 both in terms of the thermal value and also in the price attractive to some of the industries. And this is the trend of the export from the United States to China in terms of the pedicogue. This is in terms of the million terms and I think Rick later will give you a review of what is the total production of the United States. But you can see the trend of the pedicogue exported to China starting very little in the 2000s. And jump a little bit but then down to very little level, a very small level back to 2004. But when Chinese economy gets heavily industrialized and the demand for the coal actually surged, then by the time of 2008, you can see there's a sudden surge of the pedicogue export to China. And to give you context, 2008 was the year that Chinese coal price peaked. And that time it's almost over 1,000 RMB per ton of the coal and it's very poor quality of coal. It's equivalent to something about 200 US dollars. And since then the coal price started to fall because we already reached a very high capacity of the coal and the supplies also become too stretched. So people started using all the alternatives to fight against this price. So you can see the sudden surge of the pedicogue imported to China and then jumps almost 20 times from just about 350,000 tons in 2008 to over 7 million tons in 2012. Sorry, in five years' time, 20 times in five years' time. And then 2014 there is a sudden drop in terms of the consumption but that is mostly due to China's own economic slows down. There is a very strong break on most of the heavy industries, productions, the overcapacity finally hits the economy. And also because of the fall or collapse we call the price of the coal. The coal price actually fall to almost half of the level of the 2008. So in that way they regain the price advantages to the pedicogue but in a shortly. And in China the pedicogue was used in slightly different ways. As we already mentioned pedicogue is over 90% in terms of the carbon. So it's very high in terms of the thermal value. It's also been blended to go to generate power and steam in refineries. But there is no clear indications or statistics to show in China how it's exactly being used in industries, especially in some of the industries I mentioned before, glasses, ceramics and the cement. Because those industries they are using very different sorts of the boilers or clings to burn their fuels. And you don't even know how they burn, what kind of temperature, what kind of technology they're using. And especially important where they actually de-sufferize their emissions before they release them. So there could be a large contributions of that from the pedicogue to the source of the sulfur dioxide which is again a very important source to the air pollution in China. There is also very interesting technologies being used in China and we identified that is quite suitable technology to burn the low quality coal as well as stuff like pedicogue to remove the sulfur pedicogue, sulfur dioxide. That is the circulative fluidized bed boilers or otherwise known as the CFB. But the CFB was very small in terms of scale compared with the standard fleet in China's coal power plant. The largest one we can get in terms of CFB is only about 600 megawatts. But most of the Chinese coal power plant and today has to be at least one gigawatt. So they are not really quite suitable size in terms of being used in the power generations. And most of the CFBs being used in the refineries own power plants like the Sennopecs own productions. But we have reason to believe that neither of that almost none has been used in the industries we mentioned before like the glasses and the ceramics because the technologies are required. Here is the breakdown of the use of the pedicogue in China. You can see how much we consume each year. One thing to mention that in China the pedicogue is little known to most of the statistics and even to the energy sector itself. So we cannot find official data of pedicogue consumption in the national statistics book. And they don't even have the category of pedicogue until 2010. So this is starting from 2011. And you can see that the consumption is increasing for all these three years except 2014. And then the import is increasing significantly for that three years. And by the time of 2013 it accounts about one-third of the total consumption. And there's also local refineries which is very interesting part. I give you more information later. In terms of the state-owned enterprises, the three oil companies in China, you can see there's also very interesting cases. Sennopec, which is not very large in terms of the production compared with CNPC, which is the largest oil company in China. But they actually make or produce a much larger share of the pedicogue compared with CNPC and CNOC, which is the third or largest one. The reason for that is CNPC is mostly have their assets within China and the upstream assets in China or the crude generated from the China's domestic oil private field is usually light and medium. So not so heavy. So the generation of the pedicogue was much less compared with Sennopec who mostly imports the crude from overseas market. And for the reason of the price, they tend to use the cheaper but heavier and more sour crude from Middle East, from Latin America, and other countries. So at the end, even though there is much less, there is probably less refinery being made by, there is almost comparable level of the capacity in terms of the refineries between Sennopec and CNPC, but in terms of the production of the pedicogue, Sennopec is much larger. And most of the production is also high sufferer. The highest one we got in our