For a processing plant with high energy demands, switching to natural gas or adding to existing fuel supply capabilities could save money on operating costs, extend the life of plant equipment and provide greater flexibility in the face of market volatility.
But is using the fuel viable if a plant doesn't have ready access to a natural gas pipeline? That's the question many chemical makers must consider as operating costs rise and they contend with air-quality issues from the combustion of No. 2 fuel oil, whose emissions are higher than those from natural gas.
Many plant owners rely on a financial analysis for a go/no-go decision. However, it often provides a flawed perspective. A comprehensive feasibility study considers everything from equipment-specific requirements and regulatory expectations to cost of construction — and can yield some surprising and positive results.
In many cases, a natural gas product, such as compressed natural gas (CNG) or liquefied natural gas (LNG), that easily can be transported from a remote location and stored on site offers significant benefits. With the historically low prices of natural gas due in large part to shale gas development, associated natural gas products like CNG and LNG have become more economically attractive.
The first step in a comprehensive feasibility study is to gather information about the facility's current process heating requirements from available documentation and discussions with plant engineers and operators.
It's important to determine existing equipment-specific consumption for average and peak periods. Engineers then can convert annual usage rates (gal/yr) into daily and hourly ones. Multiplying these by the average heating value (Btu/gal) of the No. 2 fuel oil establishes the amount of energy that natural gas must provide and thus the amount of gas necessary, allowing for a proper comparison.
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The calculated annual and daily LNG of CNG consumption rates then can be used to determine the projected range of annual and weekly LNG tank-truck deliveries necessary for the plant — and then to give a preliminary estimate of on-site tank storage or daily on-site trailer requirements.
Another important aspect of any prospective plant modification to a new fuel source is an assessment of regulatory requirements of federal and state agencies.
By strict interpretation, the Code of Federal Regulations (CFR) Title 49 Part 193 — Liquefied Natural Gas Facilities: Federal Safety Standards applies only to pipeline- and distribution-company operated LNG plants, not facilities used by ultimate consumers of LNG or natural gas. However, every state imposes additional restrictions and might mandate requirements for the siting, construction and operation of a proposed LNG facility. Note that CNG facilities are regulated under CFR Tile 49 Part 192 at the federal level.
Because of the possibility of varying interpretation, we recommend assuming that all the code requirements set forth in federal and state regulations apply. In many cases, the interpretation and enforcement of the federal standards is the responsibility of the state public utilities authority — which would dictate conservative measures for feasibility studies, to be followed up with active agency engagement in the project planning and execution phases.
Often, switching to natural gas offers clear environmental advantages. The combustion of natural gas produces considerably less CO2, SOx, NOx and particulate matter than the firing of No. 2 fuel oil. In one recent case, we found that switching to natural gas would require a review of the plant's air permit information because each of its stack's estimated particulate matter, SOx, NOx, hydrocarbon and CO emissions in t/yr are registered with the state. Yet, the switch to natural gas in that particular case could reduce CO2 generation by as much as 28%.
COST TO CONSTRUCT
A feasibility study also should evaluate some site-specific considerations. In most cases, a plant operator already will have selected a preferred site for the proposed LNG facility that includes enough room to hold necessary equipment and appurtenances such as multiple cryogenic storage tanks and impoundment systems, a boil-off gas system, truck unloading stations, vaporization equipment and a cryogenic piping system. Upgrades to the site might include improvements to vehicle access drives to allow increased traffic and modifications to the fire protection system to ensure adequate water supply and pressure, as well as appropriate supervisory controls and data acquisition (SCADA) equipment, metering and security systems in accordance with federal and state guidelines.
Compared with LNG, installation of a CNG facility would require a similar feasibility study but likely would need less on-site natural gas process equipment.
With the basic information described above, engineers can estimate the order-of-magnitude cost range associated with the design and construction of the new facility and the estimated payback period.
The switch from No. 2 fuel oil (or other liquid or solid fuel) to natural gas as a plant's primary fuel source likely will require modifications to existing state permits and new building/construction permits.
At the federal level, there could be impacts based upon recent and ongoing regulatory developments at the Environmental Protection Agency, specifically with respect to the Mandatory Reporting of Greenhouse Gases and Title V Greenhouse Gas Tailoring Rule.