US Petrochemical Industry Future - Integrating Design Operation and Maintenance

U.S. PETROCHEMICAL INDUSTRY FUTURE – INTEGRATING DESIGN, OPERATION, AND MAINTENANCE

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When a petrochemical company decides to build a plant, the operating company is buying someone else’s process technology usually. That technology is most likely going to be identical or similar to the operating company’s competitors, even if it is a different design variation. Some like to think they have a design advantage; however, the only operational advantage they may have has nothing to do with the design of the plant. In any case, design variations are overrated. The usual case is the initial price is right. Let’s start prospecting Alaska before the gold rush fizzles.

My opinion is that the usual upper management is more concerned with the overall schedule of a new plant from front end design to construction completion and startup than the efficiency of the design. It makes sense since they know their plant isn’t any more efficient than the competitor’s recent addition, and the emphasis is getting the plant up and running at 100% of design capacity per original schedule. I learned that quickly with my first job in a petrochemical plant. An experienced Plant Manager will tell you whatever you don’t like can be possibly changed later via an approval capital budget. His job is to get the plant (investment) making product(s) (money), not to make the plant personnel happy about the initial condition of the plant now or in the future.

Often many future considerations are overlooked during the latter part of construction due to the haste to start production. Maybe that has changed a little bit nowadays, but I doubt it. Maintenance starts on day one of operation where it become clear very fast where the main operational problem areas will be, and they are usually the most expensive rotating equipment items.

After the startup, the fun begins and the clock starts ticking on the operating expense side. In the past, if you were lucky to build during a recession and ready to startup during the initial phases of economic recovery, than things were honky-dory for a while. Those days are over. Any petrochemical plants that have started in the last five years have or are planning to start up in the next five years will experience immediate pressure on the income statement due to stagnant to falling product prices and/or rising feedstock and energy costs. Recent methanol and ammonia plant expansions and relocated or new plants are a very good example, and these ethylene plants are about to join the crowd of less than expected rate of return on initial investment. LNG plants have less than 10 years life before they are forced to shut down after depleting decreasing natural gas reserves.

What’s the point so far? The point is that most are on an overcrowded elevator on the way down fast. The only way they are going to survive the crash is to brace themselves and prepare, and stop thinking about grow, grow, and grow because they may already be in a deep hole. Just because feedstock cost is temporarily low, that means nothing if demand isn’t rising like it used to. When the feedstock cost starts to rise do to the overcrowded playing field and later due to uneconomical feedstock cost, than the plant will become a major burden. From then on, it will be a constant struggle to make a profit. The first tactic will be to cut manpower to the minimum, and they better be ready to operate with the minimum staff. I explained one way survivors will use in


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“U.S. Petrochemical Plant Future – Flexible Labor”. Future operation must utilize still other survival tactics different from the past “good-ole days” of operation, which I partially explain in “The Future of Engineering Consulting”.

The survivors will have to be one of the most cost efficient operations in the industry in order to be still operating ten years from now. Most will grow themselves an early grave due to excessive debt accumulation. Labor reduction is the easiest way to reduce cost, and just read the news to see that is already in progress in all areas of the economy. Simultaneously to initiating labor reduction, the surviving petrochemical industry has to be much more energy efficient.

The future will be all about energy conservation in your particular sector of the petrochemical industry. And guess what? It doesn’t come from hiring the “experts” with the latest buzz words like reliability engineering, mechanical integrity, sigma-six, and all the rest concerned with prolonging assets that probably have a short-term life anyway. What do I mean by that?

