2010 THE INDUSTRY GRASSROOT NEWS - FEB 23,2010

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14 years 1 month ago - 14 years 1 month ago #7771 by Anton
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Fluor Confirms Study for China Refinery, Petchem Complex
by Fluor Corp.
February 22, 2010
Fluor Corp. announced Monday that it is currently performing a feasibility study for a joint venture led by PetroChina Company Limited. The proposed 440,000 barrel-per-day refinery and 1.2 million tons-per-year petrochemicals complex will be located in Taizhou, Zhejiang Province, China. The undisclosed contract value was booked in the fourth quarter of 2009. The feasibility study is underway and is being led by Fluor's Shanghai and Houston operations centers with support from Beijing and Manila. The final feasibility study report is expected to be completed at the end of 2010. The PetroChina-led joint venture also includes Royal Dutch Shell PLC and the international arm of Qatar Petroleum.
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Refiners Deal with Clean Fuel Consequences
Crude oil refiners are finding themselves ensnared in a pollution debate whose roots lie in the U.S.'s pursuit of lower tailpipe emissions. While the combustion of motor fuels is cleaner than ever, production of motor fuels has become more energy intensive. Essentially, one kind of emission has been swapped out for another. This relatively new way of looking at a gamut of products--be they toys, cars or gasoline--counts the emissions over the entire life cycle of production, distribution and use. And this has wide-ranging implications for both refiners and regulators. Refiners are concerned they will bear the additional costs for higher emissions that are actually a byproduct of these regulations. The costs would be through fees, taxes or the need to purchase carbon credits to offset those emissions. Environmentalists have also pointed to pollution from refining to make their case for biofuel blending in gasoline, a move refiners have been resisting because it curbs demand for petroleum products. In the past decade, the U.S. Environmental Protection Agency created and enforced rules to reduce the amount of sulfur found in gasoline and diesel fuel. By June, diesel burned by trucks on the highway can contain no more than 15 parts of sulfur per million, compared with the previous limit of 500 parts per million. Removing sulfur from fuel to create ultra low sulfur diesel, or ULSD, involves two hydrogen atoms binding with a sulfur molecule under high temperatures and pressure.
"The irony is we produce the low sulfur fuel which reduces tailpipe emissions, but the additional processing step in producing lower sulfur diesel actually increased our greenhouse gas emissions," said Donald Cuffel, principal environmental engineer at Valero Energy Corp. (VLO), the U.S.'s largest refiner by capacity. "Even cleaner fuels have an environmental consequence." Valero's Benicia, Calif., refinery releases an additional 16,000 metric tons of carbon dioxide because of the extra energy needed to operate the ULSD unit for a year, while the "corresponding reduction in tailpipe emissions expressed as reduced SO2 [sulfur dioxide] is about 200 tons" for that fuel, Cuffel said. While refiners have articulated the impact ULSD has had on operations, they have had a tough time explaining that clean-fuel regulations are the cause of higher emission levels. This year, refineries, among the heaviest emitters of greenhouse gases in the country, must begin tracking the emissions. California's low carbon fuel standard, which calls for a return to 1990 emissions levels by 2050, have also kicked in. Meanwhile, climate-change legislation has stalled in Washington but a carbon tax is still being discussed. There's no uniform method for monitoring or calculating emissions across facilities, making any comparisons or standard-setting difficult, said Robert McCormick, principal engineer of fuels performance at the Department of Energy's National Renewable Energy Laboratory. The EPA's guidelines will lead to more transparency, but this will take time, he added.
Now that they are being asked by the EPA to track their carbon footprint, Charles Drevna, president of the National Petrochemical and Refiners Association, said the refining industry is concerned regulators will use the data to penalize heavy emitters or to direct business decisions on emissions-reduction technology. Higher fossil-fuel emissions also "mean biofuels, natural gas, hybrid electric vehicles--anything that uses less petroleum--will look more attractive," said McCormick. In early February, the EPA issued Renewable Fuel Standard 2, which finalized plans to increase biofuel blending from about 12.95 billion gallons in 2010 to 36 billion in 2022. The mandates kick in incrementally as the Obama Administration pushes to increase fuel efficiency in vehicles.By turning the spotlight back on greenhouse-gas emissions at refineries, the refining industry may be trying to seek changes to RFS2 or influence other regulations, McCormick said. The industry stepped up lobbying efforts after losing a fight over the allocation of emissions credits, which were a key part of the climate change bill passed by the U.S. House of Representatives last year. It's a risky gambit for the refining industry because it calls attention to a fact they usually don't like to advertise--that producing fuel is a dirty business.
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Foster Wheeler Wins More Work In Vietnam
by Foster Wheeler AG
February 17, 2010
Foster Wheeler AG announced Tuesday that its Global Engineering and Construction Group has been awarded a contract by Nghi Son Refinery & Petrochemical Limited Liability Company (NSRP LLC) for the provision of technical and commercial services for the planned Nghi Son Refinery and Petrochemicals Complex. NSRP LLC is a joint venture company comprising PetroVietnam and its international partners. The Foster Wheeler contract value for this project was not disclosed. Foster Wheeler will support NSRP in the preparation of the enquiry packages, bid clarifications, and bid evaluation and provide all necessary technical and commercial support leading to award of the engineering, procurement and construction contract. Recently, Foster Wheeler successfully completed, on schedule, the front-end engineering design for this new complex, which will be Vietnam’s second refinery. Fumitaka Hosaka, lead NSRP LLC project director, said, “Recognizing Foster Wheeler’s performance in preparing the FEED, NSRP is pleased to award Foster Wheeler this contract for additional technical and commercial services.”
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Fla. Legislators Consider Lifting Offshore Drilling Ban
By now, the arguments are well rehearsed. Offshore oil drilling is either a dangerous gamble with Florida's beach-driven tourism industry, or a potential job creation and tax windfall. Either way, an emotional and politically charged drilling debate is taking shape in the state Capitol, a slow-moving political drama that is likely to unfold over the next two years on whether to allow oil drilling in the Gulf of Mexico, three to 10 miles from Florida's West Coast beaches. Republican legislative leaders are holding hearings and producing reports on the economic and environmental impacts of offshore oil and natural gas exploration. Even supporters say the drill bill is unlikely to become law this year, with lawmakers skittish about the 2010 election, gas under $3 a gallon and a reluctant state Senate taking a go-slow approach to the issue.

