The American Petroleum Institute (API) retained MathPro Inc. to assess the impact of the ultra-low sulfur standard for diesel fuel on refinery “producibility,” more generally, to develop an indication of how refinery producibility may be impaired as diesel fuel quality standards become more stringent. (For this study, “producibility” refers to a refinery’s ability to sustain refined product out-turns in the face of circumstances that tend to impair refinery production capability.)

The study considered two possible upset conditions in particular – shutdowns of the hydrogen plant and the hydrocracker unit – and assessed how they likely would affect refinery operations, product out-turns, and cash flow.

The study employed formal refinery modeling, using MathPro Inc.’s ARMS refinery LP modeling system to represent operations of a “notional” refinery, representative of deep conversion refineries in PADDs 1, 2, and 3, producing both ULSD and off-road diesel under different scenarios.

The analysis indicated that the stringent ULSD sulfur standard would amplify the effects of upset conditions on producibility in a given refinery. These effects generally would include: (1) reduction in crude runs, (2) reduction in product out-turns, and (3) down-grading of some product volumes to lower-quality products (e.g., on-road diesel downgraded to off-road diesel) or to low-quality "distress" streams sold to other refineries. To maintain total product supply, other refineries, with accessible and available processing capacity, would have to process these distress streams into finished products.