For U.S. refineries that produce more than 75M barrels per day, the Environmental Protection Agency’s Tier 3 regulations, which mandate reduced gasoline sulfur content, come into effect in 2017. For smaller refineries, these regulations take effect in 2020.
They describe options that contribute to compliance, manage costs and open the article explaining these regulations:
Tier 3 regulations go well beyond Tier 2. The annual average sulfur in gasoline sold moves from 30 ppm to 10 ppm across all company sites, and this extends to the point of sale. The sulfur cap on any single batch is set at 80 ppm at the refinery gate, while the distribution cap is 95 ppm. This applies not only to finished gasoline, but also to blendstocks like reformulated blendstock for oxygenate blending (RBOB).
EPA estimates the cost of compliance:
Tier 3 regulations will cost the average refinery $0.065/gal of gasoline shipped, in addition to a capital investment of $2.025 B in 2011 US dollars.
Non-compliance is even costlier:
Failing to meet specifications can result in fines and even prohibition from delivery into a market region. The EPA has promised stricter enforcement of the standards and that those fines will increase in the future. In a recent court case, the EPA imposed a $2.9 MM civil penalty against a company that had committed a number of offenses, including excessive volatile organic compound (VOC) emissions from several of its facilities, failure to comply with the per-gallon sulfur standard for gasoline produced at one of its refineries, shipping gasoline with more than 10% ethanol, and exceeding Reid vapor pressure (RVP) standards for gasoline distributed from one of its terminals.
To achieve this sulfur content limit:
…blending will continue to become more complex in the future, and the need to meet tighter specifications will increase the pressures on blending operations.
Marcelo and Patrick note that these blend recipe can be sent to a tank prior to delivery or blended inline. If done inline:
…blend control becomes more critical. Rather than meeting specifications at the final tank, where any needed adjustments can be made, an inline blender must meet specifications in real time for each blend segment (typically approximately 5,000 bbl). Blending directly to ships or pipelines requires custody-transfer-level measurement accuracy, with all the attendant calibrations, certifications and record keeping. In addition, there must be online analyzers that meet inline certification, calibration and accuracy standards.
Reducing the variability in the blend operations allows the process to operate closer to the specification limit, which:
…significantly reduces giveaway and costs. Note that production costs increase exponentially as sulfur content decreases, so shifting closer to the specification limit saves money, with the amount increasing rapidly as the specification limit is reduced. A $0.01/gal increased margin in a refinery that produces 100 Mbpd will result in a gain of $14.8 MM/yr.
Fourier Transform Near Infrared (FT-NIR) spectrometers can dramatically improve the accuracy and frequency of online analysis. Marcelo and Patrick describe additional ways to reduce variability.
Control valve performance, measurement accuracy and loop tuning also play significant roles in blender variability and reproducibility. As a result, a blender upgrade project will also need to verify that the field equipment is working properly; all control loops are tuned; and measurement devices have been properly selected, installed and calibrated.
Read the article as they describe other impacts from the Tier 3 regulations on product logistics at the terminal, the complexity and difficulty of the blending process and a path to compliance.
The business results in achieving improved blend control are significant:
Implementing the latest methods has yielded ongoing savings of $0.15/bbl due to gasoline tank optimization, $0.10/bbl to $0.35/bbl in octane giveaway reduction, and $0.05/bbl to $0.15/bbl in volatility giveaway reduction. It has accounted for $1 MM in one-time savings due to component tank rationalization, with a subsequent $100,000 annuity; a $10 MM one-time savings in final product tank rationalization, followed by a $100,000 annuity; a $100,000 annuity due to the avoidance of marine demurrage; and a $1 MM savings from inventory reduction.
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