|
Imperial Oil to convert vegetable oil into feedstock for diesel fuel
Gary Park for Petroleum News
Imperial Oil, ExxonMobil’s 70% owned Canadian branch plant, is planning to build a renewable diesel facility at its refinery complex near Edmonton.
The company said the unit would be the largest of its kind in Canada, processing 23,000 barrels per day in addition to the 200,000 bpd already handled at Imperial’s adjacent Strathcona Refinery.
Imperial said its renewable diesel will use canola, soy or sunflower oils as feedstock in combination with hydrogen.
The end product would be usable year-round in any type of engine that uses diesel for combustion. It differs from biodiesel, which converts used cooking and other oils into fuel.
Subject to a final investment decision in mid-2022, Imperial expects the project will reduce emissions by 3 million metric tons a year, which is the equivalent of taking 650,000 cars off the road.
The Calgary-based company, which operates refineries in Ontario as well as Alberta, expects the facility to come on-stream in 2024, well ahead of the Canadian government’s 2030 deadline to meet more stringent carbon-intensity targets for fuels.
Clean Fuel Standard The 2030 target date, part of the new rules contained in a draft of Canada’s Clean Fuel Standard, was supposed to be implemented by the end of this year, but likely faces a delay because of the current federal election campaign.
However, many refineries in Canada are starting to use renewable diesel in a bid to put themselves ahead of the regulations.
Imperial Vice President Jon Wetmore said that had it not been for the revised clean fuel policy “we probably wouldn’t find value in the (planned renewable diesel project).”
The new federal standards will require suppliers, such as refineries, to reduce the lifecycle carbon intensity of the fossil fuels they supply.
However, Wetmore said the shift to renewable diesel is unlikely to make much of a dent in his company’s fossil fuel output.
While the fuel Imperial expects to produce is called renewable, it will not be emissions free, because it will be made using blue hydrogen, which is derived from natural gas.
Although Imperial has not disclosed the price tag of the project, Wetmore said it will be in the “hundreds of millions of dollars” and will spur parallel investment in a carbon-neutral hydrogen facility.
A recent analysis by the U.S. government’s National Renewable Energy Laboratory found that on average renewable diesel lowers carbon-dioxide emissions by 4.2% compared with petroleum diesel.
Similar plans Similar plans have been rolled out across Canada in the last few months, including a proposal by Calgary-based Tidewater Midstream and Infrastructure for a C$150 million initial public offering to pay for a 300 bpd renewable diesel facility at its refinery in Prince George, British Columbia.
In July, Dallas-based private equity firm Cresta Fund Management bought a controlling stake in the 135,000 bpd Come by Chance refinery in Newfoundland, with the goal of converting the facility to produce renewable fuels.
Calgary-based Parkland Industries is working on “co-processing” or blending renewable fuel directly into its diesel production at its Burnaby, B.C. refinery.
By year’s end it expects the change to yield more than 100 million liters of “bio-feedstock,” which the company says will be the equivalent of removing 80,000 cars from the road.
Susan Bell, director of Americas refining and marketing at IHS Markit, said “clean technology is going to get much more important to the sector … because globally that’s the way governments are moving.”
She said that if the Canadian government maintains its commitment to achieve net zero emissions by 2050 “then we have to do something to lur transportation fuel supply.”
National Bank analyst Travis Wood said further plans are likely to be announced as the “oil and gas sector in Canada continues to adapt … and lead the ongoing energy transition in North America.”
- GARY PARK
| 