Final Presentation

Hello All,

Here is my final presentation.  If any edits are made to it the file will automatically update to include them.  Thank you for reading the blog over the past weeks and I hope I was able to educate you about the optimization of oil refineries.

Presentation Link

Who Does What?

Hello,

So this week is going to be a bit different from the past few weeks.  Rather than focus on the actual optimization of oil refineries, I feel it is important to have a post on the industry as a whole, and more specifically on Fluor’s position within it.  Some of this will be slightly similar to what I have put in in other posts, but those posts never focused on industry.  For this reason I hope to paint a clearer picture than I have regarding this topic.

So where does this fit into my research of oil refinery optimization?  Well, outside of expanding upon the company I worked at, it also will help to show how the industry operates.

Within the oil refinement industry (or at least the part of it that matters to this project) there are three main groups of companies.  These include oil companies, licensors, and project management companies (Fluor falls into this group).  What do each of these groups do?

Let’s start with the oil companies.  As discussed in a previous post, their main job is to make money.  Opinions on that aside, they have a financial obligation to their stockholders to do so, and by not working to maximize profits they would risk the company moving towards failure.  Luckily for me, this in many ways is what drives optimization of oil refineries in the first place.  

Onto the licensors.  These guys generally have a product or technology that they have created that they then license out to be used in an oil refinery.  Tough to figure out where their name comes from huh?  They do contribute more to the process than just licensing though.  These companies also consult as to how their technology can best be implemented in the refinery.  I have thoughts that this also helps them to make sure their product is in the best place to succeed, thereby making their company look better, but that is just a thought and is by no way confirmed (thought it was interesting to share though).

And the most important group to the project is the project managers (definitely not biased here).  Fluor is in charge of planning and managing the project as a whole.  They have to decide how to revamp and/or design a refinery based on the agreed to budget.  Fluor will also bring in the licensors they need for the necessary technology to achieve the desired optimization.  This does mean that Fluor does not have the ability to make the final decision though, as the oil refinery decides how much money they are ultimately willing to spend as they are the client Fluor is working for.

Anyways that is the general overview of the players within the oil refinery industry, and it was one that was fascinating and exciting to work within.  Thanks for reading.

Stephen

Raising The Productivity Anywhere Possible

Hello,

Before I get started, I’m going to give a fair warning.  This week may be a bit more on the technical side.  I’ll try to stop and explain as I go, but I may overlook something, and for that I say sorry in advance.   Well, let’s get into it.

This week we will discuss the optimization of a more specific part of the process allowing us to gain insight into just HOW much goes into oil refinery optimization (from the very general layout to the extremely specific).  For that we will be using the catalyst in the fluid catalytic cracker (FCC) as an example.  Don’t worry, I’m already taking a step back to explain.  So the FCC is a unit that is very important to an oil refinery.  It is one of the more productive units that is used early on in the refinery process to crack hydrocarbons to create gasoline.  To help heat the oil the FCC unit uses a catalyst (hence fluid catalytic cracker).  

Cool now that we got that explanation out of the way, what is there to optimize here.  Let’s look at the catalyst itself.  The catalyst has been heavily optimized, looking for the best compound to use to get the best production from the unit.  However, optimization goes further.  At Fluor I learned that they have looked further here than most anyone else.  Currently, there is a tray sitting over the catalyst that distributes the oil down onto it, and the tray sits on a ring on the unit’s wall.  This means that some of the catalyst lays below this ring.  How much? Up to 20% to be exact.  The reason this is important is that the current system of distributing the oil has an extremely difficult time of distributing the oil unto this 20%.  As you would expect, this causes a loss in productivity, and is one of the many reasons (more possibly overlooked even now) that the actual productivity is lower than on paper.  

So how did Fluor look to solve this problem?  They developed a new way distribute the oil, allowing it to spread out more.  This means that the oil is able to reach the edges more as well as making the catalyst in the middle areas do less work.  Overall, this leads to a large productivity increase.  I don’t want to go into much detail as to how they do this to make sure I don’t share anything I shouldn’t.  Anyways that is what I have for this week.  Next week I’ll have another example and will go into the importance of these specific examples of optimization.

