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FOR IMMEDIATE RELEASE
January 2010

Future Roles of FCC and Hydroprocessing Units in Modern Refineries 

Technical Solutions to Economically Satisfy Ultra-clean Fuel Demand and GHG Emissions Concerns while Processing Heavy Crudes and Renewable Feedstocks

We are announcing a very timely multi-client strategic report that presents in-depth and insightful analyses of technology advances and economic assessments of solutions to (1) secure steady supplies of ultra-clean transportation fuels; (2) increase the use of heavy crudes and feedstocks derived from biomass, algae lipids, vegetable oils, and animal fats; (3) reduce emissions of greenhouse gases; and (4) raise productivity and improve energy efficiency in the three key processing units—fluid catalytic cracking (FCC), hydrotreating, and hydrocracking—in the future.

For the oil industry, 2009 was filled with economic and environmental challenges that left some refiners struggling to stay profitable by operational  and financial adjustments. The two biggest influential factors were the economic recession in most parts of the world since mid-2008 and the concern over climate change and GHG emissions. The much-hyped and intensely-debated UN's Framework Convention on Climate Change (UNFCCCC) in Copenhagen, Denmark from Dec 7-18 yields more uncertainties for the global energy industry as a whole. The coming years will be tough for refiners in developed countries because of weak consumption, mandated higher vehicle standards, increased biofuel blending, and over-investment in heavy oil processing that gives dismal return due to poor margins and carbon footprint concerns. These adverse impacts will also spread to the refining industry in the fast growing Asia, Latin America and Middle East as the international fuel market is well integrated.

A fundamental question is, "Will a refiner still be in business in the next ten years?" The next decade represents a watershed era that will bring about a drastic shift in the refining industry. Current demand destruction is a temporary threat in comparison to the uncertainties and potentially earnings-damaging environmental mandates and market erosion of the future. Refiners must act now by reconfiguring their FCC, hydrotreating, and hydrocracking operations in order to remain profitable and to survive twin profit margin threats. In the first threat, revenues will take a blow caused by biofuels mandates and weak product demand as the world takes time to emerge from the economic crisis. In the second, environmental and regulatory compliance expenses for ultra-clean fuels production, carbon cap and trade (or carbon tax), and possibly carbon capture and sequstration are beginning to pile up.

This 1600+ page Report will answer the ultimate question of how to allocate resources in future operations based on feed availability, product values, operating costs, financial capability, and carbon footprint. We present well-defined strategies as benchmarking tools to allow refiners and supplier companies to turn urgent concerns over the supply of ultra-clean fuels and climate change into business opportunities.

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