Research and Innovation, Position Paper 03 - 2010

Biofuel InfrastructureManaging in an Uncertain Future

Research and Innovation in

DNV The objective of strategic research is through new knowledge and services to enable long term innovation and business growth in support of the overall strategy of DNV. Such research is carried out in selected areas that are believed to be particular significant for DNV in the future. A Position Paper from DNV Research and Innovation is intended to highlight findings from our research programmes.

This isDNVDNV is a global provider of services for managing risk. Established in 1864, DNV is an independent foundation with the purpose of safeguarding life, property and the environment. DNV comprises 300 offices in 100 countries with 9,000 employees. Our vision is global impact for a safe and sustainable future.

Contact informationNarasi Sridhar, Ph.D.Director, Materials Program, DNV Research & Innovation Det Norske VeritasNarasi.Sridhar@DNV.Com+1(614) 761-6920

Feng Gui, Ph.D.Materials and Corrosion Technology Center DNV Columbus, Inc.Feng.Gui@DNV.Com+1(614) 761-6929

John A. Beavers, Ph.D.Materials and Corrosion Technology Center DNV Columbus, Inc.John.Beavers@DNV.Com+1(614) 761-6909

Joshua JamesMaterials and Corrosion Technology Center DNV Columbus, Inc.Joshua.James@DNV.Com+1(614) 761-1214

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The growth in global bioethanol demand alone is projected to reach 272 billion litres per year in 2030 up from 33 billion litres in 2005 [1]. Although the focus at present is on crop-based ethanol and biodiesel, considerable government and private company investments portend a future biofuel mix consisting of alcohols from high-yield cellulosic materials and biodiesel derived from diverse sources, including algae.

To deliver these projected volumes of biofuels, significant investments in infrastructure for transportation, intermediate storage, blending, and distribution is needed in many countries. This report aims to provide a framework for considering the business, environmental, and safety risks involved in expanding the biofuel infrastructure. In doing so, the report recognizes that there is considerable ongoing debate on the sustainability of different biofuels in different regions of the world, but has chosen to focus on the infrastructure risks.

The key points of this position paper are:• New infrastructure, including shipping, pipeline,

and storage will be necessary to meet the anticipated increase in global demand for biofuel.

• Building the new infrastructure will entail regulatory, economic, safety, and environmental risks that must be considered together.

• The material integrity issues vary significantly for different biofuel types. For ethanol (1st or 2nd generation), the main issues are stress corrosion cracking of steel and degradation of elastomers in ethanol-gasoline blends. A number of inhibitors are available to mitigate SCC of steel in ethanol, but laboratory evaluation is recommended before approving a specific inhibitor.

• Other issues related to ethanol transportation include product contamination related to reaction of ethanol with residues in the pipelines, compatibility of other fuels such as jet fuel, emergency response procedures, and environmental consequences.

• For biobutanol, the stress corrosion cracking tendency appears to be much less than for ethanol.

• For biodiesel, the main issue appears to be corrosion of steel or other non-ferrous metals. However, significant gaps remain in our understanding of the material compatibility issues.

• Because the future mix of biofuels may be quite different from that today, a flexible framework for managing the safety and business risks associated with the biofuel transportation infrastructure is necessary.

Key Points

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In 2008, the world consumption of liquid transportation fuel was estimated to be 4900 billion litres (31 billion barrels), of which gasoline formed about 25 percent (1 barrel of Petroleum = 42 gallons (liquid) = 159 litres). As result of a global effort to address climate change, assure energy supply, and reduce dependence on conventional fossil fuels, several countries have passed legislation to promote the production of biofuels and to guarantee certain production targets to meet the steady increase on energy demand.

Mandatory blends and utilization targets are common mechanisms established by several countries to promote the use of biofuels. A mandatory blend refers to the percentage of biofuel that a transportation fuel needs to have when it is sold to the end customer [1]. Brazil and a number of other developing countries have adopted this system. Utilization targets determine a specific volume of biofuel utilization or a percentage of the total transportation fuel demand that needs to be replaced by biofuels. While the US has adopted volumetric targets the European Union has taken the second approach. Both of these approaches require no particular blend level, allowing certain degree of flexibility to change the blend type according to market fluctuations [1].