Stephen

Clearing the Smog Around Oil Refineries and the Environment

Hello again,

So this week will be on how the oil industry deals with environmental regulation.  However, before I get into that, I’ll take a second to lay out what the next few weeks will be on.  After this week, the general overarching topics will be covered, and I will go into specific examples of optimization on a very detailed level to gain insight into just how far optimization goes with oil refineries.  

Anyways, back to environmental concerns and oil refineries.  So, first off, optimization of oil refineries and environmental regulations don’t exactly go hand in hand.  This is because generally it takes further refining of the product to make it more environmentally friendly, and thus more costly to produce it.  For this reason, unless it is mandated by law, oil refineries tend to work to meet specification without going much further in order to stay competitive.  There are some refineries that take a slight hit in the profits to lower their environmental impact, but this is mostly done by smaller private companies (as opposed to publicly traded companies, a.k.a companies traded in the stock market) if at all.  The reason for this is kinda outside my scope so I’ll keep the explanation brief: If a publicly traded company made that trade for environment over profits, it's likely that their reported net earnings would decrease.  The risk is that if the decrease is large enough, the company would potentially have their stockholders sell their shares, lowering the company's value.  Basically, not good.

This is where governmental regulation comes into play.  The government sets certain specifications to meet in order to sell oil in the given state (usually done on a state level within the United States), and the oil industry then adjusts to meet them.  By doing so, the government effectively increases the price of refining oil and thus increasing the price of gas, but helps the environment in the process.  Not a bad trade off.  

So what does the government regulate to help the environment exactly?  The answer is sulfur, and to be honest I was a bit surprised as it feels that the sulfur levels are rarely mentioned.  And this regulation has helped the environment a lot.  Sulfur is one of the main contaminants in oil, and lowering it greatly aids air quality.  Unsurprisingly, California generally leads the charge in lower sulfur, followed by the rest of the United States usually, and then the rest of the world (not a hard set rule, but generally true).  Over the last few decades, sulfur levels have decreased from a few hundred parts per million, down to the 10-15 ppm range.  This staggering decrease has helped, however the government on both a federal and state levels have continued to lower allowable sulfur levels, especially now focusing on diesel fuel (as that is currently higher).  Anyways, that's what I going on as far as environmental concerns and oil refineries.  Thanks for reading!

Stephen

Trying Not To Use Energy While Making Energy

Hello,

This post will be on the optimization of energy within an oil refinery.  In many ways, energy optimization is a subset of economic optimization because if you save energy you save money.  However, I feel that it is important to set it aside because it is one area of refineries that has waste in some form (nor is it possible to completely prevent really).

So first things first, what do I mean by energy optimization?  In refineries, it takes energy to heat and cool the products for the distillation process.  Furthermore, there are compressors that require energy to pump the fluids and even light sources that require power amongst other parts of the refinery that require energy.  The optimization comes into play through figuring out our to best layout the refinery to use the least amount of energy as possible.

Energy optimization in refineries starts with heat.  To gain some perspective at the heat differences, some substances are heated to well over 1000 degrees fahrenheit while others are cooled to a good amount under 0 degrees.  As you would expect, the heating and cooling of these substances takes a lot of energy.  Also, for distillation to work, substances have to be heated to their boiling point, then condensed back into their liquid state.  This leads into the waste in energy.  When a heated substance is cooled, there is a waste of energy in the form of heat.  To combat this refineries use heat exchangers.

A heat exchanger allows a heated substance to heat a different substance, thereby using the thermal energy of the first substance.  It is important to note that the heat exchanger does not mix the two substances (that would be counter productive…) but rather only allows heat to be transferred between the two.  Heat exchangers are more efficient when they limit the amount of heat lost to the environment.

Another important area for refineries is that of pumping the fluids from unit to unit.  Compressors are the main energy drain here and are required when pumping a substance from low to high pressure.  This means that the best way to optimize energy in this regard is to lay out the refinery in such a way that limits the need for compressors.  To put it in simpler terms, engineers try to adjust the layout of the refinery to use gravity and pressure in their favor when moving substances from one unit to another.  

Well that’s the basics of energy optimization.  If there is anything not clear in here, I will be happy to answer questions in the comments.  On a side note, my 18th birthday is tomorrow, so I’ll be writing next week a year older (because that’s how age works, best not to question it).