This “trash society” based on planned obsolescence and “plastics gone wild” mentality is doomed. There is not enough economically priced fossil fuel feedstock in existence to keep this suburban, happy motoring, more-stuff-to-throw away lifestyle going for another ten years. So why spend money on the programs and the manpower to keep fixed assets based on a continuation of the Baby Boomer age operational for 30 to 40 years? That is what is what these experts are trying to do with all these “reliability” and latest maintenance (reactive to preventive to predictive and now reliability-centered) acronym programs. From LNS research:

What Comes After Predictive Maintenance? Posted by Dan Miklovic on Thu, Mar 17, 2016

I have been in the Asset Performance Management (APM) space for over 45 years now, and certainly have seen the long and slow evolution that has taken place as we have moved away from purely reactive maintenance to a point where the standard practice is PM. With the growth of programmable logic controllers (PLCs), distributed control systems (DCSs), and digital communications in the late 1980’s through the 1990’s, condition-based maintenance (CBM) started the shift towards predictive maintenance. The onset of statistical analysis tools in the last15-20 years has enabled reliability-centered maintenance (RCM). Yet, all of these advances have come at a relatively slow pace. Part of the reason for that has simply been the cost-benefit ratio has been low enough that it is difficult to justify the investment.

That’s right! 45 years ago reliability-centered maintenance might have made sense in a new, growing U.S. petrochemical industry. Why didn’t past management invest more in maintenance? Anyone know the answer? Because the top brass didn’t think the plant would be running for 40 to 45 years hence. Plus the CEO and Vice Presidents certainly wouldn’t be in charge then. It was, and still is, about fast payback, high return on investment, running up the earnings per share short-term (just long enough for the tenure of the present CEO and his/her EPS-related bonus plan). It is too late to apply reliability maintenance carte blanche to the mature petrochemical industry. It has to be applied where return is most noticeable and benefit is


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immediate. That isn’t easy, and the worst thing you can do is hire a lot of long term liabilities to try to find it.

So what am I suggesting? Go back to the reactive maintenance? No, just apply that to the fixed assets, with very few exceptions in key, highly corrosive or fouling environment fixed assets. The rotating assets are where both energy savings design and reliability is important. Again, what am I getting at? What is the largest variable operating expense in any plant next to feedstock cost? Electricity is the next biggest variable expense either purchased or self-generated using natural gas, which may also be your feedstock (hence total reliance on natural gas). This is the area you need to concentrate on maximizing both reliable performance and energy efficiency. Why? How?

Every plant has either liquid pumping circuits or gas or vapor (steam usually) flow circuits with rotating equipment (pumps for liquid, compressors for gas, and steam turbines for steam) either initiating or utilizing the flow. Also, in these circuits are various types of heat exchangers exchanging heat between circuits. Here is where energy is wasted! Why?

Because the circuits are either designed only for steady-state design production rates and/or minimum first cost. This new combination of buzz words, pinch analysis, is a way of getting the maximum out of your heat exchange networks. From Wikipedia:

Pinch analysis is a methodology for minimising energy consumption of chemical processes by calculating thermodynamically feasible energy targets (or minimum energy consumption) and achieving them by optimising heat recovery systems, energy supply methods and process operating conditions. It is also known as process integration, heat integration, energy integration or pinch technology.

The process data is represented as a set of energy flows, or streams, as a function of heat load (kW) against temperature (deg C). These data are combined for all the streams in the plant to give composite curves, one for all hot streams (releasing heat) and one for all cold streams (requiring heat). The point of closest approach between the hot and cold composite curves is the pinch point (or just pinch) with a hot stream pinch temperature and a cold stream pinch temperature. This is where the design is most constrained. Hence, by finding this point and starting the design there, the energy targets can be achieved using heat exchangers to recover heat between hot and cold streams in two separate systems, one for temperatures above pinch temperatures and one for temperatures below pinch temperatures. In practice, during the pinch analysis of an existing design, often cross-pinch exchanges of heat are found between a hot stream with its temperature above the pinch and a cold stream below the pinch. Removal of those exchangers by alternative matching makes the process reach its energy target.

