At the middle of the month OPEC release their Monthly Oil Market Report, a document of over 80 pages. The MOMR reviews the global economies and discusses the oil outlook.
For 2011, OPEC projects a 1.4mb/d demand increase over 2010, which is now somewhat lower than the 2.1mb/d they projected earlier. That means oil demand grew from the 84.57mb/d in 2009 to 86.67mb/d in 2010 and is projected to increase to 88.08mb/d for the year 2011.
The principal drivers of this demand growth are the emerging economies. Total demand in the developed world, North America, Western Europe and OECD Pacific (Total OECD) is projected to increase by only 0.19mb/d from 2009 to 2011. 87.23% of global oil demand growth comes from outside the OECD. In a couple of years the "total other regions" will consume more oil than the "total OECD".
The interesting development, for the marine market, is contained in the forecasted y-o-y growth in product demand. For 2011 the trend in declining residual fuels continues unabated at -6%, gasoline and diesel demand lead the refined product growth at 21% and 41% respectively.
Tuesday, May 17, 2011
Tuesday, May 10, 2011
Bilge Water Discharges
Canadian Inland Water regulations authorize the treatment of oily bilge water through approved equipment overboard with the ship making way. The required effluent quality must be better than 5 parts per million (ppm) of oil in the discharge water, while the ship is moving.
The regulations class oil and oily water as a pollutants that mustn't be discharged from a ship. Therefore, since the regulations authorize the treatment of oily bilge water, the effluent that falls within the regulated discharge requirements becomes then a discharge free of oil under the oil pollution prevention regulations.
How oil-free is then the 5ppm bilge water discharge from a ship? Are compliant bilge water discharges a pollution threat for the Great Lakes - Seaway system?
1 liter is a cube with sides of 100mm each, or equal to 1 Million cu.mm; therefore 1 cu.mm of oil in 1 liter of bilge water is 1ppm; 5ppm is one cube with sides of 1.7mm in 1 liter of bilge water. Which means that the upper limit for compliant bilge water discharges is a small drop of oil in 1 liter of bilge water. This quantity of oil is evenly dispersed in the effluent, in very fine droplets, too fine to coalesce into larger oil droplets to form visible pollution.
So not only do the regulations require fairly clean water, but in addition the ship has also to "make way".
Here is a quick calculation on "typical" worst case discharges from Canadian Lakers. One of the most common bilge separator sizes installed is a 16GPM system, which processes bilge water at about 3,600 liters per hour equal to 3.6 liters per second. A ship making way at 2 knots, the ship does 2 nautical miles per hour, equal to about 3.6km/hr or about 1 meter per second. Therefore, in the worst case under the regulations this ship discharges 1 liter bilge water per second containing an oil drop of 1.7mm over a distance of 1 meter traveled. Since the actual oil content must be below the 5ppm limit and the ship's speed is typically above the 2KN mentioned, therefore a smaller "drop of oil" gets stretched further than the 1 meter mentioned.
I am quite comfortable stating that compliant bilge water discharges are not a pollution threat for the inland waters. Bilge water discharges are not point sources like refinery effluents or run-off from roadways and parking lots, or any other oil pollution from land based sources.
The regulations class oil and oily water as a pollutants that mustn't be discharged from a ship. Therefore, since the regulations authorize the treatment of oily bilge water, the effluent that falls within the regulated discharge requirements becomes then a discharge free of oil under the oil pollution prevention regulations.
How oil-free is then the 5ppm bilge water discharge from a ship? Are compliant bilge water discharges a pollution threat for the Great Lakes - Seaway system?
1 liter is a cube with sides of 100mm each, or equal to 1 Million cu.mm; therefore 1 cu.mm of oil in 1 liter of bilge water is 1ppm; 5ppm is one cube with sides of 1.7mm in 1 liter of bilge water. Which means that the upper limit for compliant bilge water discharges is a small drop of oil in 1 liter of bilge water. This quantity of oil is evenly dispersed in the effluent, in very fine droplets, too fine to coalesce into larger oil droplets to form visible pollution.
So not only do the regulations require fairly clean water, but in addition the ship has also to "make way".
