API Process Safety Group Report by LMwgG8

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									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
•   Continued implementation leveraged through the API/NPRA
    Metrics & Analysis subgroup
       Drive consistency in data collection, reporting and messaging

•   API Data Collection – Preliminary Results (as of 4/28/11)
       15 companies reported

       145 facilities (incl. int’l sites): 94 refineries & 51 petrochemical

       Approximately 70% U.S. refining capacity

       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
•   Established RP 755 Implementation Team to assist with
    implementation issues
•   Draft charter covers areas such as:
       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


•   Planning Committee established to develop program


•   Call for presentations went out in late March


•   Companies currently evaluating who to send to workshop and what
    subjects they might propose for the program


•   Workshop will be held on July 26 in The Woodlands, TX
                                                                       6
                     Refinery Alkylation
•   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

•   Legislative/regulatory activity resulting in reduction/ban of
    refinery HF alkylation production could result in:

       Loss of well paying jobs due to refinery closures

       Loss of local tax revenue from property, sales and income tax
        reductions

       Unnecessary increased refinery investment and annual operating
        costs, threatening the economic viability of refineries

       Remaining refinery system operating at or near maximum
        capacity and vulnerable to unforeseen refinery outages

       Increased the dependence on gasoline imports – a potential
        national security concern

                                                                     VG - 8
Refinery Alkylation – Draft Findings by Scenario

•   Scenario 1 – Shutdown of all HF alkylation units

       Potential closure of nine refineries, four of those being in the Rocky
        Mountain region.

       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

       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.

       Significant surplus of LPG would need to be transported and consumed
        in alternate markets



                                                                                 VG - 9
    Refinery Alkylation – Draft Findings by Scenario

•   Scenario 2 – Mandated use of vapor suppression technology

       Potential closure of 3 refineries

       $3.3 billion would need to invested to enable remaining refineries
        to use of vapor suppression technology

       $139 million of increased aggregated annual operating costs

       4 to 6 cents per gallon of gasoline - increased incremental
        compliance costs




                                                                      VG - 10
    Refinery Alkylation – Draft Findings by Scenario

•   Scenario 3 – Mandated conversion to alternate technology
    (i.e., sulfuric acid alkylation)

       Potential closure of 3 refineries

       $6.3 billion would need to invested to enable remaining refineries
        to switch to alternate technology

       $289 million of increased aggregated annual operating costs

       7 to 9 cents per gallon of gasoline - increased incremental
        compliance costs




                                                                      VG - 11
    Refinery Alkylation – Draft - Other Findings
•   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


•   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


•   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

•   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

								
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