46th International Conference on Petroleum Processing, June 7, 2013, Bratislava, Slovak Republic

Improvement of energy efficiency in oil refining a question of survival

Atanas Ivanov1 , Dicho Stratiev, Ivaylo Marinov

LUKOIL Neftohim Burgas JSC, Bulgaria, Burgas 8104,

e-mail: Ivanov.Atanas.S @neftochim.bg

Abstract
The mankind nowadays aims at decreasing the use of energy resources not only for
reducing expenditures but also for suppressing the effect of human activities on the nature,
and especially for decreasing the greenhouse gases emissions which are known to cause
global warming. In order to achieve this target the European commission has been making
efforts to regulate and reduce the greenhouse gases from the industry and from the civil
activities, and also to reduce the energy consumption by applying regulations directed to
improvement of energy efficiency.
In times of financial crisis, decades lowest refining margins and stringent regulations
towards decreasing the use of fossil fuels the refining sector in Europe is in an extremely
challenging position. The second biggest refining cost after the expenditures for purchasing of
crude is energy consumption. Therefore the search of ways how to efficiently use the energy
resources is a question of survival of the modern refining.
The refineries need to invest money and knowledge in order to improve their energy
efficiency. Many projects in this direction were completed the last decade, but there is still
need this process to continue and more comprehensive results to be achieved. The investment
in new energy saving equipment is one route. Also, heat integration of the process streams, as
well as integration of the refineries with the power generating facilities is another purposeful
approach. Nevertheless, there is need to change the peoples attitude and working habits in
order to further reduce the energy resource usage. This should lead towards fulfilment of the
regulative obligations, reduction of the human impact on the nature and also to improvement
of the refineries efficiency and competitiveness.
Key words: Energy efficiency, energy consumption, management
 1. Introduction

The energy resources have played decades a significant role in the mankind development due
to their connection with all kind of peoples activities. Currently, human beings are so
dependable on energy that a life without it is unimaginable.
Although alternative technologies and resources have been developed, oil is remaining the
main source of energy for the foreseeable future [18]. On the other hand, the energy use could
be considered in two different and important paths: resulting in greenhouse gases emissions,
which affect the nature, and constantly increasing the costs of exploitation, production,
processing and end use.
As it is described in the literature Energy is the life blood of a refinery and its uninterrupted
supply is crucial to the operation and profitability of the facility but also, and crucially, to its
safety. [13]. Therefore, refiners desperately need to optimise the energy use by applying not
only reduction measures but more important efficiency measures.

2. Energy consumption and environmental effect

Energy demand growth

Well known fact is that the energy consumption is constantly increasing worldwide, mainly
driven by economic and population growth [3]. For example, Abdelaziz et al. have shown that
in the next two decades the world marketed energy use will raise by 33% with the biggest
share of the nations outside the Organisation for Economic Cooperation and Development
(OECD). In other sources it is cited that the world primary energy demand will increase by
1,6 % per year on average in the period from 2006 to 2030 (overall increase of 45 %) with a
share of around the half for China and India [18]. Furthermore, in the IEO2011 Reference
case it is stated that the world marketed energy use shall grow by 53 % in the period from
2008 to 2035 [17]. The industrial development worldwide is determined as the main factor for
the increase of the consumption of energy resources [7]. The percentage of energy
consumption by the industrial sector in the different countries varies between 30 and 70 %
depending on the region and the economic development [7]. The share of the refining segment
in the energy consumption in the US, for example, is approximately 9 % [7].
 Environmental effect of the human activities

Substantial discussion has been raised past decades with regard to the negative impact of the
human activities on the environment. The energy resources production and consumption leads
to an increase of the greenhouse gases in the atmosphere, such as carbon dioxide (CO2),
carbon monoxide (CO), nitrogen oxides (NOx) and sulphur dioxide (SO2) [7,9,17]. These
emissions are claimed to cause global warming effect, acid rains, floods, drought, famine and
have disastrous consequences for the climate on the earth [7]. One of the main contributor
to the generation of such greenhouse gases is the production of electricity by burning of fossil
fuels [9]. All these facts should raise the peoples awareness and invoke drastic measures
towards decreasing the generation of the greenhouse gases by a reduction and more efficient
use of the energy resources worldwide. Similar need is declared in the World Energy Outlook
of the International Energy Agency [3] by stressing the fact that the consequences for the
global climate of policy inaction are shocking.

Energy policies and regulation

Different regulatory measures have been undertaken to force nations, industry, other
economic sectors and people to reduce and optimize their energy consumption resulting in a
decrease of the emissions. The "20-20-20" targets, announced by the European Union set
three key objectives for 2020 [18]:

Reduction by 20% from 1990 levels in EU greenhouse gas emissions;

Increase by 20% of the share of EU energy consumption produced from renewable
resources;
Improvement by 20% in the EU's energy efficiency.

