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aw., mm mmm sm pw Li A16933 nlllfal. Ae-*. o . ri LEAD INDUSTRIES ASSOCIATION. INC. * MAOIION AVCNUI NKW VOML H. v. imy JJC SUBJECT: February 33, 19tt EVUtUTIM OP OS* ve. FTHffi T Tfl- " e*"1-TM To Hadsi > of i Board of Director* and Industry Dewlopnent Ccaadttee of tha Load Industrie* Association, Zne. *!* Jk Attached please find a copy of the report entitled "Evaluation of Use versus Kon-Use of TZL in Gasoline" presented by the Ethyl Corporation at the Public Health Service Syspoelua on enriromental Lead Cgert aerl nation held In Washington. D.C. In Dece*>er, 1965. Because of the Halted nuP>er of copies aade arallable to ua, your altemats has not received a eojy of the report. Sincerely yoora. ENBtao \ Secretary-Treasurer 1 mtrM.iUHlJWin JUHi jUM j U'li N 3353 m ii Wl.Jt11UWUP^WWBWWPW!W|WPW<^PW>W LIA16934 i4 EVALUATION OF USE yi, NON-USE OF TEL IN GASOLINE - aa^ig^apnytg, |t iyi my ETHYL CORPORATION Farndala, Michigan Da camber 196S N 3353.01 mmmu* Unfa *8EWI LI A169 3 5 m EVALUATION OF USE v. NON-USE OF TEL IN GASOLINE Lead antiknock* art an essential ingredient in gasoline. Their use conserve* natural resource*. They are used for economic reason* and thus I wish to direct your attention primarily to an appraisal of eco* nomic aspects of the "Evaluation of Use vs. Non-Use of TEL in Gasoline.M First, a word about our refinery technology operations might be in oioer. Our Refinery Technology activity is an engineering organisa tion whose principal function is to help petroleum refiners make the most efficient use of antiknock compounds. Over the years, this group has worked closely in literally hundreds of studies with essentially every gasoline manufacturer in this country and many more throughout the Free World on one phase or another of problems related to gasoline manufacture, blending, and use. Our work primarily involves consulting service* on the optimum use of antiknocks. This area, in turn, involves: 1. The most efficient operation of processing equipment to pro duce gasoline component*. 2. The most efficient blending of gasoline components to finished gasoline. 3. The tailoring of the antiknock quality of gasolines to the octanenumber requirement of automobiles. Because optimum utilisation of antiknock compounds has a direct bearing on all of these functions, this study draws on our extensive, thorough, and authoritative background in discussing the economic aspects of the use of lead antiknock compounds in gasoline. At this time, 1 would like to highlight the results of two studies. The first is an appraisal of the effect of elimination of lead from gasoline on the U.S. Petroleum Refining Industry as a whole. The second will be a description of the situation faced by a moderately sised refiner in order to illustrate the nature of problems individual refiners would encounter. "UWWiW mcombos m LI A169 36 / Petroleum refining economic le e complicated subject. For this reeton, eound etudies of economice mult be complex end mint ate the leteet tool* of economic enelyela. Any eimple epproech will tend to over* look important coneideretlona. Recognising thie complexity, in both tudiei we have used the modern management science technique known as linear programming to simulate refinery operations, with solutions \ i obtained through the application of large electronic computers. Today, i this approach is recognised as the standard and accepted method for such investigations. Because we have not taken a simple approach, my subject matter is also necessarily fairly complex. For the industry study, we employed a model that simulates the operation of the entire U. S. refining industry. This model is used by Ethyl to forecast future demand for antiknock compounds. It effectively reproduces industry activity in historical periods on which statistical data permit a check. Furthermore, we have had extremely good success at prediction of near-future demand with this model. In the lead use vs. I non-use study, simulated situations evaluate the effects of producing gaso * i line without lead antiknocks in contrast to a base case that reflects present- day operations with lead. We compare least-cost situations with lead to least-cost situations without