Cleaner refining in the future means biofuels and more efficient conventional fuels

Global energy executives said a cleaner refining industry in the future will mean more biofuels and other cleaner alternatives, but it also will require increased emphasis on the data-driven production of conventional fuels for safer and more efficient operations.

While various types of cleaner biofuels may represent the future eventually, there is no better way now to reduce emissions than to safely operate a refinery while utilizing the best technologies and data analytics, said John Florez, associate director of oil and gas for the Boston Consulting Group.

"Decarbonization is important, but we can't forget the basics," Florez said Dec. 7 at the 23rd World Petroleum Congress in Houston.

"There are billions of data points at refineries that don't ever get looked at," he said. "That is one of the big unlocks."

Mark Nelson, executive vice president of Chevron Downstream & Chemicals agreed, but he also emphasized the evolution of the industry from one that mostly just turned crude oil into fuels. Now, Chevron is working to turn soybean oils to renewable fuels, and dairy waste into compressed natural gas fuel.

"The value chains of today will be very different from the value chains of tomorrow," Nelson said.

Refineries also will become increasingly integrated with petrochemical operations, including on biofuels, recycling efforts and carbon capture projects.

"I think moving forward the integration aspect is going to get even more sophisticated," he said.

Nelson's remarks came as the US Environmental Protection Agency Dec. 7 proposed easing biofuel blending requirements for US refiners in 2020 and 2021, while raising the amount of renewable fuel refiners would have to mix with gasoline and diesel in 2022 to the highest total volumes to date.

For its part, Chevron has begun producing test batches of sustainable aviation fuel, called SAF, at its El Segundo Refinery in California. Sustainable aviation fuels are produced from biofeedstocks that can reduce carbon intensity. Chevron also is working with Gevo to make SAF using an alcohol-to-jet process.

This year, the El Segundo Refinery is producing 2,000 b/d of biofeedstock and the plan, in 2022, is to convert the diesel hydrotreater to 100% renewable capacity, increasing capacity to 10,000 b/d of renewable diesel. By 2030, the goal is to produce 100,000 b/d of renewable diesel and SAF at the California refinery.

In the fall, Chevron said it would invest $600 million in a joint venture with Bunge, the world's largest oilseed processor, to expand soybean processing capabilities in Illinois and Louisiana to make renewable fuel feedstock. Bunge currently supplies soybean oil to the El Segundo refinery.

International views

But fuel and refining needs and challenges vary around the world.

In Africa, the more pressing need is for lower-sulfur fuels and more standardized fuel grades to meet demand and combat air pollution problems, said Anibor Kragha, executive secretary, African Refiners and Distributors Association.

The problem, he said, is the lack of investment to convert refineries to low-sulfur production.

"If we don't, we're going to have a public health disaster," Kragha said, citing a rapidly growing African population and increasing fuel demand.

Africa has four times the population of the US, for instance, but the US has more than four times the annual carbon emissions of all of Africa.

While West Africa has more crude oil production it can rely upon, Kragha said, East Africa may want to focus more on biofuels in order to reduce its reliance on Middle Eastern imports.

In Europe, more refiners are eyeing the status of the Fit for 55 initiative, which is the tentative European Union plan to reduce greenhouse gas emissions 55% by 2030.

Gabriel Szabo, executive vice president for downstream at Hungary's MOL Group, said a lot of the potential policy changes are risky and expensive for refiners and consumers. Carbon capture projects are critical for the industry, for instance, he said, but they remain incredibly expensive.

The cost of transportation goes up with more biofuel requirements and more energy transition initiatives, he said.

"This is a fact. Society will learn that," Szabo said, arguing that global trends have emerged this year with the public pushing back against higher fuel prices.