Effects of Changing the Proportions of Automotive Distillate and Gasoline Produced by Petroleum Refining


EPA-460/3-74-018
JULY 1974
          EFFECTS OF CHANGING
               THE PROPORTIONS
   OF AUTOMOTIVE DISTILLATE
      AND  GASOLINE PRODUCED
       BY PETROLEUM REFINING
     U.S. ENVIRONMENTAL PROTECTION AGENCY
       Office of Air and Wante Management
     Office of Mobile Source Air Pollution Control
    Alternative Automotive Power Systems Division
          iAnn Arbor, Michigan  48105

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                                EPA-460/3-74-018
    EFFECTS  OF CHANGING
      THE PROPORTIONS
OF AUTOMOTIVE DISTILLATE
  AND GASOLINE  PRODUCED
  BY PETROLEUM REFINING
             Prepared by

   F.H. Kant, A.R. Cunningham, andM.H. Farmer

    Exxon Research and Engineering Company
              P.O. Box 45
         Linden, New Jersey 07036
          Contract No. 68-01-2112
      EPA Project Officer:  Charles E. Pax
             Prepared for

     ENVIRONMENTAL PROTECTION AGENCY
       Office of Air and Waste Management
    Office of Mobile Source Air Pollution Control
   Alternative Automotive Power Systems Division
         Ann Arbor, Michigan 48105

              July 1974

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This report is issued by the Environmental Protection Agency to report
technical data of interest to a limited number of readers.  Copies are
available free of charge to Federal employees,  current contractors and
grantees, and nonprofit organizations - as supplies permit - from the Air
Pollution Technical Information Center, Environmental Protection Agency,
Research Triangle Park, North Carolina  27711; or, for a fee, from the
National Technical Information Service, 5285 Port Royal Road, Springfield,
Virginia  22151.
This report was furnished to the U.S."Environmental Protection Agency by
Exxon Research and Engineering Company, Linden, New Jersey, in fulfillment
of Contract No. 68-01-2112 and has been reviewed and approved for publication
by the Environmental Protection Agency.  Approval does not signify that the
contents necessarily reflect  the views and policies of the agency. The material
presented in this report may be based on an extrapolation of the  "State-of-the-
art."  Each assumption must be carefully analyzed by the reader to assure that
it is acceptable for his purpose. Results and conclusions should be viewed
correspondingly.  Mention of trade names or commercial products does not
constitute endorsement or recommendation  for use.
                    Publication No. EPA-460/3-74-018

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                                FOREWORD
          This study was performed pursuant to an amendment to Contract
No. 68-01-2112:  "Feasibility Study of Alternative Fuels for Automotive
Transportation"; published as Report No.  EPA-460/3-74-009 of June 1974.

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                          TABLE OF CONTENTS
                                                                Page
1.   SUMMARY                                                       1
2.   OBJECTIVES                                                    2
3.   BASIS AND APPROACH                                            3
    3.1.  Key Assumptions                                         3
    3.2.  Co-Product Considerations                               3
    3.3.  Approach                                                3
4.   RESULTS AND DISCUSSION OF REFINING CALCULATIONS               5
    4.1.  Parametric Cases                                        5
    4.2.  Results of Refining Calculations                        5
    4.3.  Discussion of Results                                  11
    4.4.  Additional Qualifications                              12
    4.5.  Discussion of Conversion Processes                     14
    4.6.  Automotive Wide-Cut                                    15
5.   POSSIBLE EXTERNAL IMPLICATIONS                               18
    5.1.  Heavy Ends Considerations                              18
    5.2.  Naphtha as an Industrial Fuel                          18
    5.3.  Syncrudes as Fuel Oils                                 19
    5.4.  Chemical Feedstock Considerations                      20
    5.5.  Case Study and "No Surprise" Scenario for 1990         21
6.   CONCLUSIONS                                                  27
7.   REFERENCES                                                   29

                         APPENDICES
1.   Discussion of U.S. Petroleum Refining in 1974                30
2.   Basis for Petroleum Refining Calculations                    43

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                                 1.   SUMMARY
          This study examines the effects of changing the proportions of auto-
motive distillate fuel and gasoline produced by refining petroleum.  The study
applies quantitatively to a U.S. petroleum refinery that would come on stream
in the 1990-2000 time-frame.