The top 14 biofuels producing countries will need approximately 154 billion litres (971 million barrels (MB)) of ethanol by 2022 to meet the targets. If new and planned production facilities are included in the global capacity a total of 1,000 MB could be produced per year by 2022, exceeding the mandated requirements. However, Nastri has suggested that due to the rapid increase in fuel demand the projected fuel consumption could be up to 40% higher than anticipated [2]. Assuming a continuous growth on the global gasoline demand and based on 2006

gasoline consumption statistics, recent models developed by the University of Campinas (Brazil) have predicted that as much as 223 billion litres per year (1,400 MB/y) of ethanol will be necessary to replace 10% of the global gasoline consumption. As a result, if the expected installed capacity driven by new projects in the US and Europe is not in place by 2022, mandated targets might not be met [1].

The biodiesel situation is more complicated. The expected blending targets will increase demand for biodiesel to approximately 67 billion litres (424 MB/y by 2022). However, the world’s installed capacity, including existing and projected facilities, will be able to produce in the best case scenario up to 307 MB/y by 2022. In other words, an increase of approximately 30% in biodiesel production over the best case scenario predictions will be necessary to meet mandated targets. It has also been suggested that a worldwide biodiesel obligation of 10% could require as much as 860 MB/y of biodiesel by 2022 [1]. If the considerable research efforts in to produce biodiesel from algae and other non-food biomass yield commercially viable processes, the projected biodiesel demand can be easily met.

At present, biofuel is first sent to blending terminals through tanker trucks, rail cars, and barges, where they are blended with gasoline or diesel and then sent to consumer filling stations via trucks. In the U.S. 67 percent of the ethanol is transported to blending terminals via trucks, 31 percent by rail cars, and 2 percent by barges. Biofuel is also exported through ships to receiving terminals which then blend them with gasoline and then transport them to filling stations using trucks. On-shore pipeline and terminal storage systems will need to be expanded and modified to deliver the anticipated large volumes of

Biofuel – Facts and Figures

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biofuel from diverse sources to the end users. This report examines the technical and business risks involved in the expanded pipeline infrastructure to deliver liquid biofuel.

Biofuel TypesFigure 1 shows the major pathways through which biofuels are produced. The biological and chemical processing routes produce “biofuels” that may be different in chemical and physical characteristics from petroleum-based fuels. On the other hand, the thermochemical routes produce fuels that are essentially indistinguishable from corresponding petroleum-based fuels. The grains (e.g., corn), sugar crops (e.g., sugar cane, beets, etc.) and oil seed

crops (e.g., rape, soy, etc.) constitute the 1st generation biofuel sources. The agricultural residues (e.g., corn stover), grasses (e.g., miscanthus), and high-oil vegetables (e.g., jatropha) constitute 2nd generation biofuel sources. Algae or other genetically modified organisms/plants yielding high fuel content form the 3rd generation biofuel sources. Each succeeding generation of biofuel source is considered to be more sustainable.

liquid Biofuel volumes, Types produced in differenT regions The biofuel market is dominated by ethanol in the Americas (mainly the U.S. and Brazil) and biodiesel in

Figure 1. A variety of feedstocks and routes results in a number of end-products. Modified from [3]

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Europe (mainly Germany). At present, almost all ethanol is produced using starches or sugars as the basis either from grains (U.S. being the dominant producer) or from sugar crops (Brazil being dominant). Similarly, almost all biodiesel is produced using either vegetable oils or animal fats as the starting materials. In the future, it is anticipated that the considerable research being conducted today will result in ethanol production from cellulosic materials. Correspondingly, it is anticipated that current research will lead to increasing commercial utilization of algae as the source for biodiesel.

Biofuel TargeTseuropeThe Directive 2009/28/EC of the European Parliament and of the Council on the promotion and the use of energy from renewable sources has reaffirm EU’s ambitious targets with respect to renewables [5]. The directive, which

superseded the original bill of 2007, endorsed a mandatory 2020 target of 20% of all energy use through renewable energy sources (RES). The agreement specifies that by 2020 10% of the transport fuel, with a 5.75% intermediate target for 2010, needs to be from renewable sources including biofuels, hydrogen, and green electricity [5,6]. In addition, the mandate obliges EU members to ensure that biofuels offer at least a 35% carbon emissions savings compared to fossil fuels by 2010 and as much as 50% by 2017. As of 2017 the target will be increased to 60% [5].

