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We Make Progress
2019 Annual Report
AFPM 2019 Annual Report
Table of Contents
For the first time ever, more than half the world’s population
is middle class or wealthier. Their need for transportation
fuels and the many products made from petrochemicals is on
the rise, and our members are answering the call. We make
the gasoline, diesel, jet and marine fuels that power the cars,
trucks, ships and planes that keep people and goods moving
and advancing, and the energy that heats and cools millions
of homes. Joseph W. Gorder Chet M. Thompson
Chairman of the Board President and CEO
Our petrochemicals enable the products that supply
the world with life-saving pharmaceuticals and medical Valero Energy American
equipment, plastics and storage containers that keep food Corporation Fuel & Petrochemical
fresh longer, and the materials integral to the cell phones Manufacturers
and computers that connect the world.
25 million children
46 million Americans
Ask the question “What do U.S. fuel and petrochemical Petrochemicals like ethylene, propylene, butadiene and xylene
manufacturers make possible?” — and for 25 million children, make possible medical exoskeleton technology that enables
the answer is the diesel fuel that powers their school buses. paraplegics to walk again, and strong, lightweight plastics that
For 46 million Americans, the answer is the jet fuel that brings make today’s cars more efficient. They’re also a big part of the
families together for the holidays, that makes Disneyland or packaging that keeps your food fresh, the robotic tractors and
New York City a summer vacation, and that allows a high school drones used in modern agriculture, and bringing food from the
graduate from Sarasota attend college in Seattle. farm to your table. And they’re integral to our everyday lives,
used to make everything from clothes, carpets and furniture;
to tablets, PCs and phones; to aspirin, bandages and shampoo.
These are just a few of the thousands of products that are made
from petrochemicals.
Among other technology breakthroughs, advances in Metal-organic frameworks are porous, consist of sponge-like
petrochemicals are creating a new, cost-effective way to help crystals, and are highly unique. They contain the largest internal
alleviate growing challenges to accessing potable water. surface areas of any known substance (if unfolded, just one
gram of the material could theoretically be thinly spread across
Although the earth is nearly 70 percent water, only 2.5 percent an entire football field). Researchers have discovered that
is fresh water, and less than one percent is available for drinking these permeable membranes can mimic the filtering function
and irrigation. The World Health Organization has estimated of organic cell membranes. As a result, they allow water
that over two billion people around the world today don’t have molecules to pass through while capturing and storing chemical
access to safe drinking water. compounds — particularly, the salt and ions in saline water.
Not only is this process more energy efficient than traditional
But scientists are developing a process that removes salts and desalination techniques, but it is also more cost-effective.
minerals from ocean water, making it potable. This futuristic
science involves the use of metal-organic frameworks — little Thanks to petrochemicals and some of the world’s greatest
known, next-generation materials — that wouldn’t be possible minds, these membranes have the potential to bring clean water
without petrochemicals. to more people.
2
Looking into the future, fuels and petrochemicals
will continue to be invaluable in our lives. As
we pursue innovations that could dramatically
extend the human lifespan, significantly improve
transportation, keep food fresh for much longer,
and even make skies cleaner, one thing is clear:
Earth is nearly
70% water
Only 2.5% is
fresh water > 1%
is available
for drinking
and
irrigation
U.S. refineries have risen to the challenge of meeting the The members of the American Fuel & Petrochemical
world’s growing demand for petroleum products today and will Manufacturers own and operate 110 refineries, which accounts
continue to fill this vital role well into the future. We are uniquely for 94 percent of all U.S. refining. In 2018, U.S. refining
able to do this because our refiners run the most efficient and capacity totaled 18.6 million barrels per day, and U.S. refinery
technologically advanced operations in the world. utilization rates averaged 93 percent, the highest level in more
than a decade.1
4
18,598,497
In 2018, U.S. refining
17,593,847
17,823,659
capacity totaled
18.6 million
16 barrels per day 4
12
Barrels per day (millions)
U.S. refinery
8
utilization
rates averaged
93%, the
highest level
in more than
a decade.
4
0
2008 2013 2018
1.0% 0.5%
16
0.5%
S
0%
6
Between 1970 and 2016, investments in cleaner
fuels have helped reduce U.S. air pollution, even
as total miles driven nearly tripled.5
1970 2016
73% reduction
in air pollution
and nearly 3x miles
driven6
1970
2016
$30 billion+
Total investment in projects
in the last two years alone.
