Impact of Carbon Cap and Trade on Refinery

Energy Conservation Economics

Ian M. Glasgow, Stan Polcar, Earl Davis, Tram Nguyen,

Jerry Price, Chris Stuecheli, R.E. (Ed) Palmer

2010 AIChE Regional Technology Conference

Galveston, TX
 Agenda

• Introduction
– Proposed Legislation
– Existing Legislation
– Refinery GHG Emissions
• Refinery Case Studies
– Revamp Crude Preheat Exchange Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam Ejectors with LRVP
– Diesel HDS Hot Feed with Steam Generation
– Power Recovery from FCC Regenerator flue gas
• Conclusions
Introduction

• GHG Emissions
– CO2 – SF6
– N2O – HFC
– CH4 – PFC
• Remain concentrated
over long period of time
• Not concentrated in area
of emission
• Global not regional
solution
 Introduction
U.S. Greenhouse Gas Emissions, 2008

(Million Metric Tons Carbon

Dioxide Equivalent)

2008 Total = 7,052.6

*Adjusted.

From EIA webpage; www.eia.doe.gov

 Proposed Legislation

• Proposed Federal Cap and Trade Legislation

– 2007 Lieberman-Warner - Senate committee approval
– 2009 Waxman-Markey – Passed by the House
– 2009 Boxer-Kerry – Senate committee approval
– 2010 Kerry-Lieberman – Draft developed

• Bingaman-Brownback (S-3813)
– Renewable Energy Standard (15% target by 2021)
– Extension of tax credits and increased DoE loan guarantees
– Gulf Oil Spill Response
 Regional GHG Reduction Initiatives

Western Climate Initiative (WCI)

• Stationary source emissions begin in 2012
• Transportation emissions begin in 2015

Regional Greenhouse Gas

Initiative (RGGI)
• Electricity generators emissions in 2009
• Proposed Regional LCFS

Midwestern Accord
• Stationary and transportation
emissions begin in 2012
 Existing Legislation
2007 Energy Independence and Security Act
• Renewable Fuel Standard (RFS-2)
– 36 billion gallon/year by 2022
• Develop heavy duty vehicle standards
• Increased CAFE standards
– Combined 34.1 mpg CAFE by 2016

CO2 Percent Reduction Comparison Waxman RFS-2

Transportation Sector
CAFE CAFÉ + RFS-2

25.0
% Reduction of 2005 GHG Emissions

20.0

15.0

10.0

5.0

0.0
2012 2013 2014 2015 2016 2017 2018 2019 2020
 Existing Legislation - EPA

• Covered facilities required to report GHG emissions

• Utilization of the Clean Air Act
– 2007 Supreme Court Massachusetts vs. EPA decision
– Endangerment exists
– Mobile Sources
• 250 g CO2/mile (35.5 mpg) by 2016
• Various credits available to reduce emissions
• NOI of increased CAFE from 2017 to 2025

– Stationary Sources
• “Tailoring Rule”
– 100,000 MT/yr (215 mmBtu/hr fired duty) for new facility
– 75,000 MT/yr (160 mmBtu/hr fired duty) for revamp
• Title V Operating Permits
• PSD Permits require BACT
– EPA guidance to be released soon
• EPA considering a Carbon Market for Utilities
 Introduction – Refinery GHG Emissions

Distribution of Refinery Emissions GHG Manufacturing Emissions

LPG/Coke
Misc Other, 0.4
9%

Plant
10% (FCC/Reforming)
Catalyst, 35.6
Heaters/Boilers,
50.1
Gasoline,
Diesel, Jet,
Marine No. 6 H2 Plant, 13.6
81%

Flare, 0.3
Refinery Case Studies

• 150 MBPSD Notional Refinery

• Product Slate
– 8.4 MBPSD LPG
– 14.8 MBPSD Jet
– 78.8 MBPSD Gasoline
– 43.0 MBPSD Diesel
– 3.4 MBPSD No. 6 FO
– 1,260 ton/day coke
• Hydrogen from on-site plant and CCR
• FCC with Cat Feed HDS
• Resid Upgrading with Delayed Coker
• Flare Gas Recovery Installed
Refinery Case Studies

• Assumptions
– Arab Medium Crude Feed
– Incremental fuel is natural gas
– Any power reduction replaces
electricity from coal
– NG price : $5.50/mmBTU
– Steam price: $7.70/Mlb
– Power price: $0.07/kWh
– Targeted 20% IRR
– 8,400 hours of operation pear year
Refinery Case Studies

• Identified Energy Efficiency

Projects
– Revamp Crude Preheat Exchange
Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam
Ejectors with LRVP
– Diesel HDS Hot Feed with Steam
Generation
– Power Recovery from FCC
Regenerator flue gas
 Refinery Case Studies – Crude Heater
 

450 F
417 F
 Refinery Case Studies – Crude Heater
 

445 F

440 F
443 F
 Refinery Case Studies – Crude Heater

 
Crude Preheat Revamp
30.0%

25.0%

20.0%
IRR

15.0%

10.0%

5.0%

0.0%
0 20 40 60 80 100

GHG Cost $/met ton
Refinery Case Studies

• Identified Energy Efficiency

Projects
– Revamp Crude Preheat Exchange
Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam
Ejectors with LRVP
– Diesel HDS Hot Feed with Steam
Generation
– Power Recovery from FCC
Regenerator flue gas
 Refinery Case Studies – Air Preheat