interviews to the Sennopec refinery in terms of suffer content is 7%, which is very high. To give you context that we always say that the Chinese Co is very dirty, but in terms of the suffer content in the standard Chinese Co is only 1%. So pedicogue, it could be 7% high in terms of the suffer contributions. The majority of that production is between three and five. The use of the pedicogue in China is also interesting. If you look at this chart, you may not be so much worried because an eminent, which is the largest one in terms of the metal, in terms of the users is what we call the metal. Metal manufacturing means that pedicogue used in this sector in principle is not to be burned, but it's not the situation. I will tell you later. And the contributions of the sulfur dioxide could also be significant from there. Fuel is mostly used by the glass and ceramics and those industries I mentioned. So they will be burned and they will be likely released of the sulfur dioxide without even treatment because first of all, there's little recognition of that contribution from pedicogue first. And secondly, there is also much less requirements in terms of emissions in those industries. We have paid much attention to the cofire plant since the Chinese central government become aware of the air pollution issues. So we come out with very stringent standards for cofire plant, but the standards for those industries are still lagging behind. So at that time, they are mostly without much control. And certainly a lot of those industries are actually located in the remote areas in provinces either inland of China or the places where the provinces officials would like to protect them from the environmental standards or requirement of environmental protections because they contribute huge revenues to their taxation. Steel is about 5%, which this is the sector that we find we don't have to worry very much because there's not much combustion happening there. Silicone metal is very interesting because this is the sectors responding to China's increasing installation and manufacturing of solar PV. But in this process, it again, like annulment, is not supposed to be burned. It's just put into there as an element to replace the silicon out of the stone, actually. But what happens is their temperature is very high. So when you put the pedicogue as a source of coal in there, most of them will be burned because of the temperature is too high. This is not as a source to generating power or temperature, but it's just an element to be put into there to take into part of the reactions. But as a result, they also got to be burned and all the sulfur dioxide content in there will also be burned. And I check with industries in the silicon metal industries, they have nothing at all in terms of the removal of the sulfur dioxide from the production. So this is also going to be released. A newman, which is very interesting. A newman is through the power. Basically, we have the process called electrolysis to replace a newman here and to reduce them to a newman into the metal. But what happens is pedicogue will be used there mostly as anode. So you will actually cascade all the pedicogue and make them into a kind of anode to put into the reaction process. And its only purpose in there is actually to conduct the flow of the current. So you will be able to reduce the aluminum back into aluminum. So there is no, there's not supposed to be burned. But what happens is there is a high temperature and a service. And when we use the pedicogue, some part of this about 10% or slightly higher of that sulfur dioxide content in the pedicogue in the anode will be released from the service during that process. What happens in China is the whole aluminum capacity has increased so much. There is not enough low carbon, sorry, no sulfur pedicogue supply to catch up with the demand. So the industry there find a way to actually use this high sulfur pedicogue. So they used to be used, the pedicogue less than 1% in terms of sulfur content. But now they can use the sulfur content up to 3% or even 5% just blend with others and then casting them and make them into the shape of the anode and put into the refineries. Sorry, put into the reactions. And this is not only in the stories. Because of the high sulfur content of the pedicogue anode, they also got much more easy to be destructed during the whole process. That which means you will need more of the pedicogue anode to replace the destructed ones. And that requires higher demand in terms of pedicogue. Also increase the contribution, release of the emissions of the sulfur dioxide. But what happens next is a lot of those anode after they've been destructed and been used a few times and finally out of the use as anode, they are still pedicogue. They are still high in terms of the sulfur content and carbon. And you then find out in China in electronic sellers like Alibaba or others, you will be able to buy them as a few online. There will be sellers telling you that this is wasted anode, but it's pedicogue. You can just buy them. I have about 30,000 tons per month supply and there is price to bid. So at the end, you can still burn them. You can still make them into the cycle of the few. So this is a quite questionable use at the end because we don't know how much of that actually end up into this sector. And this details is very difficult to get, especially because of the industries are usually small and medium and they are not really quite happy to be asked to comply with environmental regulations. So we have to find ways to get the details, but it's very, very difficult. And we are trying to work together with the Ministry of