lead so that each way of operating is fairly represented. i This Table (1) presents for the U. S. refining industry raw material intake and product distribution for the base case using lead and a case simulating how the industry would be forced to operate if lead antiknocks were unavailable. Raw material prices and product values assumed for this study also are shown in this table. For the leaded base case, the volumes of raw material intake and the volume of products heavier than butane are consistent with published statistics for 1961. Statistical data for 1961 are used in this study since this is the latest annual period for which complete information was available at the time work was started. 9 2- w V. ' The "no lead" ease maka* the same volume aa Lha laaded caaa of all products haavier than butane. Thia ia the only reasonable assumption that can be made since the Industry would have to satisfy the demand for all products whether lead antiknocks were available or not. It has been assumed for simplicity that aviation gasoline can ba made in the "no lead" situation. Actually, this assumption is not really valid since high-quality aviation gasoline cannot be made if lead antiknocks are unavailable. Excess hydrogen, fuel gas, and propane are valued as fuel in both the lead case and the simulated "no lead*' case. Butane is valued at per gallon in the leaded base, which is consistent with current values. It is valued at fuel price in the case without lead because fuel gases are pro duced in excess of base volumes and because light hydrocarbons become impractical components for gasoline blending with the type of processing required to manufacture unleaded gasolines. In the "no Irad" case, crude oil and natural gas liquids intake are allowed to vary to permit attempted production of the same quality and quantity of petroleum products as in the leaded base case. As a result, crude oil consumption increases more than one million barrels per day and the consumption of natural gas liquids decreases to xero, with an overall increase in total petroleum raw materials of about 1/2 million barrels per day. Overall, raw material intake increases by more than 5%. However, the consumption of crude oil increases by more than 10%. We are convinced that the manufacture of gasolines without lead antiknocks would be very destructive of our petroleum natural resources. The consumption of natural gas liquids decreases for the same reason that the value of butane must be degraded. The type of processing required to manufacture unleaded gasolines makes the highly volatile natural gas liquids impractical raw materials for petroleum-refining operations. Consequently, the natural gas industry would have to find alternate uses for these materials or they would become low value by- -J- *J*WW wiiguaHiw<wfwp LIA16936 products of natural gaa production. This Table (2) ebow* processing investment and operating costa for tbs various types of processing considered available in this study. Investment costs which are expressed as dollars per barrel of capacity, include a charge of 20% of processing unit cost for the coat of off-site facilities and can be thought of as average costa to the whole Industry or as specific costs to refineries with crude running capacity of roughly 75,000 B/D- Unit, fixed, and incremental costs are all expressed on a calendar-day basis. Fixed costs are equivalent to 56% per year of capital investment. Included are charges for increased maintenance, insurance, property taxes, depreciation, intereat on borrowed capital, income taxes, and return on investment. No charge for increaaed work ing capital haa been made in thia study to cover such factors at die increased inventory of crude oil. catalyst, and hardware that would be required. No allowance has been made for the increased operating labor, supervision, and technical support of operations that would be needed with the increased complexity of operations. This Table (3) shows, for the U.S. refining industry, the through put of materiel for various petroleum-refining processes. Again, the data lor the leaded base case are consistent with the availability of various types of processing facilities in the U.S. refining industry in 196J. Tor unleaded