Here is a quick calculation on "typical" worst case discharges from Canadian Lakers. One of the most common bilge separator sizes installed is a 16GPM system, which processes bilge water at about 3,600 liters per hour equal to 3.6 liters per second. A ship making way at 2 knots, the ship does 2 nautical miles per hour, equal to about 3.6km/hr or about 1 meter per second. Therefore, in the worst case under the regulations this ship discharges 1 liter bilge water per second containing an oil drop of 1.7mm over a distance of 1 meter traveled. Since the actual oil content must be below the 5ppm limit and the ship's speed is typically above the 2KN mentioned, therefore a smaller "drop of oil" gets stretched further than the 1 meter mentioned.
I am quite comfortable stating that compliant bilge water discharges are not a pollution threat for the inland waters. Bilge water discharges are not point sources like refinery effluents or run-off from roadways and parking lots, or any other oil pollution from land based sources.
Tuesday, April 19, 2011
Marine Fuel - 3
Not all crude oil is created equal, as it ranges from light-sweet crude to heavy crude oil; with some of the heaviest stuff coming from Cold Lake Alberta.
In the "good old days" oil was refined in topping refineries. This was (as I understand it) basically atmospheric refining, where light products were boiled off. With light crude the refiner got about 75% light product with 25% residual oil. With the shift to heavier crude oil refiners added complexity to the refining process, squeezing more light product from the feedstock. Valero gives a good overview of this evolution on their Quebec City refinery website. What is evident from their comments is that they are configuring this refinery for heavier crude oil.
Industry consensus is that the supply of light crude is shrinking. The peak oil theory is proposed by some and opposed by others. However, the continuing drive towards cleaner refined product requires increased complexity of the refining process, which eventually configures the refinery to be able to use heavy feedstock, including residual fuel. Valero's Corpus Christie refinery is such a refinery, capable of refining the heaviest (and residual) oils into light product, asphalt and petroleum coke.
The way I read it is that with the shift towards heavier feedstock the refiner needs to increase his ability to squeeze more light product from the heavier oil; he needs to increase the complexity of the refinery. Then he needs to remove more pollutants from the refined product to meet the tightening fuel quality standards; again increasing the complexity of the refining process. On top of that demand for refined product keeps rising, which the refiner needs to satisfy with increased yield from existing refineries. So that eventually he has upgraded from the Quebec refinery in 1981 to the Corpus Christie refinery of 2010, cutting residual oil from something like 25 - 30% down to 0%., leaving no base stock for marine fuel blending. While this Valero example shows the extreme case, the continuing shift towards heavier residuals globally confirms the theory. Let's face it, refiners will supply premium products longer than furnishing residuals for a discounted marine product, which means heavy fuel will disappear before we run out of gasoline and diesel.
In the "good old days" oil was refined in topping refineries. This was (as I understand it) basically atmospheric refining, where light products were boiled off. With light crude the refiner got about 75% light product with 25% residual oil. With the shift to heavier crude oil refiners added complexity to the refining process, squeezing more light product from the feedstock. Valero gives a good overview of this evolution on their Quebec City refinery website. What is evident from their comments is that they are configuring this refinery for heavier crude oil.
Industry consensus is that the supply of light crude is shrinking. The peak oil theory is proposed by some and opposed by others. However, the continuing drive towards cleaner refined product requires increased complexity of the refining process, which eventually configures the refinery to be able to use heavy feedstock, including residual fuel. Valero's Corpus Christie refinery is such a refinery, capable of refining the heaviest (and residual) oils into light product, asphalt and petroleum coke.
The way I read it is that with the shift towards heavier feedstock the refiner needs to increase his ability to squeeze more light product from the heavier oil; he needs to increase the complexity of the refinery. Then he needs to remove more pollutants from the refined product to meet the tightening fuel quality standards; again increasing the complexity of the refining process. On top of that demand for refined product keeps rising, which the refiner needs to satisfy with increased yield from existing refineries. So that eventually he has upgraded from the Quebec refinery in 1981 to the Corpus Christie refinery of 2010, cutting residual oil from something like 25 - 30% down to 0%., leaving no base stock for marine fuel blending. While this Valero example shows the extreme case, the continuing shift towards heavier residuals globally confirms the theory. Let's face it, refiners will supply premium products longer than furnishing residuals for a discounted marine product, which means heavy fuel will disappear before we run out of gasoline and diesel.
Thursday, April 7, 2011
MARPOL matters
IMO posted the biannual agenda of the DE Sub-Committee for 2012-2013. For the DE-56 meeting a total of 23 agenda items are listed, of which item 19 caught my eye.
Under 19 the "Revision of the Revised guidelines on implementation of effluent standards and performance tests for sewage treatment plants (resolution MEPC.159(55))" will be discussed. Target completion date for this task is 2012, suggesting that revised sewage regulations are in the works.