          Currently, U.S. petroleum refineries emphasize the production of gaso-
line relative to automotive distillate fuel.  The current ratio is about 12:1
on a volume basis or about 10:1 on a BTU basis.  Refinery process calculations
indicate that significant savings are theoretically possible if current practice
were able to shift towards equal quantities of automotive distillate and gasoline.
The maximum theoretical saving is about 2% of the crude oil fed to the refinery. There
would also be investment and operating cost savings in new refineries designed
specifically to produce equal quantities of the two types of automotive fuel:

                            	Range of Maximum Saving	
  Cost of automotive fuel   10 to 13 cents per million BTU of automotive fuel
                            1.2 to 1.5 cents per gallon
  Investment                $83 to $100 per million BTU of calendar day
                            of capacity to produce automotive fuels


          In terms of the current delivered cost of imported crude oil, the
maximum theoretical saving in crude oil (as measured by a lower requirement for
refinery process energy) is about $1 billion per year.  However, the extent to
which such a future saving may be possible is not established by this study.   The
external impacts of major changes in gasoline/distillate ratio need to be
analyzed, and the incentive for such an analysis appears substantial.

          One significant external impact is expected to be on the availability
of petrochemical feedstocks.  It would be unwise to become committed to a
major change in refining practice without first evaluating the possible impacts
on the chemical industry.   This, however,  is not the only industry that could
be affected.  Almost all users of fuel oils create a competitive demand for
petroleum that, in this study, is converted preferentially to automotive
distillate fuel.

          Additionally, the "optimum" (internal to the refining of average
quality conventional crude oil) of producing approximately equal quantities of
automotive distillate and gasoline is not expected to apply quantitatively  to
the processing of syncrudes derived from coal or oil shale.  The gasoline/
automotive distillate ratio for minimum investment and process energy  consumption
is expected to be closer to 2:1 than to the 1:1 ratio calculated for conventional
crude oil.
                                      - 1 -

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                               2.  OBJECTIVES
          Several automotive engines, under study by EPA and others,  are
capable of using distillate fuel rather than gasoline.  The engine types
include the diesel, the automotive gas turbine, the Stirling, and certain of
the stratified change designs.  The objective is to develop engines with
improved emission characteristics and fuel economy.  There would be a further
advantage if the production of the requisite amount of automotive distillate
fuel from petroleum and/or synthetic crudes consumes less energy than that
needed to produce gasoline.

          EPA is interested in learning whether the shift to increased
distillate production, associated with the widespread use of new engines
requiring distillate fuel, would:

          (1)  result in significant improvements in resource utilization;

          (2)  cause other impacts of significance (positive or negative).

          At the level of effort agreed upon, the study cannot answer all the
questions that it raises.  In such cases, the objective is to provide suffic-
ient information to allow EPA to decide whether additional work would be
justified.

          The time-frame for the study is 1990-2000.  This is the period dur-
ing which major market penetration of a new automotive power plant could
occur if it were introduced in the early 1980's and then developed according
to a typical market penetration model
                                     -  2  -

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                           3.   BASIS AND APPROACH
3.1.  Key Assumptions

           (1)  If a new automotive power plant requiring distillate fuel were
                to be introduced in the early 1980's,  major market penetration
                could occur in the 1990-2000 time-frame.

           (2)  Post-1980,  petroleum-derived products  may be supplemented to
                an increasing extent with comparable products derived from
                coal and oil shale.

           (3)  By the 1990's, the use of oil for base load power generation
                will be declining rapidly, thereby increasing the theoretical
                availability of liquid fuels to the transportation sector.

3.2.  Co-product Considerations

                Distillate fuels and gasoline are co-products of petroleum
      refining.  If the yield structure is changed in order to make more
      distillate and less gasoline, multiple changes in refinery processing
      may be needed.  This  will affect the amount of energy used in such pro-
      cessing for a given amount of product output.  Thus, changing the
      product slate will change the crude oil requirement.  Stated another way,
      for a given quantity of crude oil input there will  be different total
      quantities of products output depending on exactly  what is produced,
      i.e., on the relative proportions of the various products.

3.3.  Approach

                An optimum ratio of gasoline to middle distillate does not
      exist per se.  Rather, the ratio should be viewed in the context of
      energy supply and demand as a whole because:

           (1)  Petroleum refineries must meet the demand for many types of
                petroleum products, not just automotive fuels.  Such require-
                ments limit the flexibility with which the gasoline/distillate
                ratio may be varied, and also determine how much of the
                distillate produced is available for automotive use.

           (2)  Other forms of energy can substitute for  petroleum products
                in many applications, thereby affecting the constraints
                referred to in (1).

                Thus, in the present limited study, a  dual approach is used:

           (1)  A quantitative examination of how petroleum refining opera-
                tions would be affected by substantial changes in gasoline/
                distillate  ratio.
                                     -  3  -

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     (2)  A qualitative examination of the possible impacts, external
          to the refinery, of different ratios.