Stephen

Making Something From Nothing....Kinda

Hi again,

In my last post I mentioned that I would dive into the different areas of optimization, and how they are achieved.  This week I will go into how lower end products are made into products of higher value.  To achieve this, there are a multitude of units that work towards this goal, so I will go over the general concept, and talk about one unit in particular.

The general concept of a refinery is to take crude oil and create valuable products, most notably gasoline.  To do this, the refinery takes the heavy crude, and breaks the long hydrocarbon chains into smaller ones.  However, during this process, a number of other products are created, some more valuable than others.  Generally, the lighter the product (smaller hydrocarbon chains creates a lighter product) the more valuable it is.  The least valuable product from refineries tends to be asphalt, which is a mixture of heavy byproducts.  

So now the quest is to make those heavy byproducts lighter and thus more valuable.  Enter the magical coker unit.  What does it do? Great question.  This unit will take those super heavy products, such as residual oils (heavy byproducts from units that create what eventually turns into gas), and makes them into a few different lighter products.  The main products are naphtha (mixed with other products to make gasoline), light and heavy gas oils (used as an energy source), and petroleum coke (also called pet. coke or simply coke).  As you may have guess, the last product is where the name of the unit comes from.  

The petroleum coke in many ways is why this unit is so useful.  Petroleum coke is very similar to coal in use and appearance.  This means that the coker takes what would eventually turn into asphalt, and creates a valuable energy source.  I also mentioned last week about the need to optimize energy, and some coker units do this by using some of the petroleum coke produced to provide the necessary energy to run the unit itself (I’ll continue into energy optimization next week).

Now why is the coker and units like it important to mention?  The reason is that these units are one of the main ways that refineries are currently implementing to find better economic optimization.  The reason for this is because cokers are more useful as the quality of crude oil declines (remember in the last post I mentioned that the quality is in constant decline currently), as poor quality crude creates heavier byproducts that need a unit like the coker to refine.  Thus, units that refine these heavy byproducts are becoming increasingly necessary in the world’s refineries.

Well, that’s a bit on economic optimization.  It is a pretty complicated topic and I may revist this again later, but next week will be on energy optimization.  See you then.

Stephen

Goodbye California

Hello,

Well, I have now returned to Arizona after an all around great experience in California.  I learned so much about the industry I hope to enter, insight into the possible major I will choose, and of course, how to optimize refineries.  In this post I will go over the general aspects of optimizing a refinery, and go into specifics in the upcoming weeks.

So first off I feel it would be good to clear some misconceptions about the oil industry that plays into my research.  The largest one is that oil is quickly becoming more scarce and that it has a huge effect on the market.  Any changes to scarcity are happening slowly and does not really change the market all that much.  If there are any changes in scarcity, it is that over time the quality of the crude oil being processed has decreased (I will go into this more later).  Another misconception, related to the scarcity one, is that there is going to be more money in oil sooner rather than later, because the scarcity will cause the price to increase.  In reality, the oil market is cyclical, and highly dependent on a variety of factors.  

Anyways, onto the optimization.  Refineries are optimized to reach the highest level of economic efficiency as possible.  This means that it is very common that over time refineries try to invest in units that take lower end products and make higher end products.  An example of this would be using products that would normally go into asphalt, and making gasoline products from them.  There are little to no waste products from refineries, it’s just the value of the product and which product is being produced that is optimized here.

Another area of optimization for refineries is that of energy usage.  They are designed to avoid wasting energy throughout the process, and to try to use heat from the process that is needed elsewhere in the process to try not to waste that energy.  In many ways, heat is often the highest area of waste and could be where future changes are made.

Environmental concerns are also playing into the industry.  As legislation is passed to decrease emissions, refineries are forced to implement units that will help them meet the specifications.  The most common form of this is decreasing sulfur levels in fuels.  There have been huge advancements here in the past few decades, and as more legislation is being passed throughout the United States and the world as a whole.

Anyways, that’s the brief overview.  I will go into more detail in the upcoming blog posts.

