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.

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).