With A Decarbonized Future Bearing Down, Refineries Look At The Nitty-Gritty Of The Transition – Forbes


As the Biden administration makes good on its promises to heat up the conversation on climate change, owners of refineries and chemical plants are zeroing in on ways to cut their use of carbon-emitting fuels. 

Refineries and other industrial plants are widely recognized as significant contributors to carbon emissions: industrial processes accounted for 27% of all carbon emissions in 2019, according to data from the U.S. Environmental Protection Agency.

The challenge is that industrial processes require massive amounts of energy for the transformative processes that make gasoline or cement. Many of these processes require really high temperatures – sometimes 1000 degrees or more; and heating is responsible for more than half of carbon emissions. The remaining emissions mostly come from the electricity required to run motors and other equipment, and from carbon dioxide produced as a byproduct in in some of the processes.

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There are several reasons oil refining and chemical companies in the US are thinking hard about their carbon footprint.

The first is the growing acknowledgement by the vast majority of the public that climate change exists and is a result of human behavior.

An added incentive is the very real possibility that carbon pricing might be adopted by the Biden administration, given worldwide trends.

And then there is the growing investor and shareholder interest in how companies are making the transition.

“Independent refiners are absolutely feeling the same pressure and the same premise of the energy transition as majors like BP and Shell,” said Pavel Molchanov, an energy analyst at Raymond James RJF . “The independent refiners are also subject to shareholder pressure to decarbonize.”

So, what are the options for refineries hoping to lessen their carbon contribution, other than abandoning the sector?

There’s a number of them, according to Alan Rossiter, the executive director, external relations and educational program development for UH Energy at the University of Houston. Rossiter spent much of his career as a chemical engineer advising refineries and chemical plants on how to become more energy efficient.

Energy efficiency is great place to start decarbonization, as it not only reduces greenhouse gas emissions, but also brings in cost savings from reduced energy consumption, Rossiter explained. And there is a range of improvements plants can make – for example, operational improvements, better maintenance, and facility improvements. The first two options are relatively cheap for plants, but facility improvements typically require additions and upgrades, or even completely new plants, which can be extremely costly.

“The most common applications of energy efficiency in a refinery or a chemical plant are around recovering and reusing heat,” Rossiter explained. “This means recovering heat that would otherwise be wasted.”

As a result, improvements like upgrading an inefficient boiler system can reduce the need to burn fuel. Yet while these improvements are significant, a typical boiler upgrade, for example, only reduces energy demand by two to three percent. More can be achieved by major process revamps, but even these have limitations.

“There is just so far you can go with energy efficiency,” Rossiter said. “These plants make chemical transformations and separations that require a certain minimum amount of energy, and well before you get to these limits, you find that the equipment gets very expensive and you run into practical problems.”

Using electricity to replace natural gas or coal-fired heating is another option for plants. However, the electricity must come from low-carbon or carbon-free sources, or electrification would simply move the plants’ emissions to power generation facilities.

“Electrification can reduce your steam demand, therefore reducing the cost of environmental upgrades,” said James Turner, an executive director of process technology for engineering company Fluor FLR FLR , in a recent webinar. “Burning less fuel already means that you’ll make less CO2, which is a strategic driver for many companies.”

One of the biggest hurdles in using electricity to replace fossil fuels in industry will be the delivery of power to the industries that need it. A multibillion-dollar investment in power transmission and distribution lines will be needed, along with huge batteries. 

Furthermore, “Inside the plant you’ll need a whole lot of investment for new equipment to electrify processes that currently use natural gas or other fossil fuels for heating,” Rossiter said.

In theory, about 70% of the services that currently burn fuel in these plants could use electricity to replace it. But for the oil refiners, the biggest challenge will be the costs of revamping the equipment.

Using hydrogen as fuel is another interesting option for refineries under investigation.

“It is a virtually unlimited store of energy, and it is available everywhere. It is contained in water,” Rossiter said. “However, it takes much more energy to convert it into a fuel than you get when you burn it. This is a major challenge.”

The use of hydrogen in cars is already popular in California, which now has more than 40 hydrogen fueling stations. And hydrogen is also being used as a fuel in refineries and chemical plants – but only in small amounts, mixed with natural gas. 

The leap to using pure hydrogen as a fuel is still under development, with companies like Shell and Dow Chemical studying the challenges involved in a transition from natural gas to hydrogen.

“If you want to burn it, you can, but you might have to do a lot of redesign on the furnace,” Rossiter said. “Hydrogen is very corrosive, and damage can occur to conventional materials if you expose them to hydrogen in high concentrations.”

Biofuels are yet another option. And while used cooking oil and algae tend to capture the public’s imagination when discussing biofuels, synthetic natural gas is actually a better option for decarbonizing refineries and chemical plants, as it can directly replace natural gas. This is a big advantage, as plants can use their existing equipment pretty much as is, greatly lowering the investment bar.

Yet biofuels face production challenges, as they take precious water and land resources as well as additional energy to produce.

All of the options involve a balancing act. It’s all part of the transition, while keeping an eye on containing the costs to ensure that the business itself remains competitive.


Emily Pickrell is a veteran energy reporter, with more than 12 years of experience covering everything from oil fields to industrial water policy to the latest on Mexican climate change laws. Emily has reported on energy issues from around the U.S., Mexico and the United Kingdom. Prior to journalism, Emily worked as a policy analyst for the U.S. Government Accountability Office and as an auditor for the international aid organization, CARE. 

UH Energy is the University of Houston’s hub for energy education, research and technology incubation, working to shape the energy future and forge new business approaches in the energy industry.

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