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Released January 31, 2022 | SUGAR LAND
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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Before the rise of the oil and gas industry, homes were heated by coal or wood, and they were lit by whale oil, lard oil, coal oil, etc. To the great benefit of whales, by the mid-1870s, most of these options were being replaced by petroleum-based kerosene.
Now the clamor for reduction in a fuel's carbon intensity is pushing oil companies to help with the next energy transition. They're doing this by partnering with renewable energy producers and researchers to speed the process and further reduce the energy intensity involved even in renewables. Carbon intensity is defined by the U. S. Energy Information Administration (EIA) as "The amount of carbon by weight emitted per unit of energy consumed (CO2 emissions/energy)."
If all proposed renewable diesel projects are completed, the EIA reports, the nation's production capacity for the fuel would rise from the .5 billion gallons available in 2020 to about 5 billion gallons per year in 2024.
Industrial Info is tracking more than $18 billion worth of renewable diesel projects in the U.S. and Canada. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels and Petroleum Refining project database can click here for a list of detailed projects.
Click on the image at right for a chart showing U.S. and Canadian renewable diesel project activity by project type.
But it's not just any renewables, says IIR Energy's Vice President of Natural Gas Processing Greg Carlson. "These companies are going after stricter carbon intensity (CI) ratings." Crude oil tops that list, but a previous darling, biodiesel, also has a higher CI rating, but is less engine-friendly, than the newer form called renewable diesel. Although CI includes the amount of carbon released in burning a fuel, it also includes carbon expended all the way up the supply chain, from mining/harvesting to refining.
Carlson noted that government programs, both federal (Renewable Fuel Standard, or RFS) and state, such as California's Low Carbon Fuel Standard (LCFS) are largely driving this move because the processes otherwise "are not economical without subsidies." Therefore, taxpayers will be paying the difference. "It costs to feel good," he noted.
Projects such as Exxon Mobil Corporation's (ExxonMobil) (NYSE:XOM) (Irving, Texas), listed below, which use farm waste are more CI-friendly because the CO2 emissions from farming are shared with consumer agriculture used for food or clothing, instead of being used exclusively for fuel feedstock, Carlson said. Farm byproducts such as plant stalks and beef tallow "are already a waste--they'd otherwise be going into the landfill." There are other benefits. At the landfill, farm waste would exude CO2 as it decomposed, without providing any energy benefits. And those plants in the landfill do not increase anyone's ESG score. Below is a list of some representative projects announced in recent weeks.
ExxonMobil has joined with research firms Genomatica (San Diego, California) and Clariant ) (Muttenz, Switzerland) to fund development of enzymes and microbes designed to efficiently break down agricultural waste, non-food biomass and algae for use in biofuels such as renewable diesel and jet fuel.
Chevron Corporation (NYSE:CVX) (San Ramon, California) has signed a memorandum of understanding (MOU) with biofuels producer Bunge North America Incorporated (Chesterfield, Missouri) regarding a "proposed 50/50 joint venture to help meet the demand for renewable fuels and to develop lower carbon intensity feedstocks," according to a press release.
The oil giant would contribute approximately $600 million toward doubling the size of Bunge's existing biofuels plants in Cairo, Illinois, and Destrehan, Louisiana, hoping to reach 14,000 tons of combined capacity by 2024.
Brazil's national oil company, Petróleo Brasileiro S.A. (Petrobras) (NYSE:PBR) (Rio de Janeiro), is planning to develop additional renewable fuels projects. Petrobras expects to spend $600 million in additional renewable diesel projects by 2026. Part of that plan will include production of the fuel using co-processed soybean oils. Bio-aviation fuel development also is in the planning stage.
North of the U. S. border, Canada's Federated Cooperatives Limited (Saskatoon, Saskatchewan), a large cooperative that includes a group of smaller coops in Saskatchewan and elsewhere in western Canada, is planning a new renewable diesel fuel and canola-crushing plant. The facility, a joint venture with Federated Cooperatives Limited (FCL) (Saskatoon) and AGT Food and Ingredients (Regina, Saskatchewan), would be located near FCL's existing oil refinery in Regina. The joint venture plans to use canola grown in the region as feedstock.
