Ralph E. Lewis considers whether reners can step up their processing capacity to meet the huge increase in demand for low sulphur fuel that will be necessitated by emissions regulations.

To understand potential supply challenges, it is important to understand how low sulphur distillate is produced, what renery production trends have been and world demand for these fuels in recent years’.

The late French mathematician Henri Poincaré once remarked:
‘It is far better to foresee without certainty, than not to foresee at all.’ Applying this aphorism to the present questions associated with modern marine fuels, let us take a forward look into two
critical questions seemingly consumed with uncertain resolution.

First we will consider potential supply shortfalls that may arise with looming International Maritime Organization (IMO) mandates for low sulphur marine fuels. Then we will address an alarming trend
in bunker quality deterioration – and what remedies are available.

Supply and demand Considerable attention has recently been drawn to the IMO 2015 mandate for a switch to 0.1% sulphur marine fuels in designated Emission Control Areas (ECAs), and the
worldwide change to a 0.5% sulphur fuel in 2020.

The goal, of course, is a reduction in marine vessel emissions, and many consultants and government agencies have conducted comprehensive modelling exercises to justify
the mandates. But while it is easy enough to prescribe new standards, the reality of the marketplace can just as easily thwart the best of intentions. Is it a case of too much too fast?
Or will refiners ramp up sufficient production capacity to fulfill demand for these fuels?

The answers are dependent on a wide range of factors, but the two major considerations are simply supply and refinery capacity.
Both are fraught with challenge.

In 2008, the IMO estimated that annual vessel consumption of fuel oil in ECAs was 27 million metric tonnes (mt). The new ECA area for Canada and the United States, scheduled for implementation in 2015, will
require an estimated additional16 million mt, bringing the total for all ECA areas to 43 million mt, barring any increase in marine activity.

This level of consumption means that an estimated 771,363 barrels a day (b/d) of 0.1% sulphur fuel will be required when the switch is made, and this is exclusive of any
additional ECA zones that may come into play...................

Read more downoload attachement

Ralph Lewis is the Vice President of Houston-based
Power Research Inc. Lubricity and stability test data is
available on the PRI Internet site.

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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