California’s Crude Oil Switch
Oil refineries have turned to dirtier crude in recent years because it is cheaper than the light, sweet crude. Oil refineries that have the flexibility to process a wider spectrum of crude oils – from light to heavy – have a competitive advantage and are more profitable, industry analysts say.
According to investor reports, some of the state’s top gasoline producers have upgraded their facilities to process heavier, higher sulfur crude oils. The Chevron refinery in El Segundo and the Shell refinery in Martinez added sulfur removal or recovery units. Chevron built a plant to produce hydrogen in El Segundo and has a permit pending for a similar expansion in Richmond. The Tesoro refinery in Avon/Martinez and Chevron’s El Segundo operation are both adding “coking” facilities that will allow for the processing of low-grade oil.
All of these processes require a lot of energy, but they can also help refineries strip out more sulfur to meet clean air rules, or help them produce high quality products from low quality crude.
For example, several refineries have built separate plants to produce their own hydrogen, which binds to sulfur and effectively removes it during the refining process. Hydrogen is also added in the refining process to make “light, hydrogen-rich motor fuels from the carbon-dense, hydrogen poor components of crude,” according to the study.
Adding coking facilities allows refineries to generate gasoline and diesel from lower-value fuel oils. Coking also produces a desired byproduct – petroleum coke – which can be used to fuel power plants. “The coking units are installed at existing refineries to increase the refinery’s ability to process heavier crude oils,” according to an EPA white paper on energy efficiency technology and petroleum refining.
Karras, the study’s author, emphasized that California’s tough environmental laws aren’t solely responsible for the rise in refinery emissions, because other states in his study have adopted similar laws over the years. What sets California apart, he said, is the way its refineries go about removing the sulfur.
California’s refineries generally choose to remove the sulfur earlier in the process, or further “upstream,” which expends more energy and emits more CO2 than if it were removed further “downstream” in the process. According to the study, facilities on the East Coast, Midwest and Gulf Coast have a greater capacity to remove sulfur downstream compared with California plants.
California refineries are also trying to squeeze out more products of value – not just gasoline, but diesel and jet fuel — from the dirtier crude, and that requires more energy and emits more CO2.
Schaefer, who directs the Environmental Integrity Project, says the “game…is to get more out of each barrel” of crude.
“In a nutshell, the refinery is determined to get the very most out of each barrel, and if it’s dirtier crude, that’s more work,” he said.
Photo from Thomas Hawk via flickr
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