... more companies are coming around ...

From the Trade Arabia News Service, February 12, 2020

Honeywell has unveiled a new “Refinery of the Future” concept, which will be showcased at the annual Middle East Technology Forum for Refining & Petrochemicals (ME-TECH), taking place from February 18-20 in Abu Dhabi.

The concept demonstrates how carefully planned investments in refining operations — including integration with petrochemicals production — can help refiners improve profit margins.

At ME-TECH, Honeywell UOP, a leader in the oil and gas industry, will explain how its “Refinery of the Future” concept can help refiners unlock new value from crude oil, potentially improving net cash margin by almost $30 per barrel.

Honeywell will also showcase the impact of integration between refining and petrochemicals on the oil and gas sector in the Middle East and explain how new production technology is enabling economies of scale that lower the cost of petrochemical production.

“The history of refining crude oil is rooted in the production of fuels, but forward-looking refiners are branching out into petrochemicals to stay competitive and ensure continued profitable growth,” said Hesham Tashkandi, vice president and general manager, Honeywell Performance Materials and Technologies, Middle East.

“Changes in market dynamics, combined with advanced technologies in the efficient management of hydrocarbon molecules, are opening up alternative paths to profitability for refiners. With the right retrofit technology and domain expertise, the ‘refinery of the future’ is now within reach.”

Recent projections show that by 2022, the top quartile of refineries by margin will be integrated with petrochemicals. World-scale refineries employing new technologies are being built in regions with growing fuels demand. These new, global, integrated plants will be considerably more resilient to shrinking gasoline and diesel margins and will remain more competitive than much of the current installed base.

A new Honeywell white paper titled ‘Refinery of the Future’ will also debut at ME-TECH, detailing how petrochemical integration requires a strategy that is designed to maximize value at each step and Honeywell UOP technologies provide the right solutions.

Honeywell’s case studies show potential diversification pathways to petrochemicals, which can be completed through a series of economically viable investments in bottom-of-barrel conversion, hydrocracking to naphtha technologies, and an aromatics complex integrated with a Toluene Methylation unit. These technologies enable production of enough heavy naphtha to support profitable world-scale paraxylene production from the same crude rate.

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Ineos, UPM Biofuels reach raw material supply deal, Plastics Today, February 11, 2020

UPM Biofuels has agreed to supply Ineos with UPM BioVerno naphtha, a renewable raw material made in pulp production, to produce bio-attributed polymers in Germany. Ineos will use the feedstocks to produce plastics for various applications, including Ineos business Inovyn’s Biovyn bio-attributed polyvinyl chloride.

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Sustainability, innovation go hand in hand at Covestro, Ethical Corp., February 11, 2020

Sustainability has always been a pillar of Covestro’s operations and is intertwined with every aspect of its innovation, including research and development and business decisions, says executive Rebecca Lucore. Covestro has reduced its carbon dioxide emissions 40% below 2005 levels, is working toward 50% by 2025, and uses events such as the annual Intern Sustainability Challenge to find new solutions that support its sustainability goals.

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Company produces 100% renewable nylon, Forbes, February 11, 2020

Bioengineering company Genomatica has advanced the world’s march away from fossil fuels on a new front, producing a key component of nylon from plant sugars. The key was the use of engineered micro-organisms and a thoroughly renewable fermentation process to turn the sugars into caprolactam, the basic nylon ingredient that’s normally refined from crude oil.

Here is something for you to worry about, as I am –

Commentary by S. Tom Bond, Jane Lew, Lewis County, WV

The current dust-up in Iraq is more than an insult to the nation whose leader proudly proclaimed “Mission Accomplished” on May 1, 2003. It wasn’t the end of major combat operations, which dragged on for years, with troops still in Iraq in an advisory capacity, many of them within the walls of the huge embassy constructed in Bagdad, the largest in the world. The unrealistic goals and incompetent subsequent management continue today.

The group calling itself the “Islamic State of Iraq and Greater Syria,” represents the Sunni faction of Islam in a war against the Shiite branch. The United States deposed Saddam Hussein, who controlled the Sunni branch which subdued the numerically larger Shiite segment of the Iraq population. What the United States did was set up a Shiite government in Iraq, reversing the historical arrangement. Iran, much larger and next door, is also Shiite, and this brought Iraq and Iran much closer together. Then the Iraq duly elected parliament voted in 2011 to have the United States leave.

Both Iraq and Iran are considered an oil and gas powerhouse. Lots of very high grade petroleum. Iran is a current hate object not only for Israel and the United States, but also for the other Gulf States, which are Sunni.

It occurs to many observers that the Islamic State of Iraq and Greater Syria is no longer conducting a terrorist attack, but a full scale war. The group has the reputation of being too violent even for al-Qaeda, which kicked it out.

Who pays? According to this article in The Economist, in Mosul ” The jihadists seized huge stores of American-supplied arms, ammunition and vehicles, apparently including six Black Hawk helicopters and 500 billion dinars ($430m) in freshly printed cash.” (Incidentally this Economist article is great for events leading up to its publication on June 14th.)

Labor is cheap. Part of the supply is from Saddam’s underground resistance still fighting, and part is from Islamic idealists streaming in from all over the Mid-east. At one time war was largely a matter of courage, but today war is industrialized and it takes money. Where does it come from? Some would have you believe it just grew.

This looks more reasonable to me. “Supporters in the region, including those based in Jordan, Syria, and Saudi Arabia, are believed to have provided the bulk of past funding.” You have to read the original paragraph carefully – it does not included Iran, which supported al-Qaeda in Iraq, although that crosses sectarian lines. (This is another very helpful article.)

In short, this is our payments to the Mid-east for oil coming back to us from the oil sheiks.

Now, back to the oil supply. For this section I am indebted to the Energy and Capital Newsletter. Iraq has huge proved oil reserves, 143.1 billion barrels according to the U. S. Energy Information Administration. Iraq is currently pumping out 2.9 million barrels a day. (E&C) Production is falling. If the ISIGS continues, production will fall further, causing a world wide price shock. This is because the world supply is delicately balanced, and decreased supply will increase the price sharply because more can’t be produced to meet demand. Lybia’s output has fallen because of disruption there. Mexican oil is running out.

The North Sea (between the United Kingdom and Denmark) will fall by 22% this year. Nigerian and Venezuelan production is declining. Sanctions cut off Iran, and Russia is a big question mark. Demand is rising.

OPEC (the Organization of Petroleum Exporting Countries) appears willing to keep its production constant, at least this year. So an oil price shock seems to depend in part on the advance and control of the Islamic State of Iraq and Greater Syria fighters. The “inelastic” nature of supply and demand for oil suggests one should be prepared for a substantial increase in price if supply goes down.

How will this affect natural gas prices? If oil goes up, where ever possible energy demand will be shifted to natural gas. This is especially important in the US Northeast, rapidly shifting to natural gas anyway, and in industry and electrical generation. This will tend to increase the price of natural gas, even if it is being over produced. And, more fracking means much more environmental impacts in our Region.

World conditions will particularly boost the worth of the “wet” part of wet gas, because the ethane, propane and butane extracted from wet gas can serve as a source of olefins, used to make plastics, i.e. petrochemicals. Much of this also comes from the lowest boiling fraction of oil, called naphtha. Less oil, particularly the light oil from the Mideast, less naphtha. It appears then the environmental impacts will almost certainly continue for years to come, as continued reliance on fossil fuels means more greenhouse gases, more global warming and more climate change.

>> Tom Bond is a retired chemistry professor and resident farmer in central West Virginia, and a member of the Guardians of the West Fork and the Monongalia Area Watersheds Compact <<