Transition to 15 ppm ULSD

ULSD Workshop

November 20-21, 2002

Houston, TX

Transition to 15 ppmTransition to 15 ppmULSD ULSD

2

Experiences to Draw onExperiences to Draw on

• Annual RVP change over – since 1989

3

Experiences to Draw onExperiences to Draw on

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

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Experiences to Draw onExperiences to Draw on

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of low sulfur diesel fuel – 1993

5

Experiences to Draw onExperiences to Draw on

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of low sulfur diesel fuel – 1993

• Introduction of Simple Model RFG – 1995

6

Experiences to Draw onExperiences to Draw on

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of low sulfur diesel fuel – 1993

• Introduction of Simple Model RFG – 1995

• Introduction of Complex Model RFG – 1998

7

After Further ReviewAfter Further Review

• Annual RVP change over – since 1989– Can produce blends below the maximum RVP to

facilitate turn over

8

After Further ReviewAfter Further Review

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992– Plenty of room between maximum oxygen limit and

minimum specification requirement

9

After Further ReviewAfter Further Review

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of Simple Model RFG – 1995– Very similar to RVP change over

10

After Further ReviewAfter Further Review

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of Simple Model RFG – 1995

• Introduction of Complex Model RFG – 1998– Again, very similar to RVP change over

11

After Further ReviewAfter Further Review

• Annual RVP change over – since 1989

• Introduction of Oxygenated Gasoline – 1992

• Introduction of Simple Model RFG – 1995

• Introduction of Complex Model RFG – 1998

• Introduction of Low Sulfur Diesel Fuel – 1993– Some things are the same– Some things are different

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After Further, Further ReviewAfter Further, Further Review

• Introduction of low sulfur diesel fuel in 1993 will be the closest parallel for ULSD

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Things That Are The SameThings That Are The Same

• Introduction of new product

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Things That Are The SameThings That Are The Same

• Introduction of new product

• Drop dead compliance date

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Things That Are The SameThings That Are The Same

• Introduction of new product

• Drop dead compliance date

• Immediate demand for product

16

Things That Are The SameThings That Are The Same

• Introduction of new product

• Drop dead compliance date

• Immediate demand for product

• Choices to make

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Things That Are The SameThings That Are The Same

• Introduction of new product

• Drop dead compliance date

• Immediate demand for product

• Choices to make

• Adjustments to operations

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Things That Are The SameThings That Are The Same

• Introduction of new product

• Drop dead compliance date

• Immediate demand for product

• Choices to make

• Adjustments to operations

• Division of facilities or new construction

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Things That Are DifferentThings That Are Different

• Competing product still being marketed

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Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0

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Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…

22

Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…• Choices are short term

23

Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…• Choices are short term• Radical changes to operations

24

Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…• Choices are short term• Radical changes to operations• Sulfur Credits

25

Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…• Choices are short term• Radical changes to operations• Sulfur Credits• Small refinery exclusion

26

Things That Are DifferentThings That Are Different

• Competing product still being marketed• Refinery Production is regulated 80/20, 100/0• Initial need (verses demand) is zero, demand is…• Choices are short term• Radical changes to operations• Sulfur Credits• Small refinery exclusion• Degrees of magnitude 3000 – 500 vs 400 - 15

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Physical Transition, Initial stagingPhysical Transition, Initial staging

• June 1 – July ?

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Physical Transition, Initial stagingPhysical Transition, Initial staging

• June 1 – July ?

• Won’t be without problems

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Physical Transition, Initial stagingPhysical Transition, Initial staging

• June 1 – July ?

• Won’t be without problems

• We have “outs” at this point

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Physical Transition, Initial stagingPhysical Transition, Initial staging

• June 1 – July ?

• Won’t be without problems

• We have “outs” at this point– Downgrades

– Little or no demand

– Time

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31• Pace of downstream conversions

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31• Pace of downstream conversions• Who/how many will handle both products?

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31• Pace of downstream conversions• Who/how many will handle both products?• Price differential vs inventory

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31• Pace of downstream conversions• Who/how many will handle both products?• Price differential vs inventory• Use of Credits?

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Now Things Get InterestingNow Things Get Interesting

• July ? – August 31• Pace of downstream conversions• Who/how many will handle both products?• Price differential vs inventory• Use of Credits?• Out of the wood work/None to be had

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September 1, 2006September 1, 2006

• A non-event

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September 1, 2006September 1, 2006

• A non-event– No overnight change

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September 1, 2006September 1, 2006

• A non-event– No overnight change– Production control, 80/20

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September 1, 2006September 1, 2006

• A non-event– No overnight change– Production control, 80/20– No major distribution problems

ULSD Workshop

November 20-21, 2002

Houston, TX

Transition to 15 ppmTransition to 15 ppmULSD ULSD