gasoline, the figures shown represent the capacity required to produce the slate of products demanded of die industry. The next column of figures reflects the new processing required by the industry to make gasolines without lead. No excess capacity is assumed in the no-lead case Just as no excess capacity hat been assumed for the leaded base case. The investment in new processing facilities required to permit the U.S. petroleum relining industry to produce gasolines without lead anti knocks would be about $3,000,000,000. This is roughly 1/3 of the industry's current total investment in p>trolsu.r refinery process facilities. Further, it ie six or seven times the current high annual level of capital expenditures -4 - w t c in nw petroleum refining facilities; end current expenditure* ere trein ing the cepebilltiee of conetruction compeniee. Current expenditure* ere being u*ed for expenelon of menufecluring operetion* to provide for growth in demend, to improve product quality, end to incree** the efficiency end flexibility of current operetion*. The multibillion doller investment re quired to meke ge soli do* without leed would not provide for needed growth, quelity, flexibility, end efficiency. In feet, e lot* in flexibility, efficiency, end geeollne quelity from current levelc would be experienced without anti knock*. This Table (4) ehowe, for the U.S. refining induetry, the propertiee of gasolines produced in the leed case end in the case with no leed. In the leaded bate case. Research end Motor octane nombtri for premium end regular geeolinee are U.S. average valuee for 1965. Volatility properties of lead case premium and regular geeolinee ere average U.S. valuee for ell area* end ell eeeeone of the year end ere derived from Bureau of Mines survey date. Thee* properties ere Reid vapor pressure end percent of gasoline evaporated at the stated temperature* in degree* Fahrenheit. Hydrocarbon-type analyses for the teeded bate-cate gasoline* ere calculated from the composition of gasoline* obtained in the simulation of the U.S. refining industry and are representative of today's fuel*. Moving on to the specification column, present-day Research and Motor octane numbers have been used a* minimum standards for fuels produced without lead antiknock*. The volatility specifications for unleaded gasolines have been set ao a* to provide reasonably satisfactory performance, although somewhat lesa satisfactory than average leaded gasoline*! It ia practically impossible to produce gasoline* without lead that would have the asm* volatility characteristic a as present-day fuels and at the same time approach current standards of octane quality. Thus, we have as sumed U.S. averag* volatilities could shift somewhat from present average* but that the limits of the current range of gasoline volatilities would be the limits of acceptability and that the U.S. average volatility would have to fall within this rang* and could not be on either extreme. - 5- .mimehi ii m.nwuuH'v-je mjmm Ll IMP Hydrocarbon* type specification* art not imposed on either tha laad caaa or tha "no load" caaa. Now tat'a consider tha last column, which a hows tha faaolina properties for tha no-laad caaa. Experimental and commercial data ahow that gaeolinea produced without laad antiknocke become more eenaltiva; that ia, tha differences between Raaaarch octane number and Motor octane number increaeee. Thu a, Raaaarch octane number muat be reload above currant level* to maintain current Motor octane number. For premium gasoline made without laad, Raaaarch octane number goea from 100.0 to 101.1 to maintain tha Motor octane number at 91.2. For regular gaaolina, the Reeearch octane number increaees from 93.9 to 94,9. Experience and experimental data show that, despite the higher Raaaarch octane number, thcee unleaded fuele are more prone to knock ia care on tha road than today's leaded gasolines. A recent study involving ten care and fuels similar to those shown in this table verifies this conclusion. Thus, gasoline* made without lead antiknock* will aatiafy fewer of the care on the road than leaded gasolines, even if laboratory octane quality ia maintained. Although we have attempted to maintain reasonable control on the volatility quality of gasolinea