The change in legislation from the original 2007 target of 10% biofuels was driven by questions regarding the sustainability of biofuels including concerns related to increasing food prices, biodiversity loss, and questionable CO2 reduction values [6]. These concerns resulted in some countries such as Germany and France reducing mandates and tax incentives. In addition, the European Parliament’s Industry and Energy Committee asked for at least 40% to be met by second-generation biofuels that do not compete with food production [6]. Based on current production volumes, there are a number of countries in Europe, particularly UK, Malta, Luxembourg, Spain, Italy, and Slovenia, that might have problems meeting EU’s 2010 goals. Suggested changes in legislation to include imported biofuels or energy investments outside EU within mandated targets might be required [6].

uniTed sTaTesThe U.S. passed the Energy Independence and Security Act of 2007 (EISA), which required the creation of a Renewable Fuel Standard (RFS) program. The U.S. environmental Protection Agency issued revised RFS effective on July 1st 2010 (called RFS2) that for the first contained specific fuel volume requirements (Figure 3)

Figure 2. Global ethanol and biodiesel production trends in billions of liters per year [4]

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The EPA set specific targets for 2010, requiring a cellulosic biofuel volume of 24.6 million litres (6.5 million gallons,) biomass-based diesel volume of 4.35 billion litres (1.15 billion gallons), and advanced biofuels volumes of 3.6 billion litres (0.95 billion gallons). Lifecycle greenhouse gas reduction thresholds are specified compared to the 2005 baseline gasoline or diesel fuel:

EPA determined that the current corn-based ethanol meets the 20 percent GHG reduction threshold whereas ethanol produced from sugar cane meets the 50% GHG threshold, thus enabling it to be applicable to the advanced biofuel category. Overall, EPA estimated that the 136 billion litres (36 billion gallons) of biofuel in 2022 will displace about 51.5 billion litres (13.6 billion gallons) of petroleum-based gasoline and diesel or about 7 percent of expected annual consumption in 2022.

BrazilBrazil represents one of the most advanced and attractive markets for biofuels outside EU and US. Brazil was the first country to introduce ethanol on a large scale as a replacement for gasoline in the early 70’s. Today, Brazil mandates gasoline to have 20-25% ethanol at the pump, also offering hydrated ethanol for their large fleet of flex-fuel vehicles [1,5,7]. Additionally, in 2008 President Lula da Silva has signed legislation promoting the development of biodiesel through tax incentives, with a focus on small producers, and fixing a utilization target of 3% for 2008 and 5% (11.9 MB/y) by 2012 [1]. Brazil has an installed capacity coupled with a distribution network that meets or surpasses governmental mandates for 2012. The large number of new facilities under construction will clearly increase Brazil’s production capacity even further, making Brazil one of the largest exporters of biofuels worldwide.

resT of The World In South America, Argentina has now set an ambitious goal to replace 5% of the diesel and gasoline used in the transportation sector by biofuels (i.e., E5 and B5 blends) [6]. The Argentinean government has also guaranteed a minimum price level for ethanol and biodiesel, which will promote the development of the sugarcane and soybean oil industries. In North America, Canada has passed

Figure 3. RFS2 requirements for different biofuel types issued by U.S. EPA

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legislation mandating the use of E5 and 2% biodiesel by 2010 and introduced a number of tax incentives such as a tax exception of 4% for biodiesel production and consumption [1].

In Asia, China, India, and Thailand have set the most aggressive goals with respect to biofuels and renewable energy sources in general [6]. China represents the world’s third largest biofuel market. China has set a 15% ethanol target for 2010 and a 15% biodiesel target for 2020 [1]. China is expected to grow their installed capacity almost 6-fold in the next few years, including significant investments in second generation high-yield biofuels such as Giant King Grass [6]. India has set a very aggressive target for ethanol and biodiesel of 10% by 2012, which will require a 13-fold increase in installed capacity to meet such objectives [1]. Likewise, Thailand has set a 10% biofuels target and it is heavily promoting the use of E85 blends.

Thailand’s government has recently removed import tariffs on flex-fuel vehicles as a mechanism to promote high ethanol blends. Finally, Malaysia has set a B5 mandate to promote the use of biodiesel from Palm Oil [6].