What pinch analysis will probably do with the initial design is add up front engineering and capital cost but increase long-term operating efficiency (energy efficiency). Concentrating further


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on rotating equipment reliability in the design phase will synchronize with this idea. Returning to Miklovic’s article, he says something I agree with:

Yet, all of these advances have come at a relatively slow pace. Part of the reason for that has simply been the cost-benefit ratio has been low enough that it is difficult to justify the investment. First it was the cost of the sensors, but digitization drove that down over time. Then it was the cost of connection, but wireless has driven that down. After that it was the cost of configuration, but self-aware device shave driven that down. Analytics were difficult because a deep understanding of statistical methods and domain expertise was scarce. Today’s analytical engines, developed by vendors to address the big data issues associated with customer data and the proliferation of data scientists at most suppliers, has now made the analytics barrier a moot point.

In essence we have reached the tipping point. The convergence of the IIoT, Cloud, Big Data and Analytics, all facilitated by the growth of smart handheld devices. Enabling mobility has created the perfect storm that will drive shifts over the next three plus years. So, by 2020 when self-driving cars become a common sight, although not the majority of cars on the road, a new model of maintenance driven by Smart Connected Assets will emerge.

True, just apply this technology where it counts and has the quickest payback because your plant probably isn’t going to be running twenty years after startup.

Other than pinch analysis to optimize heat exchanger network design, what else can be done? I wish I had this technology in an affordable package in the 1970s – variable speed drives. What the 1970s plants had, and many now still have, were a lot of control valves wasting the energy that the old relatively inefficient motors of that day generated. Even though the plants are designed to operate at design rate and should be operated there for maximum efficiency, there are many situations that require operation below design where the control valves start closing, wasting even more energy.

Variable speed of rotating equipment is an area that should be maximized. It doesn’t always have a sufficient payback (read all about it), but all the economical possibilities should be utilized. This is even more important because pinch analysis will probably add heat exchangers and add pressure drop in the flow circuit requiring additional rotating equipment energy consumption. It always comes down to first cost versus time-based energy savings. The past low energy cost environment was part of the cause for delay in many energy savings revisions. The initial cost of all these new ideas were just too burdensome for the upper management fixated on this year’s and next year’s EPS. Nothing has changed that operating philosophy. However, the future players will have to save every Btu or kW possible just to play the game.

In the mid-1970s, I was a “Production Engineer” in a petrochemical plant. We didn’t have fancy titles. My job assisted by the one “Maintenance Engineer” was operation, reliability, maintainability, cost reduction, “Sigma-Six”, and preventive, predictive, proactive maintenance; and any other BS buzzword you could think of. I was also the Project Engineer. My main job was


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to monitor the daily performance of one of the two plants producing the same main product. I was also supposed to recommend improvements annually. I quickly realized that I better know what makes that clock tick and proceeded to learn the nuances of the operation down to every piece of equipment’s normal operating envelope.

One night at two in the morning, I get a call from the Production Manager that one of the distillation columns is not operating on spec. Specifically, the overhead composition contained too much of a heavy component that would buildup down the line in the process and cause major problems eventually. He had been on the phone with the Shift Supervisor trying to correct the problem. He had the Shift Supervisor increase reflux flow to reduce the heavy component in the overhead. It wasn’t working. He wanted me to go out to the plant and help them correct the problem as fast as possible.

I get there and look at the reflux flow and notice right off the bat that it is way too high. How come the overhead has too much heavies? I don’t know, but what I did know is that a small range of reflux given a normal feed composition is where this column operated with no problems for months.

I tell the Shift Supervisor to order a significant decrease in reflux back to the normal reflux flow I would see every day that I studied the operator logs, which was every working day young Pilgrims. He wanted to call the Production Supervisor. I said “no, just do it; I’ll take responsibility.” Within one hour, the overhead composition was back to normal. I immediately called the surprised Production Supervisor and told him the problem was solved. Apparently, he didn’t believe me, and probably was concerned I didn’t consult him first. He spoke to the Shift Supervisor, who confirmed the solution.

Now I am a young Mechanical Engineer and the Production Supervisor was a much more experienced Chemical Engineer and the Shift Supervisor had been there at least six years. What did I have, they didn’t? Data!!!!!! It is no coincidence that Gene Roddenberry named his superior than human android in Star Trek Next Generation – Data. Old Gene knew about the future, I am sure.

