API Process Safety Group

1
API Process Safety Group

• Report to CRE
• Presenter Mike Lubcyik
• May 18, 2011
• Seattle, WA

2
RP 751 Safe Operation of HF Alkylation Units

• RP 751 Committee undertaking accelerated
  review/revision of this document
• Kick-off conference call and 2 working meetings
  held to date
• Still planning a 2-pronged approach for update
  process
• Review and update RP from a technical basis
• Strengthen RP in specific areas to reduce risk
  tolerance - signals that industry is raising
  the bar for safety of HF alkylation operations
• Revision committee includes both API and NPRA
  members
• Completion target is Year End 2011

3
RP 754 Process Safety Performance Indicators

• Continued implementation leveraged through the
  API/NPRA Metrics Analysis subgroup
• Drive consistency in data collection, reporting
  and messaging
• API Data Collection Preliminary Results (as of
  4/28/11)
• 15 companies reported
• 145 facilities (incl. intl sites) 94 refineries
  51 petrochemical
• Approximately 70 U.S. refining capacity
• 188 Tier 1 (160 for refineries) 204 Tier 2 (169
  for refineries)
• Conducting quarterly conference calls developing
  and posting FAQs on API website
• RP 754 Metrics Workshop May 9th Fort Worth,
  TX

4
RP 755 Fatigue Risk Management Systems

• Established RP 755 Implementation Team to assist
  with implementation issues
• Draft charter covers areas such as
• Share implementation challenges, lessons-learned,
  etc.
• Provide input to API on responding to
  interpretation requests
• Host workshops, conference calls etc. to share
  information to help share implementation
  learnings
• Gather information to be considered in next
  edition
• Kick-off meeting held April 21st next meeting
  June 7th
• Team drafting workplan for discussion at June
  meeting
• High level of interest - 13 companies and API
  NPRA
• Process Safety Group and Refining Subcommittee
  will be kept apprised of activities of the Team

4
5
RP 756 Safe Location of Tents Fabric
Structures

• RP 756 Committee reworked document to address
  concerns
• References RP 752 where practical
• Contains simple work flow diagrams / pictures /
  tables
• Introduces alternative work process for TA tents
• Seek funding for Baker Risk Tent Explosion
  Testing (Mar Aug)
• Process Safety Group (PSG) agreed to postpone
  ballot until after test data available (Fall
  2011)
• PSG recommends testing on tents for blast
  response to vapor cloud explosions be conducted
  in support of new RP 756
• Testing will provide data on response to tents to
  various blast loads, identify failure modes for
  different tents and obtain data to estimate
  vulnerability of tent occupants
• API is awaiting testing proposal from Baker Risk
  while evaluating funding alternatives

5
6
Facility Safety Workshop/Forum

• Facility safety workshop held in October 2010 to
  establish stronger working relationship among
  stakeholders identify areas for further
  constructive dialogue.
• Topic agreed to by all stakeholders was sharing
  of best practices of joint Health Safety
  Committees
• Planning Committee established to develop program
• Call for presentations went out in late March
• Companies currently evaluating who to send to
  workshop and what subjects they might propose for
  the program
• Workshop will be held on July 26 in The
  Woodlands, TX

6
7
Refinery Alkylation

• API study on Potential Gasoline Market Supply
  Cost Impacts of Restricting HF Alkylation
  revised due to underestimated impacts
• Final draft of messages findings related to the
  study to be presented and endorsed by Refining
  Subcommittee
• Study results incorporated in final draft of
  white paper
• Draft short papers derived from white paper
  being reviewed by Process Safety Group. Topics
  include
• Considerations Associated with Alkylation
  Technologies
• Conversion of HF alkylation unit to Sulfuric Acid
  alkylation unit
• Management of Alkylation Safety Risk
• Technology Development Use of Solid Acid
  Catalyst
• Reconvene member company lobbyists to share
  latest advocacy educational materials

7
8
Refinery Alkylation Draft General Messages

• Legislative/regulatory activity resulting in
  reduction/ban of refinery HF alkylation
  production could result in
• Loss of well paying jobs due to refinery closures
• Loss of local tax revenue from property, sales
  and income tax reductions
• Unnecessary increased refinery investment and
  annual operating costs, threatening the economic
  viability of refineries
• Remaining refinery system operating at or near
  maximum capacity and vulnerable to unforeseen
  refinery outages
• Increased the dependence on gasoline imports a
  potential national security concern

VG - 8
9
Refinery Alkylation Draft Findings by Scenario

• Scenario 1 Shutdown of all HF alkylation units
• Potential closure of nine refineries, four of
  those being in the Rocky Mountain region.
• Loss of over 1/3 (35) of the U.S. summer
  gasoline blendstock supply and about 1/3 (30)
  loss of gasoline and distillate supplies in the
  Rocky Mountains
• Loss of almost half (45) of the aviation gas
  production in the U.S. - a significant negative
  effect on private and some commercial aviation
  operations.
• Significant surplus of LPG would need to be
  transported and consumed in alternate markets

VG - 9
10
Refinery Alkylation Draft Findings by Scenario

• Scenario 2 Mandated use of vapor suppression
  technology
• Potential closure of 3 refineries
• 3.3 billion would need to invested to enable
  remaining refineries to use of vapor suppression
  technology
• 139 million of increased aggregated annual
  operating costs
• 4 to 6 cents per gallon of gasoline - increased
  incremental compliance costs

VG - 10
11
Refinery Alkylation Draft Findings by Scenario

• Scenario 3 Mandated conversion to alternate
  technology (i.e., sulfuric acid alkylation)
• Potential closure of 3 refineries
• 6.3 billion would need to invested to enable
  remaining refineries to switch to alternate
  technology
• 289 million of increased aggregated annual
  operating costs
• 7 to 9 cents per gallon of gasoline - increased
  incremental compliance costs

VG - 11
12
Refinery Alkylation Draft - Other Findings

• Aggregate capital spending costs would have been
  higher had the study used the CERA Downstream
  Capital Cost Index (DCCI) rather than the
  Nelson-Farrar (NF) Construction Inflation Index
• Scenario 2 3.5 billion vs. 3.3 billion
• Scenario 3 7.8 billion vs. 6.3 billion
• Aggregate capital spending cost for Scenario 3
  would have been higher had the study used the
  higher of the 2 references for ISBL investment
  costs
• 6.8 billion (8.5 billion using DCCI) vs. 6.3
  billion
• For Scenario 3, additional sulfuric acid
  regeneration capability would be needed to handle
  the increased volume of spent acid
• 5 new facilities and 11 expanded facilities would
  be needed
• 248 million ton-miles per year of increased
  sulfuric acid transportation by road or rail
  would result presents a safety/risk transfer
  issue
• For Scenario 3, acid regeneration costs will
  increase
• Increase in industry annual regeneration
  expenses 298 million/year (NF) or 338
  million/year (DCCI)

VG - 12