Environmental Protection to find a way to get more accurate data about how the sulfur pedicogue has been used. So and the result, you can see there is significant potential impact from the high sulfur pedicogue. There is much higher sulfur emissions from that pedicogue compared even with coal. And also it has higher, about 11% higher in terms of greenhouse gas emissions than coal because it actually comes out of the heavy crude and also is higher in terms of carbon content than coal. And at the end, if you look at the life cycle analysis, the whole carbon emissions during the whole process of the pedicogue would be even higher because remember how it comes from. It actually comes from the heavy crude, unconventional oils and high sulfur pedicogue, high sulfur crude, and that requires different technologies and much more energy to even extract them. And then you will have to transport them and refinery also requires much more energy to produce them. And at the end, you get the high sulfur pedicogue and you burn them. So the life cycle analysis in terms of what is the carbon emissions could be generated from the high sulfur pedicogue could be even higher. I think we have some of the data in our oil climate index which you can find on our website but I think we also need to get more accurate data when we include more of the sources from places like China. So that is also something we need to look into. To just give you context of how important this is because I always got questions in China people ask me, so you talk a lot about this pedicogue and it's important, it seems to vary at 30, how large in terms of the share compared with the coal. That's true. We are talking about about 33 million tons of the pedicogue consumption and that is very small piecemeal compared with almost four billion tons of coal consumption within China. But if you look at regional impact, especially because the pedicogue was mostly produced in the local refineries and also the coastal areas where refineries are located, they are actually quite concentrated in terms of where it's been produced and also consumed. You can actually quite, not that easily, but you can quite not difficult to find out where they've been consumed and a potential contribution of their emissions. So this is the Jing-Jing Ji area which for people outside of China you probably don't know but that is the Beijing and the surrounding province. It's mostly the areas that have been identified as a third of the economic zone in China and also very much suffered from the air pollution and the next one you probably heard is the Yangtze River Delta and also the Pearl River Delta which is surrounding by Shanghai and also Guangzhou. So these are the three major economic activity zooms in China on the east side and Jing-Jing Ji area, you can see the total suffered dioxide emissions from Jing-Jing Ji is just above 150, sorry this is around this is 10,000 tons so I used the Chinese unit. So basically it's about 150, 1.5 million tons in terms of suffer dioxide generated in that whole area and in terms of the north east which is the three provinces mostly heavy industrialized based in China they are only about 180, 1.8 million tons of the suffer dioxide emissions and then the Pearl River Delta was just about this but if we are talking about the petcoke or the petcoke consumed in China and in terms of the release of the suffer dioxide if you assume all the petcoke in China in terms of average 3% of the suffer content then you're already almost reached the bar of the total emission of all these three major areas along so that including all the sources and this is only coming from petcoke and if the percentage of the suffer content is higher up to 5% then it could jump into nearly 2.5 million tons of suffer dioxide emissions that is much higher and in a short word that means all these heavy targets were set in this area for example in China to reduce the co-consumption by 63 million tons by 2017 could quite easily be offset by the release of the suffer dioxide by petcoke alone so without addressing the petcoke there's no way that we can win the fight against the air pollution so here are a few policy uh policies suggesting we come out at the end and we have also have to mention that this is the first stage of the research we very much looking forward to work together with the Chinese MEP and also the American industries uh and as well as the uh government in the United States to address this because we realize this is not just a simple issue that's relating to those two countries it's very much a global issue and we have to address the first one in China first is to monitor usage the statistics as we said before is still lacking and lack of transparency and sometimes it's also very inaccurate we need to go to in details about the industry level and plant the level to say how it's been consumed we also need to use economic economic instruments including some for example import tariffs or uh carbon tax uh carbon pricing to change the distorted price of the petcoke compared with co and other energy sources and the very reason for that is you can see that the Chinese government is very much like or relying on the command and control measures to even fighting the issue of the air pollution so like in Beijing they are talking about reducing the co consumptions by 60 million tons uh by 2017 so that is very much command control there is no economic incentives to you you just have to do it but then what happens to that is all the industry players they will always try to and a strong incentive to for them to find alternative ways to find the corners they will be able to card and petcoke is exactly