Stephen

So Much More To Learn

Hey everyone,

My time in California has continued to be fantastic.  Outside of work I have spent time with my cousins in Pasadena.  We have also gone hiking near Laguna, and went indoor rock climbing the other day.  All in all, it’s been fun to just explore the surrounding area.

Picture From Laguna

Okay but back to my research.  So it was brought but that in the commotion of trying to finalize where I will be working for this research project, I never mentioned the exact topic of my research.  Sorry about that, but here it is: I hope to find what current improvements are being made to the oil refinery process to increase productivity.  Well, lucky for me, the work I have been doing at Fluor are on projects that are revamping refineries to improve productivity.  

My first week (last week) was dominated by trying to get a grasp on what was going on around me.  I did a lot of research and asked a lot of questions, and by the end of the week I was able to generally understand the discussions going on around me.  I’ve had to learn quickly, and every time I feel I gain a footing I’m shown that I still have SO SO MUCH to learn.  I love that though, and the epitome of that was my second week.

In my second week at Fluor I was put on another project that is working on revamping a refinery.  They are at an earlier stage in the project, and the engineer I am working under graduated from Colorado School of Mines. On this project I have been given work to edit documents and drawings that will be used to plan the project.  This has helped me to learn the process directly, and has challenged how fast I can learn.  

During my time at Fluor, I have also had the incredible opportunity to have meetings with many different people at many different levels in the company.  Through these meetings I am able to gain insight into the difference roles of a mechanical and process engineers at Fluor.  In short the process engineers are more responsible for planning the project as a whole, and the mechanical engineers are responsible for implementing it.  This means that mechanical also has more business and logistical responsibilities.  These are by far not the only two groups working on making the project work, but they are the two I am most interested in myself.  I still do not know which one interests me more, but the biggest take away for me is that regardless of the choice I make, it will not be a bad one for me.    

As far as information pertinent to my project, I am working on organizing what I have learned, and will be writing about that in the coming weeks.

Stephen

And So it Begins...

Hey everyone,

So I have now found myself in Southern California, and I love it here.  I am staying with my cousins in Pasadena and just generally enjoying my time.  However, I am working in Orange County.  For those unfamiliar not caught up on their California geography, this is a 1-1.5 hour drive with little to no traffic, and a 2 hour at best at rush hour.  Luckily (kind of), on my way there in the morning I start driving at 5:30am so there is light traffic, on the way back, well I make good progress on my book on tape and make some phone calls (In car bluetooth, so don't worry I'm not breaking CA law) to pass the time.  I don’t like to complain though, I have an amazing opportunity at Fluor, and any way to take advantage of that is completely worthwhile.

Speaking of my time at Fluor, I had a great first week there.  I am shadowing engineers working on revamping a refinery.  Currently I am mostly working with Process Engineers (A type of Chemical Engineering), and next week I will also be observing some Mechanical Engineers.  Everyone is extremely helpful and is more than happy to give advice as well as answering all of my questions.  Furthermore, I have been very lucky with the amount of chances they are providing me to observe and learn about the industry.  I have been included on an incredible amount of meetings.  From what I can tell, there are three main levels of personnel on the project: Project Managers, Disciplinary Leads (Process, Mechanical, etc.), and Engineers.  I have been able to attend meetings that include all three levels.  I began with a team meeting between the Process Engineer lead and the Process engineers, and also attending the Project Manager meeting as well as the team meeting between the Project Managers and Disciplinary leads.

From these meetings and my time there so far I have been able to learn not only about engineering itself, but a lot about the overall industry and how business is conducted.  The day of the Project Manager meeting and team meeting between the Project Managers and Leads was on the same day.  This allowed me to see the flow of information from Managers to the Leads, and I was most impressed with how fast problems were dealt with.  For example, there were a few obstacles the Managers were debating how to solve in their meeting, and when the team meeting came a few hours later they had decided how they would like the problem dealt with, and only a few hours after that the Engineers were already working down that path to the solution.  

Overall, I am learning a lot in a very short amount of time.  I will share more of what I have learned that is industry specific in the coming weeks.  I will not be disclosing any material specific to the project for obvious reasons, but I will take what I have learned and apply it to my more general terms of wanting to learn how refineries will be changed and advanced in the future.  

Oh, and while this is a few weeks late, it still needs to be said: Go Broncos!

