New regulations coming from the Environmental Protection Agency (EPA) increasingly conflict with existing regulations and could jeopardize a refiner’s ability to comply with federal fuel formulation regulations. Refiners frequently have to make modifications to operations that are necessary to make cleaner petroleum fuels. Such upgrades, however, could trigger greenhouse gas (GHG) emissions regulations, putting those projects at risk.
Cleaner fuels dictated under the Clean Air Act and the regulation of GHG emissions requires facilities to install advanced technologies that actually increase energy in order to produce the increasingly complex motor fuels. This results in simultaneously penalizing facilities by requiring them to control GHG emissions, which are emitted by the necessary new processing technology.
Here’s a case study to consider – sulfur is a component of crude oil. Hydrotreating is the principal technology used to reduce sulfur in petroleum products (i.e., gasoline, home heating oil or diesel). This and other such technologies, in turn, require addition energy consumption, that create greenhouse gas and other emissions. So, the production of extra hydrogen necessary for the hydrotreater results in an increase in GHG emissions because the hydrocarbon source (natural gas or refinery fuel gas) must be “cracked” to recover the hydrogen – thus releasing large amounts of CO2. A further gasoline sulfur reduction standard, therefore, will increase the carbon footprint of a refinery.
EPA’s Tier 3 Vehicle Emission and Fuel Standards Program requires a reduction in the sulfur content in gasoline, yet the energy-intensive equipment refiners must use to remove additional sulfur will actually increase greenhouse gas emissions by 0.5 percent according to one analysis.
Make sense? We don’t think so either.