produced without laad, tha premium gasoline tends to become heavier. Without soma volatility epecificationa, it would become much more so. On the other hand, the regular grade gaaolina become* more volatile for the no-lead cate. Again, this tendency would be more pronounced without reasonable volatility specifications. Directionally, these problems become very severe if a significant part of the required capital investment is not devoted to control of gasoline volatility. But, If we Ignored volatility specifications, the resulting premium fuel would be unsatisfactory in warm-up characteristics and would produce higher hydro carbon emissions. Cn the other hand, the regular grade gasoline would be unsatisfactory in terms of cold weather carburetor icing and warm weather vapor-lock tolerance, and the evaporative losses would become aevera. 4 JIW ,m e "U nppnw LI A16941 mmm "T*- Ii in --i" -|~T ' **- .*. I o I It Is desirable to bav* similar volatility In both grade* of gasoline both from civilian and military point* of view. Today1* premium and regular gasolines have similar volatiliti** but tbi* practice would become impractical if lead were not available. Again, th* hydrocarbon type analyac* for th* no-lead situation are calculated from th* compositions of th* gasoline* obtained in th* simulation Study. 1 This Table (5) summarise* the main conclusion* from this part of th* study and show* th* inc r*a*ed cost of manufacturing gasolin* if lead antiknock* were not available. Th* cost of making gasolines approaching th* quality of today's gasoline* without using lead antiknocks is estimated to be 2. bf/gallon for th* U.S. refining industry a* a whole. This is a 30% increase in the manufactured cost of gasolin* (including raw material cost) based on an assumed present-day cost of 6. 5f /gallon for an efficient large refinery. Principal component* of th* increased cost of gasoline are the increased consumption of petroleum raw material* (183,000,000 barrels/ year) and th* enormous capital investment (3 billion dollars) in new process facilities that would be required. The type of gasolinee which would have to be produced without lead would be lees satisfactory than today's fuels : and would require serious consideration with regard to certain problem areas. 1. Premium gasolinee would become hesvier, and thus would < hsve poorer warm-up properties and produce higher hydrocarbon emissions. 2. Regular gasolines would become lighter, and therefore would be prone to carburetor icing, would have lees resistance to vapor lock and would produce higher evaporative losses. This Table (6) highlights three other areas that should be considered. Reduced flexibility of refining operetione is a serious problem that would face the industry if antiknock compounds war* unavailable for us* in gaso line blending. This loss of flexibility manifests itself in two ways: 9 -7 - . a#1 up' \\fm**tm*"* Wjmrv"v LIA169A2 1 1. It would reduce the Industry's currant capacity for providing emergency supplies of gasolines, Jet fuels, and specialities on short notice. Refiners would no longer be able to Incorporate large volumes of marginal gasoline stocks or release potential high-octane gasoline feedstocks or high- octane components for other uses, 2. It would complicate gaaollna blending. Increased time and effort would be required to blend gasoline from components. Inventories of components would have to be larger. This loss In efficiency has been estimated to require an increase of at least one-half number for all octane targets to assure satisfying specifications. It has been suggested by a few Individuals that, rather than restore present octane quality with processing, cars ahould be modified to operate on the quality of gasoline that could be produced by simply leaving lead antiknocks out of gasoline. Assuming that present-day cars could be made to perform on fuels of that quality as well as they perform on present fuels (and this assumption is not valid), fuel economy would be adversely affected. An estimated 10% Increase in gasoline consumption would result. This increased gasoline consumption would cost the motorist an additional 2 billion dollars per year based on a gasoline price of JOf /gallon as well as depleting