MBA Resources And Advice: Fuel oil

An oil tanker taking on bunker fuel.

Classes

Fuel oil is classified into six classes, numbered 1 through 6, according to its boiling point, composition and purpose. The boiling point, ranging from 175 to 600 °C, and carbon chain length, 9 to 70 atoms, of the fuel increases with fuel oil number. Viscosity also increases with number, and the heaviest oil has to be heated to get it to flow. Price usually decreases as the fuel number increases.
No. 1 fuel oil, No. 2 fuel oil and No. 3 fuel oil are variously referred to as distillate fuel oils, diesel fuel oils, light fuel oils, gasoil or just distillate. For example, No. 2 fuel oil, No. 2 distillate and No. 2 diesel fuel oil are almost the same thing (diesel is different in that it also has a cetane number limit which describes the ignition quality of the fuel). Distillate fuel oils are distilled from crude oil.
Gas oil refers to the process of distillation. The oil is heated, becomes a gas and then condenses.
Number 1 is similar to kerosene and is the fraction that boils off right after gasoline.
Number 2 is the diesel fuel that trucks and some cars run on, leading to the name "road diesel". It is the same thing as heating oil.
Number 3 is a distillate fuel oil and is rarely used.
Number 4 fuel oil is usually a blend of distillate and residual fuel oils, such as No. 2 and 6; however, sometimes it is just a heavy distillate. No. 4 may be classified as diesel, distillate or residual fuel oil.
Number 5 fuel oil and Number 6 fuel oil are called residual fuel oils (RFO) or heavy fuel oils. More Number 6 oil is produced compared to Number 5 oil, the terms heavy fuel oil and residual fuel oil are sometimes used as names for Number 6. Number 5 and 6 are what remains of the crude oil after gasoline and the distillate fuel oils are extracted through distillation. Number 5 fuel oil is a mixture of 75-80 % Number 6 oil and 25-20% of Number 2 oil. Number 6 oil may also contain a small amount of No. 2 to get it to meet specifications.
Residual fuel oils are sometimes called light when they have been mixed with distillate fuel oil, while distillate fuel oils are called heavy when they have been mixed with residual fuel oil. Heavy gas oil, for example, is a distillate that contains residual fuel oil. The ready availability of grades of fuel oil is often due to the success of catalytic cracking of fuel to release more valuable fractions and leave heavy residue.

Bunker fuel

Small molecules like those in propane gas, naphtha, gasoline for cars, and jet fuel have relatively low boiling points, and they are removed at the start of the fractional distillation process. Heavier petroleum products like diesel and lubricating oil are much less volatile and distill out more slowly, while bunker oil is literally the bottom of the barrel; the only things more dense than bunker fuel are carbon black feedstock and bituminous residue which is used for paving roads (asphalt) and sealing roofs.
Bunker fuel is technically any type of fuel oil used aboard ships. It gets its name from the containers on ships and in ports that it is stored in; in the days of steam they were coal bunkers but now they are bunker fuel tanks. The Australian Customs and the Australian Tax Office define a bunker fuel as the fuel that powers the engine of a ship or aircraft. Bunker A is No. 2 fuel oil, bunker B is No. 4 or No. 5 and bunker C is No. 6. Since No. 6 is the most common, "bunker fuel" is often used as a synonym for No. 6. No. 5 fuel oil is also called navy special fuel oil or just navy special; No. 5 or 6 are also called furnace fuel oil (FFO); the high viscosity requires heating, usually by a recirculated low pressure steam system, before the oil can be pumped from a bunker tank. In the context of shipping, the labeling of bunkers as previously described is rarely used in modern practice.