Now what caused the incidence of abnormally high heavies in the overhead to appear in the first place? I don’t know – a change in feed composition (confirmed later not the case), bad overhead sample analyses, or the board operator letting the control get away from him in between log entries (they were written down at fixed intervals in those days)? Who cares, I didn’t. I was soon headed back to my bed. You see, this is what one of the latest buzz word combinations is all about – advanced process control. These guys always think they have come up something new! From Wikipedia:

In control theory Advanced process control (APC) refers to a broad range of techniques and technologies implemented within industrial process control systems. Advanced process controls are usually deployed optionally and in addition to basic process controls. Basic process controls are designed and built with the process itself, to facilitate basic operation, control and


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automation requirements. Advanced process controls are typically added subsequently, often over the course of many years, to address particular performance or economic improvement opportunities in the process.

Advanced process control is a computer program designed to take data via numerous sensors, apply it to process equations, and keep certain pressures, temperatures, flows, levels, and flow compositions within control limits much better than these minimally technically educated, trained mostly by experience only board operators can do, even if they have been there 30 years. What miraculous new advances in technology!! Eventually, even better artificial intelligence will take over the job.

Whatever is running the show down the road, data is what is needed and sensors are what deliver the data. As Miklovic says:

Part of the reason for that has simply been the cost-benefit ratio has been low enough that it is difficult to justify the investment. First it was the cost of the sensors, but digitization drove that down over time. Then it was the cost of connection, but wireless has driven that down.

Wireless technology is available now, and it will be used more extensively in the future. Emerson, Honeywell, and others are pushing it because they always lead the way. The operating companies follow, if they are smart. The initial design should maximize the use of wireless and use other technology available that limits the ridiculous amount of instrument wiring in these old plants. The key point is there is no such thing as too much data, just wrong or technically deficient interpretation of it or data you can’t afford to get.

I can give you many more examples of where data is important similar to the above, but you get the idea. Energy conservation in these plants is not a complicated subject. Much can be done with relatively minimum capital investment and minimum staff, and I explain all that in one of the reports, “Energy Conservation – The Easy Stuff”. The easy stuff is the place to start, but it won’t be enough.

Recent advances in simulation software are the next thing to investigate, and its use should be decided before a plant is commissioned because it involves coordination starting at the design phase of a new plant. Trying to add the simulation after startup will involve additional monitoring devices and other costs which make the total cost difficult to justify, especially for an older plant that is struggling to survive the latest economic recession. Don’t throw good money after bad!

The two areas that most impress me that I certainly could have used in the 1970s are electrical and mechanical “design-analyze-operate” software. I’ll start with the electrical software that probably is the most useful. This partnership of Intergraph’s “SmartPlant” Electrical and “ETAP” resulting in a bi-directional interface between design and operation is an excellent idea. If you are involved in operation and maintenance of a plant, it is waste of space to explain the benefits of knowing how the all too invisible electrical system is functioning in real time. Also, a method of training and responding to the unexpected is valuable information to keep the plant running,


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which you are employed to do, by the way. You are going to need to invest in electrical sensor equipment to make this worthwhile. You can read (or hear) all about it in “ETAP” videos.

The other interesting area for those who believe fixed asset longevity will pay off for them is the direction Codeware is going in with “Inspect”. The refining industry is really into this Fitness for Service movement, which started without a name in the 1980s and gained momentum starting in 2000 with the first edition of API 579. From an article “Recent Advances in Fitness-For-Service Assessment”:

Ted Lynn Anderson Quest Reliability, LLC Boulder, Colorado, USA

1 Executive Summary

Fitness-for-service (FFS) assessment is a multi-disciplinary approach to determine, as the name suggests, whether a structural component is fit for continued service. In 2000, the American Petroleum Institute (API) published API 579, a Recommended Practice for FFS assessment. Although this document was intended primarily for refining and petrochemical assets, it has seen widespread use in a wide range of industries that utilize pressure vessels, piping, and storage tanks. In 2007, API joined forces with the American Society for Mechanical Engineers (ASME) to produce an updated document with the designation API 579-1/ASME FFS-1. This document, which is a Standard rather than a Recommended Practice, contains numerous improvements and explicitly addresses industries outside of refining and petrochemical.