crude oil resources and increasing total hydrocarbon emissions proportionately. Still another factor should be considered. If forced to operate t without antiknocks, the refining industry would be dependent to an even greater degree on the availability of platinum catalyst for catalytic reform ing as a means of producing needed octane quality ---both in normal times and in times of emergency. Since platinum Is not a native raw material, the United States is subject to the availability of this metal in the world market. The principal world source of platinum is the Soviet Union, with , South Africa a secondary aource. Very small amounts are produced in the Western Hemisphere. We eetimat* that the present capacity for catalytic reforming wmu. ui^ipwygpfiwiipww*^ LI A16944 rfUM* iifcfeeiiMMMOia*eaiaMaMii*iVliii. ..fw i-yi.. . --Au -M'tr.Ml'<-*... llfc*-.* H 1. Higher average octane quality on both premium and regular gaaoline. 2. Slightly higher percentage of premium gaeoline on total gasoline, 3. Higher percentage of gaaoline on crude. 4. Smaller else proceeeing unite, reeulting in higher capital costa in S/barrel of capacity, lees flexible operations, and limited sisee of economically justified unit operations. The current Investment in process facilities for this refinery is about 20 million dollars. In this Figure (2) the additional processing unite required in manufacture gasolines without lead antiknocks are shown. The required investment in new processing facilities totals 13-1/2 million dollars or about 2/3 of the total current investment. At the present time, the management at a refinery of this else could well be seriously considering the relative advantages and dis advantages of adding a hydrocracker to the present processing scheme. In such consideration, a major concern would be whether the " I million dollar" investment can be justified in terms of improved product distri bution or quality or even the banker's willingness to finance such an investment. For this refiner, contemplating a $13-1/2 million investment in new facilities seems impossible with no improvement in produce quality, or product slate, or operating efficiency. The problem areas noted for the U. S. refining industry apply for this illustrative refinery as well, but become more severe. Premium gasoline would become heavier, and regular gasoline would become more volatile. These properties vrould bit harder for the small refiner to hold in line. Petroleum raw material intake would Increase about 10% and ths manufactured cost of gaaoline would increase almost 4f/galloa, or about 43%. Assuming that ths cost of manufacturing unleaded gasolines could - 10 - *PPPS*W* mm i a *- - iMr*~T' minim aS&tilLaSM*ii inrm -1 v fMtoerik'nSHiSC LI A 16945 be pasted from ths refiner to to* motorist, injustices would Inevitably be crested. Refiners wito costs lower toss toe sversg* would benefit where* ss refiners wito costs sbov* to* average {such ss to* on* illustrated) would suffer. Directionally, toe small refiner, wbos* costs would almost always xc**d to* average, would b* hurt to* most. At Uast 100 small refineries (roughly 1/1 of to* total number of refin*ri*s in to* United States) would probably have to be closed. V* have been told by small independent refiner* that they would b* usabl* to compete In to* gasoline manufacturing business if antiknock* war* unavallabl* to th*m a* a means of producing competitive antiknock quality. Thee* refiners would be forced out of toe petroleum refining business. ryiiM ir-ff'f-iin ri iin'ii"*Sr`------ LIA169 4 6 ----? ---- Table 1 U. S. REFINING INDUSTRY INTAKE AND PRODUCTION laUJf Crude OU Nilikrtl Cm Li<juidi Unfinished OU* Total Petroleum Raw Material Product!oa Eace** Hg. U SCr Fuel Gee. FOE - 30. S (/M Btu Propane - 30. 5 (/M Bta Butane - 4 (/gal. Premium Caaoline # 12. 3 (/gal. Regular Caaoline # 10.5 (/gal. Ariation Caaoline #13.0 (/gal. Naphtha Specialnea Petrochemical* Military Jet Fuel Keroaene li Comm. Jet Fuel Dieael Fuel Heating OU Reaiduale It Road Oil* Lubricant* Asphalt It Wax Coke, Ton* Miscellaneous Valued# J0.5 (/Id Btu Raw Material Price 3.05 2.31 io (/mscf 1.02 1.17 2.52 5.15 4.41 5.46 4.30 4.45 3. 89 3.57 3.34 3.30 2.05 10.29 2.55 12.00 B. 40 Leaded Bate M B/D B. 717 579 B7 OST 743 339 24B 139 1. 