Crude oil refining is a mature industry. Most of the basic processing technology has not changed in over 50 years. Still, refineries are running at full capacity and producing cleaner fuels with fewer emissions. The basic technologies are the same, but process control has been improved, advanced catalysts have been developed, and efficiency has been enhanced.

Oil industry funding for downstream research and development has focused on meeting environmental regulations and resolving operational issues. Historically, 70-90% of available capital for refineries has been spent to update processes to meet environmental requirements on emissions and products.

U.S. refining capacity of 16.9 million barrels per day is not enough to meet our current demand for refined petroleum products (20.5 million barrels per day). Even though refiners are adding capacity, imports will continue to be needed to meet demand. While no new refineries have been built in the United States for more than 30 years, refining capacity has increased. This has been done through onsite expansion and increased throughput.

NETL's downstream research and development funding has focused in three areas: refining processes, the environment, and science. The type of projects that have been funded, the reasons for funding the research, and some representative projects are outlined below. Most projects were funded through competitive solicitations that required cost-sharing. NETL also managed oil refining projects that have been awarded through the Small Business Innovative Research (SBIR) or Historically Black Colleges and Universities (HBCU) programs.

With historically tight margins (between the cost of crude oil and the price of refined products) in the competitive refining industry, most refining R&D has focused on increasing efficiency, solving problems, and meeting environmental regulations. For the most part, innovative refining research has been minimized within the industry. The innovative refining research work funded by NETL has supported projects that were either:

• Considered high-risk / potentially high-reward projects.
• Not being pursued by industry.
• Joint industry projects that leveraged DOE and industry funding in specific research areas

• Bioprocessing of crude oil or distillation fractions. Bioprocessing holds the promise of being a revolutionary way to process crude oil and petroleum fractions. If successful, bioprocessing could lead to lower-temperature, lower-pressure, and lower-cost refining.
• Heavy crude oil processing. Heavy crude oils, such as those in California and in much of the Western Hemisphere, are generally more difficult to refine than lighter crudes. Since heavy crude oils are more readily available in the United States, removing processing barriers for their use enhances energy security and encourages production. One heavy oil processing project uses a combination of molecular modeling with experimental results to develop a method to reduce naphthenic acids from heavy crude oils. Naphthenic acids cause corrosion in refineries.

• Airborne particulates. Particulate matter smaller than 2.5 microns, known as PM2.5, is known to be a human health risk factor. PM2.5 is monitored at outdoor locations, but most people are indoors most of the time. One project examines the issue of relating particulate matter monitoring to actual human exposure.
• Water research. Three DOE National Laboratories (NETL, Lawrence Berkeley, and Lawrence Livermore) are examining aspects of TMDL research. This refers to the total maximum daily load of a pollutant that achieves compliance with a water quality standard; the “TMDL process” refers to a plan to develop and implement the TMDL. The DOE laboratories are working with industry and local and regional environmental regulators to model the input of all sources (industrial, agricultural, and communities) to the toxic load in a Southern California watershed. They also are developing models that are designed to help allocate responsibility for meeting regulations.

• U.S. crude oil supply is increasingly heavier and more sour (higher sulfur content). Determination of the thermodynamic properties of heavy hydrocarbons—often hydrocarbons with high sulfur and nitrogen content—provides the basis for designing processing parameters for higher product yield with lower energy consumption.
• Sound science is critical for making regulatory decisions that allow development without sacrificing the environment. NETL projects listed under environmental research are focused on providing information to ensure regulations are based on reasonable science.