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The Environmental Paradox for Savvy Refiners

By Process Pro Eric

Mar 03, 2014
 

As a process engineer, where do you draw the line between environmental responsibility and company profitability?

 
 

From the start of my career as a refinery process engineer, I’ve constantly struggled in one area.  I have often found myself wondering where to make the trade-off between being very good at my job versus being a responsible resident of this planet.

 

In my mind, there are two areas of environmental responsibility when it comes down to operating an oil refinery.  One pertains to operating the facility within permit limits, which include equipment emissions, oil 

spill prevention, and other containment issues of the such. 

 

The other area of responsibility concerns meeting regulatory product specification, such as gasoline sulfur or benzene content.

 

It is clear in my mind that every refiner should operate with full intention of remaining within permit compliance.  These boundaries define a refinery’s license to operate, and every effort must be dedicated to comply in this area.

 

 

Regardless how good of an engineer I am, I choose not to optimize around permit limits because the risks far outweigh any potential reward. 

 

On the other hand, environmental compliance with regard to product specification is a different issue.  Whether it is the sulfur content in diesel fuel, or benzene content in U.S. gasoline, I find it appropriate in my mind to optimize refinery operation to the very edge of legal limits here. 

 

Obviously I do not support making product that is off-spec, but the consequence of off-spec product only has financial consequences.  Since refiners have the ability to re-blend or re-process product before it leaves the refinery gate, they have limited risk of shipping refinery product to the public that is off-spec.

 

As a result of this layer of protection, I find it perfectly acceptable to optimize product specifications that are driven by environmental regulations.  There are tens of millions of dollars associated with refinery spec optimization, and therein lies the paradox. 

 

I aim to be an environmentally conscious person.  I recycle everything that I can, and I carpool when possible. However, these items are easy to accommodate because they are merely a matter of convenience.  In my role as a refinery engineer, the option to remain environmentally conscious no longer trades off convenience, but comes at a large financial cost. 

 

As an example of complying with environmental regulations, I recognize that my refinery must sell diesel product at the pump that does not exceed 15 ppm sulfur.  As long as the diesel product meets the 15 ppm sulfur regulation, it is fully compliant with the law (assuming that all other specifications are met as well).

 

So what if I were to tell you that my diesel hydrotreater has the capability of producing product that can be 10 ppm, or even 5 ppm.  I can reduce the sulfur content of all diesel products by nearly 70%, and the only cost to my company is a reduction in profit.  Do you think that oil companies make enough profit that they should voluntarily give up some earnings to be more environmentally conscious?

 

What if I told you the cost would only be $1 Million dollars a year to reduce diesel sulfur by 70%?  What if the cost were $5 Million, or $10 Million?  Would you make your decision to giveaway product quality depending on the level of financial cost?

 

I’m sure that ultra-environmentalists would be in strong favor of that option.  Oil companies, on the other hand, would surely support the opposite.  I have never worked in any refinery where we purposely gave away on product specs just to be more environmentally friendly.   Whether the cost was only $1 Million or $10 Million, it just has never happened.

 

So does it make me a morally challenged individual if I make every attempt to operate my equipment to the fullest capability?  Or does it just qualify me as a very prudent engineer if I maximize profitability to the greatest extent while remaining in full legal compliance? 

 

Should we always allow regulators to define the laws on what’s adequate?  Do we believe that they have proper control of managing the environment?  As a collective society we cannot agree on the direction of the environmental changes, so it’s not unreasonable to say that we may have it all wrong (in either direction)

 

 

 

After spending years of thinking, I’ve come to the conclusion that as long as I operate within the absolute confines of the law, I am comfortable with optimizing my units as much as possible to maximize profits for my company.

 
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  • S.santhiraj :   As for as I am concerned, all Engineers are hired mercenaries to harm environment ! Any engineering or industrial activity ends up polluting the environment!

    Mar 06, 2014

  • Lauren :   Interesting piece. I see your situation between a rock and a hard place. I was wondering though...regarding maximizing profit at the cost of environmental degradation, to these companies take into account the healthcare costs associated with such pollution? Do they take into account the amount of money it will take to get the environment back to 'almost' new? I think that when looking at long term profitability, these also should be addressed. Yes, you might maximize your profit for 5-10 years, but at what point does this begin taking an even more expensive toll on healthcare costs or environmental costs? At some point this is going to be an inverse calculation. The more you maximize profit, the more pollution in the environment, the higher healthcare costs...thus your 'maximized' profit isn't really maximized. it just appears that way to the small group of individuals who are gaining this profit. I think you must find a happy medium. On a more global note: corporate social responsibility and social entrepreneurship is growing; individuals focused on solving problems and not on maximizing profit is a growing trend. This will be seen (eventually) in the energy/industrial sector. This is going to drastically change maximizing profit, because maximizing profit isn't going to be the bottom line, we will see a triple bottom line emerge. Granted, this is some years, if not decades away, but my idea of long-term isn't 10-15 years, but 30-40+ years. I think embracing these changes is crucial for survival, as we see in adaptation everywhere. What if your company was the first to embrace such low sulfur content? Think about the marketing opportunities of being a company that sets trends and not follows them....think about what that could do for long-term business...

    Mar 09, 2014

  • Scott Roney :   Product specifications are set by government regulatory authorities who are subject to elected politicians, who govern only by the consent of the voters. Thus these specs reflect our consensus, as a society, regarding what is acceptable and what is not. If the diesel sulfur spec is too high, then we should lobby the government to reduce it, not arbitrarily make lower-sulfur diesel (which will have negligible impact on air quality from a single refiner). The situation for refinery emissions is much the same. Obviously, if a plant is polluting the surrounding neighborhood to such an extent that it is unlivable, then a wrong is being committed. But if your permit allows you to emit X pounds per year of H2S or NH3, and you have sent an operating limit of 10% below that to contain excursions, then how can you determine the marginal public health or environmental benefit of reducing emissions by a further 10%? You only know the marginal cost. In each case, it's not (usually) a simple, black-and-white issue of morality - any number we choose is going to be somewhat arbitrary and based upon trade-offs between competing interests. Those trade-offs are best decided at the political level, or possibly the corporate level (taking into account the company's reputation and the overall trend of the regulatory environment).

    Mar 14, 2014

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