The 2024 American Fuel and Petrochemicals Manufacturer’s (AFPM) Summit New Orleans – My Top 3 Takeaways
Top 3 takeaways from 2024 AFPM Summit
Number 3: Something doesn’t compute —
My annual informal opinion poll at the Summit again showed that all U.S. refineries are “long octane”. Yet all other market indicators point to a shortage of domestically produced octane barrels, and the supply of banked sulfur credits just hit an all-time low. On this important, unpopular topic, something doesn’t compute.
Number 2: The refining industry continues to lead —
The re-purposing of refinery hydroprocessing units for renewable diesel, and related technical and economic advances have led to over-achievement of federal and state government renewable fuels goals.
A top refining technology supplier, Topsoe, will bring in nearly 1 billion dollars this year, mostly from licensing of new renewable diesel units, revamps, catalysts, and related technologies for clean hydrogen and ammonia production to decarbonize U.S. energy supply.
And five other highly capable refining technology suppliers/licensors are hot on Topsoe’s trail with their own improved technologies.
When it comes to actual accomplishment, the refining industry continues to lead in decarbonizing energy supply in the U.S.
Number 1: Remarkable progress —
Sticking with the renewables theme — two years ago, the top causes of unplanned shutdowns on renewable diesel units were reactor plugging, equipment fouling, mechanical failures and corrosion. Today, 80+% of turnaround cycles are limited by reactor kinetic capacity, which is where you want to be.
Last week I learned, from the AFPM Renewables Q&A panel and audience, the world’s top experts, who run these units, that the biggest concerns today are feed sourcing and handling (“we weren’t used to feeds turning rancid”), volatile economics and scale up challenges.
And Chevron announced they quietly achieved a breakthrough at their El Segundo refinery by converting an existing unit to renewable diesel production, then back again to petroleum diesel (when margins went south), and proving they can now switch back and forth at will in the turnaround time normally needed to just change out a catalyst. They did this with intent – to demonstrate every aspect of flexible operation, and achieved it with no one else noticing.
Other refiners are rightly proud of their accomplishments in revamping and converting whole refineries to expand U.S. renewable fuel production capacity.
It struck me last week, this is remarkable progress. In 2 years, renewable diesel refining has progressed a long way toward becoming a mature technology.
Recommendation
Every refining executive should have a comprehensive understanding of the technical, regulatory, and economic aspects of Tier 3 gasoline, octane, and the sulfur credit program and how they affect your business. Those wanting a quick education on the Tier 3 issue should get the short book, Gasoline Desulfurization for Tier 3 Compliance, which will make you an industry expert in a day.
Once you have become expertly informed of the problem, you can save your team years of redundant work by buying Hoekstra Research Report 8. We are the ones who saw this situation coming, did the research and field tests, ran the simulations and analyzed the results so you and your team can take immediate steps to increase gasoline margin capture in the Tier 3 world.
The report includes detailed pilot plant and commercial field test data, full detail of sulfur credit pricing and credit bank status, spreadsheet models to help improve gasoline optimization, sulfur credit strategy and refining margin capture in the Tier 3 world.
Don’t get caught panic buying after the credits spike.
George Hoekstra
+1 630 330-8159
