PETROANALYSIS || ARTICLE
Why does’t Venezuela start using “Orimulsion”?
Stuart Wilkinson, Director Wilkinson Seekatz Partners
A couple of decades ago there were plans to use part of the crude oil in the Orinoco Oil Belt as a feedstock for electricity generation in Venezuela. Thus “Orimulsion” came into being. Operations, however, were closed down in 2005 but there is little doubt that its use as a boiler fuel was proved. Most importantly, the use of Orimulsion could have contributed to the development of Venezuela’s industrial development, and still could do so if the circumstances were to present themselves.
A couple of decades ago there were plans to use part of the crude oil in the Orinoco Oil Belt as a feedstock for electricity generation in Venezuela. Thus “Orimulsion” came into being. Here, crude oil was mixed with water and an emulsifier added so that the oil and the water would not separate. Orimulsion would compete with coal. Even though commercial supply contracts had been signed in various countries, Orimulsion operations were closed down in 2005. From then on emphasis would be placed on the production of syncrude rather than on this boiler fuel named Orimulsion.
Now that the “Shale Revolution” has reduced the opportunities in the U.S. market for international petroleum producers, a pertinent question would be the following: Should Venezuela re-balance its plans for the development of its petroleum industry by reviving Orimulsion? The country would thus be producing a boiler fuel for use in thermoelectric power plants to produce electricity for the country’s national grid.
However, and this point must be made clear, Orimulsion came up against environmental questions: in 1997 two British power stations, Pembroke and Richborough, failed to renew their contracts for Orimulsion; at the same time a Florida state regulating committee decided to reject a deal with Florida Power and Light to use Orimulsion in its Manatee power plant. Both the cancellation of the British contracts and the decision by the Florida were ultimately prompted by environmental concerns raised by the use of Orimulsion.” (1)
Just previously, in October 1996, the UK Parliamentary Office of Science and Technology published the following detailed table with regard to emissions from coal, heavy fuel oil, gas, and Orimulsion. Since at that time, “fuels derived from bitumen e.g. Orimulsion” (2) were under consideration for expanded use in UK power stations, in particular in National Power’s mothballed station near Pembroke in Wales. The Parliamentary Office also noted that concerns had been raised in Parliament and elsewhere over the potential air pollution from such fuels, and the potential environmental effects of any Orimulsion spill.
The following table compares Orimulsion emissions with coal, heavy fuel oil, and gas. Here, Orimulsion ranks a little cleaner than coal but much cleaner than heavy fuel oil. Gas is the cleanest by far:
During the same period, and with regard to toxic emissions, the report “The Recovery and Recycling of Vanadium and Nickel from the Combustion Residues of Orimulsion and Other Fuels”, which was a project funded by the European Community under the BRITE/EURAM II Programme, May 1996, indicated that the vanadium and nickel present in the ash after burning Orimulsion could be recovered and commercialized:
“When Orimulsion is combusted a very fine ash is produced, much of which is carried up the power station flue stack with the flue gases .… The fine dust or fly ash contains significant amounts of vanadium and nickel, which derive from the Orimulsion fuel oil. Nickel is a carcinogen and vanadium species classed as toxic substances … and … represent an environmental hazard, unless dealt with in a responsible manner. Hydrometallurgical techniques provide a more cost effective method of recovering vanadium from vanadium rich fly-ashes, consequently Orimulsion as a new source of vanadium is reported in this short paper … [and] … nickel … is also a valuable material in economic terms. In terms of its metal price this has varied over the three years of the project from $2.4 per pound to $4 per pound. This is in contrast to the vanadium price which has varied from a low of $1.2 per pound up to a high of $4.3 per pound.” (3)
The Parliamentary Office’s newsletter “POSTnote” gave Orimulsion’s cost to be around £33 per tonne at that time – it was priced to compete with coal – so the recovery and commercialization of vanadium and nickel from power station flue ash should therefore be taken within this price context. In addition, further economic benefits could accrue from the by-products of the flue-gas desulphurisation (FGD) process that the Pembroke power station would use: an imput of 600,000 tonnes of limestone per year would be required, but this would generate about one million tonnes per year of gypsum, which could be sold for wallboard manufacture, road construction, soil improvement, and cement manufacture, for example. This form of gypsum, known as “FGD gypsum” cost $35 to $50 per tonne in early 2014. (4) One would expect, therefore, that such recovery and commercialization would offset some costs arising from burning Orimulsion.
According to the 2004 study “Orimulsion is the best way to monetize the Orinoco bitumen”, Orimulsion can be used in diesel engines for power generation, in cement plants, as a feedstock for Integrated Gasification Combined Cycle and as a “reburning” fuel (a method of reducing NOx by staging combustion in the boiler). The article adds that in 2001 Orimulsion was included in the Venezuelan Electricity Plan. The fuel would supply an important part of the forecasted increase in the demand for electricity at low cost. This plan contemplated not only the conversion to Orimulsion of existing oil and gas-fired plants but also the construction of new capacity specially designed for Orimulsion. A large electricity generating complex in the Orinoco Belt, just on top of the bitumen reservoir, the study adds, would bring an appreciable and structural reduction in generating costs since the Orimulsion would be manufactured “just in time” next to the point of use. (5)
As can be seen, much analysis and investment went into the development of Orimulsion, and into ways of cleaning up and possibly commercializing its toxic emissions. There is little doubt that its use as a boiler fuel was proved, and that it could have been an important feedstock for Venezuelan thermoelectric plants. Furthermore, it could have contributed more to the development of the country’s industry, and still perhaps could do so in the future if the circumstances were to present themselves.
- Enfoque Petrolero, October 1997.
- Powergen/National Power, UK. From “POSTnote”, Parliamentary Office of Science and Technology, October 1996.
- “The Recovery and Recycling of Vanadium and Nickel from the Combustion Residues of Orimulsion and Other Fuels”, a project funded by the European Community under the BRITE/EURAM II Programme, May 1996.
- “Gypsum for Field Application”. Paulding County Progress, 2nd March 2014.
- “Orimulsion is the best way to monetize the Orinoco bitumen”. Carlos Rodriguez, Sept-Oct 2004.