          For the purpose of (1), it is not necessary to know the size
of the future vehicle population nor what the, total demand for automo-
tive fuels will be.  Instead, the effects of changing the gasoline/
distillate ratio may be shown relative to a base case.  This approach
establishes what may be technically feasible in a typical refinery.
Also, it determines the hypothetical ratio that would minimize refining
investment and/or consumption of process energy.  However, the approach
does not reveal whether the hypothetical ratio would be practical in
view of the petroleum and energy situation in total.  Only by a full
examination of (2) can it be determined whether the calculated ratio is
a true optimum or merely an unrealistic suboptimization of refinery
processing—unrealistic because the externalities would prevent
refineries from being so operated.

          The report is structured so that the results of the calcula-
tions concerned with (1) are presented first.  However, the reader
should bear in mind that the implications of the refinery processing
calculations are qualified by the externalities discussed subsequently.

          Those wishing to approach the matter from the vantage point
of current domestic refining operations may wish to read Appendix 1
before proceeding to Section 4.
                              - 4 -

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            4.  RESULTS AND DISCUSSION OF REFINING CALCULATIONS
4.1.  Parametric Cases

                Two sets of parametric calculations were made:

           (1)  one base case involved an 8% yield of heavy fuel oil;

           (2)  the other base case involved a 22% yield of heavy fuel oil.

                These cases simulate (1) the current level of fuel oil pro-
      duction by domestic refineries, and (2) the current level of domestic
      fuel oil consumption as a percentage of total petroleum consumption,
      after taking petroleum imports into consideration.

                Starting from each base case, parametric calculations were
      made:

           (1)  The output of automotive distillate fuel was increased, while
                the output of motor gasoline was correspondingly reduced.

           (2)  The BTU's in the total automotive fuel product (distillate
                plus gasoline) were kept constant.

           (3)  The output of all other products was kept constant on a BTU
                basis (see Table 1).

           (4)  The crude oil charge*was allowed to vary in order to reflect
                any conservation of resources (as measured by savings in
                energy consumed by the refining processes) due to the changes
                in the relative production of automotive distillate and
                gasoline.

                Details of the refining processes used and the manufacturing
      specifications for each product are given in Appendix 2.   For each
      parametric case, a linear program was used to calculate the minimum cost
      of making the required product yields in a refinery with a nominal
      crude oil charging capacity of 100 MB/D (100,000 barrels per day).

4.2.  Results of Refining Calculations

                The effects of increasing automotive distillate fuel produc-
      tion at the expense of motor gasoline were measured in terms of changes
      in:

           - process energy consumption;

           - cost of automotive fuels;

           - refining investment.
* The crude oil fed to the refinery.
                                    - 5 -

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                         TABLE 1
              Product Yields in Base Cases
• Low Fuel Oil Case (8%)

    LPG
    Motor gasoline
    Aviation turbo fuel
    Automotive dist.  fuel
    Other middle dist.
    Fuel oil
   Product Percentages
BTU Basis     Vol. Basis*
    2.2
   54.3
    9-5,
    6.1*
   19.7
    8.2
    LPG
    Motor gasoline
    Aviation turbo fuel
    Automotive dist. fuel
    Other middle dist.
    Fuel oil
 1.9
46.0
 8.0,
 5.1*
16.7
22.3
 3.2
57.0
 9.2
 5.6
17.9
 7.2
• High Fuel Oil Case (22%)    BTU Basis     Vol. Basis**
                  2.8
                   ,1
                   ,9
49.
 7.
 4.8
15.4
20.0
 * These yields correspond to those for fuel products
   manufactured by domestic refineries in 1972.(2)

** The higher fuel oil case takes account of imports of
   heavy fuel oil, treating such imports as if they were
   produced by domestic refineries.  The yields oif the
   other fuel products were prorated downwardly from those
   in the low fuel oil case in order to allow for the
   higher percentage of fuel oil assumed in the aggregate
   refinery output.

   In each base case, the yield of automotive distillate
   fuel is 10% (on BTU basis) of the total output of
   automotive fuel (i.e., automotive distillate plus
   gasoline).  This simulates:current production by
   domestic refineries (low fuel oil case) and current
   supply including imports (high fuel oil case).
                                          EPA-460/3-74-018
                          - 6 -

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                The changes, relative to the two base cases (8% and 22%
      yield of heavy fuel oil), are reported in terms of savings in Table 2.
      The negative values in the last column signify that the calculated
      energy consumption, automotive fuel cost, or investment was higher than
      in the pertinent base case.  It will be seen that all of the other con-
      ditions gave savings relative to the base cases.  For ease of compari-
      son, the data from Table 2 are plotted in Figures 1 and 2.  The principal
      points to be noted are:

           (1)  In both the low and high fuel oil cases, maximum savings were
                obtained when the amount of automotive distillate produced
                was approximately half the total automotive fuel output (on a
                BTU basis).