Biofuel infrasTrucTure The U.S. National commission on Energy Policy’s Task Force on biofuels Infrastructure [7] defined the biofuels expansion into two major phases from an infrastructure perspective. During Phase 1 (concluding in 2015), existing multi-modal transportation infrastructure will continue to play a major role, but will require additional infrastructure investment. In Phase II (after 2015), the volume of biofuel production will expand beyond 15 billion gallons per year, but the infrastructure needs will depend on the mix of biofuels, geographical distribution of production and consumption centres, availability of flex fuel vehicles, etc. For example, Figure 5 shows the current

Figure 4. Major gasoline refining and consumption areas in the U.S. (top) versus major ethanol (bottom) production and consumption regions [7]

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gasoline consumption and distribution infrastructure. In comparison, the ethanol production centres are located at the geographic centre and needs a different distribution pathway.

It should be noted that while pipelines form the bulk of the transportation of petroleum fuels, rail, truck and barges currently serve as the main transportation modalities for ethanol. The rail, truck, and barge transport modes are more costly and less efficient than pipeline transport for long distances. Construction of new pipelines will require significant investment and therefore careful assessment of enterprise-wide risk is needed.

It has been estimated that for long-distance transportation of fuel, pipeline is less hazardous than trucks or rail cars based on frequency of fatalities per distance transported. While the pipeline infrastructure in the U.S. is still nascent, Brazil has a well-established ethanol pipeline already and is planning to expand this infrastructure even further.

The European biofuel infrastructure strategy is yet to be developed. Currently, biofuels and blends are transported from blending terminals to gas stations and other distribution points by rail, truck, and ship/barge with no mention of pipeline transportation. It is unclear how Europe will approach the large scale-up in biofuel production and the logistics related to EU’s Directive 2009/28/EC. The optimization of the infrastructure network will be one of the most challenging aspects faced by the EU if the 2020 goals are to be met.

In this regard, Ernst & Young has developed an indexing methodology to rank the attractiveness of global markets for investments in biofuels and other renewable fuel sources. The index is composed of three weighted

factors including: market regulatory risks, supporting infrastructure, and access to finance [6]. From these factors, infrastructure is the most important one, carrying a weight of 42%. Infrastructure in this context indicates the access to arable land, an adequate distribution network, and the level of investment in research and development (R&D).

The most up-to-date indices (i.e., March 2009) are summarized in Figure 5. Brazil, US, and China represent the top-three most attractive countries for biofuel investment today. This is, in part, due to their robust infrastructure, the solid investment on R&D, the number of projected new constructions, and the certainty of the mandated targets. France is EU’s best-positioned country follow by Spain and Germany in a distant 9th place. The low performance of European countries has been mostly related to uncertainties on the stability of mandated targets

Figure 5. Biofuels country attractiveness indices – March 2009 [6]

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and the elimination of incentives for biofuel producers. Nevertheless, the lack of a common consensus regarding a biofuel distribution network has weighted negatively on the indices.

chemical specificaTions for eThanolIn the U.S., the standard for fuel ethanol is governed by ASTM D 4806. Similar fuel grade ethanol specifications exist in other countries or regions as shown in Table 1 for selected countries2. The U.S. is unique in requiring the addition of a denaturant in order to render the ethanol undrinkable. Generally, the chemical specifications are derived for automotive performance rather than storage

and transportability of ethanol. It must be noted that in the U.S., until recently, the chloride content was specified to be a maximum of 32 mg/l. But this has been revised downwards because measurement techniques have improved. From the point of view of ethanol’s compatibility with steel, lower chloride levels are certainly beneficial.

chemical specificaTions of BiodieselBiodiesel specifications are shown in Table 2. Today in the United States nearly every Original Equipment Manufacturer (OEM) has approved the use of biodiesel blends of up to 5% (B5). However, future biodiesel usage may include higher blends, B11, B20, B99, and even B100.

Constituent U.S.

ASTM D 4806

Brazil (anhydrous)

India: IS 15464-2004)

Europe EN 15376

Ethanol, vol% 92.1 (min.) 99.3 min. 99.5 min. 96.7 min

Methanol, vol. % 0.5 max. 0.038 max 1 max Solvent washed gum, mg/100 ml

5 max

Water, vol. % 1 max

Not specified (about 0.4 v%)

0.3 max

Denaturant content, vol % 1.96 – 4.76 permitted permitted Inorganic chloride, mg/L 8 max - 20 max Copper, mg/Kg 0.1 max 0.07 max 0.1 max 0.1 max Acidity as Acetic Acid, mg/L 56 max 30 max 30 max. 56 max Sulfur (mg/Kg) 30 max 10 max Sulfate (mg/Kg) 4 max Phosphorus (mg/L) 0.5 max pHe 6.5 - 9 Not specified Appearance Clear Clear Clear