Uses

A fuel station in Zigui County on the Yangtze River

Oil has many uses; it heats homes and businesses and fuels trucks, ships and some cars. A small amount of electricity is produced by diesel, but it is more polluting and more expensive than natural gas. It is often used as a backup fuel for peaking power plants in case the supply of natural gas is interrupted or as the main fuel for small electrical generators. In Europe the use of diesel is generally restricted to cars (about 40%), SUVs (about 90%), and trucks and buses (virtually all). The market for home heating using fuel oil, called heating oil, has decreased due to the widespread penetration of natural gas. However, it is very common in some areas, such as the Northeastern United States.
Residual fuel oil is less useful because it is so viscous that it has to be heated with a special heating system before use and it contains relatively high amounts of pollutants, particularly sulfur, which forms sulfur dioxide upon combustion. However, its undesirable properties make it very cheap. In fact, it is the cheapest liquid fuel available. Since it requires heating before use, residual fuel oil cannot be used in road vehicles, boats or small ships, as the heating equipment takes up valuable space and makes the vehicle heavier. Heating the oil is also a delicate procedure, which is inappropriate to do on small, fast moving vehicles. However, power plants and large ships are able to use residual fuel oil.
Residual fuel oil was used more frequently in the past. It powered boilers, railroad steam locomotives and steamships. Locomotives now use diesel; steamships are not as common as they were previously due to their higher operating costs (most LNG carriers use steam plants, as "boil-off" gas emitted from the cargo can be used as a fuel source); and most boilers now use heating oil or natural gas. However, some industrial boilers still use it and so do a few old buildings, mostly in New York City^{[citation needed]}. Residual fuel's use in electricity generation has also decreased. In 1973, residual fuel oil produced 16.8% of the electricity in the United States. By 1983, it had fallen to 6.2%, and as of 2005, electricity production from all forms of petroleum, including diesel and residual fuel, is only 3% of total production. The decline is the result of price competition with natural gas and environmental restrictions on emissions. For power plants, the costs of heating the oil, extra pollution control and additional maintenance required after burning it often outweigh the low cost of the fuel. Burning fuel oil, particularly residual fuel oil, also produces much darker smoke than natural gas, which affects the perception of the plant by the community.
Heavy fuel oils continue to be used in the boiler "lighting up" facility in many coal-fired power plants. Although on an enormous scale, this use is analogous to lighting kindling to start a fire; without performing this simple function it is difficult to begin the large-scale combustion process.
The chief drawback to residual fuel oil is its high initial viscosity, particularly in the case of No. 6 oil, which requires a correctly engineered system for storage, pumping, and burning. Though it is still usually lighter than water (with a specific gravity usually ranging from 0.95 to 1.03) it is much heavier and more viscous than No. 2 oil, kerosene, or gasoline. No. 6 oil must, in fact, be stored at around 100 °F (38 °C) heated to 150 °F (66 °C)–250 °F (121 °C) before it can be easily pumped, and in cooler temperatures it can congeal into a tarry semisolid. The flash point of most blends of No. 6 oil is, incidentally, about 150 °F (66 °C). Attempting to pump high-viscosity oil at low temperatures was a frequent cause of damage to fuel lines, furnaces, and related equipment which were often designed with lighter fuels in mind.
(For comparison, BS2869 Class G Heavy Fuel Oil behaves in similar fashion, requiring storage at 104 °F (40 °C), pumping at around 122 °F (50 °C) and finalising for burning at around 194 °F (90 °C) / 248 °F (120 °C).)
Most of the facilities which historically burned No. 6 or other residual oils were industrial plants and similar facilities constructed in the early or mid 20th century, or which had switched from coal to oil fuel during the same time period. In either case, residual oil was seen as a good prospect because it was cheap and readily available, even though it provided less energy per volume-unit than lighter fuels. Most of these facilities have subsequently been closed and demolished, or have replaced their fuel supplies with a simpler one such as gas or No. 2 oil. The high sulfur content of No. 6 oil—up to 3% by weight in some extreme cases—had a corrosive effect on many heating systems (which were usually designed without adequate corrosion protection in mind), shortening their lifespans and increasing the polluting effects. This was particularly the case in furnaces that were regularly shut down and allowed to go cold; the internal condensation produced sulfuric acid.
Environmental cleanups at such facilities are frequently complicated by the use of asbestos insulation on the fuel feed lines. No. 6 oil is very persistent, and does not degrade rapidly. Its viscosity and stickiness also make remediation of underground contamination very difficult, since it reduces the effectiveness of methods such as air-stripping.
When released into water, such as a river or ocean, residual oil tends to break up into patches or tarballs—mixtures of oil and particulate matter such as silt and floating organic matter- rather than form a single slick. An average of about 5-10% of the material will evaporate within hours of the release, primarily the lighter hydrocarbon fractions. The remainder will then often sink to the bottom of the water column.

Maritime

In the maritime field another type of classification is used for fuel oils:

MGO (Marine gas oil) - roughly equivalent to No. 2 fuel oil, made from distillate only
MDO (Marine diesel oil) - A blend of heavy gasoil that may contain very small amounts of black refinery feed stocks, but has a low viscosity up to 12 cSt so it need not be heated for use in internal combustion engines
IFO (Intermediate fuel oil) A blend of gasoil and heavy fuel oil, with less gasoil than marine diesel oil
MFO (Marine fuel oil) - same as HFO (just another "naming")
HFO (Heavy fuel oil) - Pure or nearly pure residual oil, roughly equivalent to No. 6 fuel oil

Marine diesel oil contains some heavy fuel oil, unlike regular diesels. Also, marine fuel oils sometimes contain waste products such as used motor oil.

Standards and classification

CCAI and CII are two indices which describe the ignition quality of residual fuel oil, and CCAI is especially often calculated for marine fuels. Despite this marine fuels are still quoted on the international bunker markets with their maximum viscosity (which is set by the ISO 8217 standard - see below) due to the fact that marine engines are designed to use different viscosities of fuel.^[1]. The unit of viscosity used is the Centistoke and the fuels most frequently quoted are listed below in order of cost, the least expensive first-

IFO 380 - Intermediate fuel oil with a maximum viscosity of 380 Centistokes
IFO 180 - Intermediate fuel oil with a maximum viscosity of 180 Centistokes
LS 380 - Low-sulphur (<1.5%) intermediate fuel oil with a maximum viscosity of 380 Centistokes
LS 180 - Low-sulphur (<1.5%) intermediate fuel oil with a maximum viscosity of 180 Centistokes
MDO - Marine diesel oil.
MGO - Marine gasoil.

The density is also an important parameter for fuel oils since marine fuels are purified before use to remove water and dirt from the oil. Since the purifiers use centrifugal force, the oil must have a density which is sufficiently different from water. Older purifiers had a maximum of 991 kg/m3; with modern purifiers it is also possible to purify oil with a density of 1010 kg/m3.
The first British standard for fuel oil came in 1982. The latest standard is ISO 8217 from 2005. The ISO standard describe four qualities of distillate fuels and 10 qualities of residual fuels. Over the years the standards have become stricter on environmentally important parameters such as sulfur content. The latest standard also banned the adding of used lubricating oil (ULO).

Transportation

Fuel oil is transported worldwide by fleets of supertankers making deliveries to suitably sized strategic ports such as Houston, Singapore, and Rotterdam. Where a convenient seaport does not exist, inland transport may be achieved with the use of barges. The lighter fuel oils can also be transported through pipelines. The major physical supply chains of Europe are centered around the Rhine.