The movement is now a “popular cause” almost with the API developed programs for certification.

API 510 – Certified Pressure Vessel Inspector API 653 – Above Ground Storage Tank Inspector API 570 – Authorized Piping Inspector This movement is out of control just like the ASME and API increasing proliferation of recommended practices and standards trying to justify their continued existence. All movements, especially well intentioned ones, eventually become expanding bureaucracies with self-promoting reasons for their existence in your organization, industry, community, or country. Therefore, let us create new buzz words and more reasons to hire employees that weren’t needed heretofore. Let us not ask why we need this; however, let us jump on the latest bandwagon. Everyone else is so it must be right for us.

For instance, the proliferation of adds for “Reliability Engineers” and “Mechanical Integrity Engineers” seems to be a relatively recent realization of something, which I don’t understand given the future prospects for petrochemical industry longevity. A typical add is as follows (the head hunter spelled integrity as intergrity):


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Mechanical Integrity Specialist The Mechanical Integrity Specialist is responsible for the regional mechanical integrity program by providing leadership and technical expertise necessary to the team of Client and contract inspectors that ensure the integrity of the facility process stationary, rotating, and instrumented equipment through the application of appropriate inspection tools and through the implementation of procedures, processes and training that promote continuous improvement and ensure compliance to applicable regulatory codes and standards. ESSENTIAL JOB FUNCTIONS • Champions the inspection process through training, coaching and mentoring. • Supervises the performance, development and progression of the mechanical integrity personnel. • Responsible for the regional on-stream mechanical integrity process as defined by PSM, DOT, API and Client Codes and Standards • Keeps stakeholders informed of inspection status, findings, and forecasts through routine progress reviews and alignment meetings. • Provides input on annual budgeting requirements and manages the Mechanical Integrity budget. • Tracks and reports progress of scheduled inspection requirements; communicates and tracks inspection findings through completion. • Leads efforts to optimize inspection frequency through the utilization of RBI and appropriate inspection techniques and Code application • Participates in project teams to ensure appropriate reliability objectives are incorporated into design, construction and installation of fixed equipment. . • Develops procedures, processes, guidelines and necessary work tools that institutionalize work processes and practices and provide for efficient knowledge transfer of best practices across the region and company. • Initiates, leads and provides input on the development of equipment Inspection Plans & Repair Procedures • Identifies instances where the application of API 579 Fitness For Service is applicable • Charters necessary root cause failure analysis and the completion of identified action items associated with fixed equipment. • Ensures compliance to Client mechanical integrity policies, procedures and guidelines • Collaborates with regional counterparts to drive consistent work processes, procedures, KPI measures, and implementation of best practices • Responsible for the creation and implementation of maintenance procedures for stationary pressure vessels and piping systems, rotating equipment, and instrumentation. MINIMUM KNOWLEDGE & SKILLS & ABILITIES • Knowledge of fundamental reliability tools and processes including root cause failure analysis, Pareto analysis, and relevant inspection techniques and tools. • Demonstrated experience and solid understanding of the Mechanical Integrity requirements as defined by OSHA’s Process Safety Management.