As a result, the German government revealed a plan for emissions reduction by 40 % by 2020
based on 1990 [4]. Besides, the UK government targets 12,5 % reduction of the 1990 levels to
2008-2012 and 60 % of the 1997 levels by 2050 [1]. Numerous countries adopted agreements
between their governments and the industry in order to facilitate measures to meet specific
energy consumption and energy efficiency objectives [7]. As it has been stated in ref. 7 those
measures are not always voluntary; nevertheless, the industry aims to find techniques how to
reduce their costs for energy and improve its economic efficiency.
However, there is a significant mismatch between the regulatory measurement for emissions
reduction and the refining products quality requirements. The more stringent requirements for
diesel and gasoline sulphur content have resulted in higher hydrogen consumption and
consequently higher consumption of energy resources and respectively the emissions of
greenhouse gases have also increased [2, 13].

3. Oil refining and energy use

Financial crisis and the industry

In the Draft Technology Roadmap for the U.S. Petroleum Industry it was predicted that In
the 21st century, the petroleum industry must prepare to address many important challenges.
[10].
The world economy is still under the influence of the Global financial crisis occurred 2007-
2008. The global recession has led to significant decline of oil products consumption in
Europe and North America. The crisis has had adverse repercussions on the refineries
economics leading to numerous closures in Europe and worldwide. According to some
sources since 2007 refining capacity of approximately 1000 kilo barrels per day were closed
permanently and more than 1600 kilo barrels per day changed their ownership [19].

Refining margins

The main reason for the above mentioned closures is the dramatic decline of the refining
margins, defined as the difference between the prices of oil products produced by a refinery
and the price of the purchased crude oil as a source. From average 48 $/t in 2004-2008 period
the refining margin dropped to 20.8 $/t in 2009-2011 [19] (Fig. 1).
Figure 1: Average refining margin 2004-2011 [19]

The low margins could also be explained with the competitive nature of the business segment
as well as with the substantial investments driven by the legislation towards reduction of
industry emissions and improvement of product quality [2]. Moreover, the factors that
influence the refining margins are the refinery capacity utilisation, energy consumption, prices
of crude oil and products, and the refinery complexity [12]. Due to the fact that the oil prices
are an undependable factor for the refineries, the financial results could be improved mainly
by reducing costs.

Refining energy costs

As mentioned above the crude refining consists of many processes, which require certain
amount of energy in order to achieve the production of dedicated products. In general, the
technological processes in the refineries consume energy between 6 % and 15 % of the crude
oil intake [2, 12, 13]. The wide range of this use depends on the level of conversion and
complexity of the refinery. The simplest the refinery (mainly distillation and products
treatment), the lower the specific energy consumption. In the opposite, the higher the crude
conversion (the presence in the technological scheme of conversion processes like catalytic
cracking, thermal cracking, hydrocracking, etc.), the higher the energy consumption [13].
Besides, some sources assume that the refinery age also affects the energy consumption due to
the different approach and focus towards energy efficiency in the past decades [13].
On the other hand, the energy consumed by the processes in a refinery comprises between 60
% and 80 % from the operating expenses, or approximately 6 % to 7 % related to the crude oil
costs [12]. The energy costs in the LUKOIL Neftohim Burgas refinery, Bulgaria (LNB) for
example comprise of nearly 65 % from the operating expenses, which could be regarded as
typical for a European refinery [13].
Reviewing the refinery processes and their energy consumption it could be summarised that
the energy giants in a typical refinery are: the atmospheric and vacuum distillation with share
of around 40 % of the total energy consumption [2, 10]. This could be explained by the fact
that the whole amount of crude oil is processed by these units, and the crude oil is separated
into different fractions by means of rectification, which is known to be highly energy
intensive. Other processes, such as catalytic cracking and reforming are also energy-intensive,
but on the other hand, the released excessive energy could be utilised by producing steam and
hydrogen for further use [10]. On Figure 2 is given an example for the energy consumption of
the main refinery technological processes.

Figure 2: Energy consumption of the main refinery technological processes [10]

Average annual use (trillion Btu)

The energy consumption of the processes in the LUKOIL Neftohim Burgas refinery in
Bulgaria (LNB) shows similar results. Approximately 30 % of the energy is consumed by the
crude distillation units. Other energy giants are Fluidised catalytic cracking (FCC) with
around 10 %, hydrogen production unit (Steam methane reformer) nearly 8 %, Catalytic
reformer (CCR) approximately 6 %, FCC gasoline hydrotreatment unit (PrimeG+) circa 3 %,
etc.
Regarding the process equipment, the fired heaters in a refinery use the most part of the
energy, due to the significant number operated for the technological processes [13].

