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Dutch IGCC pioneers chalk up pain and gain Emergency response is behind schedule in the European public sector A new refining industry in Europe's Asian Corridor Commission proposes milestone energy proposal Replace fuel oil with distillate? Cancelled projects will sustain margins “Marine distillate not fuel oil from 2010” Branson's biofuels megastore You heard it here first: refinery CO2 storage a reality in Norway Buncefield 2: Investigation critical Where now for Swedish Class 1 diesel My slow awakening to climate change The luckiest motorist alive Safety row goes on over Europe's largest LNG terminal New WHO guidelines on city air quality put focus on diesel Would LNG really 'evaporate harmlessly' in an accident? Another lesson in the thermobaric bomb Spare a thought for the oil-rich But will the good times keep on rolling? Carbon storage and the zero emissions refinery Everything just changed E85 and high octane gasolines The problem of small-minded young engineers New Permit Regulations Biodiesel newbuilds and a new green superfuel Spilled wine and our split industry Drilling down into the prospects for IGCC The beginning of the start of the end of oil | European refiners pocket 60 cents a gallon premium for octane Shell’s marketers in Germany and elsewhere are doing some pretty cool stuff with their gasoline. And then there’s some surprising, some might say, slightly crazy things happening in bio-gasoline here in Sweden right now. But, in general, the gasoline market is stagnant or in negative growth in most of Western Europe. From a quality point of view, EN228 European gasoline also feels more mature. Whereas there remains a considerable area of doubt about particulate tailpipe emissions from the diesel parc – which may yet land refiners with a hefty job of cutting poly aromatic hydrocarbons, the refining industry and the catalytic converter are generally thought of as having met the challenge of gasoline vehicle emissions in the urban environment. But the fact that gasoline cars now emit small microfractions of the pollutants emitted by vehicles in the 1970s, when the clean air action got under way in the States, doesn’t mean that fuels won’t change. For one thing, there’s the global environment to consider – greenhouse gas emissions and the blending of renewable fuels into gasoline. For another thing, things just have to change. There’ll be innovation, or the appearance of innovation, because customers expect that. You can see both these phenomena being played out right now. Here on my home turf in Sweden, it looks like the Environment Party has persuaded the Government to make a pretty off-the-wall interpretation of the Biofuels Directive (2003/30/EG). The directive, which calls for 5.75% (energy not volume) of fuels to be from renewable sources by 2010, is being generally interpreted by member states as meaning that somewhere around 5% of bio-derived liquids will be blended with conventional diesel and gasoline. Since 5.75% on an energy basis implies slightly greater volume, perhaps 8% ethanol, then there’ll be a shortfall. This’ll probably be met with higher blends of biodiesel for selected vehicle fleets. But in forecourt gasoline, it’s expected that most countries will want to aim for around a 5% blend because that’s allowed for under the E228 specification. But not in Sweden. Here, according to the government-proposed legislation, retail stations all over the country will from January 1 next year start installing pumps, tanks and point of sale for a parallel fuel for which there is no European specification. Not only that, but as far as I can see only three makes of vehicle currently on the market can fill up at the 2400 or so stations (the largest ones) which would eventually be included in a proposal which is intended to at least one renewable alternative. The fuel I’m referring to is E85, the 85% Ethanol to gasoline blend, the raw materials for which will come from two Swedish manufacturing plants, with the balance from Brazilian sugar growers. Compressed natural gas is also somewhat popular in Sweden, but providing filling facilities for that costs about ten times the 300,000 Swedish Kronor (US $38,500) for a an E85 pump and tank. Likewise, a commission found that the proposals made it attractive to install E85 infrastructure instead of biodiesel. E85 will be well known to many readers. Many cars are specified as able to run on E85 in the US, sometimes due to a loophole in clean air regulations, rather than a proliferation of refuelling sites. Then of course there’s South America. The European car industry’s pretty unexcited (!) about Sweden’s decision. “We’d hoped that the biofuels directive would be interpreted so that the existing gasoline would contain small, manageable amounts of bio-ethanol,” Dr Klaus-Peter Schindler, Volkswagen’s Head of Authorities and Regulations, told me. “You need adapted vehicles, parallel fuel distribution and the cars won’t start in winter… you have to plug them in to run a preheater.” Needless to say, the Swedish petroleum industry’s not over the moon either. They feel the move to impose an alternative fuel at larger stations has forced the hand of the industry in the direction of E85, which is logistically cheaper. Eucar, which carries out research into pre-competitive technologies at a European level from Brussels has a well-to-wheels analysis which questions the cost to benefit of wheat-based ethanol where greenhouse gas emissions are concerned. Put briefly and oversimply, a lot is hanging on the development of cellulose (wood fibre) based biofuels, but the technology’s immature. Looking on the bright side, perhaps the move will stimulate a technology innovation here among the Swedes. They’ve got a lot of raw materials for wood-derived biomass, if they can make it pay. So, I said that concern about climate change is changing the face of gasoline, but also that it would just change anyway. Gasoline market growth may be unexciting in itself, but there’s a pretty active battle for market share and, depending on your point of view, it’s based on real product differentiation. Shell and BP are most active. Both are offering a gasoline with higher octane and additives which clean inlet valves and carburettor. BP uses the old Amoco brandname, Ultimate, for its 97 Research Octane additised fuel. Shell has for some time used the Optimax brand, but also now the name V-Power 100. The latter is a 100 octane fuel. Both BP and Shell have used these or similar premium products in the past to get clean fuels out into the marketplace ahead of regulatory deadlines. As things stand, the regulations have now caught up so that in Germany for example, where the premium gasoline market is hottest, it’s rather difficult to see the practical advantages of these fuels to the customer. All gasoline must contain detergents, for example. I checked this with a friend at the German Environment Agency, which watches its oil industry like a hawk. Dr Axel Friedrich was a little dismissive of fuel consumption or power claims made for these gasolines. European cars are, after all, designed to run on 95 octane fuel and its some years now since Saab gave up its experiment with variable compression. But for sheer panache, you’ve got to admire what these companies are doing. Take Shell. They’ve got some great refining assets in Germany and up the Rhine. They’ve got alkylation and other routes to their 100 octane gasoline. And, with the help of references to Formula 1’s Michael Schumacher, they’ve managed to get consumers excited about the fuel and interested in its composition. The bottom line is that Shell is getting a whopping 13 cents per litre (that’s 60 $ cents per US gallon) premium over the price of unleaded 95 for V-Power gasoline. That’s a handsome pile of cash for a few points of octane. • Rob Routs, Shell’s Executive Director Downstream, pointed out the other day that 5% of world diesel will be from synthetic-fossil or synthetic bio-fuels by 2015. By the time you read this, we’ll be putting together a special report on the mega investments and innovative new syn diesels, some of which are already on the market today. If it’s your field and you’ve views to contribute, drop me a line.
* Tim Lloyd Wright has edited refining publications, chaired international downstream meetings and reported for UK newspapers and BBC Radio. Today Tim combines writing with running a motivation and lifestyle business in Sweden. Contact Tim via timlloydwright.com. | |||||||
Download Energy Industry Resumé with work samples Profile: Tim Lloyd Wright MA Here you'll find a brief profile of my work with international energy, transport and associated environmental issues. Energy trends articles You heard it here first: refinery CO2 storage a reality in Norway From the archive... Over-processed fuel leaves oil tankers adrift | ||||||||
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