Topics in Module 4 Include:
Module 4.1 — Fundamentals of Refining: Units, Processes and Products
Presenter: Robert Auers
To understand the fundamentals of refining, we need to understand what a refinery does — they’re not that much different than moonshiners! This includes a brief overview of several key refinery units and why they’re important. This includes crude oil distillation, hydrotreating, naphtha reforming, cracking, and coking units. We’ll also do a quick review of the history and current state of the U.S. refining sector.
Module 4.2 — Refined Products Demand, Pricing and Outlook
Presenter: Robert Auers
Most refineries focus on the production of three key refined products — gasoline, diesel and jet fuel. As a result, these are often referred to as the “Big 3” refined products. Most of global crude oil demand is ultimately driven by the demand for these refined products. (Your car wouldn’t get very far on raw crude oil!) We’ll look at global and regional U.S. supply and demand for these products and how those trends will affect the U.S. refining sector going forward.
Module 4.3 — Lab Model: Crack Spread
Presenter: Robert Auers
The crack spread is a market indicator widely used in the oil industry and serves as a good indicator of refinery profitability. It measures the difference between the cost of crude oil and the revenue generated from selling the refined products. The crack spread is a helpful rule of thumb and market indicator, but it's a blunt instrument that relies on weighted prices for crude, gasoline and diesel.
Module 4.4 — Lab Model: Refinery Yield
Presenter: Robert Auers
This module, a follow-up to Module 4.3, examines the yield model, which provides more nuanced insights into which prices are affecting margins for a specific refinery setup. The model takes into account a representative yield of products that a sophisticated refinery might produce from various grades of crude under different configurations. It then calculates the refinery margin based on those weighted values, providing a much more comprehensive analysis.
Module 4.5 — Renewable Diesel and SAF
Presenter: Robert Auers
There has been plenty of debate in recent years about greenhouse gas (GHG) regulations and how they might impact the transportation fuels sector. Some regions have been very innovative in their approach to GHGs. California, Oregon and Washington state have low-carbon fuel standards (LCFS) in place and other states are evaluating the idea. LCFS programs were the original driving force behind the increased investment in the manufacturing of renewable diesel and sustainable aviation fuel (SAF) and remain an important factor. But, as LCFS credit prices have fallen and RIN prices have increased, the National Renewable Fuel Standard (RFS) has become the most important driver of renewable diesel economics. Even more recently, sustainable aviation fuel (SAF) has gained particular interest due to a global desire to decarbonize aviation. This module breaks down the standards and strategies influencing these markets.