Need for energy efficiency

Due to all mentioned factors about the energy consumption in the world, industry sector and
refining particularly, the increased regulatory requirements about the products quality and
emissions, as well as the need of being competitive, it is easy to understand that improvement
of energy efficiency in refining is a question of surviving. Many literature sources have
reached to the same conclusion. For example, Drumm et al. defines that due to increased
prices of crude oil the energy cost reduction is a key lever to reduce the overall expenses
and respectively to improve profitability [4]. Other sources have also concluded the great
importance of the energy efficiency due to the high environmental costs and low refining
margins [5, 10]. The authors in refs 5 and 10 continue with presenting the energy efficiency as
the most economically effective approach to increase the competitiveness of the companies.
On the other hand, the need for emissions reduction due to the climate changes also raises the
importance of the energy efficiency [5]. Furthermore, the energy efficiency is considered in
several different dimensions, such as legal, environmental, social, economic, and financial,
and technological [6]. The latter is related to integration of improved technologies at all stages
of energy consumptions: improved products and processes, applied equipment, procedures,
knowledge, as well as energy efficiency orientation and development of new more efficient
technologies. Although significant work has been done in this area during the last decades,
there is still a potential and relevance to further improve the energy efficiency [5]. The
evaluation of the Solomon Energy Index (EII ) for the past 18 years has displayed a 10 %
energy efficiency improvement of the EU refineries, which comprises the total annual average
energy use of four large EU refineries [13]. This fact furthermore proves the importance and
the potential of energy efficiency measures.
 4. Energy efficiency management systems

Energy efficiency barriers

Stressing the importance of the energy efficiency it is worthwhile to summarise the main
obstacles for its development and improvement. The understanding of the barriers is useful
for their overcoming and avoiding, when an energy efficiency programme is to be
implemented.
Some literature sources summarise the main barriers to energy efficiency as:
Lack of time;
Lack of priorities for investment;
Different priorities for investment;
Lack of capital needed;
Cost of possible production failures;
Technical risk of production disruptions;
Insufficient information for energy consumption of the purchased equipment.
Other authors relate the energy efficiency barriers with the information, which availability is
limited and with the invisibility of the energy efficiency [5]. Furthermore, the challenges for
energy efficiency incorporate technical, economic, organisational (behavioural),
informational, knowledge, financial and policy factors [5]. Sola and Xavier additionally
suggest that the peoples activities mainly in the administration area of the production
processes could hinder the use of energy efficiency technologies, because people are the
driving force for implementation of changes in an organisation [6]. Typically, the main
obstacles in a refinery to improve its energy efficiency could be related with the human
behaviour in the process operations level. The experience in LNB has shown that the
operational habits and the over-securing leads to increased use of energy. The energy
efficiency measures often are perceived with resistance because of a high risk for the
reliability and stability of the technological processes. On the other hand, some administrative
layers in the refinery also reveal resistance to suggested energy efficiency improvements even
when clear evidences are available. The suggested reason for this is again the human nature to
oppose to changes. Reasons for this are different blocks such as perceptual blocks
(stereotyping, tendency to define problems too narrowly), emotional blocks (fear of taking
risk, incapacity to tolerate ambiguity, preference for judging rather than generation ideas),
cultural blocks (taboos, focus rather than fantasy, problem-solving is a serious business,
tradition and change), etc. [20]. The determination of all barriers of the energy efficiency
improvement and implementation, as well as the roots of those obstacles is a field for further
investigation.
In conclusion, Krewitt et al. claim that a political will and suitable legislative measures are
needed to cope with such barriers and improve the energy efficiency [3]. It could be added
furthermore, that a company will at a high level is also required in order to overcome all the
human and administrative factors that hinder the implementation of energy improvement
measures. This is supported by the statement that due to the long return of investment in
energy efficiency the latter could not be regarded as a business driver [10].

