Determining Criticality of Rare Earth Elements in the Petroleum Refining Industry

Open Access
Author:
Guelly, Kirsten Helene
Area of Honors:
Energy, Business, and Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Antonio Nieto, Thesis Supervisor
  • Andrew Nathan Kleit, Honors Advisor
Keywords:
  • Rare Earth Elements
  • Petroleum Refining
  • Fluid Catalytic Cracking Catalysts
  • Criticality
Abstract:
The Rare Earth Elements (REEs) are a group of 17 elements consisting of the 15 lanthanides, yttrium, and scandium. REEs play an important role in technologies across a number of industries including electronics, defense, energy, and petroleum refining, which is the focus of this report. China has historically dominated all aspects of REE mining and production. Over the past decade, China has increasingly reduced REE export quotas, and these reductions caused REE prices to reach unimaginably high levels in 2010 and 2011. These events revealed the vulnerability of REE supply and the volatility of the REE market, and prompted global efforts to diversify supply. The petroleum refining industry felt the effects of these price spikes, as the use of REE in fluid catalytic cracking catalysts is the largest domestic use of REE. Lanthanum and cerium are used to stabilize the catalysts used in the fluid catalytic cracking (FCC) portion of the petroleum refining process, which is the process that breaks crude oil into separate petroleum products. Alternative catalysts were developed that employed less REE in response to the high price environment; however, a higher REE concentration in FCC catalysts has proven to produce the highest levels of activity and highest gasoline yields (McClean et al, 2012). This report proposes a mechanism for identifying and quantifying the risks facing the supply of REEs in the petroleum refining industry. 5 Key Supply Risk Factors (KSRFs) have been determined, and the risks facing the supply of lanthanum and cerium were evaluated through the scope of these KSRFs in 3 hypothetical supply-demand case scenarios. As the demand for REEs continues to grow, it is important for oil producers to recognize and understand the risks that threaten supply, and to use this information to develop effective strategies to mitigate risk.