 

Table 1. Specification for Fuel Ethanol in different countries and regions Table 2. Specifications for biodiesel in the U.S. and Europe

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overall ThreaTsIn addition to the known threats posed for pipelines (e.g., third-party intrusion, coating damage, etc.), transportation of biofuels brings additional integrity threats that must be considered in any overall risk management process (Figure 6)

There has been no known incidence of stress corrosion cracking of any material in biodiesel and biogas, but incidences of corrosion have been reported. In contrast, corrosion in anhydrous ethanol systems is rare, but a significant number of stress corrosion cracking incidences has been reported [8].

Studies of corrosion and stress corrosion cracking in biobutanol are sparse, but the current DNV studies indicate that neither of these is a significant threat. Similarly, swelling, softening, and permanent set of elastomeric materials have been reported in ethanol [9]. While these threats may exist for other biofuels, there have been no

published studies to evaluate these threats. The rest of this chapter reviews the published information and outline mitigation methods.

corrosion and sTress corrosion cracking

Stress corrosion cracking (SCC) is the joint action of mechanical loading and environment on a material. Neither mechanical loading nor environment by itself is sufficient to cause SCC. Beginning approximately in 2002, several ethanol storage tanks at blending terminals suffered leaks due to SCC [8].

These tanks were less than 2 years in ethanol service. Since then an industry survey has found more than 35 incidences of SCC failures in tanks, associated piping, and fittings. All failures to date have been in blending terminals, but the failures have occurred in a number of regions in the U.S. Ethanol producers, rail cars, transportation trucks, and service stations have not reported any SCC. Brazil, which

Integrity Threats for the Biofuel Infrastructure

Figure 6. Illustration of integrity threats for pipelines and storage tanks arising from biofuel transportation in addition to the other known threats.

Figure 7. Intergranular brittle fracture seen at high magnification in a scanning electron microscope of a crack in steel exposed to fuel grade ethanol

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has produced and distributed ethanol for several decades, has also not reported any SCC. Because of these failures, there was concern about the ability of pipelines to safely transport ethanol to and from blending terminals.

Extensive research was undertaken by DNV and others to understand the factors leading to SCC of ethanol [10]. Initial, statistically designed experiments revealed that the most important environmental factors causing SCC were:• The presence of dissolved oxygen in the ethanol from

exposure to air• Increased levels of chloride• Increased level of methanol• Presence of rust on the steel surface

The metallurgical grade of steel plays no significant role in promoting SCC. SCC does not occur when the ethanol content in an ethanol-gasoline blend is less than 10 volume percent (Figure 8), which also shows that above 10 percent ethanol, SCC may occur if the oxygen content in the air space is above about 0.2 percent.

Another factor that is important to the cracking of steel in ethanol is the chloride concentration in ethanol. Even a relatively small chloride concentration (less than 5 ppm) can cause significant SCC.

Fresh steel surface has a higher reactivity to ethanol. If a structure is statically loaded, the metal initially deforms and exposes fresh surface, but after some time ceases to deform. However, cyclic loading or episodic loading such as that induced by emptying and refilling a large tank can cause fresh plastic deformation at the tips of pre-existing flaws, which can serve to cause SCC.

As illustrated in Figure 9, when steel is exposed to 95 volume percent ethanol, crack growth occurs initially.

Figure 8. Effect of blend ethanol content and dissolved oxygen on SCC of steel

Figure 9. Effect of cyclic loading and ethanol content in an ethanol-gasoline blend on crack growth rate in steel.

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Even when the ethanol content is reduced to 20 percent (E-20), cracking does not stop completely. However, the crack growth stops when the ethanol content is reduced to 10 percent (E-10). Cracking can restart if ethanol is increased to E-95. If an inhibitor is added, cracking slows down and when oxygen is removed by purging the ethanol with nitrogen, cracking stops. This illustrates that we can manage SCC in ethanol using a number of controls.

meThods To miTigaTe sccSCC can be mitigated by reducing stress levels through proper post-weld stress relief annealing, reducing the dissolved oxygen using chemical or mechanical oxygen scavengers, and using inhibitor additives. Stress relief annealing is not always practical, especially for large tanks and existing pipelines. Chemical oxygen scavengers can be effective, but their acceptability by end use customers

(automotive companies) is not certain. DNV has tested many proprietary inhibitors supplied by inhibitor manufacturers and found that some inhibitors are effective while others are not. Test protocols have been established and users must test specific inhibitor packages prior to accepting them for service. DNV has found that the most effective inhibitor for SCC in ethanol is a generic chemical, ammonium hydroxide. As little as 75 ppm by weight of ammonium hydroxide appears to be effective in preventing SCC. However, its effect on automotive components is not fully established.