It will simply get more expensive to produce oil-based fuels, Carlson said, as the above-mentioned regulations put more taxes and restriction on traditional refining processes. Environmental, Social and Governance (ESG) or not, investment in renewables is becoming a necessity for exploration and production firms of all types.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Now the clamor for reduction in a fuel's carbon intensity is pushing oil companies to help with the next energy transition. They're doing this by partnering with renewable energy producers and researchers to speed the process and further reduce the energy intensity involved even in renewables. Carbon intensity is defined by the U. S. Energy Information Administration (EIA) as "The amount of carbon by weight emitted per unit of energy consumed (CO2 emissions/energy)."
If all proposed renewable diesel projects are completed, the EIA reports, the nation's production capacity for the fuel would rise from the .5 billion gallons available in 2020 to about 5 billion gallons per year in 2024.
Industrial Info is tracking more than $18 billion worth of renewable diesel projects in the U.S. and Canada. Subscribers to Industrial Info's Global Market Intelligence (GMI) Alternative Fuels and Petroleum Refining project database can click here for a list of detailed projects.
But it's not just any renewables, says IIR Energy's Vice President of Natural Gas Processing Greg Carlson. "These companies are going after stricter carbon intensity (CI) ratings." Crude oil tops that list, but a previous darling, biodiesel, also has a higher CI rating, but is less engine-friendly, than the newer form called renewable diesel. Although CI includes the amount of carbon released in burning a fuel, it also includes carbon expended all the way up the supply chain, from mining/harvesting to refining.
Carlson noted that government programs, both federal (Renewable Fuel Standard, or RFS) and state, such as California's Low Carbon Fuel Standard (LCFS) are largely driving this move because the processes otherwise "are not economical without subsidies." Therefore, taxpayers will be paying the difference. "It costs to feel good," he noted.
Projects such as Exxon Mobil Corporation's (ExxonMobil) (NYSE:XOM) (Irving, Texas), listed below, which use farm waste are more CI-friendly because the CO2 emissions from farming are shared with consumer agriculture used for food or clothing, instead of being used exclusively for fuel feedstock, Carlson said. Farm byproducts such as plant stalks and beef tallow "are already a waste--they'd otherwise be going into the landfill." There are other benefits. At the landfill, farm waste would exude CO2 as it decomposed, without providing any energy benefits. And those plants in the landfill do not increase anyone's ESG score. Below is a list of some representative projects announced in recent weeks.
ExxonMobil has joined with research firms Genomatica (San Diego, California) and Clariant ) (Muttenz, Switzerland) to fund development of enzymes and microbes designed to efficiently break down agricultural waste, non-food biomass and algae for use in biofuels such as renewable diesel and jet fuel.
Chevron Corporation (NYSE:CVX) (San Ramon, California) has signed a memorandum of understanding (MOU) with biofuels producer Bunge North America Incorporated (Chesterfield, Missouri) regarding a "proposed 50/50 joint venture to help meet the demand for renewable fuels and to develop lower carbon intensity feedstocks," according to a press release.
The oil giant would contribute approximately $600 million toward doubling the size of Bunge's existing biofuels plants in Cairo, Illinois, and Destrehan, Louisiana, hoping to reach 14,000 tons of combined capacity by 2024.
Brazil's national oil company, Petróleo Brasileiro S.A. (Petrobras) (NYSE:PBR) (Rio de Janeiro), is planning to develop additional renewable fuels projects. Petrobras expects to spend $600 million in additional renewable diesel projects by 2026. Part of that plan will include production of the fuel using co-processed soybean oils. Bio-aviation fuel development also is in the planning stage.
North of the U. S. border, Canada's Federated Cooperatives Limited (Saskatoon, Saskatchewan), a large cooperative that includes a group of smaller coops in Saskatchewan and elsewhere in western Canada, is planning a new renewable diesel fuel and canola-crushing plant. The facility, a joint venture with Federated Cooperatives Limited (FCL) (Saskatoon) and AGT Food and Ingredients (Regina, Saskatchewan), would be located near FCL's existing oil refinery in Regina. The joint venture plans to use canola grown in the region as feedstock.
It will simply get more expensive to produce oil-based fuels, Carlson said, as the above-mentioned regulations put more taxes and restriction on traditional refining processes. Environmental, Social and Governance (ESG) or not, investment in renewables is becoming a necessity for exploration and production firms of all types.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