8
2018 In Petrochemical
$11 billion
U.S. investments Industry, A Second
Wave of Growth
2017 2019
$3.6 billion
U.S. investments expected U.S.
investments
of ethylene9
ExxonMobil Chemical Company in the
Americas, is a key player in a petrochemical
boom of historic proportions. Zamora oversees
a significant part of ExxonMobil’s plans to
invest $20 billion along the Gulf Coast over
Total Ethylene Consumption (derivative)10 10 years through a series of projects that includes
the company’s first petrochemical plant to be
250 proposed on a completely undeveloped site in
four decades. Those plans also include a new
cracker, completed in July 2018, on the very
site he worked at in Baytown that is the first by
ExxonMobil to be built from scratch in 20 years.
200
Zamora’s dream became a reality thanks to a
plentiful U.S. supply of cheap natural gas and
gas liquids, combined with increasing demand
Thousands of Tons
20 9
20
20 1
20 2
20 3
20 4
20 5
26
27
2
2
2
1
2
20
20
20
20
20
20
20
20
20
For the first time ever, more than half the world’s population is
middle class or wealthier. As the increase in average incomes
grow, so does the demand for life-changing and life-enhancing
products such as refrigerators, cell phones, televisions and cars.
65,500,000,000
53,500,000,000
45,100,000,000
21,500,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
10
1,250,000t
250,000t
240,000t
214,000t 218,000t
148,000t
95,000t
3,000t
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
110
refineries
229
petrochemical facilities
12
American Fuel & Petrochemical Manufacturers afpm.org 13
AFPM 2019 Annual Report
U.S. refiners and petrochemical manufacturers Our members are constantly innovating and seeking new ways
have invested billions of dollars in new equipment, to reduce emissions, including investing in carbon capture
innovation and engineering to be increasingly efficient and storage projects, and new technologies to reduce flaring
and cleaner than ever. emissions and incidents.
These investments have brought about lower emissions These efforts have paid off significantly. Our industries have cut
and greater operating capacity. From 2011 to 2017, the six most common emissions by nearly 70 percent and ozone
refining production increased an impressive 10.5 percent,13 levels have decreased more than 30 percent since 1990. Since
while total reported greenhouse gas emissions (GHG) in then, the U.S. gross domestic product is up nearly 200 percent,
the refining sector remained relatively consistent. our population has grown by 30 percent, vehicle miles traveled
are up 40 percent and energy consumption rose more than
Amid rising ethylene production and several new 15 percent. As of 2016, we have reduced sulfur levels in gasoline
ethylene facilities coming online, reported greenhouse by 97 percent.15 We have preserved and protected land and
gas emissions for petrochemical production remained water resources through effective waste management programs
consistent over the same time period.14 and by adhering to federal guidelines that govern effluent
discharge, hazardous waste disposal and other priority areas.
14
Since 199016
16
$$$
S
200% 30% 40% 15% 73% 97%
U.S. gross Population Vehicle miles Energy Emissions Sulfur levels
domestic traveled consumption reductions in gasoline
product
0
2000 2017
16
“ Our efforts to minimize flaring
together with other improvements
we made in our environmental
performance has helped us earn
back public trust and confidence
in our operations.”
– Jake Reint
Flint Hills Resources
Safety is a core value of fuel and petrochemical Incidence Rates of Non-Fatal Injuries or Illnesses
manufacturers who work together to enhance safety Among Manufacturing Sector17
in an efficient and effective way. Our commitment to
safety is reflected in our performance records that 11.0
show a 30-year decline in rates of injury and illness
by a factor of 10, of 0.7 per 100 employees for refining 10.0
5x
maintain a strong culture of safety to ensure everyone
in the plant goes home safe every day.
7.0
lower than
8 6.0
the total
recordable rates
5.0 of the entire
manufacturing
7 4.0 sector
3.0
6
2.0
5
0.0
Home Building
Sugar
Ship Building
Food
Animal Food
Paper
Petrochemical
Refining
Computer Manufacturing
Incident Rates
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
18
U.S. refiners and petrochemical manufacturers take Refining and Petrochemical Tier 1 Process Safety
a collaborative approach to safety, working together Event Rates18
to progress towards the goal of zero incidents.
0.3
To further this goal, AFPM offers Occupational
and Process Safety Programs enabling members
to share practices and learn from each other
to continuously improve safety at their facilities.
Recently, AFPM expanded these programs to
include an immersive learning working group,
utilizing emerging technologies such as virtual
reality and augmented reality to improve hazard 0.2
Process Safety Event Rate
0.0
2012 2013 2014 2015 2016 2017
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
A career with the U.S. Army took Russell Lewis all over this At the Shell Deer Park Manufacturing complex in suburban
country and abroad. But whether he was an operations officer Houston, the Drone Aerial Response Team (DART) monitors
in Fort Drum, N.Y., or a battalion commander in Afghanistan, livestream video footage, enabling action within 15-20 minutes.
a particularly memorable adage was applicable for every job. In 2017, the first year of the program, the team logged
477 flights, with estimated cost savings of $1.2 million.