Figure 10. Effect of sequential fuel transitions from E20 fuel blend to neat gasoline followed by E20 fuel blend on the swelling of elastomeric materials.

Figure 11. Comparison of the swollen elastomeric samples upon exposure to sequential fuel immersions of E95 fuel and gasoline (a) Viton Sample after 28 days of exposure to E95 followed by 28 days in Gasoline & 7 days in E95, (b) Low-Swell Buna N Sample after 28 days of exposure to E95 followed by 7 days of exposure to Gasoline and (c) Initial dimensions of samples.

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performance of seals and gaskeTsElastomeric materials can undergo swelling (Figure 12 and 13), softening, and permanent deformation that would impair their ability to seal joints. DNV evaluated a number of candidate elastomers used by the pipeline industry and found that: • Volumetric Swelling of all elastomers increases as the

amount of gasoline in the ethanol blends is increased. • Swelling of elastomers in ethanol blends was

determined to be more than that of Neat Fuel Systems.

• Viton GF, Viton GFLT and Teflon were determined to offer the best hardness retention and least volumetric swell upon exposure to both neat fuel systems and sequential transition of fuel systems.

• Leaching of the soluble non-bound ingredients of some elastomers, such as Viton and Low Swell Buna-N and Buna-N samples was witnessed by coloration of test fluids during immersion tests.

• In dynamic seals for pumps, etc., swelling may be less, but the lack of lubricity due to the solvent action of ethanol may lead to problems such as tearing and frictional heating.

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an inTegraTed risk managemenT approach for Biofuel infrasTrucTureThrough our extensive research and those carried out by other laboratories, we have answered many important questions raised by industry regarding storage and transportation of fuel grade ethanol. Research is continuing on biodiesel and other biofuels. The storage and transportation industries perform risk management of their systems utilizing many different methods. Does our current understanding of the risks in transporting biofuels require a new approach to risk management? For biodiesel, the integrity threats appear to be qualitatively no different than those for diesel or other liquid hydrocarbon pipelines. The internal corrosion rates may be affected by constituents arising from biodiesel sources/manufacturing, but there appears to be no new mode of failure. Therefore, the current practices of risk management may be applied to systems carrying biodiesel, with the additional data input from ongoing research projects.

However, for ethanol, the current practices of risk assessment for pipelines may not be sufficient. This is mainly because of the potential for stress corrosion cracking inside the pipe. Stress corrosion cracking, especially at its early stages is difficult to detect by standard inspection tools. Secondly, because the product is everywhere, there is a potential for SCC at any given site.

A bow-tie approach may provide a flexible framework for risk management of the biofuel infrastructure. The bow-tie approach is a systematic method to identify controls or barriers that will prevent an adverse event from happening or an adverse consequence if that event happened (Figure 12). Although, it can be used quantitatively, it is generally meant to be used as a qualitative management and communication tool.

The top adverse event can be anything that leads to a safety, environmental, product quality, or other consequences. The various hazards and associated threats that could lead to the top event are initially identified. Then a series of controls or barriers that can either prevent or mitigate these threats are identified. Similarly, on the right side of the top event consequences and barriers that could prevent such consequences are identified. A barrier is any physical or management action that prevents an adverse event or consequence. For example, a barrier can be a coating (physical barrier) or it can be a set of organizational controls, such as inspections.

For example, in an ethanol pipeline the top adverse event may be a leak of ethanol. The various threats leading to product leak from a pipeline can be broadly classified as those that are general to any liquids pipeline (external corrosion, external SCC, intrusion damage, etc. identified at the bottom left side of the diagram) and those that

Risk Management Approaches for Biofuel Pipelines

Figure 12. A simple illustration of barrier management approach in a bow-tie framework

