comparison with UK Practice 44 5. Pollution Reduction Issues, Techniques and Costs 46 5.1 Introduction 46 5.2 Sulphur and Sulphur Dioxide Abatement 46 5.3 Sulphur Recovery Units (SRU) and Sulphur Balance 49 5.4 Abatement of Oxides of Nitrogen (NOx) 50 5.5 Particulate Abatement 53 5.6 CCGT/CHP Facilities 53 5.7 VOC Abatement 53 5.8 Effluent Water Treatment 53 5.9 Summary of Costs of Abatement Plant 55 6. Pollution Reduction Strategies 58 6.1 General Considerations 58 6.2 Options for Reduction of Releases to Air 59 6.3 Results of Evaluation of Options 62 6.4 Implications for the Refinery Sector 65 6.5 Comparison with Legislation 66 6.6 Timetable for Implementation of the Options/Strategies 66 7. Longer-Term Strategies and Influences 68 7.1 Introduction 68 7.2 Sulphur Removal 68 7.3 Oxides of Nitrogen 69 7.4 Particulates 69 7.5 Volatile Organic Compounds (VOCs) 70 7.6 Carbon Dioxide Releases 70 7.7 The Emergence of Fuel-Cell Technology and Effect on Refineries 71 7.8 Summary 72 8. Conclusions 74 iii R&D Publication 21 Appendices A1 Description of UK Refineries 77 A2 Brief Layman’s Guide to Oil Refineries 80 A3 Glossary of Terms and List of References 83 This Review has been prepared by Foster Wheeler Energy Limited under the terms of its contract with the Environment Agency. Whilst the report and recommendations have been prepared in accordance with normal professional standards, information contained herein is largely dependent upon data in the public domain provided from the Environment Agency Public Register and other third parties. Foster Wheeler has not made any independent verification of such data. Accordingly, Foster Wheeler makes no representation or warranty, express or implied, with respect to the completeness or accuracy of any information contained in this Report. This Review is intended for the sole use of the Environment Agency and Foster Wheeler shall have no responsibility whatsoever to any third party for the whole or any part of this Report or the information contained herein. iv R&D Publication 21 FOREWORD EXECUTIVE SUMMARY The Environment Agency has the strategic aim and European, including the UK, refiners have been duty to protect and enhance the environment. To struggling with over capacity and poor or negative support this work it also has a duty to undertake margins for many years. This situation has been research and make the results available to others. especially difficult since 1994. Overall, utilisation levels have risen recently but highly-efficient markets Processes with a significant potential to cause have resulted in any surplus product reducing pollution are regulated by the Agency under prevailing prices and preventing improved provisions in The Environmental Protection Act profitability. 1990. Included within these processes are many in the petroleum refinery industry sector. Operators of One result of low profitability is that refiners have, these techically complex processes are required to where possible, minimised capital expenditure and use the best available technique not entailing reduced operating costs. However, there has been, excessive cost to prevent or minimise releases of and will be, some expenditure to meet new polluting substances in order to achieve the best environmental specifications on product quality and practicable environmental option. requirements for control of releases to the environment. The availability of plenty of light, low- The Agency, therefore, commissioned this sulphur North Sea crude has helped to minimise this independent report from Foster Wheeler Energy expenditure. UK refineries have as a result now Limited to help it form an objective view of the become dependent to a greater or lesser extent on current environmental performance of the UK light, low-sulphur feedstock to meet current product refinery sector. The study has sought to identify specifications and emission-release limits. significant issues that could affect the industry’s environmental performance. Emissions, process The continuing availability of this quality of crude is options and abatement practices from a number of therefore a key factor in determining the future countries were investigated and worldwide best profile of UK refineries. An assessment of crude oil practice considered in the context of applicability to availability from the North Sea has been carried out the UK situation. and it is concluded that supplies will continue to be adequate at least until 2005, and probably beyond. It Recent changes in the European transport fuel is to be expected that UK refiners will continue to specifications and the UN sulphur protocol are depend mainly on North Sea crude during this period. evidently going to present the sector with some significant and conflicting economic and technical Given this premise, one of the most important factors challenges. The results of this review will assist us to for refiners during the period that this Review covers make appropriate regulatory decisions to ensure that is the further tightening of product quality standards, the UK refinery sector uses the best available particularly those for transport fuels. The European techniques not entailing excessive cost to protect the Commission and Parliament have recently agreed environment. It will also serve as an important new standards, which are to become effective from contribution to the efficient regulation of the 2000 and 2005. The 2005 standards include a sharp petroleum refinery industry sector. reduction in levels of benzene, aromatics and sulphur in gasoline and sulphur in diesel. It has been estimated that the increased refinery processing, mainly in the form of extra hydrotreatment, needed to meet the fuel specifications for 2005 would mean the UK refinery sector increasing its CO2 emissions by between 2% and 4%. The supply of hydrogen required for this extra hydrotreatment will be an issue refiners will need to address. The investment needed to meet these new standards will mark a watershed for European refiners. Most refineries will require modification as they will be unable to produce compliant product, even when Dr R J Pentreath processing the best quality crudes such as those from Chief Scientist and Director of Environmental the North Sea. Depending on the overall profitability Strategy levels of the industry in the next few years, we could see a significant investment programme or a series of closures and mergers. If margins rise to the level which offers a reasonable rate of return then, besides investment to meet EU product quality legislation, further upgrades to the bottom of the barrel would be 1 R&D Publication 21 expected to occur. This would entail substantial A number of comments have been made in this expenditure. However, if margins remain depressed, Review concerning the data on the Public Register. some further mergers or closures might be expected, For example, the Environment Agency may wish to since, for some operators, it is likely to be consider requesting, as a standard requirement, a uneconomic to carry out a heavy programme of VOC (volatile organic compound) release inventory investment under these circumstances. and a sulphur balance for each refinery, information that only a few refiners presently supply.
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