The Benefits Side of Regulatory Compliance

As the politics of greenhouse gas emissions in Washington and other capitals around the world continue to unfold, process manufacturers must continue to meet the regulatory mandates that come their way. They are also challenged to improve safety, security, and their operating margins to address global competitive pressures.

Emerson’s Patrick Truesdale, a refining and chemical industries senior solution consultant, will be presenting at the March 21-23, 2010 NPRA Annual Meeting. His presentation is entitled, Benefits in Achieving Regulatory Compliance. At first blush, it seems counterintuitive that achieving regulatory compliance would have financial benefit. But, for refiners, energy is the largest operating expense. Patrick notes that energy efficiency projects not only reduce these operating costs, they also aid in regulatory compliance and improve safety.

In the U.S., the new greenhouse gas mandatory reporting rule (GHG MRR) mandated that monitoring begin January 1, 2010 with the first report due on March 31, 2010. The report specifies levels of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) emitted based on industry accepted measurement standards and procedures from ASTM International, the American Petroleum Institute (API), and others. The reporting rule defines strict quality assurance (QA)/quality control (QC) standards and associated documentation. Non-compliance to these reporting rules includes civil and possible criminal penalties.

Patrick points to three ways to most economically meet the GHG MRR regulations. The first is to put the business processes and procedures in place to enhance loss control. It’s a good idea to follow well-established measurement standards and fiscal controls such as Sarbanes-Oxley, custody transfer, foreign trade zone (FTZ) customs and excise, etc. Loss control can also be enhanced through mass and energy balances as well as the establishment and ongoing monitoring of key performance indicators (KPIs).

The second way to help meet GHG MRR regulations is to enhance key equipment performance such as control loops, measurement devices and systems, and leak identification and repair. The third way is to improve the energy efficiency of key combustion units such as furnaces, heaters, and distillation columns. As you focus on these energy efficiency opportunities, it also means you’re reducing emissions, as I described in an earlier post. Benefits can also come in safer operations from reduced variability, increased equipment reliability, better utilization of assets, improved quality, and improved loss management.

Patrick presents a path forward based on the strategy of “low-hanging fruit” first. Start with the low capital cost items in terms of funds and time to implement that have the highest potential savings. The good ‘ol 9-box grid with high-medium-low potential savings versus high-medium-low capital costs is a good way to organize the projects to execute.

For instance, making procedural changes, monitoring KPIs, improving instrumentation and controls might be low in capital costs yet deliver medium-level potential savings. Fixing insulation, steam traps & leaks, etc. may be low in both capital costs and potential savings. Redesigning the process and upgrading process equipment may be high in capital costs yet yield significant savings.

In the presentation, Patrick offers numerous examples such as suggested KPIs to establish and track, measurement of fuel flows by mass instead of volume, adding wireless devices to improve energy monitoring, resizing pump outflow control valves, and using advanced multivariable control on fired heater units to operate at optimum combustion levels.

There are more examples than I can fit into this post, but I hope these give you a flavor of the experience that Patrick plans to share in this presentation. If you’ll be in Phoenix for the NPRA Annual Meeting, it may be worth your time to check out Patrick’s presentation. It would be a great thing if you could take some of his thoughts back to your plant to improve energy efficiency and reduce energy costs, while helping meet the regulatory reporting mandates and improving process safety.

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