The Uncertain Future of Oil Refineries

Abstract

With the effects of decarbonization and digitalization trends already felt throughout the energy sector, oil refineries face technological and environmental challenges that threaten their role and relevancy in future energy systems. The most standard type of refining products, transportation fuels, are undergoing a massive transition from fossil fuel-based to greener means while the emergence of electric vehicles threatens combustion engine vehicles completely. Not only the products of oil refineries but the refining processes and operations are also subject to change for energy efficiency and emission reasons. Meanwhile, the expected expansion of the middle-class in areas like China, India, Indonesia and the Middle East corresponds to an increase in consumption of refining products and petrochemicals, which are seen as the next driver of demand in the future. This paper aligns the technological and environmental challenges and developments that the industry is preparing with Qualitative Content Analysis to generate meaningful criteria to evaluate the integration of oil refineries in decarbonized and digitalized energy systems. Then, the meaningful criteria are analyzed through scenario building in the context of relevant scenarios and forecasts to generate a roadmap for relevancy and integration of oil refineries in future energy systems. This roadmap consists of three steps of recommendations and actions: increased CO2 efficiency of refining operations, relentless progression of emission mitigation and finally, integration of oil refineries into industrial clusters.