My friend, Dennis Bryant posted on his blog today the following from the USCG:
"The US Coast Guard issued a notice announcing that, in accordance with IMO Res. MEPC.191(60), the restrictions on discharges from ships in the Wider Caribbean Region (WCR) special area (SA), as specified in MARPOL Annex V, Regulation 5, will come into effect on May 1, 2011. The WCR includes the Gulf of Mexico. Once the restrictions come into effect, no person may discharge, within the SA, garbage from a ship except (under limited conditions) food wastes. 76 Fed. Reg. 19380 (April 7, 2011).
Under 19 the "Revision of the Revised guidelines on implementation of effluent standards and performance tests for sewage treatment plants (resolution MEPC.159(55))" will be discussed. Target completion date for this task is 2012, suggesting that revised sewage regulations are in the works.
My friend, Dennis Bryant posted on his blog today the following from the USCG:
"The US Coast Guard issued a notice announcing that, in accordance with IMO Res. MEPC.191(60), the restrictions on discharges from ships in the Wider Caribbean Region (WCR) special area (SA), as specified in MARPOL Annex V, Regulation 5, will come into effect on May 1, 2011. The WCR includes the Gulf of Mexico. Once the restrictions come into effect, no person may discharge, within the SA, garbage from a ship except (under limited conditions) food wastes. 76 Fed. Reg. 19380 (April 7, 2011).
Wednesday, March 30, 2011
Marine Fuel - 2
Carrying on from last weeks comments on declining residual oil quantities.
The Globe and Mail published recently an article about the fact that heavy oil is gaining weight in energy markets, based on comments at the World Heavy Oil Congress in Edmonton, earlier this month. According to the experts, by 2030 heavy oil will make up 16 - 20% of the world total supply of oil, up from below 6% today.
Refineries, to process heavier oil, require to upgrade the refining process in order to get adequate quantities of refined product from the feedstock. The upgrade of the refining process results in lower quantities of residuals that are not suitable as base for marine fuel blending. They are too heavy and S-content is way too high to be used as base for IFO blending. As a rule of thumb, the S-content in the residual is typically more than twice the S-content of the feedstock.
The EIA charts show how residual declined, without a major shift towards heavier feedstock. Looking forward we'll need to factor in the increase in heavier feedstock as well as increased synthetic crude oil quantities.
The Globe and Mail published recently an article about the fact that heavy oil is gaining weight in energy markets, based on comments at the World Heavy Oil Congress in Edmonton, earlier this month. According to the experts, by 2030 heavy oil will make up 16 - 20% of the world total supply of oil, up from below 6% today.
Refineries, to process heavier oil, require to upgrade the refining process in order to get adequate quantities of refined product from the feedstock. The upgrade of the refining process results in lower quantities of residuals that are not suitable as base for marine fuel blending. They are too heavy and S-content is way too high to be used as base for IFO blending. As a rule of thumb, the S-content in the residual is typically more than twice the S-content of the feedstock.
The EIA charts show how residual declined, without a major shift towards heavier feedstock. Looking forward we'll need to factor in the increase in heavier feedstock as well as increased synthetic crude oil quantities.
Wednesday, March 23, 2011
Marine Fuel - 1
From time to time I look at the EIA website, mostly out of curiosity. The US Energy Information Agency publishes the US statistics on oil related matters every Wednesday.
The EIA's weekly supply estimates have in their right columns the links to graphs, showing historic trends to 2011 for specific products and groups. The ones I find of interest are the trends for crude oil refinery inputs, gasoline, distillate fuels and residual fuels. What these graphs indicate to me is that refinery yields have increased over the years. US refiners are producing more refined product from lower feedstock quantities, thereby leaving less residual oil for marine fuel blending. The EIA figures suggest that US refineries produce a lower percentage of residual oil than others.
If we take the US refining trend towards higher refinery yields as indicative for how global refining evolves, then it is reasonable to project that somewhere down the line there won't be enough residual fuel to satisfy the demand for industrial and marine fuel.
The EIA's weekly supply estimates have in their right columns the links to graphs, showing historic trends to 2011 for specific products and groups. The ones I find of interest are the trends for crude oil refinery inputs, gasoline, distillate fuels and residual fuels. What these graphs indicate to me is that refinery yields have increased over the years. US refiners are producing more refined product from lower feedstock quantities, thereby leaving less residual oil for marine fuel blending. The EIA figures suggest that US refineries produce a lower percentage of residual oil than others.