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are specific to ethanol and its blends (internal SCC, internal corrosion, etc. identified at the top left side of the diagram). The barriers to threats are technology controls such as, the addition of inhibitors and inspection as well as management controls, such as training, safety procedures, etc. The processes leading to a degradation of these barriers (yellow boxes) could be loss of inhibitor effectiveness through adsorption on deposits, errors in ethanol blend analysis, etc. It should be noted that leak through a pipeline occurs only if two or more of these barriers are breached. For example, if ethanol blend analysis is performed to maintain the blend composition below E-10, then no SCC would occur even if inhibitor is absent. Similarly, if higher ethanol concentrations are introduced in the pipeline, but proper inhibitor dosage is maintained, then SCC is not likely to occur. Each of these barriers or control points can be “assigned” to a specific team for management actions and can be tracked as part of an overall risk management plan.

consequences of leaksThe consequences resulting from this leakage may be fire or environmental damage. A concern with ethanol fire is the use of the appropriate fire retardant. In the U.S. the Ethanol emergency Response Coalition (www.ethanolresponse.com) provides information on issues related to fire fighting and other emergency measures. Because ethanol is a good solvent, special fire retardants that resist the solvent action of ethanol are necessary to prevent restarting of the fire. The only foams recommended for ethhanol fire suppression are the AR-AFFF and AR-FFFP foams.

There have been a few studies of environmental consequences of ethanol release [11]. In 1999, there was a release of 72,000 liters (19,000 gallons) of E-95 from

an underground storage tank owned by Chevron, which undertook a study of the consequences [11]. The ethanol concentration depends on the ethanol/ water ratio and depth to groundwater. Concentrations exceeding 1 weight percent are possible. For example, ethanol concentration as high as 1.7 percent was measured within 10 weeks of release. Secondly, ethanol can mobilize other organic constituents in the soil if they are already present. Such organics include benzene, toluene, ethylbenzene, and xylene (BTEX) and non-aqueous phase liquids (NAPL). Ethanol acting as an oxygen absorber, can act to inhibit natural degradation of benzene in the soil and therefore extend its plume. Ethanol can also degrade due to bacterial action to form methane. It is believed that small volume releases (0.04 gallon/day) may not have a significant impact on groundwater resources.

prioriTizing locaTions of sccAlthough the bow tie approach provides a comprehensive framework to manage and communicate risks, it does not provide information on (1) the prioritized locations along the pipeline where such risks have to be monitored and managed and (2) quantitative information of risks to a pipeline company such that different risks can be compared for proper decision making.

For prioritizing locations for detailed risk management, other factors leading to pipeline leakage must be considered quantitatively. Direct Assessment (DA) methodologies [12,13] have been used for prioritizing locations of external SCC and internal corrosion of liquid hydrocarbon pipelines. The external SCC DA [12] prioritizes locations based on four major classes of data: pipe-related data such as metallurgy and coating condition, environmental-related data, such as soil properties, operations-related data, such as pipe temperature and pressure fluctuations,

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and corrosion control-related data, such as cathodic protection parameters. Internal SCC from ethanol differs from external SCC in several significant ways: (1) Soil and cathodic protection are not relevant, (2) pipe metallurgy is not important, and (3) the SCC environment is flowing rapidly through the system and therefore the environmental conditions cannot be considered to be localized. However, SCC locations may be prioritized based on features such as high stress regions, locations close to pumping stations where significant pressure fluctuations may occur, locations where significant sludge or water drop out occurs and where inhibitor may partition. Important knowledge gaps remain in this regard. For example it is not known whether inhibitor effectiveness is affected by phase separations, whether internal coatings would perform effectively in the presence of ethanol, and whether ethanol and inhibitors would react with other additives, such as drag reducing agents.

More importantly, dissolved oxygen is consumed through cathodic reaction on pipeline walls, but the distance over which the dissolved oxygen is consumed would depend on flow rate and cathodic reduction kinetics. For ethanol, cathodic reduction kinetics has not been adequately quantified. If this is known, then it can be assumed that after a certain distance from the oxygen ingress point, the dissolved oxygen concentration is extremely low and SCC is unlikely for the highest ethanol concentrations even without any inhibitors. Thus, locations of high SCC threat may be prioritized based on distance from oxygen ingress points (e.g., ethanol injection points, potentially leaky joints, etc.) A systematic ISCCDA needs to be developed for ethanol lines.

The liquid hydrocarbon ICDA [13] assumes that the locations most likely to suffer from internal corrosion

are those locations where liquid water drops out. Such an assumption is valid for pipelines carrying biodiesel, but not necessarily for pipelines carrying alcohol fuels. In the case of E-95 ethanol, water is completely miscible. However, for gasoline-ethanol blends, a water phase may separate resulting in internal corrosion. The phase behavior of water in ethanol-gasoline mixtures is not well known.

quanTiTaTive risk assessmenTsQuantitative risk assessments may be performed in a variety of ways and may include a number of considerations. One method of quantitative risk assessment is to simply determine probabilities of various threats and barrier losses and then combine these probabilities through appropriate AND and OR gates in an event tree. Indeed, the bow tie diagrams may be used for this purpose.

An alternative approach is to utilize the direct assessment methods, but assign distributions to various input parameters determining the most important locations for SCC or internal corrosion. As an example, the probability

Figure 13. Prioritization of integrity management

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of leakage is a complex function of SCC growth rate, which itself is a function of cyclic stress intensity, dissolved oxygen, inhibitor concentration, and ethanol volume fraction. For a pipeline transporting ethanol above E-15, the SCC severity index for any location may be estimated and different locations ranked.

Business risk assessmenTThe technical uncertainties involved in integrity management can be combined with regulatory and market uncertainties to assess the business risk in building a dedicated biofuel transportation pipeline or re-purposing an existing line.

For example, such a business risk assessment will include the capital costs for building or repurposing a line, the operational costs involved in ensuring the integrity of pipelines (e.g., costs of chemical additives), the costs of fulfilling various regulatory and siting requirements, and the costs of any potential releases of biofuel due to leaks. The business risk assessment will also include the revenues from product delivery and any tax incentives attending biofuel operations. Such a business risk assessment has not been conducted in a formal manner, but the tools are available. DNV is developing some of these risk management tools with the assistance of pipeline industry.

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Many countries are contemplating significantly increasing biofuel production as a way to secure future energy supplies and mitigate global warming. While many of the technologies for producing advanced biofuels are still in the research and development stage, when these come to the market, the infrastructure will play a key role in ensuring efficient, reliable, and safe delivery of these fuels to the end users. Pipeline is the most effective transportation mode in meeting these requirements.

Ethanol offers unique challenges in managing pipeline and storage tank integrity because of its potential to cause stress corrosion cracking (SCC) of steel. However, considerable research has been conducted by DNV and others to identify the factors that cause SCC of steel and methods to mitigate it. Butanol has not showed any propensity to cause SCC in tests conducted so far. Biodiesel may be managed utilizing the same type of approach used for other liquid hydrocarbons currently transported with minor changes in practices owing to its different corrosivity.

A flexible framework for risk management of biofuel infrastructure is necessary to systematically identify the integrity threats and consequences and mitigate them. Two approaches are presented that can accomplish this. A bow-tie method provides a framework for systematically considering all the threats and barriers to prevent the threats and consequences. The bow-tie approach is useful to identify and communicate action items. However, for pipelines the bow-tie method has to be augmented by a risk assessment method that can help in prioritizing locations along the pipeline that need in-depth inspection and assess overall business risks. A probabilistic framework is presented that can rank the SCC severity index along a pipeline carrying ethanol. It is believed that this method should be developed further and validated using field

data. The technical uncertainties should be combined with regulatory and market uncertainties in assessing the overall business risks.

Conclusions

21

DNV activities in the biofuel infrastructure has been supported by industry consortia led by Pipeline Research Council International (PRCI), American Petroleum Institute (API), Association of Oil Pipelines (AOPL), the Renewable Fuels Association, the National Biodiesel Board, and the Steel Tank Institute. The industry support was co-funded by the U.S. Government through the financial assistance provided by the Department of Transportation Pipeline and Hazardous Materials Safety Administration. Individual companies also provided considerable support in several aspects of this work including ADM, Colonial Pipeline Company, Buckeye Pipelines, Marathon, and Kinder Morgan Pipeline Company.

Acknowledgement

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References

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10. J.A. Beavers, F. Gui, and N. Sridhar, Recent Progress in Understanding and Mitigating SCC of Ethanol Pipelines, Corrosion/2010, Paper 10072, NACE International, Houston, Texas.

11. Buscheck, T.E., K.T. O’Reilly, G. Koschal, and G. O’Regan. 2001.“Ethanol in Groundwater at a Pacific Northwest Terminal.” In Proceedings of the Petroleum Hydrocarbons and Organic Chemicals in Ground Water Conference. National Ground Water Association / API. Houston, TX. November 14-16, pp. 55-66.

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