Can Large Integrated Refineries Replace All Crude Oil with Cellulosic Feedstocks for Drop-in Hydrocarbon Biofuels?

May 03, 2023

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by Charles Forsberg and Bruce E. Dale (Hydrocarbon Processing) Hydrocarbon liquid fuels are central to the U.S. economy, delivering almost half the country’s energy to the residential, commercial, industrial and transportation sectors.

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The U.S. Energy Information Agency’s (EIA’s) long-term projections show no major changes in U.S. liquid fuels hydrocarbon demand because the costs of alternatives are significantly greater.¹ Recent assessments² have considered how much this demand could be reduced without large cost impacts on the customer. The conclusion was that it would be very expensive to reduce the future U.S. demand for hydrocarbon liquids below the equivalent of 10 MMbpd vs. the current consumption of 18 MMbpd. Fully replacing liquid hydrocarbons is difficult because these hydrocarbons have multiple critical applications, such as a dense transportable energy source, as low-cost energy storage, as a chemical feedstock, and as a chemical reducing agent. They also enable high-temperature radiative heat transfer. Many applications depend upon multiple characteristics of hydrocarbons or upon the chemistry of the carbon in the hydrocarbon product.

The largest uncertainty in future demand is the use of liquid hydrocarbons for low-cost energy storage. The U.S. consumes about 100 quadrillion units of energy/yr, with about 6 wk of stored energy to address hourly to seasonal variations in energy demand and contingencies such as cold weather fronts and hurricanes. If liquid hydrocarbons must replace any significant fraction of the energy storage functions of natural gas and coal on an hourly to seasonal basis, then total future liquid hydrocarbon demand could be as high as 20 MMbpd.

While society needs liquid hydrocarbons, the societal goal of reducing atmospheric carbon dioxide (CO₂) emissions will limit the use of crude oil. This means that, as refineries provide liquid hydrocarbon products to customers, they are also required to find alternative carbon feedstocks to replace fossil-derived crude oil. The first option includes renewable electricity-based fuels that start with CO₂ from the atmosphere or other sources; hydrogen can be added to produce liquid hydrocarbons. These fuels are very expensive³ because they start with fully oxidized CO₂in air or water at low concentrations.

The second feedstock option is cellulosic biomass. Plants remove CO₂from the air to produce biomass. Rather than directly burning biomass or letting it decay, that biomass can be converted into hydrocarbon fuels that are then burned with no net change in atmospheric CO₂levels. Within some system options, stable carbon can be sequestered in soils. Based on a series of studies and workshops,^4,5 the authors concluded that the U.S. may be able to produce up to 30 MMbpd of liquid hydrocarbons from cellulosic biomass. The current U.S. demand is 18 MMbpd of liquid hydrocarbon products. Therefore, the answer to the question presented in this article’s title (“Can large integrated refineries replace all crude oil with cellulosic feedstocks for drop-in hydrocarbon biofuels?”) is, “Yes.” The following will outline this alternative path forward for the oil, gas and refining industries in the near-, intermediate- and long-term future.

System design

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The refinery.

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Replacing crude oil with cellulosic feedstocks.

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Improved conversion efficiency:

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Larger set of feedstocks available

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Hydrogen becomes the largest cost of hydrocarbon production

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Depot and transportation constraints.

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The following are three major depot options:

Biomass densification and shipment to refineries by train as dry pellets.

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Anaerobic digesters to produce a methane/CO2 gas mixture shipped via pipeline to the refinery, and a carbon- and nutrient-rich digestate that is returned to the soil.

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Flash heating of biomass to produce pyrolysis (bio) oil and biochar.

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Refinery processing

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Carbon sequestration and long-term soil productivity

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Policy requirements

The public and policy challenges may be greater than the economic or technology challenges. If lowering CO₂ emissions to the atmosphere is important, payments are required for removing and sequestering CO₂from the atmosphere: as carbon char to the soil and CO₂deep underground. Second, the public must recognize that decreasing CO₂emissions to the atmosphere is not about reducing the use of hydrocarbon fuels or products, but rather about replacing the fossil fuels currently used to produce these products. Finally, society and its leaders must understand how expensive and slow it will be to replace hydrocarbon liquids vs. changing the feedstock and modifying existing refinery systems.

Appropriate policies could accelerate a transition to low-carbon hydrocarbon liquid fuels. Crude oil prices vary widely over time. This makes it financially risky to deploy any alternative technology, since new plants may come online at times of low oil prices. One strategy is to ensure a minimum price for cellulosic biofuels for a given number of years. If oil prices were above this price, the federal government would make no payment for cellulosic biofuels production. If oil prices were below this target price, the federal government would pay the difference between crude oil prices and the set price.

Takeaways

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The strategy herein implies large changes for the oil industry, including:

Crude oil as a feedstock disappearing over time
Integrated refineries changing feedstocks
The natural gas industry’s primary product becoming hydrogen
Refineries using high-temperature nuclear reactors to meet their expanding heat demands.

While these changes can seem large and challenging, they are likely to be small, quick and inexpensive vs. developing and deploying new technologies to replace hydrocarbon liquids for all applications in a period of a few decades. READ MORE

Appendix: Can a Nuclear-Assisted Biofuels System Enable Liquid Biofuels as the Economic Low-carbon Replacement for All Liquid Fossil Fuels and Hydrocarbon Feedstocks and Enable Negative Carbon Emissions? (Center for Advanced Nuclear Energy Systems)

Replacing liquid fossil fuels and hydrocarbon chemical feedstocks with liquid biofuels from large-scale nuclear biorefineries (Applied Energy)

Addressing the low-carbon million-gigawatt-hour energy storage challenge (The Electricity Journal)