September 22, 2019

Mountain of Petroleum Coke From Oil Sands Rises in Detroit

Detroit’s ever-growing black mountain is the unloved, unwanted and long overlooked byproduct of Canada’s oil sands boom.

And no one knows quite what to do about it, except Koch Carbon, which owns it.

The company is controlled by Charles and David Koch, wealthy industrialists who back a number of conservative and libertarian causes including activist groups that challenge the science behind climate change. The company sells the high-sulfur, high-carbon waste, usually overseas, where it is burned as fuel.

The coke comes from a refinery alongside the river owned by Marathon Petroleum, which has been there since 1930. But it began refining exports from the Canadian oil sands — and producing the waste that is sold to Koch — only in November.

“What is really, really disturbing to me is how some companies treat the city of Detroit as a dumping ground,” said Rashida Tlaib, the Michigan state representative for that part of Detroit. “Nobody knew this was going to happen.” Almost 56 percent of Canada’s oil production is from the petroleum-soaked oil sands of northern Alberta, more than 2,000 miles north.

An initial refining process known as coking, which releases the oil from the tarlike bitumen in the oil sands, also leaves the petroleum coke, of which Canada has 79.8 million tons stockpiled. Some is dumped in open-pit oil sands mines and tailing ponds in Alberta. Much is just piled up there.

Detroit’s pile will not be the only one. Canada’s efforts to sell more products derived from oil sands to the United States, which include transporting it through the proposed Keystone XL pipeline, have pulled more coking south to American refineries, creating more waste product here.

Marathon Petroleum’s plant in Detroit processes 28,000 barrels a day of the oil sands bitumen.

Residents on both sides of the Detroit River are concerned that the coke mountain is both an environmental threat and an eyesore.

“Here’s a little bit of Alberta,” said Brian Masse, one of Windsor’s Parliament members. “For those that thought they were immune from the oil sands and the consequences of them, we’re now seeing up front and center that we’re not.”

Mr. Masse wants the International Joint Commission, the bilateral agency that governs the Great Lakes, to investigate the pile. Michigan’s state environmental regulatory agency has submitted a formal request to Detroit Bulk Storage, the company holding the material for Koch Carbon, to change its storage methods. Michigan politicians and environmental groups have also joined cause with Windsor residents. Paul Baltzer, a spokesman for Koch’s parent company, Koch Companies Public Sector, did not respond to questions about its storage or the ultimate destination of the petroleum coke.

Coke, which is mainly carbon, is an essential ingredient in steelmaking as well as producing the electrical anodes used to make aluminum.

While there is high demand from both those industries, the small grains and high sulfur content of this petroleum coke make it largely unusable for those purposes, said Kerry Satterthwaite, a petroleum coke analyst at Roskill Information Services, a commodities analysis company based in London.

“It is worse than a byproduct,” Ms. Satterthwaite said.“It’s a waste byproduct that is costly and inconvenient to store, but effectively costs nothing to produce.”

Murray Gray, the scientific director for the Center for Oil Sands Innovation at the University of Alberta, said that about two years ago, Alberta backed away from plans to use the petroleum coke as a fuel source, partly over concerns about greenhouse-gas emissions. Some of it is burned there, however, to power coking plants.

The Keystone XL pipeline will provide Gulf Coast refineries with a steady supply of diluted bitumen from the oil sands. The plants on the coast, like the coking refineries concentrated in California to deal with that state’s heavy crude oil, are positioned to ship the waste to China or Mexico, where it is burned as a fuel. California exports about 128,000 barrels of petroleum coke a day, mainly to China.

Tony McCallum, a spokesman for the Canadian Association of Petroleum Producers, played down the impact of Keystone XL. “Most of the Canadian oil earmarked for the U.S. Gulf Coast is to replace declining heavy oil imports from Mexico and Venezuela that produces the same amount of petcoke, so it doesn’t create a new issue,” he wrote in an e-mail.

Much of the new coking investment has gone into refineries in the Midwest to allow them to take advantage of the oil sands. BP, the British energy company, is building what it describes as the second-largest coke refinery in Whiting, Ind. When completed, the unit will be able to process about 102,000 barrels of bitumen or other heavy oils a day.

And what about the leftover coke? The Environmental Protection Agency will no longer allow any new licenses permitting the burning of petroleum coke in the United States. But D. Mark Routt, a staff energy consultant at KBC Advanced Technologies in Houston, said that overseas companies saw it as a cheap alternative to low-grade coal. In China, it is used to generate electricity, adding to that country’s air-quality problems. There is also strong demand from India and Latin America for American petroleum coke, where it mainly fuels cement-making kilns.

“I’m not making a value statement, but it comes down to emission controls,” Mr. Routt said. “Other people don’t seem to have a problem, which is why it is going to Mexico, which is why it is going to China.”

“One man’s junk is another man’s treasure,” he said. One of the world’s largest dealers of petroleum coke is the Oxbow Corporation, which sells about 11 million tons of fuel-grade coke a year. It is owned by William I. Koch, a brother of David and Charles.

Lorne Stockman, who recently published a study on petroleum coke for the environmental group Oil Change International, says, “It’s really the dirtiest residue from the dirtiest oil on earth,” he said.

Rhonda Anderson, an organizing representative of the Sierra Club in Detroit, said that the mountain’s rise took her group by surprise, but it had one benefit.

“Those piles kind of hit us upside to the head,” she said. “But it also triggered a kind of relationship between Canada and the United States that’s allowed us to work together.”

Article source:

You’re the Boss Blog: Fishonomics: How Southfork Kitchen Did This Summer

A striped bass does its part.Chris KoszykA striped bass does its part.

