International Energy Agency

The 2010 Key statistics by the IEA are rather interesting. Oil consumption keeps rising, residual fuel production is declining and we see a shift in the global refining picture. The developing economies of China, Asia and the Middle East are adding refinery capacity aggressively while in the developed world capacity is being consolidated.

In 1973 33.8% of refinery throughput ended up as residual fuel, by 2008 this shrank to 15.1% globally. In Canada refineries produce only about 7% residual oil from their feedstock, in the USA it is lower still. The fact that refiners today produce more light product per barrel of oil, suggests that the quality of the residual fuel is deteriorating.

Regulations are tightening, calling for cleaner stack emissions from ships, on the other hand residual fuel quality is declining. The question then is, how will ship owners comply with these tightening regulations? Will they be able to burn lower quality residual fuels forever with secondary treatment of the exhaust gases, or will they be forced to burn premium-priced light fuel, because marine fuel won't be available anymore; in part due to the increased refinery yield, in part due to the shift in refining to the emerging economies?

Is it possible that tightening oil supply will some day force ship owners to burn distilled product?

Air Toxics from Cement Plants

In the most recent EM magazine by the Air & Waste Management Association, on page 44 there is an article on the threat to the American cement industry by tight EPA air emission standards. According to the Portland Cement Association the stringent standards and need to install expensive controls could force 30 plants to close and it puts another 12 plants "at risk" of being forced out of business.

What the EPA wants to achieve with the tighter emission rules is a reduction in the annual emissions of mercury (by 11,600 tons), hydrocarbons (by 11,700 tons), particulate matter (by 10,500 tons), hydrochloric acid (by 2,800 tons) and sulfur oxides (by 160,000 tons).

The Portland Cement Association did a webinar on this and the power point presentation, as a summary, is posted on the web. What I found interesting is how well the cement plant population aligns with marine transportation arteries (as per slide 4 of the presentation).

To put two of the cement industry's toxins into perspective, considering the coming ECA:

• With an ECA in domestic waters, SOx from ships would be cut by less than 40,000 tons, and
  
• Marine does not contribute to mercury pollution.
  

Horse Power

From time-to-time I wonder about the need for high powered personal vehicles.

A recent write-up on the new Jaguar cars got me thinking whether we needed 510HP in a car to go 280km/h rather than only the pedestrian speed of 240km/hr. Similarly, North American motor journalists tell us we need monster bikes of more then 1000cc to move us.

I think it is understood that oil is a finite source of energy, we will deplete it. The World Business Council for Sustainable Development (WBCSD) in their Vision 2050, suggest that with business as usual we will require every last resource on Earth, and another Earth, and a third more. "That's obviously a huge issue" says Dr. Mohammad Zaidi, executive VP and chief technical officer at ALCOA.

Vision 2050 suggests we better start acting now, changing from the current exploitation model to a sustainable model. Maybe we should look at the horse power issue on our vehicles?

In 2008 Canada generated 734Mt of greenhouse gases; emissions from cars, SUVs and motor cycles accounted for 85.664Mt equal to 11.67% of the total. I wonder how much the emissions from personal vehicles could be reduced by scaling back on engine power in our cars and bikes. My guess is that we'd be just as mobile with less than half the current average engine power. The reason I say this is that in North America we tend to drive European cars with larger engines than are common in Europe.

Vision 2050 suggests we are exceeding now Earth's capacity. If we look for sustainability to 2050 I suggest we heed WBCSD's call for action now; maybe reducing the engine power in our personal transportation is a good start?

How will that pan out?

The Dow Jones News wire gave updates on the vehicle sales in China, India and Russia. China has surpassed the USA as the world's largest car market. For the January to July 2010 period car sales in China grew by 42.8% year-over year! Sales increases in India and Russia on the side of personal use vehicles as well as trucks grow also in double digit percentages. In addition to the car sales there are then the sales of motor cycles and scooters, which are significant in these developing markets. Obviously gasoline and diesel consumption in these emerging markets will increase much faster than in the OECD, and with it there will be a shift in the global oil supply and refining markets.

The OECD is supplied by multinational oil companies within a free market trading principle. On the other hand, most emerging economies are supplied from state run oil companies. I am wondering whether or not this will affect easy access to oil for the OECD refiners.

A recent oil pollution case in the USA

The latest press release from the United States Dept. of Justice on a case of falsifying oil record book entries is interesting for the following reasons:

• The US lays criminal charges based on the "fraudulent statements" to the port state control officer, e.g. presenting an ORB with false entries. - In this case, the company and officers were convicted.
• The severity of the sentence and fines decreases with cooperation and forthcoming statements by the company and crew. - In this case the fine to the company and the sentences handed down (so far) are relatively mild.
• The fate of the C/E will be determined in a separate hearing. - Of interest is the reference to the sentencing guidelines in this paragraph.
• The company agreed to implement an elaborate and detailed environmental compliance plan for the fleet.