TY - JOUR
T1 - Economic analysis of the benefits to petroleum refiners for low carbon boosted spark ignition biofuels
AU - Carlson, Nicholas A.
AU - Singh, Avantika
AU - Talmadge, Michael S.
AU - Jiang, Yuan
AU - Zaimes, George G.
AU - Li, Shuyun
AU - Hawkins, Troy R.
AU - Sittler, Lauren
AU - Brooker, Aaron
AU - Gaspar, Daniel J.
AU - McCormick, Robert L.
AU - Ramirez-Corredores, M. M.
N1 - Funding Information:
The authors gratefully acknowledge funding support from the Co-Optimization of Fuels & Engines (Co-Optima) project sponsored by the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, Bioenergy Technologies and Vehicle Technologies Offices. This work was authored in part by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. The views expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S. Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S. Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for U.S. Government purposes. Additionally, we would like to acknowledge Amie Sluiter for providing thoughtful comments in her review of this work.
Funding Information:
The authors gratefully acknowledge funding support from the Co-Optimization of Fuels & Engines (Co-Optima) project sponsored by the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, Bioenergy Technologies and Vehicle Technologies Offices. This work was authored in part by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. The views expressed in the article do not necessarily represent the views of the DOE or the U.S. Government. The U.S. Government retains and the publisher, by accepting the article for publication, acknowledges that the U.S. Government retains a nonexclusive, paid-up, irrevocable, worldwide license to publish or reproduce the published form of this work, or allow others to do so, for U.S. Government purposes.
Publisher Copyright:
© 2022 The Authors
PY - 2023/2/15
Y1 - 2023/2/15
N2 - A refinery modeling framework is developed to estimate the benefits of blending high-quality biofuels directly with refinery gasoline components to produce premium grade fuels. The results offer a change in paradigm - instead of biofuels being competitors to fossil fuels, biofuels can add value to refineries’ product slates, because of their favorable properties. This potential value can be characterized by calculating the breakeven value (BEV), as defined below. The proposed modeling framework incorporates extensive data from (1) projected product demands over the next few decades, (2) crude oil and refinery products pricing, and (3) fuel specifications. The complete refinery models serve as a basis for assessing the value of biofuels, assuming profitability remains the same for representative petroleum refinery configurations. Resulting valuations varied widely with BEVs observed between $10-$120/bbl given the considered blending levels and crude prices. Further, BEV was correlated with the fuel octane ratings such as octane numbers (research, RON and motor octane numbers, MON) and both antiknock index (AKI, average of RON and MON) and sensitivity (S, difference between RON and MON), with a slightly higher correlation with the sensitivity. However, the expected decrease in gasoline demand for the upcoming years could negatively impact biofuels demand and value, in a business-as-usual scenario. The analysis also showed high valuations in smaller refineries since they can enhance the capabilities for producing specialty, high-value fuels/products, and introduce high octane-barrels into otherwise constrained blending operations. Additional implications towards refiners include opportunities to rebalance operations, access to high-value fuel markets, and synchronization with broader transportation industry trends. Furthermore, results indicate the value of Co-Optima boosted spark ignition (BSI) efficiency gains can extend to refiners to incentivize decarbonization and diversified feedstock production.
AB - A refinery modeling framework is developed to estimate the benefits of blending high-quality biofuels directly with refinery gasoline components to produce premium grade fuels. The results offer a change in paradigm - instead of biofuels being competitors to fossil fuels, biofuels can add value to refineries’ product slates, because of their favorable properties. This potential value can be characterized by calculating the breakeven value (BEV), as defined below. The proposed modeling framework incorporates extensive data from (1) projected product demands over the next few decades, (2) crude oil and refinery products pricing, and (3) fuel specifications. The complete refinery models serve as a basis for assessing the value of biofuels, assuming profitability remains the same for representative petroleum refinery configurations. Resulting valuations varied widely with BEVs observed between $10-$120/bbl given the considered blending levels and crude prices. Further, BEV was correlated with the fuel octane ratings such as octane numbers (research, RON and motor octane numbers, MON) and both antiknock index (AKI, average of RON and MON) and sensitivity (S, difference between RON and MON), with a slightly higher correlation with the sensitivity. However, the expected decrease in gasoline demand for the upcoming years could negatively impact biofuels demand and value, in a business-as-usual scenario. The analysis also showed high valuations in smaller refineries since they can enhance the capabilities for producing specialty, high-value fuels/products, and introduce high octane-barrels into otherwise constrained blending operations. Additional implications towards refiners include opportunities to rebalance operations, access to high-value fuel markets, and synchronization with broader transportation industry trends. Furthermore, results indicate the value of Co-Optima boosted spark ignition (BSI) efficiency gains can extend to refiners to incentivize decarbonization and diversified feedstock production.
KW - Biofuels
KW - Boosted spark ignition
KW - Economic value
KW - Low carbon
KW - Method development
KW - Refinery modeling
UR - https://www.scopus.com/pages/publications/85141468099
UR - https://www.mendeley.com/catalogue/9a0f1521-004e-3029-8f5f-cbd789f28386/
U2 - 10.1016/j.fuel.2022.126183
DO - 10.1016/j.fuel.2022.126183
M3 - Article
AN - SCOPUS:85141468099
SN - 0016-2361
VL - 334
JO - Fuel
JF - Fuel
M1 - 126183
ER -