“ There’s one thing we’d say about a soldier,” Lewis said.
“ If you can save me from danger, save me from danger.” In the aftermath of Hurricane Harvey, two drone teams
completed an entire site assessment in two weeks — an
Lewis has carried that philosophy over to his position as the unprecedently quick amount of time compared to the old
Corporate, Western Regional Security Supervisor for Marathon method which required employees to climb stairs and manually
Petroleum Corporation. From his office in San Antonio, Lewis inspect each tank.
plays an integral role in ensuring the safety of the company’s
employees. The need for “persistent surveillance” in this line One drone would fly a mission and identify issues with pictures
of work isn’t all that different from what Lewis was responsible and video. That intel enabled engineers and maintenance
for in the military. workers to make repairs quickly, while the other drone scanned
other areas for trouble.
While the potential for incidents at a refinery pales in
comparison to danger on the battlefield, there are precarious “ We’re saving people from working at heights, saving rental
positions an employee may face in fuel and petrochemical costs, saving man hours and time on tools,” said John McClain,
manufacturing. That’s where drones come into play. DART’s chief pilot.
20
“ Whether in the military or
at refineries, using a drone
means that’s an officer or
an employee I don’t have to
put out there.”
– Russell Lewis
Marathon Petroleum Corporation
$1.2 million
saved
At the Shell Deer Park In 2017, the first year of In the aftermath of
Manufacturing complex the program, the team Hurricane Harvey,
in suburban Houston, the logged 477 flights, with two drone teams
Drone Aerial Response estimated cost savings of completed an entire
Team (DART) monitors $1.2 million. site assessment in
livestream video footage, two weeks — an
enabling action within unprecedently quick
15-20 minutes. amount of time.
Each year
our industries $55,000
provide almost
Annual average U.S. worker’s salary
$50,000
4 million job
opportunities and
add hundreds of
billions of dollars
to the American
economy.
$0
22
After Active Duty, Veterans Find “ The refining industry to me
is an amazing fit in that
New Purpose in Refinery Work sense. It is also rewarding
work that instills a sense of
pride, similar to that sense
of pride I felt while serving
Chad Harbin served in the Navy for more than five my country.”
years as part of an American counter-narcotics – Chad Harbin, Phillips 66
team. After enlisting as a high school senior
following the 9/11 attacks, he became part of a
team responsible for patrolling the Pacific Ocean
and Caribbean Sea.
24
Our members focus on
contributions that align with
their values and goals and
support charities that address
a wide range of health and
human services.
The future of American manufacturing requires reasonable The refining and petrochemical industries welcome free-market
and cost-effective regulations. AFPM supports regulatory competition unimpeded by market distorters including mandates
reform that enhance transparency, accountability and efficacy and subsidies. Policymakers should also look to ensure U.S.
of federal regulations based in sound science. companies operating abroad are treated fairly through a
system of trade rules that facilitate cooperation and regulatory
alignment, and reflect the reality of an integrated energy and
petrochemical market. Finally, policymakers must ensure the full
potential of the modernized tax code is realized to spur growth
now and into the future.
26
Balance Needs for All Americans Strengthen Our Foundation
U.S. policies should balance the need for affordable The global gains of the U.S. refining and petrochemical
and reliable fuels and a growing economy with sound industries can’t be maintained or built upon unless our nation’s
environmental policies. The essential role and many societal infrastructure keeps pace. Investment in critical infrastructure,
benefits that petroleum fuels, natural gas and petrochemicals including roads, pipelines, rail, inland waterways and ports, are
provide our nation and the world should not be ignored. key to accessing and expanding the use of U.S. resources.
28
American Fuel & Petrochemical
Petrochemical Manufacturers
Manufacturers afpm.org 29
AFPM 2019 Annual Report
AFPM Chairman of the Board Mr. Graeme Burnett Mr. Robert A. Herman
Mr. Joseph W. Gorder Chairman of the Board Executive Vice President, Refining
Chairman, President and Monroe Energy, LLC Phillips 66
Chief Executive Officer Atlanta, GA Houston, TX
Valero Energy Corporation
San Antonio, TX
30
Mr. Mike Nagle Mr. J. Douglas Sparkman
President & CEO COO of Fuels, North America
INEOS Olefins & Polymers USA BP Products North America, Inc.