Stephen

Where I will be Working

Hello,

Well it has been a week, and in that time what I will be researching for the coming months has been finalized.  Like I had hoped, I will be researching the refinery process of oil and natural gas.  More specifically, I will be looking into the improvements made recently to the refinery process, and what improvements there are yet to make.  In order to accomplish this task I will be doing a mixture of self research and observing engineers at the amazing company of Fluor (Fluor's Website).

My self research will be mostly looking into past improvements, but if I stumble across a current problem with refineries I won’t complain.  I will use this research to look at how this area of the industry has changed, as well as a basis of knowledge for when I am working at Fluor.

The fun part will be my time at Fluor, a downstream energy company.  For those that do not know, the downstream energy sector is basically what happens when the oil is taken out of the ground.  Fluor’s part in the industry is to construct and maintain energy related projects (i.e. refineries).  Anyways, back to my research, starting around mid-February and lasting for about 4 weeks, I will be in Southern California, shadowing different engineers.  This will allow me to get a good glimpse into the industry and see what problems they are currently trying to solve.  Furthermore, it will give me amazing insight into the field that I hope to one day work in, and I may be able to get advice as to how to enter that field going forwards.  Overall, I’m pretty excited to say the least.

Now I feel this is a good time to explain why I am so interested in this industry, especially the downstream energy sector.  Last week I mentioned that I feel some of the largest challenges facing our society will be in the energy sector.  An obvious example of that is the problem of pollution and, more generally, environmental impacts.  I personally believe that one of the easiest ways to reduce environmental impacts, is to make it economically logical for the companies to do so (basically, make it profitable).  Downstream energy is a great example of this, because oftentimes when improvements to efficiency are made in the refinery process, emissions are decreased because of it.  This is where my interest lies, as finding more improvements that both increase economic efficiency and reduce output, are the type of challenges I would like to eventually help solve.

In completely unrelated news, the Broncos are going to the Super Bowl, and I am pretty excited (now only to not choke like 5/7 times they have previously been there).  Anyways, see you guys next week.

Stephen  

Who Am I?

Hello,

My name is Stephen Kistler.  I currently am a Senior at BASIS Scottsdale.  In the upcoming fall, I will be attending Colorado School of Mines, an engineering focused college located in Golden, Colorado (for those unfamiliar with Colorado geography, Golden is just west of Denver).  I was also born outside of Denver, and lived there for the first ten years of my life.  As you would expect, I am pretty excited to return for college.

Golden, Colorado (from Colorado.com)

Now that’s all great, but it still doesn’t tell you much about me.  For that I’ll go over my interests a bit. Academically I am interested in engineering (what a surprise based on the college I choose right?). More specifically, I am choosing between mechanical engineering and petroleum engineering, with the hope of finding a way into the energy sector.  Why the energy sector? Well mostly because I feel that some of the greatest challenges facing our society today lie there, and I would like to attempt to help solve them.  Oh, and there are jobs in that sector.  Shockingly, I also have interests outside of academia.  I love sports, both playing and observing.  I’ve played a ton of sports from soccer to basketball to baseball and try to get up to the mountains to go skiing whenever I can (for the record, skiing is better than boarding, sorry but it’s the truth).  As far as what sports I watch, I am a fan of most sports but especially football and hockey (Go Broncos, and Go Avs).  And yes, I still cheer for the Colorado teams over the Arizona teams.  Sorry Cardinals.  I also enjoy reading.  A Song of Ice and Fire, the Game of Thrones series for the non-book readers, is currently my favorite series.

Ah but you guys are here for my research project.  I am still working on finalizing some details and as such only have so much information to share.  What I can share is that I hope to be working at an energy company in California.  My exact work is still not yet finalized but I hope to be doing work in relation to the refinery process of oil or natural gas.  Overall, I am excited about the prospect of working in the field that I plan on entering as well as gaining experience and insight into it.  I do have to thank Mrs. Bailey (my vector calculus teacher) and her father for this opportunity, as they provided the connections and pointed me towards the company.

Anyways, that’s a bit about me and what I plan to be working on.  I hope to be able to give a fuller picture as to the exact details of my research as it becomes more finalized.

Stephen