Approaches for energy efficiency improvement

Probably one of the most broadly discussed area in the literature is the possibilities,
techniques, technologies, etc. for improvement of the energy efficiency in the industrial and
public sector. Broad energy saving opportunities are discussed in some sources, revealing
following areas of focus [14]:
Process and process control;
Furnaces, boilers and steam distribution;
Motors (pumps, fans, etc.);
Air compression;
Process operations and equipment;
Industrial buildings;
Energy management.
Other sources [7] observe technologies with huge potential for energy consumption reduction
such as variable speed drive for motors, high efficient motors, improved compressed-air
systems, waste heat recovery, etc. More specifically, several authors have discussed the
energy saving possibilities related with the oil refining. In several literature sources it was
suggested that the refiners should improve their energy efficiency by implementing more
efficient heat exchange and heat integration [2, 10, 12, 13], improved process control [10],
special approach to huge energy consuming equipment [10, 12], reduction of fouling in the
equipment, better pipe insulation, waste heat recovery [2, 12] cogeneration for steam and
electricity production [10, 13], improved steam use [2,12], implementation of advanced
process control systems [2], etc. In many literature sources the problem with the equipment
fouling is discussed. The fouling in heat exchanger in the refineries is regarded as a huge
problem because of the reduced heat transfer capacity, which leads to large growth of the
energy consumption [2, 10]. On the other hand, it is a reason for unpredicted shut downs and
respectively more financial losses for the refineries [2, 10]. Prediction tools for fouling could
lead to energy savings of 2 % of total fuel in a refinery [2]. Therefore, dedicated tools for the
heat exchangers efficiency incorporated in energy management systems is suggested to be
useful and leading to cost saving in energy and maintenance. Unfortunately, the effectiveness
of such tools has not been evaluated yet [10].

Energy audits

In order to implement and successfully use energy efficiency system it is absolutely necessary
to priory provide an energy audit. Energy efficiency check reveals the possible areas for
energy savings [4]. Purpose of such audit is to understand the current energy consumption and
production and use this database for improvement evaluations with further calculations of the
achieved effect on savings [4]. In addition, Abdelaziz et al. summarises the benefits of an
energy audit as decrease in energy use, resulting in reduction of operating costs, lowering the
emissions of greenhouse gases, increase of profitability and overall performance, etc. [7, 8].
Three types of energy audits are defined in the literature [8]. The preliminary energy audit
(walk-through audit) is timely limited and aims to identify the energy costs, and prioritise the
energy consumption optimisation possibilities. The targeted energy audit provides more depth
analysis of one or more areas of the project. The detailed energy audit is a comprehensive
analysis aiming to generate a detailed action plan and develop feasible options for energy use
reduction [8].

Energy management systems

As it could be assumed, the energy audits are part of a broader and more comprehensive
energy management systems. The connection between both is presented of Figure 3.
Figure 3: Energy efficiency check and energy efficiency management [4]:

Drumm et al. describe an example for such systematic approach, developed for the energy-
intensive plants of Bayer MaterialScience, which allows the direct measurement,
tracking, benchmarking, and target-setting of energy efficiency in contrast to measuring
energy consumption alone. [4]. As could be seen from Figure 3 the system comprises of two
main steps energy efficiency audit and energy efficiency management.
In addition, other literature sources ascertain that dedicated energy management systems,
consisting of periodically energy audits, as well as plans with measures, are used to stimulate
improvement of energy efficiency [13].
The main elements of the energy management system are identified to be [13]:
5. Management responsibility;
6. Energy policy;
7. Energy planning;
8. Implementation.
The authors in ref. 13 have focused on the management involvement during all the stages of
the system and on the need of development of procedures, regular audits and indicators of
efficiency.
Nevertheless, a worthwhile energy management system should provide its users with
feedback of achieved results, optimal targets, as well as comparison with previous periods.
This is needed for the users in order to understand the real meaning of the observed energy
consumption and to undertake corrective measures. The presented by Drumm et al. system
possesses a real-time energy efficiency Online Monitor (Figure 4) [4]. This monitoring tool
provides continuous feedback to the operators and visually presents the energy saving
potentials. Further useful element of this system is the calculation of the energy savings into
financial values. The dedicated graphical design increases peoples awareness, and allows
better and easier acceptance by the users.
Figure 4: Example of visual tool for online monitoring of energy resources [4]

5. Conclusions
The growing energy demand worldwide as well as the resulting increase in the greenhouse
gases emissions leading to climate change challenges the mankind to energy reduction and
more important energy efficiency.
During the last 5 years the refining sector faces dramatic changes in the profitability and
competitiveness resulting in numerous closures in Europe and in the United States. In order to
survive the refiners need to reduce cost, optimise capacity and complexity and look for further
development. Krewitt et al. concludes that In the light of increasing fossil fuel prices,
depleting resources and climate change, business-as-usual is simply not an option [3]. As the
second biggest cost, the energy consumption is assumed as the most important area of
reduction and optimisation. Different tools for energy use reduction are available. However,
completing regular energy audits is regarded as not sufficient measure for energy efficiency.
Therefore, dedicated energy management systems are vital to develop and implement in order
to achieve comprehensive monitoring of the energy resources use, to provide relevant targets,
to present real-time feedback of the consumption, and to visualise the potential of energy
savings. Investments in this area, as well as change in peoples perception and attitude
towards energy efficiency are required in order to improve energy efficiency.
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