• Base Case Fired Air Preheat Economics  ‐ Grassroot

60%
Efficiency
– 82% 50% $100

$70

• Air Preheat Heater 40%

$50

Fired Efficiency $30

IRR
30%
– 92% $15
$0

20%

• 20% IRR Target

10%

0%
20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0

Process Absorbed Duty, Million  Btu/hr
 Refinery Case Studies – Air Preheat
Air Preheat Economics ‐ Revamp
• Existing Fired 45%

Efficiency 40%

– 82% $100
35%
$70
30%
• Air Preheat Heater $50

Fired Efficiency 25% $30

IRR
– 92% 20% $15
$0
15%

• 20% IRR Target 10%

5%

0%
50.0 100.0 150.0 200.0 250.0

Process Absorbed Duty, Million  Btu/hr
 Refinery Case Studies – Air Preheat
Air Preheat Economics ‐ Revamp
• Natural Gas Price 45%

– $6.50/mmBTU $100
40%

35%
$70
• Existing Fired $50
Efficiency 30%
$30
– 82% 25%
$15
IRR
20%
$0
• Air Preheat Heater 15%
Fired Efficiency
10%
– 92%
5%

• 20% IRR Target 0%

50.0 100.0 150.0 200.0 250.0

Process Absorbed Duty, Million  Btu/hr
Refinery Case Studies

• Identified Energy Efficiency

Projects
– Revamp Crude Preheat Exchange
Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam
Ejectors with LRVP
– Diesel HDS Hot Feed with Steam
Generation
– Power Recovery from FCC
Regenerator flue gas
Refinery Case Studies – Steam Ejectors
Refinery Case Studies – Steam Ejectors
 Refinery Case Studies – Steam Ejectors

 
Vacuum Tower Steam Ejectors Revamp
45%
40%
35%
30%
25%
IRR

20%
15%
10%
5%
0%
0 20 40 60 80 100

GHG Price
$/met ton
Refinery Case Studies

• Identified Energy Efficiency

Projects
– Revamp Crude Preheat Exchange
Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam
Ejectors with LRVP
– Diesel HDS Hot Feed with Steam
Generation
– Power Recovery from FCC
Regenerator flue gas
 Refinery Case Studies – Hot Feed/Steam Gen

 
Refinery Case Studies – Hot Feed/Steam Gen
 Refinery Case Studies – Hot Feed/Steam Gen

 
Unit Hot Feed and Steam Generation
100%

80%

60%
IRR

40%

20%

0%
0 20 40 60 80 100

GHG Price
$/met ton 
Refinery Case Studies

• Identified Energy Efficiency

Projects
– Revamp Crude Preheat Exchange
Train
– Add Combustion Air Preheat
– Replace Vacuum Tower Steam
Ejectors with LRVP
– Diesel HDS Hot Feed with Steam
Generation
– Power Recovery from FCC
Regenerator flue gas
 Refinery Case Studies – Power Recovery

Orifice Chamber
1.5 psig
1,350 F

33 psig
1,350 F

Steam Drum

Blowdown
Superheated Steam 8,000 lb/hr
600 psig @ 600F
BFW
163,000 lb/hr
234F
171,000 lb/hr
To Pollution
FCC
Control/Stack
Regenerator
440 F
Flue Gas Cooler with
Economizer and Steam
Superheat Section

179 mmBTU/hr
 Refinery Case Studies – Power Recovery

Orifice Chamber
Normally No Flow
Used when Turbine is Down

33 psig 1.5 psig

1,350 F 1,025 F

Third Stage
Separator
(Protect Turbine
from Cat Fines)
Steam
Drum
Blowdown
Power Recovery 5,000 lb/hr
Turbine Generator
24,000 SHP BFW
18 MW 234F
FCC 80% Adiabatic Eff
105,000 lb/hr
Regenerator
Superheated Steam To Emission
600 psig @ 600F Control/Stack
100,000 lb/hr 480 F
Flue Gas Cooler with
Economizer and Steam
Superheat Section
110 mmBTU/hr
 Refinery Case Studies – Power Recovery

 
FCC Power Recovery  Revamp
45%
40%
35%
30%
25%
IRR

20%
15%
10%
5%
0%
0  20  40  60  80  100 

GHG Price
$/met ton
 Summary of Projects

  CO2 Reduced  NG  Reduced Boiler  Power Utility  Offsets  Capital 

(1)
Project Reduced Capacity Reduced Required Cost
metric ton/yr SCFH lb/hr kWh $MM
Crude Heater Inlet 
Temperature 34,161 91,758 ‐6,720 0 NO 19.5
Vacuum Tower 
Ejectors 6,649 16,376 10,679 ‐162 NO 2.8
Hot Unit Feed and 
Steam Generation 14,489 35,714 27,500 0 NO 3.2
FCC Power 
Recovery 140,708 ‐23,956 ‐62,325 18,158 YES 40.0
TOTAL 196,007 119,892 ‐30,866 17,996 65.5
(1)
 If offsets are required, CO2 reduced includes the offsets awarded.

9.5% reduction from Notional Refinery baseline

 Conclusions

• Various other opportunities likely available at each

refinery operation
• An energy audit is recommended to identify various
opportunities available
• Economics may want to include the cost of GHG
emissions
• Including the cost for GHG emissions has the
potential to significantly improve energy project
economics
Acknowledgements