HF

Refineries with hydrofluoric acid alkylation units account for about 40% of total U.S. refining capacity. Many in the refining sector are concerned that an Environmental Protection Agency (EPA) proposal to compel refineries to conduct exacting studies of newer, alternative alkylation technologies could be leveraged to discourage and effectively ban HF alkylation, and as a result, potentially lead to more refinery closures. The U.S. already has lost more than 1.3 MMb/d of refining capacity since 2019 — losses that exacerbated the run-up in motor fuel prices through the first half of last year — and the specter of another round of refinery closures on the horizon looms large. In today’s RBN blog, we consider the challenges that refineries with HF “alky” units might face if they were required to replace them.

Since 2019, more than 1.3 MMb/d of U.S. refinery capacity has been either shut down for economic reasons or converted to renewable diesel production. The decline in the nation’s ability to produce gasoline and diesel hampered the refining sector’s response to the post-COVID demand recovery and exacerbated the big run-up in motor fuel prices that followed Russia’s invasion of Ukraine last February. Now, there may be a new threat to U.S. refining, namely the possibility that a proposed Environmental Protection Agency (EPA) rule on hydrofluoric-acid-based alkylation could, over time, spur an even larger round of refinery closures. In today’s RBN blog, we continue our look at alkylate — a critically important part of the U.S. gasoline pool — the prospective regulation and its possible effects.

Alkylate is an important and valuable part of the U.S. gasoline pool, prized for its high octane, low volatility and low sulfur content. There are two primary catalysts that refiners can opt to use in the production of alkylate: hydrofluoric acid, or HF, and sulfuric acid, or H2SO4.  Each is quite popular, with HF and sulfuric acid technologies each representing about half of domestic alkylation capacity — and with those shares varying significantly on a regional basis. While refiners have been safely operating both types of “alky” units for many decades, HF alkylation for some time has been in the crosshairs of the Environmental Protection Agency, which recently proposed that refiners be required to undertake extensive evaluations of potentially safer alternative technologies. It’s hard to know for sure, but if EPA’s proposed rule is made final it could ultimately force many refineries to make very costly changes — into the hundreds of million dollars per unit — or maybe even shut down entirely. In today’s RBN blog, we look at alkylate, how it’s made, and the potentially profound effects of the impending regulation.