But the subtext is clear: With more drilling-friendly leadership taking over the House and Senate this November, the legislative session that starts March 2 could lay the groundwork for allowing oil rigs to set up off Florida's Gulf Coast. After the November elections, staunch drilling advocates state Rep. Dean Cannon and state Sen. Mike Haridopolos, both Republicans, will take over as powerful presiding officers in their respective chambers. Republican Gov. Charlie Crist, who once was against drilling, has been open to the idea but hasn't made it a central part of his legislative platform. "I think we'll lay the predicate this year for next year," said Barney Bishop, president of the Associated Industries of Florida, which is lobbying for offshore drilling.

Since 1990, Florida has banned exploration or drilling in its waters, which run from three miles to 10.3 miles off the Gulf Coast shoreline. Oilmen are lobbying to repeal that ban and authorize exploration in the Gulf, which is thought to be rich in oil and natural gas. Atlantic Ocean waters off the South Florida coast would not be open to drilling. However, drilling critics argue that South Florida could see fewer tourists if people come to think of Florida beaches as oil production sites or if a West Coast oil spill gets national media attention. Legislators won't authorize drilling outright. Rather, they are seeking to lift the 1990 ban and leave the decision on whether to offer drilling leases to the state Cabinet, which is comprised of the governor, attorney general, chief financial officer and agriculture commissioner.

Supporters say drilling could create up to 20,000 jobs and bring billions in permitting and severance tax revenue over several decades. They note there hasn't been a drilling-related oil spill in the United States since an incident off the California coast in 1969. "The beaches is a moot issue," said Bishop. "There hasn't been a single drilling accident in 40 years." Opponents counter that revenue and job projections are inflated and could take a decade or more to materialize - and there's no way to guarantee against a tourism-destroying oil spill. Even if the rigs are safe, a damaging spill could happen during a major hurricane or from a faulty pipeline, they note. "Our view is, you can't make it both safe and profitable," said Eric Draper, a lobbyist for the Audubon Society. The methodical approach legislators are taking this year is calculated to take away the argument that drill-bent Republicans are ramming through a sweetheart deal for the oil industry. The results are dry, hours-long hearings in Tallahassee on the geological and practical aspects of drilling. More meetings are planned even before a bill is written. That's a stark contrast to last year, when the House pushed through a drill bill in the last two weeks of session with little debate. The proposal stalled in the Senate.

