Total, Neste Oy to study biodiesel venture

Doris Leblond
OGJ Correspondent
PARIS, July 13 -- Total SA has signed an agreement with Finland's Neste Oy to study the feasibility of jointly building a new-generation biodiesel production unit in Europe.
One of Total's European refineries would use Neste Oy's hydrogenation technology to produce the biodiesel beginning in 2008.
Feedstock would be vegetable oils and animal fats. The European Union wants biodiesel to represent 5.75% of motor diesel by 2010
Total, which leads the European Union in the production of biofuels, is the main user of ethanol in France through its production of ethyl tertiary butyl ether and biodiesel. "

Quotable Quotes

'We have what is clearly a superior offer. It remains on the table. Our bid at $67 (per share) cash is considerably above the alternative offer of $63.'
A spokesman for CNOOC Limited said to Platts in reference to its takeover offer for US independent Unocal after rival bidder Chevron late Tuesday announced a new merger agreement at an improved $63.01/share.


'The three companies were out of the contest because their asset base was too small to acquire Inchon Oil. Their assets are less than Won 3-bil ($2.9-mil) each.'
An Inchon Oil Refinery official said in reference to She Kwang Energy Corp, EF System Corp and ECI having asset bases a lot smaller than the Won 1.8-tril of Inchon Oil.


'We see gasoline production dropping to the 8.6-mil b/d range from the previous week's 8.8-mil b/d on lower overall runs and storm-related disruptions to fluid catalytic cracker operations.'
Energy analyst at J.P. Morgan, Katherine Spector, said in a report ahead of Wednesday's US DOE and API inventory reports where analysts estimare a draw in gasoline stocks of 1.4-mil bbl. "

FACTS & FIGURES FOR THE CHEMICAL INDUSTRY

Although 2003 may have been the preface, 2004 was the story of the turnaround in the fortunes of chemical producers around the world. Last year at this time, C&EN was saying that while it did not show up in the annual figures, the fourth quarter of 2003 showed major improvement in economies around the world and that it looked like the trend was continuing in 2004.
And the turnaround did expand in most chemical-producing countries. In the U.S., the most important chapter was the increase in prices, which, when combined with cost cutting, helped pull chemical company earnings sharply higher.
But there were other important trends. Production volumes increased in most countries. The laggards were mainly in European countries where national economies are not expanding as fast as those for other countries around the world.
Employment is still falling in many areas, but in the U.S., at least, this means that labor productivity is improving.
In the era of globalization, foreign trade has become an ever more important aspect of the chemical industry. Many of the countries saw their chemical exports expand in double-digit percentages in 2004. Often they were growing faster than imports, providing improvements in chemical trade balances.

GAO: Special gasoline blends raising prices

The US proliferation of special gasoline blends is lowering emissions of air pollutants but raising fuel costs, says a study by the Government Accountability Office. Special gasoline blends are designed to reduce emissions of volatile organic compounds and nitrogen oxides and to meet requirements for oxygen content. The federal government requires them in areas troubled by ozone pollution. And some state and local governments have set their own specifications for special blends. GAO said it found 11 distinct special blends in use during the summer of 2004. With octane difference and other factors, 'there were at least 45 different kinds of gasoline produced in the United States during all of 2004,' it said. Models used by the Environmental Protection Agency show special gasoline blends cut vehicle emissions by varying degrees. California's reformulated gasoline, the nation's strictest in terms of content and performance standards, cuts VOC emissions by 25-29% and NOx by 6% compared with conventional gasoline.
The most common special blend, used along the Gulf Coast, cuts VOCs by 12-16% and NOx by less than 1%.

The rising number of required blends has raised costs and aggravated price volatility, GAO said. The blends cost more to make than conventional fuels, require special handling to prevent contamination, and limit interchangeability. GAO noted a consensus among experts that "the increased complexity and higher refining, transportation, and storage costs associated with supplying special gasoline blends have contributed to higher gasoline prices overall and for specific special blends either because of more frequent or severe supply disruptions or because higher costs are likely passed on at least in part to consumers."
It said its findings support those of other government, academic, and private studies showing that "the gasoline supply system is increasingly stressed" and finding "isolated pockets of higher and/or more volatile prices in cities that use special gasoline blends that are not widely used."

Price findings
In 100 cities studied by GAO, the highest pretax, wholesale gasoline prices generally were in cites using a special blend that's not widely available in the region or that costs significantly more to make than other blends. Cities distant from major refining areas or other gasoline sources also had high prices. Most of the 20 cities with the highest prices used special gasoline blends. Cities in the high-price group using conventional blends year-round are far from refining centers or are served by single, small pipelines.

During December 2000 through October 2004, average prices in the 20 high-price cities were 14-41¢/gal higher than those in the lowest-price city. Five of the 10 cities with the highest average prices are in California. Of the 20 cities with the lowest gasoline prices, eight use conventional gasoline, and nine use 7.8 rvp gasoline, common along the Gulf Coast. The other three low-price cities—Houston, Birmingham, and Atlanta—use less common special blends but are close to Gulf Coast refining centers. The study also found price volatility to be higher in cities using special blends. Eighteen of 20 cities with the most volatile prices use special blends, and 17 of 20 cities with the lowest volatility use conventional or 7.8 rvp gasoline.