409 2. B35 144 42 113 224 495 42B 1.444 777 173 321 B9 99 No Lead M B/D 9. BOO 07 087 IncreM* (or No Lead Cue M B/D 1. 083 -579 504 497 5B1 5S5 442* 1.409 2. 835 144 42 113 224 495 428 1.444 777 173 321 89 99 >244 242 317 303 wwawpw ui awiititM t iip.iiuj<Li..i,ijii m L N 3353.02 mill Hill H.I i >Jfcu'. HJ1 no. |--rH-m-'f^-.wnir^iHi. Winiroi M-.r iifa LI A169A7 inirirtTv >' T*bit 2 U.S. REFINING INDUSTRY PROCESSING INVESTMENT 4 OPERATING COST Processing Equipment Cat Cracking Hydrocracking Alkylation Isoma riantion, Cg - Cg Cat Reforming Hydrotreater Extraction Fractionation Hydrodealkylation Crude Unit Hexane laoroeriaatioa BTX FacUitiee Polymer Plant Thermal Processing Coker Cracker Visbreaker Alkylation Revamp Cat Reforming Revamp Investment Costa* $/B of Capacity 00 720 1.017 440 400 200 47 24.47 1.071 100 S12 -mm - m. 143 30 Operating Coat, $/B Fixed** Incrtmtoul 0.3944 0. 7099 1.0027 0. 4338 0. 3943 0.1972 0.44 OS 0. 0234-0. 0440 1.0340 0.0984 0. 5048 mm !* mm mm mm -- 0. 10-0. 12 0.34-0.38 0.55-0.99 0.30 0. 19-0.48 0. 05 0. 20 0.02 0.49 0.10 0. 30 0. 25 0.45 mm 0. 11 0.10-0. 20 0.05 mm -- * lrvcludti 20% of battery-limit installation for ofl-llU. * * 36% of capital investment per year. Include! 4% maintenance, 2% Insurance and taxes, 30% depreciation, interact, and return oo investment. mm mmmm -=*' :r - M. ......... ^ LI A16948 -I ,- j - ..rfttiJ-.. -iz.'jt*-J TabU 3 U. S. REFINING INDUSTRY PROCESSING THROUGHPUTS Leaded Baa a M B/CD Crude Fractionation S, 717 Catalytic Cracking, Fra ah Faad ), MS Hydrocracking 38 Thermal Proceaaing 1. 127 Catalytic Reforming 1.688 Extraction -- Hydrodaalkylation -- I* orneriration. C{ - Cg 8 laomerieation, Cg -- Alkylatton 416 Polymerisation 97 Hydrotreating 238 Fractionation of: Cat Cracked Geaoline (Lt/Hry) 620 Cat Cracked Gaeolina (Cg/Cg/Hvy) -- Thermal Caroline (Lt/Hry) 336 Reformate (C5 - Cg/Cya) -- laoroerate (Cg/Cg) -- U. Hydrocracked -- LA. Thermal Alkylation Revamp Catalytic Reformer Revamp No Lead M B/CD 9.800 3.442 849 764 3. SOS 1.075 113 958 .. 447 59 663 Hr Proceaaing Required M B/CD 1.083 811 .. 1.817 1,075 113 950 -- 31 -- 425 1,481 -- 148 2.514 395 229 86 416 1,688 861 --- 2.514 395 229 *. -- Inveatment /B MM i 100 400 720 -- 400 467 1.072 440 512 1.017 -200 108 .. 584 .* 727 502 121 418 *- 31 -85 26 22 -- -- -- - 26 65 67 26 67 15 .. 165 69 50 84 17*57 l mm wu 'mwwpw- i'll, mi w^ppiu ww'jiwfi umi i n a wa mmvi,j mm wiqmp'mmmmw******** LIA16949 I > rfe eieiiiiMf linn Ai Table 4 * U.S. REFINING INDUSTRY GASOLINE PROPERTY Premium Riiurcb OctiM Number Motor OcUm Number TEL* ml/felloe Reid Vapor Pressure, pci % Enporiud I 158T uo*f 240 *r jwr Hydrocarbon Type, Vol % Aromatics Olefins Saturates Leaded Base 100. 0 91.2 2.54 10.2 20 36 62 97 22 16 62 Specifications 100. 0 mbs. 91. 2 min. 0. 0 max. 10. 2 max. 25 min. 50 au. 57 mia. 90 No Lead 101.3 j 91.2 0.0 10.2 27 34 57 99 47 S3 IU|Ur Research Octane Number Motor Octane Number TEL. ml/felloe Reid Vapor Pressure, pel % Evaporated t 158T 160T 240 *r 365T ^^Jfydrocarboe Type, Vol % Aromatics Olefins Saturates 93.9 5.5 2.05 10.2 32 43 62 95 17 20 63 93.9 mia. 85. 5 mia. 0.0 max. 10.2 max. 20 mia. 47 max. 50 mia. 90 mia. .. -- 96. .5. 0 8. 32 47 67 100 35 21 44 'f WH. Ijp.MlUWJf ' i. J<U^|L>'WILIiJ|l.il|Wp^|Bijl IUBPU^. ' k'~*SWte pipMWCTM I Hi ^Jtei^dHcaiuulMcwSkiUi a--jin LIA16950 i nfajim~ rti Afr.a Table $ uj. RronB nmjgim kmukx COST or KAftIRG OASCLBrg VTTHJ'JT LEAD UrnTWOOB Increased Coat of Manufacturing Gasoline Percent Increase Is Manufactured Coat 2.6^/gal. of gyf"l 1 -e 30$ Increased Petrolem Raw Material Cooaiasjrtlon barrcls/yesr Cruda OU Satural Caa Liquids 396,000,000 - ,211 000,000 at Increase l$,000,000 1 1? Xnvaitaent In Sew Processing Facilities $3,000,000,000 PROBLEM ARTA3 Prealvsa Gasoline heavier (poorer vara-up and higher hydrocarbon salsalons) Regular Gasoline lighter (mots prone to vapor lock and higher eva porative losses) 's-3ncvI*p i iif i juim.iiv in i ji j .........a....... in j ,, -i mu ata*Ji--  HMWgnwpi ----r-'-'~^-r~- ---V i - jfci ii /fci RXTINERT USING LEAD LIA16951 ---------- Flgjtrt 1 ^ 3353.03 w LIA16952 .jjA**Jii3ai*&La^aaafthJi^riMtrtfc ,i;.i<;-rw **iWrtii-,-.. * - - mir iffci i |` 'i IT Figure l umtur using no lead narOE^O *OlH> Onafti