"No one can say we didn't have an in-depth discussion," said Florida House Speaker Larry Cretul. Democrat Rep. Keith Fitzgerald, who represents a coastal district in Sarasota, praised House Republicans for holding extensive hearings, but said he remained unconvinced that the financial benefits from drilling outweighed the risks. "They're not sweeping potential problems under the rug," Fitzgerald said of legislative Republicans. Still, he said, "People have to decide - do the benefits outweigh the costs? I'm a long way from being convinced. If you look at where I live, the entire economy is based on the beach. Anything that might detract from that is very costly."
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Technip takes North Sea double
French engineering contractor Technip has won two separate contracts from Canadian producer Talisman Energy to tie back the Auk North and Burghley fields in the UK North Sea.
Upstream staff 23 February 2010 06:25 GMT
The Paris-based outfit said the combined work was worth more than €40 million ($54.4 million). Technip said in a statement that it would provide fabrication and installation services for a production pipeline, an umbilical, a power cable and associated subsea equipment to tie the Auk North field back to Talisman’s Fulmar A platform. It said it would supply a production pipeline and a gas lift pipeline, plus an umbilical and other subsea equipment to connect the Burghley field to the Premier Oil-operated Balmoral floating production vessel. Technip said both projects would be installed in the second quarter of this year following welding at its spoolbase in Evanton, Scotland. Installation would be carried out from Technip’s Orelia dive support vessel and the Apache 2 pipelay vessel. The Auk fields, which Talisman took over from Shell in 2006, lie on blocks 30/16n and 30/16t in the UK North Sea. The Burghley field lies on Block 16/22.
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Taxing oil firms will keep jobs well dry
President Barack Obama is engaged in what renowned economist Ludwig von Mise, called "the politics of envy," and this will make it more difficult to re-establish job growth in America. In his State of the Union address, Obama said: "We will not continue tax cuts for oil companies, investment fund managers and those making over $250,000 per year. We just can't afford it." The president apparently believes Americans don't like oil companies, investment fund managers and those who make more than the average, and he can gain political points by attacking them. The implication of his statement, "we can't afford it," is that profitable companies and individuals who produce successfully in a free market have no right to keep much of their earnings. This continued threat of raising taxes and increasing regulations is a major reason America is stuck with such high unemployment. Producers are reluctant to invest and hire people when they are continually threatened with government actions that will increase costs.
Despite the economy having lost more than 10 million jobs during this recession, the president is sticking with his plan to increase energy costs by raising taxes and still trying to get approval for the House climate change bill. This will result in the loss of even more jobs -- directly by reducing employment in the oil and gas industries and indirectly by increasing the cost of manufacturing and transportation. The Obama administration's 2011 budget calls for $36.5 billion in new taxes on the oil and gas industry. This industry already pays more taxes and royalties than any other and supports 9.2 million jobs in the United States, about 5 percent of U.S. employment, according to a recent study by Price Waterhouse Coopers. A budget proposal to tax a profitable jobs-producing industry to support an alternative that is not otherwise economically viable won't get America out of a jobs recession. It will encourage production and jobs to move out of the United States and into countries that are politically unstable and, in some cases, threaten our security.
The U.S. Energy Information Administration predicts worldwide demand for liquid fuels, primarily oil, will increase 25 percent; natural gas, 47 percent; and coal 49 percent by 2030. Alternative energy sources are not going to meet this demand. Biofuels make up 2 percent of worldwide liquid fuel production, and non-hydro renewables make up less than 5 percent of electricity production. Rather than demonizing the industry, the Obama administration should increase market-based incentives for innovation in producing energy in the U.S., including oil, gas, coal and nuclear. Otherwise, it risks creating uncertainty about our energy supplies by pushing production out of the U.S. into countries that are less energy efficient and more polluting (per unit of output).
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