API Process Safety Group
Report to CRE
Presenter: Mike Lubcyik
May 18, 2011
Seattle, WA
RP 751 – Safe Operation of HF Alkylation Units
• RP 751 Committee undertaking accelerated review/revision
of this document
• “Kick-off” conference call and 2 working meetings held to
date
• Still planning a 2-pronged approach for update process
 Review and update RP from a technical basis
 Strengthen RP in specific areas to reduce risk tolerance signals that industry is “raising the bar” for safety of HF
alkylation operations
• Revision committee includes both API and NPRA members
• Completion target is Year End 2011
2
RP 754 – Process Safety Performance Indicators
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Continued implementation leveraged through the API/NPRA
Metrics & Analysis subgroup
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Drive consistency in data collection, reporting and messaging
API Data Collection – Preliminary Results (as of 4/28/11)
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15 companies reported
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145 facilities (incl. int’l sites): 94 refineries & 51 petrochemical
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Approximately 70% U.S. refining capacity
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188 Tier 1 (160 for refineries) & 204 Tier 2 (169 for refineries)
•
Conducting quarterly conference calls; developing and
posting FAQs on API website
•
RP 754 Metrics Workshop – May 9th – Fort Worth, TX
3
RP 755 – Fatigue Risk Management Systems
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Established RP 755 Implementation Team to assist with
implementation issues
Draft charter covers areas such as:
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Share implementation challenges, lessons-learned, etc.
Provide input to API on responding to interpretation requests
Host workshops, conference calls etc. to share information to
help share implementation learnings
Gather information to be considered in next edition
“Kick-off” meeting held April 21st; next meeting June 7th
Team drafting workplan for discussion at June meeting
High level of interest - 13 companies and API & NPRA
Process Safety Group and Refining Subcommittee will
be kept apprised of activities of the Team
4
RP 756 – Safe Location of Tents & Fabric Structures
•
RP 756 Committee reworked document to address concerns
 References RP 752 where practical
 Contains simple work flow diagrams / pictures / tables
 Introduces alternative work process for TA tents
 Seek funding for Baker Risk Tent Explosion Testing (Mar – Aug)
•
Process Safety Group (PSG) agreed to postpone ballot until after test
data available (Fall 2011)
•
PSG recommends testing on tents for blast response to vapor cloud
explosions be conducted in support of new RP 756
•
Testing will provide data on response to tents to various blast loads,
identify failure modes for different tents and obtain data to estimate
vulnerability of tent occupants
•
API is awaiting testing proposal from Baker Risk while evaluating
funding alternatives
5
Facility Safety Workshop/Forum
•
Facility safety workshop held in October 2010 to establish stronger
working relationship among stakeholders & identify areas for further
constructive dialogue.
•
Topic agreed to by all stakeholders was sharing of best practices of
joint Health & Safety Committees
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Planning Committee established to develop program
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Call for presentations went out in late March
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Companies currently evaluating who to send to workshop and what
subjects they might propose for the program
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Workshop will be held on July 26 in The Woodlands, TX
6
Refinery Alkylation
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API study on “Potential Gasoline Market Supply & Cost Impacts of
Restricting HF Alkylation” revised due to underestimated impacts
•
Final draft of messages & findings related to the study to be presented
and endorsed by Refining Subcommittee
•
Study results incorporated in final draft of “white paper”
•
Draft short papers derived from “white paper” being reviewed by
Process Safety Group. Topics include:
 Considerations Associated with Alkylation Technologies
 Conversion of HF alkylation unit to Sulfuric Acid alkylation unit
 Management of Alkylation Safety & Risk
 Technology Development – Use of Solid Acid Catalyst
•
Reconvene member company lobbyists to share latest advocacy &
educational materials
7
Refinery Alkylation – Draft “General” Messages
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Legislative/regulatory activity resulting in reduction/ban of
refinery HF alkylation production could result in:
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Loss of well paying jobs due to refinery closures
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Loss of local tax revenue from property, sales and income tax
reductions
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Unnecessary increased refinery investment and annual operating
costs, threatening the economic viability of refineries
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Remaining refinery system operating at or near maximum
capacity and vulnerable to unforeseen refinery outages
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Increased the dependence on gasoline imports – a potential
national security concern
VG - 8
Refinery Alkylation – Draft Findings by Scenario
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Scenario 1 – Shutdown of all HF alkylation units
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Potential closure of nine refineries, four of those being in the Rocky
Mountain region.
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Loss of over 1/3 (35%) of the U.S. summer gasoline blendstock supply
and about 1/3 (30%) loss of gasoline and distillate supplies in the Rocky
Mountains
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Loss of almost half (45%) of the aviation gas production in the U.S. - a
significant negative effect on private and some commercial aviation
operations.
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Significant surplus of LPG would need to be transported and consumed
in alternate markets
VG - 9
Refinery Alkylation – Draft Findings by Scenario
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Scenario 2 – Mandated use of vapor suppression technology
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Potential closure of 3 refineries
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$3.3 billion would need to invested to enable remaining refineries
to use of vapor suppression technology
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$139 million of increased aggregated annual operating costs
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4 to 6 cents per gallon of gasoline - increased incremental
compliance costs
VG - 10
Refinery Alkylation – Draft Findings by Scenario
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Scenario 3 – Mandated conversion to alternate technology
(i.e., sulfuric acid alkylation)
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Potential closure of 3 refineries
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$6.3 billion would need to invested to enable remaining refineries
to switch to alternate technology
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$289 million of increased aggregated annual operating costs
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7 to 9 cents per gallon of gasoline - increased incremental
compliance costs
VG - 11
Refinery Alkylation – Draft - Other Findings
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Aggregate capital spending costs would have been higher had the study
used the CERA Downstream Capital Cost Index (DCCI) rather than the
Nelson-Farrar (NF) Construction Inflation Index
 Scenario 2: $3.5 billion vs. $3.3 billion
 Scenario 3: $7.8 billion vs. $6.3 billion
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Aggregate capital spending cost for Scenario 3 would have been higher had
the study used the higher of the 2 references for ISBL investment costs
 $6.8 billion ($8.5 billion using DCCI) vs. $6.3 billion
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For Scenario 3, additional sulfuric acid regeneration capability would be
needed to handle the increased volume of spent acid
 5 new facilities and 11 expanded facilities would be needed
 248 million ton-miles per year of increased sulfuric acid transportation
by road or rail would result; presents a safety/risk transfer issue
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For Scenario 3, acid regeneration costs will increase
 Increase in industry annual regeneration expenses: $298 million/year
(NF) or $338 million/year (DCCI)
VG - 12