If we take the US refining trend towards higher refinery yields as indicative for how global refining evolves, then it is reasonable to project that somewhere down the line there won't be enough residual fuel to satisfy the demand for industrial and marine fuel.
Wednesday, November 17, 2010
Bilge Alarm Readings
The test procedures for the 15ppm Bilge Alarm are described in MEPC 49 Test Specifications. Basically, the accuracy of the Bilge Alarm is determined by comparing its readings against a known flow of Test Fluid injected into a known flow of water. The grab samples are analyzed in a laboratory to Standard ISO9377-2:2000, using solvent extraction and gas chromatography for the determination of the hydrocarbon oil index in water.
The methodology is clear and the oil content for the test effluent is known. Therefore, in the approval process, the Bilge Alarm is demonstrated under controlled, predictable and repeatable conditions. To get the Bilge Alarm approved, the instrument needs to correctly display the optical effect created by the known oily water mixture, as the equivalent parts per million of oil content. In other words, the instrument is calibrated for this purpose before the approval test, then shown to read oil content correctly.
As we all know, bilge water aboard a ship, or more accurately the effluent from the Bilge Separator is not the same mixture of oil and water as the one in the approval process. In the approval process the IMO Test Fluid "C" is used, which is a 1kg mixture of water, containing 25g of heavy fuel RMG 35, plus 25g of light fuel DMA , plus 0.5g surfactant and 1.7g of iron oxides. By comparison,the effluent coming out of the Bilge Separator contains typically more than 2 types of oils as it contains heavy fuel, light fuel lube oils as well as other oils; it contains probably more than 0.5g of surfactants as cleaners and detergents are present, from the cleaning of surfaces and as part of modern lube oils as well; solids content of the effluent most likely is quite different too. Then of course there is the color of the bilge water, also different than the test liquid. All this to say that the Bilge Alarm does not compare apples with apples; it is tested with "apples" but then required to read "oranges" aboard a ship.
The Bilge Alarm is approved by IMO for on-line, continuous measuring, using an optical value as a reference for oil content. The measuring system is at best an approximation, rather than a scientific measurement of hydrocarbon content in water. Port State Control procedures confirm that compliant bilge water effluent is determined by a calibrated Bilge Alarm and not a laboratory analysis.
Because the Bilge Alarm is calibrated to a specific oily water mixture, there will be a difference between the actual hydrocarbon content of compliant real life effluent and the test liquid. How big the difference will be is dependent on the complexity of the bilge water the Bilge Separator has to treat.
The methodology is clear and the oil content for the test effluent is known. Therefore, in the approval process, the Bilge Alarm is demonstrated under controlled, predictable and repeatable conditions. To get the Bilge Alarm approved, the instrument needs to correctly display the optical effect created by the known oily water mixture, as the equivalent parts per million of oil content. In other words, the instrument is calibrated for this purpose before the approval test, then shown to read oil content correctly.
As we all know, bilge water aboard a ship, or more accurately the effluent from the Bilge Separator is not the same mixture of oil and water as the one in the approval process. In the approval process the IMO Test Fluid "C" is used, which is a 1kg mixture of water, containing 25g of heavy fuel RMG 35, plus 25g of light fuel DMA , plus 0.5g surfactant and 1.7g of iron oxides. By comparison,the effluent coming out of the Bilge Separator contains typically more than 2 types of oils as it contains heavy fuel, light fuel lube oils as well as other oils; it contains probably more than 0.5g of surfactants as cleaners and detergents are present, from the cleaning of surfaces and as part of modern lube oils as well; solids content of the effluent most likely is quite different too. Then of course there is the color of the bilge water, also different than the test liquid. All this to say that the Bilge Alarm does not compare apples with apples; it is tested with "apples" but then required to read "oranges" aboard a ship.
The Bilge Alarm is approved by IMO for on-line, continuous measuring, using an optical value as a reference for oil content. The measuring system is at best an approximation, rather than a scientific measurement of hydrocarbon content in water. Port State Control procedures confirm that compliant bilge water effluent is determined by a calibrated Bilge Alarm and not a laboratory analysis.
Because the Bilge Alarm is calibrated to a specific oily water mixture, there will be a difference between the actual hydrocarbon content of compliant real life effluent and the test liquid. How big the difference will be is dependent on the complexity of the bilge water the Bilge Separator has to treat.
Subscribe to:
Posts (Atom)
Posts