one example because you they you didn't even know that before so when you spend some such a huge efforts and resources to reduce the consumption of coal then petcoke suddenly quarterly merged in and then cancel oil efforts so we really need to use certain economic instruments and more market based measures to encourage the industries to change their choice of the uh few and also responsible for the environment next one is to use cleaner burning technology in certain industries such as SFB but also not only limited to that but that is difficult because we also have to find out what is exactly being used in certain industries this is more like a trend by the way we don't know how much we can push for it but we'll be continue to do more research on that there is another one trend which may be worth pretending pay attention to is they reduce the particular productions through refineries in china we are building more and more of the refineries some of the new ones are actually employing a technology called the residual oil um uh hydrogensations um hydrogen nations basically is adding to the hydrogens into the few the residual oils um is a byproduct of the refineries um to give you the details is the the residual oil is the steps just before the all the um processes go into the cokers and then coker will generate in the petcoke so if you can add the hydrogen before that process and you will be able to actually get more of the high value um liquid product like the gasoline and jet fuel out of that without throw them all into the cokers the delayed cokers then in that way you will actually reduce the production of the petcoke even you use some of the heavy food but this is first very very expensive and secondly also requires a much more constant management level and much higher skills of the uh processing uh in terms of refineries and in china there is one big challenge because we import so much oil from all sorts of the world and it's quite difficult to ensure that the oil you're going to put into refinery is going to be constant consistent in terms of the qualities and elements so there is a concern in there but we're trying to push more of that so on that I think um will be the end for my presentation and introduction of this case and as we said we will continue to look into this issue in china and try to find a way to address this increase in global issue because what we believe is even though we can probably at the end get the petcoke much less consumed in china and also get more controlled in terms of emissions the petcoke especially high soft petcoke is not going to disappear from the world because we are more and more relying on the unconventional oil and heavy crude for our supply of the oil and then it will become international problems china is the second largest refineries if we cannot use in our own countries like the case in united states then the next solution will for chinese then it's going to export them to other different countries it's not only china receiving the petcoke from us it's also india brazil mexico and other countries and I don't really want to say that this is going to be another solution for china to simply exporting them to the other different countries so we need to find a global solution to that and thank you for your attention i can sit right here good morning everyone um thank you very much tell um and thank you debbie for for inviting me here my name is rick lutanzio i'm an environmental policy analyst for the congressional research service uh i'll speak just briefly about crs for those of you who don't know it as well um we are an office uh for the united states congress and in that way we're very similar to some of the other offices like the cbo the congressional budget officer the government accountability office we each have different functions I would say broadly our function at crs is to serve as the in-house research wing for congress and we have several hundred analysts that cover the whole range of issues for congress and we provide policy and legal analysis for members and committees and we do not work for any one member we do not work for any one committee we're available for all and as such our research is understood to be objective and nonpartisan and we try our very best to be comprehensive and thorough and authoritative so once again thank you for a wonderful presentation talking about kind of petcoax issues in china um and as we see and as we talk about that and and its effects in china and its impacts in china we we can look back on america and see that there are certain kind of comparisons um petroleum coke is not new um it has been around it's this material that's been around ever since there's been cokers on refineries petroleum refineries here in the united states and that stretches back to probably like the 1930s or so so the first question that i usually have is why why are we talking about petroleum coke now why has it become such an important issue for people um and i'm looking and i see probably there's two there's two large events that occurred recently um one of them is a little more visceral and the other is a little more intellectual or analytic that i think is pointed our attention here in the united states talking about petroleum coke um the first one that's pretty visceral i think is that recently in the past couple of years uh there have been some highly publicized and media reported events of large piles of petroleum coke in places that they had never been before um and i'm talking about detroit uh specifically and and tal had mentioned that and showed some pictures of that back in the spring of 2013 um there were large piles of petroleum coke