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• Fundamental knowledge and natural interest in stationary equipment including material science, welding processes and procedures, and common failure mechanism associated with fixed equipment.in the petrochemical, oil, gas, and refining industries. • Demonstrated ability to influence without authority • Self-motivated • Proficient with Microsoft suite of tools • Excellent technical writing and oral communication skills • Translate complex data into information useful by all levels of the organization. Experience / Qualifications: EDUCATION / EXPERIENCE: • Bachelor of Science degree in engineering – mechanical preferred. • 5+ years of experience with operations and/or maintenance of process equipment typical in the oil, gas and petrochemical industry. • Experience in facility integrity, design, operations and maintenance, a detailed understanding of risk and condition based management, and Professional Engineering registration preferred. • Candidate should be well versed in the API-510, API-570, API-579, API-650, API-620, API-653, API-571, ASTM specifications, ASME Section VIII Div.1, ASME B31.3, B31.4, and B31.8. • Working knowledge of corrosion issues and corrosion phenomenon occurring in equipment and piping operating in mid-stream operating environments. • Thorough knowledge of Mechanical Integrity processes, procedures, and Code related material • Leadership experience • Certification in API 510 and 570 a plus. • Experience in the application of API 580/581 RBI evaluations and API 579 Fitness for service is a plus

Now get as many headhunters looking for someone with all these qualifications (which are few by the way). Of course, getting the head hunters to understand what they are looking for first requires that that the requester understand what he or she is looking for and why. It takes a lot of time and a lot of money spent to get all this training so you think you are going to find these individuals growing on trees? The 5 years + experience requirement is really the most laughable. You know they don’t each this stuff in engineering school?! How about 15 years + being more like it?

Now the expertise exists out there, but they are usually found in the organizations that started the movement in the first place in order to create a before-then nonexistent market. There is no need to hire someone with these qualifications when you can get someone a great deal more experienced on a contract basis and as needed. I say as needed because the first to go when the “Brass” says cut back are the highest paid and the ones who aren’t absolutely needed to keep the plant running, which is just about everyone not in an operational role. With contract personnel you don’t have to worry about the inevitable economic downturn, which always results in depopulation of the organization. This is a lesson that never seems to be learned.


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I’m all for this reliability movement in the refining industry because some of these refineries will still be running 30 years from now. However, most of the petrochemical industry should get off the latest industry hypemobile and understand where they are going with this movement. I think the surviving petrochemical industry will be about specialty and smaller and probably short lived ventures and facilities. Plus they will eventually have to move into the new biochemical industry with new facilities. These billion dollar basic chemicals mega plants have as much chance of existing 20 years from now as a snowball in hell. Where is the feedstock going to come from? And if you can get it, will the resulting profit be worth all the constant large capital investments required? I am certain it won’t be worth it in the not too distant future.

Having said all this, I am impressed with some of the software out there that has to chance to make this fitness for service movement worthwhile in some cases. Codeware has been producing mechanical design software for some time with “Compress” for pressure vessel design and heat exchanger mechanical design. They have moved into the “asset integrity” movement with “Inspect”. Just like the Smart Plant Electrical-ETAP marriage, “Inspect” is coordinating with “Compress” initial design to keep a running picture of the life of not only pressure vessels and heat exchangers but also piping and storage tanks. If you are serious about the “long-term” benefits of maintaining plant assets, than you have to start at the design step and provide enough data to maintain those assets throughout whatever life you think you have. Otherwise, you just temporarily jumped on the latest hypebus, and the next all out stop is rapidly approaching.

The next movement of interest is the power management, energy management movement, which is about 50 years too late. However, it is better late than never. There are too many players in this field trying to provide the answers for controlling and maximizing the efficiency of electrical and/or total energy consumption to describe one. The key here is do you have a fuzzy, warm feeling about the longevity of your venture? If not, than this isn’t going to do you any good! If yes, than definitely look into this movement. However, if you are going to create a bureaucracy to make it work, than whatever effort you start is doomed. Look at how the U.S. Department of Energy has tried to make the U.S. safe for tomorrow – one boondoggle after another followed by one fairy tale after another. In another words, they usually propose a total waste of money on a large scale that could have been spent on many smaller scales preparing for the future.

The question should be: Is this cost effective for my organization given what I should understand about the future prospects of my business? The future trend will be toward much smaller plants as the mega plants become uneconomical to operate and end up as large metal recycle operations. Believe it or not! I’m looking for those who can see into the future and accept what they see.

US Petrochemical Industry Future - Integrating Design Operation and Maintenance

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Transcript of US Petrochemical Industry Future - Integrating Design Operation and Maintenance