Start-Up Chronicle

Getting a restaurant off the ground.

Let us now praise money. I’d sooner talk religion or politics or New York center fielders, past and present, but we have just finished the high season in the Hamptons and I have money on the mind and money on the table, and some dear readers think that divulging hard numbers will somehow help owners of florist shops in Tallahassee and microbreweries in Oshkosh.

Needless to say, there are smarter investments than a restaurant. Practically all investments are smarter, including florist shops and microbreweries. But I have always thought that if you started off with a socially worthy project, did undue diligence, worked ridiculously hard, hired wisely, found a niche and cashed in some luck chips, the financial issues would take care of themselves. And you would sleep soundly a few hours each night. It is a naïve stance, I know, and it does not always work out — and yet, money means more, and less, when it’s the byproduct of satisfaction, not a goal itself. Who could resist the chance to entertain neighbors, Mother Earth and oneself all at the same time — with the possibility of making money and an eco-statement too? We save the fish, fish save the oceans, oceans save the planet. A triple play! Are we talkin’ baseball yet?

None of this hifalutin stuff, I rush to add, devalues or undermines profit in any way. Nor does it patronize anyone who is in business just for the money — everyone likes money, the more the merrier.

Let us now mince no words. We are in a hole. We might find oil before we find profit. (Olive oil would come in handy.) Let’s review. Instead of opening in the spring or summer of 2010 and squirreling away some nuts for the long, cruel winter, we reversed the process, and not on purpose. Construction was slow, permits were stubborn, time slipped away. (I was a green builder, and I don’t mean that in a good way.)

It would have been counterproductive to open with scant experience last summer; our pretensions and prices allow us but one chance to make a good impression, lest we lose guests permanently. So we limped through the worst part of the business year to get to the best, culling staff and testing dishes, changing public relations firms and prices and pastry chefs. When the summer commenced, we were properly seasoned and ready to roll. We had a small fire in the kitchen wall. We lost Memorial Day weekend and all of June. We focused on the garden and anomie (not anemone). We reopened for July Fourth weekend, just in time to take full advantage of what we had learned over the first nine months — our gestation period.

Now some numbers. Gentlemen, start your calculators.

In July and August, we averaged 90 guests a night, six nights a week, at $100 per person. We took in about a half million dollars in 56 working nights, including one forgettable Thursday and one disruptive visitor named Irene. Had we been open in June, with an additional 24 days, we could have added another $200,000 and wound up at $700,000 for the summer. (For those keeping score at home, all numbers have been rounded off for your convenience and our deniability.)

To cover our expenses for the fire — construction, lost inventory, business interruption — we have asked a pair of insurance companies for $100,000. We had no history to lean on and no archival evidence to corroborate our June traffic, so we estimated the loss and had to wait for July data to submit. When we will receive the checks, and for what amounts, is anyone’s guess; insurance companies are in no rush to pay up.

So before anyone takes anything to the bank, let us remember that a restaurant is working well when working at a 10 percent profit margin. (The National Restaurant Association puts the average margin at 4 to 6 percent.) During a compressed time, a heightened season, productivity climbs, waste diminishes, and that percentage can reach 15. That would put the takeaway at $1,350 a night; had there been no fire, $107,000 might now be sitting in our summer checking account.

Next summer, more people will know us. Next summer, we will be open seven days a week, we will start no fires, invite no hurricanes and maybe do a Sunday brunch. Serving four courses is under consideration. Wine pairings will be expanded. And we will surely know the precise number of staff needed in the front and back. We will do better next summer.

In the meantime, we will stay open until Jan. 2, 2012. All of the diets begun on New Year’s Eve will force the restaurant to tighten its belt. The earth will be frozen and the farmers will be in Florida and families will need time to return Christmas gifts. The staff, having worked summer, fall, Thanksgiving, Christmas and New Year’s, will deserve an extended break.

Arctic char with yuzu emulsion.Chris KoszykArctic char with yuzu emulsion.

When I look around the Hamptons and see boats on the bay, children in schoolyards and fishermen on the shoreline, with mansions in the background, I am more convinced than ever that this community can sustain a sustainable seafood place. Of course, as Chef Joe is fond of saying, sustainability starts at home. We will seek other streams of revenue now, like wedding rehearsals, Christmas parties, perhaps some catering. And while many restaurants have come and gone in the Hamptons, the best ones have, by and large, endured, confirming some ineffable connection between quality and longevity. Not always, no guarantees, but paying attention to every nut and bolt can construct something larger than a mere edifice. We can evolve from brand new to trusted brand.

We will not be in the black come our first anniversary. We are newbies. We have made newbie errors. We have seen fire and rain. We keep in mind that many winning restaurants were slow out of the gate, while many short-lived nags were quick to take the lead. How long does it take to create a culture, to find your rhythm and your audience? Do we get two years? Three? Will the money hold out? The energy? The dedication?

Let us now praise famous men. Neither my accountant nor business manager nor lawyer nor executive chef nor chief tea leaf reader can extrapolate or interpret the accumulated numbers with any conviction. The future is here and yet unknown. We need more data. It arrives nightly and remains shrouded by fog. We feel confident that we are on a right path, buoyed by enthusiasm from critics and guests, but dear readers, you and I will have to wait until the late autumn to harvest the ripe integers, to pore over a year’s worth of ledgers with unjaundiced eye, and then pour a glass of fiesty pinot blanc to drink with the crow — or to crow about the eatery that will be one year old in October.

And then we can sit down and watch Curtis Granderson in the World Series.

Article source: