Refining, Cost and Market Impacts of Tightening Standards
Through our powerful refinery and global modeling tools, we provide clients with the ability to assess the supply cost and market impacts of new – generally regulatory – initiatives on petroleum products quality.
Our areas of expertise include:
- Reformulated, ultra-low-sulfur and EURO III/IV/V gasoline and diesel
- Commercial and military jet fuels (Jet-A1, JP-8, JP-11)
- Marine fuels (MGO, MDO, IFO and emerging intermediate formulations)
Our track record on the refining supply, cost and market impacts of advancing gasoline, diesel and jet fuel standards dates back to the late 1980’s. Our assessments of marine fuels include 2006/7/8 studies for the American Petroleum Institute and for the International Maritime Organization as key inputs to MARPOL Annex VI, for the U.S. EPA in support of its ECA submission and for Mexican authorities regarding their ECA submission. Our more recent studies date from 2015 with an emphasis on ensuring realistic 2020 marine fuels blends in WORLD. This modeling capability captures the interplay between regulation, refining, emissions and fuel economics. It also incorporates rigorous marine fuels consumption data and projections, as from the IMO and others, which differ from standard published statistics.
Our in-depth refinery process and physical properties blending expertise enables us to assess the effects of both major grade shifts such as from IFO to marine distillate and more narrow properties changes such as tightening of RVP or other gasoline specifications in association with new ozone rules. In 2011, EnSys undertook a rigorous review of the EPA’s gasoline cost model leading to a series of revisions.
Refinery gasoline processing/blending/cost model detailed analysis and peer review
For the EPA Office of Mobile Sources, EnSys undertook a rigorous analysis of the detailed refinery by refinery model the EPA uses to assess the cost impacts of changes in gasoline sulphur and other qualities. EnSys proposed a range of specific changes and improvements which the EPA accepted as improving the realism and accuracy of the model as it is used to underpin new regulations.
MARPOL Annex VI Analysis of Impacts on Global Refining & CO2 Emissions
Working with marine specialist Navigistics Consulting, EnSys undertook analyses of the global impacts of potential marine fuels quality changes that formed critical inputs into the MARPOL Annex VI regulatory process. Activities included a “bottom up” assessment of then current and future marine fuels demand, incorporation of these projections into the EnSys WORLD Model®, then application of WORLD to quantify the impacts on product supply costs, refining investments, trade and CO2 emissions of various ECA and global standard scenarios, including potential use of on board scrubbing. Activities including working closely with the IMO Expert Fuels Group to review premises, findings and their implications.
This assignment for the IMO followed prior work for the EPA and American Petroleum Institute which examined the effects of different compliance sulfur standards and fuel formulations. Our recent and current marine fuels assessments and services are built on the solid foundation of this earlier work.
Sub-Saharan African Refining and Fuels Assessment for the World Bank and the African Refiners Association
Working with prime contractor ICF International, EnSys adapted the WORLD Model® to focus on the sub-Saharan region and its refineries, then assessed the refining and supply costs and competitive / market / trade impacts of the region introducing low and ultra-low sulfur standards on gasoline and diesel. These costs were then compared with the health benefits that would result.
Particular attention was paid to the gauging the real-world capability of existing refineries in the region and to the costs and time-frame for implementing refinery projects.
EnSys’ Integrated Global WORLD Model
EnSys’ World Oil Refining Logistics and Demand (WORLD) Model is utilized by EnSys for petroleum fuels and other assessments. The Model extends analytical boundaries by bringing the key parameters of the downstream into one system. The WORLD Model is highly flexible, with the ability to model short, medium, and long-term forecasts. WORLD captures and simulates the global and interlinked nature of the present and future petroleum industry, providing projections for global refining activity, investments, margins, and utilizations, crude and product flows, and pricing/differentials across alternative scenarios.