# Presentation: 531435

## Improving the SAGE Refinery Representation

- John Staub, OIAF  &   Phillip Tseng, SMG
- Energy Information Administration
- April 7, 2006

## Outline

- Purpose of the new refinery representation
- Trends in crude oil prices and petroleum products
- Flow chart of refinery operations
- Enhanced model structure
- Data Sources and Data Issues
- Questions for the Committee

## Purpose of presentation

- Committee input on modeling approach                            to... enhance EIA’s modeling of world supply and demand for the *International Energy Outlook* publication.

## Purpose of Enhancements

- Observe investment decisions
- Observe prices for products and crude oils
- Assess the effects of crude oil _quality changes_ and refinery _capacity expansion_ on crude oil and product _**trade**_
- Capture interactions between demand for refined products and demand for light or heavy crude oil

## Trends

- Landed Costs of Imported Crude Oil by Density
- Shift toward Heavier Crude Oils
- World Petroleum Consumption and World Crude Oil Refining Capacity
- Apparent Consumption of Refined Petroleum Products, World vs. U.S.
- World Oil Consumption 1990-2025

## Cost of Imported Crude Oil by Density

- Crude oil prices affected by demand, density & sulfur content
- Price _differential_ increases as prices increase

## Decreasing Light Crude Oil Share

## Consumption vs. Refining Capacity

**Notes:**
World refinery capacity has not kept pace with demand in the last 25 years.
Capacity additions and refinery configuration can have profound impacts on trade of crude oil and refined products

## Potential Shift Toward Lighter Products

- In 2002, market share of motor gasoline, distillate fuel and jet fuel equaled 60 percent.
- World petroleum demand projected to increase by 50 percent by 2030.

## Potential Shift Toward Lighter Products

**Notes:**
World refinery capacity has not kept pace with demand in the last 25 years.
Capacity additions and refinery configuration can have profound impacts on trade of crude oil and refined products

## Refinery Schematic

## Refinery Flow Diagram

- VISBREAKER

- PROPANE
- DEASPHALTER

- SOLVENT
- EXTRACTION

- DELAYED
- COKER

- COKE

- GASOLINE, NAPHTHA, AND MIDDLE DISTILLATES

- FUEL OIL

- GASOLINE, NAPHTHA,       AND MIDDLE DISTILLATES

- VAC GAS OIL

- LUBE BASE STOCKS

- ASPHALT

- POLYMERIZATION

- ALKYLATION

## Original Model Structure

## Enhanced Model Structure

## Enhanced Model Structure

- Includes five types of crude oil
- Six downstream processing technologies(1) hydro-cracker, (2) fluid cat-cracker,             (3) coker, (4) reformer, (5) alkylation, and         (6) polymerization
- Blending recipes
- Driven by demand for the 17 SAGE intermediate petroleum products

## Data Sources

**Oil and Gas Journal publishes**
**Crude oil assay (e.g. distillation products)**
**Refinery capacity**
**Petroleum Engineer **
**I-O coefficients for down stream processing units**
**Product recipe and/or blending specifications**
**IEA, EIA, and Oil and Gas Journal**
**End-use demand**

## Questions for the Committee

- Adequate detail for trade analysis?
- Include octane constraints?
- Are there better data sources for calibration?

## Thank you

- John.Staub@eia.doe.gov
- 202-586-6344
- Phillip.Tseng@eia.doe.gov
- 202-287-1600