League City, TX Chicago, IL
Board of Directors
American Refining Group, Inc. CITGO Petroleum Corporation Formosa Plastics Corporation, USA
Brian Zolkos Arthur Klein Paul Huang
32
Marathon Petroleum Corporation SABIC Valero Energy Corporation
Raymond Brooks Niall McConville Joseph Gorder
Marathon Petroleum Corporation Shell Oil Products U.S. Valero Energy Corporation
Gary Heminger Brenda Stout Lane Riggs
International Members
PETROTRIN
34
Associate Members
AEGION Energy Services Axens North America Catalyst & Chemical Containers
Michael Wolf Christian Vaute Chad Doggett
Aegis Energy Advisors Corp. Babcock & Wilcox Cenovus Energy Inc.
Garfield Miller Shemara Samaco Keith Chiasson
Air Liquide Large Industries U.S. LP BAKER & O’BRIEN CenterPoint Energy
Austin Knight William Donnell Jeff Wiese
Associate Members
continued
Dorf Ketal Chemicals, LLC GTC Technology US, LLC ioMosaic Corporation
Chuck Fink Georges Melhem
Downstream Advisors, Inc.
Steven Graybill Gulf Energy Information J.J. White, Inc.
Catherine Watkins James White
DuPont Clean Technologies
Kevin Bockwinkel Gulfspan Industrial, LLC Jacobs Engineering Group Inc.
Jake Smalley Brent Schier
Echo Group, Ltd.
Mike Roebuck Haldor Topsoe, Inc. JCL Safety Services
Henrik Rasmussen James Lefler
Emerson Automation Solutions
Marcelo Carugo HELM AG Johnson Matthey
Volker Seebeck John Gordon
Environmental Resources Management
Toby Hanna Herc Rentals Inc. Katten Muchin Rosenman LLP
James Fiscus Mark Farley
Ethylene Strategies International, L.P.
Mark Woods Houston Area Safety Council (HASC) KBC Advanced Technologies, Inc.
Russell Klinegardner Cheryl Scott
Eurecat U.S. Incorporated
Frederic Jardin Hunter Buildings & Manufacturing, LP KBR
Crystal Cedro Douglas Kelly
Evergreen North America Industrial
Services HydroChemPSC Kiewit
Kelsie Ward Rick Pitman Shayne Andersen
Montrose Environmental Group, Inc. Perstorp Specialty Chemicals Roddey Engineering Services, Inc.
Daniel Fitzgerald David Wolf Michael Newton
Muse, Stancil & Company Petroleum Service Corporation An SGS S&B Engineers and Constructors Ltd.
Neil Earnest Company J.D. Slaughter
Houston Haymon
Nooter Corporation S8 Engineering Inc
Peter Cimino Pilko & Associates, Inc. Kirk Novak
George Pilko
Norton Engineering Consultants, Inc. Sabin Metal Corporation
James Norton Porocel International, LLC Bradford Cook
Terence McHugh
Nouryon Sage ATC Environmental Consulting
Rob van de Graaf Praxair Inc. Taras Lewus
Andrew Sarantapoulas
NovaPex Satellite Shelters, Inc.
Laurent Castor Michele McMurdo
Associate Members
continued
Sojitz Corporation of America Tecnon OrbiChem Ltd. Universal Plant Services, Inc.
Yuichi Hattori Charles Fryer Brad Jones
Southern Chemical Corporation The Equity Engineering Group Veolia North America
Jan Spin David Osage Harrison Lee
38
Sponsors
AFPM would like to thank our 2018 sponsors
Committees
The Associate Steering Committee provides a forum for the The Fuels Committee provides information and policy
association’s contractors, suppliers, vendors and consultants, recommendations concerning legislative, regulatory and
to communicate with the Board of Directors on items of mutual motor fuel specification developments.
interest and support. Chair: Rita Hardy, Flint Hills Resources, LLC
Chair: Jeff Webber, Altairstrickland, Inc. AFPM Secretary: Tim Hogan
AFPM Secretary: Susan Yashinskie
The Communications Committee shares information, ideas The Issues Committee advises the Executive Committee and
and communications strategies to increase support by external provides direction and guidance to AFPM staff on current policy
audiences for policy positions established by the Executive issues important to the refining and petrochemical industries.
