Billings Refineries and Canadian Shale

MONTANA, Sep 23 2008 (Neo Natura) - Billings petroleum geologist Bob Fisher is saying that the United States would be wise to rely on a friendly country like Canada for more of its imported oil. Canada is one of our closest allies, is the leading exporter of oil to the United States and is the only major oil-producing country, besides the United States, that allows Western countries to freely explore and develop its oil resources, he said.

Fisher, with Augustus Energy Partners, wrote a guest editorial in The Gazette in late June, calling on Congress to repeal legislation that prohibits the U.S. government from using gasoline and other oil products refined from oil sands. The U.S. Air Force has also asked Congress to rescind the ban.

Fisher said he is against the congressional ban for many reasons, not least because it is nearly impossible to trace fuels back to their source when so many different crude oils are blended before being shipped to American refineries.

Regional oil producers may feel another effect of Canadian developments, he said, because there might be a lack of skilled workers, which could dampen oil exploration and development. It is also possible that Montana businesses will be able to cash in on helping build Canadian infrastructure.

All three refineries in the Billings area will have a finger in the oil-sands pie. Pat Kimmet, manager of the CHS refinery in Laurel, said 90 percent of the crude oil entering the Laurel refinery is already heavy crude, with high sulfur and asphalt content, from conventional wells.

Part of refinery's feedstock is "western Canadian select," or WCS, a blend of various crude oils including some processed from the oil sands of northern Alberta.

As the supply of oil from conventional fields declines, Kimmet said, western Canadian select "is really the future of our refinery here in Laurel." Oil derived from the sands, he said, "is a huge reserve."

In anticipation of handling heavier crude oil, the CHS refinery completed a $400 million upgrade this spring that will squeeze more gasoline and diesel out of each barrel of crude. CHS has its own crude pipeline from the Canadian border to its refinery in Laurel.

Kimmet said the supply of crude from Canada is particularly welcome nowadays, when people are "concerned about the stability of other oil-producing regions of the world."

"We are just very fortunate to have it available to us from a stable country, from a country that's friendly and close to us," he said.

And even though the refinery is using heavier, dirtier feedstock, Kimmet said, upgrades over the years have cut down substantially on sulfur dioxide emissions from the plant. In the early 1990s, when emissions were at their highest levels, he said, the CHS refinery emitted about 9,000 tons of sulfur dioxide a year. That number is now down to 400 to 500 tons a year, he said.

"We've been very progressive in dealing with the environmental issues," Kimmet said. "We have the equipment in place to deal with this kind of crude."

The ConocoPhillips refinery in Billings also plans upgrades that will make it possible to handle some Canadian crude. Charlie Rowton, a company spokesman in Houston, said construction of new crude and vacuum units, which has not begun, is scheduled for completion in 2011.

The new units will be used to perform the initial separation of the crude oil into various products, which would then be further refined in other units at the plant. When the new units are in place, the capacity of the Billings refinery will go from 58,000 barrels of oil a day to 70,000 barrels.

Rowton said it is difficult to say what impact oil-sands developments will have on the Montana economy.

He also states, "Having access to more secure Canadian crude oil and upgrading our U.S. refineries ... will help maintain the economic vitality of all our refineries, including the one at Billings."

The ExxonMobil refinery in Billings was designed to handle heavy crude and has been processing oil from the oil-sands industry in Alberta for many years, according to spokeswoman Pam Malek.

Malek said ExxonMobil, which processes 55,000 to 60,000 barrels of oil a day at its Billings refinery, isn't planning upgrades related to the oil sands.

Update: Cellulosic Ethanol Demo Plant

MONTANA, Sep 16 2008 (Neo Natura) - AE Biofuels Inc. brought its pilot-scale ethanol plant in Butte, Mont., on line in August and since then has begun work to prove out its two individual cold-cook enzyme platforms. See a previous article on the plant here.

“We’re trying to differentiate ourselves from our competitors, so by having two enzymes—one for starch and one for cellulose—we can run an integrated facility where you use both feedstocks,” said Todd Casper, vice president of the company’s project development division.

Clifford Bradley, coinventor of the AE Biofuels pilot process, said the company’s first task is to perfect the simultaneous integration of starch and cellulose hydrolysis.

“We’re talking corn and corn stover,” he told EPM. “We designed the cellulose pretreatment system to use a conventional jet cooker to keep capital costs down. We can do an alkaline pretreatment or an acid, but we like alkaline. It’s milder and less messy.” He said the company’s technology can obtain cellulases capable of hydrolyzing both cellulose and hemicellulose from a single culture.

For corn stover, the gallons-per-ton conversion ratio is still unknown, but it will be the subject of ongoing work in the Butte plant. Bradley said the company achieved 84 gallons of ethanol per ton of wheat straw, which included 62 gallons from the cellulose fraction and up to 22 gallons from the pentose sugars. The plant is scaled to produce up to 150,000 gallons of ethanol per year. Later this year, the company will test sugarcane bagasse.

“Our idea is that by using both enzyme systems and converting a plant to no-cook, we can integrate corn- and cellulose-derived ethanol and actually put them in the same fermentor,” Bradley said. Work to optimize pentose fermentation is also moving forward.

Ethanol is a renewable and octane-boosting fuel additive used to reduce toxic emissions from gasoline engines. Ethanol is made from corn and other renewable sources grown in abundance across the United States. The demand for ethanol has soared because of a strong push to reduce America’s reliance on foreign energy sources.