           (2)  Beyond a 55/45 ratio of automotive distillate/gasoline,
                process energy consumption, automotive fuel cost, and invest-
                ment all increased.

           (3)  At about a 70/30 ratio, energy consumption and costs approxi-
                mated the base case values.

           (4)  Beyond the 70/30 automotive distillate/gasoline ratio, energy
                consumption and costs increased sharply (i.e., the rate of
                increase accelerated).  Slightly beyond a 73/27 ratio, the
                computer calculations became "infeasible," thereby implying
                that the physical maximum percentage of automotive distillate
                fuel had been exceeded.*

           (5)  For both levels of fuel oil yield, the maximum savings in
                process energy were about 270 relative to the respective base
                cases.  The absolute level of process energy consumption was
                higher in the low fuel oil yield cases because a higher level
                of conversion processing is involved.

           (6)  The 270 maximum saving in process energy is equivalent to a
                27, saving in crude oil.  However, if related to the total
                production of automotive fuel, the percentage would be almost
                doubled (because  the total automotive fuel output was 60%
                and 51%, respectively, of the total product output of the
                refinery).  It is reasonable to attribute the energy saving
                entirely to automotive fuel because the yields of all other
                products were kept constant.
* In a completely artificial way the percentage of automotive distillate
  fuel could be 100% by the simple, but unconscionable, expedient of
  destroying gasoline product by flaring naphtha.  The computer program did
  not permit this to be done, i.e., purposeless consumption of energy was
  suppressed.
                                     - 7 -

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TABLE 2

Summary of Effects of Changing Automotive Distillate Fuel
and Gasoline Production at Two Levels of Fuel Oil Yield
Automotive Distillate as
% of Total Automotive Fuel*
10 JL9 _28. _32 _46 55
• Process Energy Consumption
as % of Total Energy Input
Low fuel oil yield 9.1 8.8 7.9 7.4 7.2 7.3
High " " " 7.6 7.2 6.7 6.3 5.8 5.6
% Saving Relative to Base Case
Low fuel oil yield Base 0.3 1.2 1.7 1.9 1.8
High " " " Base 0.4 0.9 1.3 1.8 2.0
• Cost Savings in Cents /Million
BTU of Total Automotive Fuel
Product**
Low fuel oil yield Base 5 9 12 13 12 ,,
.High. " " " Base 36 8 10 1000
• Investment Savings in Dollars/
Million BTU Per Calendar Day
of Total Automotive Fuel
Product
' Low fuel oil yield Base 22 48 69 83 83
High " " " Base 27 53 78 99 108
, , equivalent to 1.5 cents/gallon of total automotive fuel
W ' 'n "12 " " " " " "
* n« *T,T h-in, ,- „. ",
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FIGURE 1
10
PROCESS ENERGY CONSUMPTION
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ra

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o
•H
J-> JJ
CL 3
6 0.
D C
en n
C
O >-,
O 00
U
^ 0)
60 C
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111
C •-!
H to
AJ
en o
w H
(U
o M-I
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+2
+1
00
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FIGURE 2
+15
COST AND INVESTMENT SAVINGS
+10
H O
CO 3
73
C O
O >J
•r-l PL,
O M-l
O O
Low Fuel Oil
Yield
+5
-5
20 30 40 50 60 70

Automotive Distillate as % of Total Automotive Fuel (BTU Basis)

EPA-460/3-74-018

- 10 -
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(7) Maximum cost savings were 13 cents per million BTU of total
automotive fuel product in the low fuel oil yield case, and
10 cents per million BTU relative to the high fuel oil yield
base case.* These savings approximate 1.5 and 1.3 cents/gal.,
respectively.

(8) Maximum investment savings were $83 and $108, respectively,
per million BTU of daily capacity for producing automotive
fuels.*

(9) The condition under which maximum savings were obtained
corresponds to the point at which all atmospheric gas oil**
is backed out of the feed to catalytic cracking. Thus, the
optimum, but not the maximum, yield of automotive distillate
occurs when none of the middle distillate occurring naturally
in the crude oil is cracked. The maximum yield of automotive
distillate occurs with considerable hydrocracking of vacuum
gas oil.*** The respective cracking processes are discussed
further in Section 4.5.

The reader is cautioned that the savings calculated to be
obtainable by moving in the direction of equal quantities of automotive
distillate and gasoline

(1) do not establish that the full extent of the move will be
feasible—because of possible external constraints, such as
those discussed in Section 5.

(2) do not establish that such a move is possible now, with the mix
of domestic refining capacity currently in place.

4.3. Discussion of Results