Committee and adopted by the AFPM Board. Chair: Gary Heminger, Marathon Petroleum Corporation
Chair: Chuck Rice, Marathon Petroleum Corporation AFPM Secretary: Geoff Moody
AFPM Secretary: Jaime Zarraby
The Environmental Committee provides a forum for members The primary purpose of the Legal Committee is to recommend
to exchange views and discuss environmental activities and litigation strategies to advance the interests of AFPM’s members
advises the AFPM Board and staff on current environmental and the industry. The committee also provides guidance to the
laws/regulations. AFPM staff on legislative and regulatory proposals and general
Chair: Matthew Hodges, Valero Energy Corporation legal issues affecting the industry.
AFPM Secretary: David Friedman Chair: Sherry Hesselbein, Marathon Petroleum Corporation
AFPM Secretary: Rich Moskowitz
40
Please visit the AFPM website for a complete description of all
committees and their rosters at www.afpm.org/committees.
The Manufacturing Committee provides technical support and The role of the Reliability and Maintenance Committee is to
recommendations on matters that affect facility operations and advise the AFPM Board of Directors on reliability, maintenance,
products including federal, state and local laws and regulations. and engineering matters and to provide for the exchange of
Chair: Jay Richert, Marathon Petroleum Corporation relevant technical and safety information among the AFPM
AFPM Secretary: Gordon Robertson members, the petroleum refining and petrochemical industries in
general and related industries. The Reliability and Maintenance
Committee also promotes technical exchange by developing
The Operational Planning Control & Automation Technologies programs for the Reliability and Maintenance Conference; Labor
Committee focuses on sharing practical experience with Outlook Roundtable; Cat Cracker Seminar (biannual) and by
the application management, and integration of computing cooperating with other AFPM committees in the development of
technology in areas including process control and automation, technical programs for their conferences.
modeling, real-time optimization and Internet-based applications. Chair: Hardy Kemp, Flint Hills Resources
Chair: Michael Barham, Marathon Petroleum Corporation AFPM Secretary: Gordon Robertson
AFPM Secretary: Daniel Strachan
The Petrochemical Statistics Subcommittee advises and assists The State and Local Outreach Committee purpose is to discuss
the Petrochemical Committee and AFPM staff on matters state level legislative and regulatory issues of importance to
pertaining to the collection and dissemination of statistics on AFPM’s refining and petrochemical members. The Committee
petrochemical, including trade, production and inventories. will advocate for AFPM policies at the state and local levels, as
Chair: Lindsey Stephens, The Dow Chemical Company directed by the Issues Committee.
AFPM Secretary: Rose Sabijon Chair: Brendan Williams, PBF Energy
AFPM Secretary: Don Thoren
Committees
continued
The Transportation & Infrastructure Committee helps develop The Safety and Health Committee provides a forum for
effective policy on Regulatory and Legislative matters related members to exchange views and share occupational and process
to transportation & infrastructure that promote AFPM member safety best practices and developments in safety related
interests and improve the safe and efficient transport of fuel and legislation and regulation.
petrochemicals products. The committee advocates for AFPM Chair: Randy Patton, HollyFrontier Corporation
member companies by communicating their key role in the AFPM Secretary: Lara Swett
supply chain and their efforts to improve the safe and efficient
transportation of essential fuel and petrochemical products.
Chair: Todd Miner, Motiva Enterprises The Distinguished Safety Award Subcommittee reviews,
AFPM Secretary: Rob Benedict interviews, and chooses recipients of the Distinguished Safety,
Elite Gold and Elite Silver Awards – AFPM’s most prestigious
plant performance awards.
The Waxes Subcommittee promotes the benefits of current AFPM Secretary: Danny Forest
and new wax uses and technologies to the marketplace as
well as issues related to the safe handling transportation and
specifications of petroleum wax. The Immersive Learning Subcommittee advises the Safety &
Chair: George Hudak, Baker Hughes, a GE Company Health Committee on emerging safety training technologies
AFPM Secretary: Daniel Strachan and develops training tools for AFPM members utilizing these
emerging technologies.
Chair: Bjorn Olson, Flint Hills Resources
AFPM Secretary: Danny Forest
42
The Occupational Safety Subcommittee advises the Safety The Process Safety Advisory Group (PSAG) provide leadership,
& Health Committee on AFPM occupational safety programs, support and guidance to Advancing Process Safety (APS)
including the Regional Network program, as well as data and programs in an effort to promote process safety performance
metric collection programs such as the Incident Classification excellence across the association memberships.
Matrix and the Injury & Illness Metrics. Chair: Ray Brooks, Marathon Petroleum Corporation
Chair: Willis Jernigan, Koch Industries AFPM Secretary: Lara Swett
AFPM Secretary: Danny Forest
Information Resources
Publications* Communications
44
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