reported by the new york times of all people and picked up by a number of other media outlets pictures of this um several stories high on the detroit river um once again here in an area that had never seen it before um and immediately there was community and stakeholder questions what is this um what is it doing here where is it going uh what impacts does it have on my community on my health and on the environment um these were the questions that were brought up very quickly shortly after that i guess it was in the fall of 2013 a similar um reported event occurred in chicago uh in whitening indiana um on the calumet river uh once again very similar large large piles petroleum coke in a place that they weren't before and people started asking questions um the the detroit river um petroleum coke was stored at the detroit bulk storage facility um that was storing the material for the marathon refinery uh that was near detroit and in chicago it was i guess the british petroleum refinery uh was producing in and both of these plants had recently put cokers on um on their industrial processes in order to accept for the most part in order to accept the heavier crude oils that were coming across the border from canada that were selling at a discounted rate um and the keystone xl pipeline was not approved and there was transportation constraints and um so here was a stranded or at least a somewhat stranded material that was selling at a discount and so for a variety of economic reasons these refineries decided well let's put on some cokers and we can take this um and we can make it and by virtue that you ended up getting this this co-product or byproduct or waste i mean there's a variety of terms that one in the media and various stakeholders had used for petroleum coke and it was an attempt to kind of unpack what this material was and and what its impacts would be um so the questions were were pretty obvious um you know what was this material um what were its health impacts its environmental impacts and where was it going um and after that after we knew what the material was what controls were available be it the federal or the state or the local levels in order to to deal with material um and so this was the stakeholders concerns um we see and as as we looked into and as a one of the things the michigan department of environmental quality quickly looked into the health and environmental impacts of the material looked back at the epa who had done hazard characterizations of petroleum coke back in the day um this was a large production source um and what they what epa found years ago and what um michigan had found recently was that contrary to the popular media reporting uh that it was hazardous and toxic etc um they found that that wasn't really necessarily the case this this was just a material um it was not a toxic waste per se it wasn't even a waste um this was understood pretty much as a co-product of the refining industry and it was understood as a commodity by the industry right um this was to be sold as a product um uh for a variety of reasons and those of us who know the refinery sector know that um there is there is a crude oil input and there is quite a variety and an array of products finished products that come out of the refineries refineries sector everything from ethane and butane and propanes to gasolines and distillates uh to asphalt to various precursors for plastics and petroleum coke here was just one understood by the the the industry to be one other commodity um that this stuff was to be moved and there was a lot of discussion at least originally that um here on the Detroit River it was in the winter time that it was piling up and the reason they couldn't move it is because it was the winter and the great lakes were frozen over um and that comes spring time this stuff would go um so there was a lot and we can talk a little bit more and if there's there are more questions about the characterization of petroleum coke and what its impacts were um we can see but the thought was then to turn our attention to how does one control and what does one do with this um and there was a lot of look is the is it controlled federally is it controlled at the state and local level and we see that by and large petroleum coke at least the storage and the transportation of petroleum coke is very much a state and a local issue it's very much done through permitting it's very much done through the very variety of policy tools and legal tools that state and local governments do for their industries at the federal level petroleum coke isn't isn't housed under many of the large environmental statutes um the clean air act has uh national ambient air quality standards that deal with particulate matter um but most of that control is passed on to permitting that's done at the local and state level the same is true for industrial stormwater runoff um uh under the clean water act um if this material was near rivers or lakes and it was to wash out you know through rain or stuff like that um yes there are some provisions under the clean water act but once again this is mostly permanent and it's in it's and that permitting capacity is is passed along in in the federalist way that the clean water act and the clean air act function onto the state and the local level and so in many ways it was Detroit and Chicago who who looked to um to deal with the petroleum coke piles that that were building up uh the mayors you know and the department of environmental quality looked into a variety of things and in each each area dealt with it in a different way um Chicago passed rules that um storage was to be covered um Detroit you know looked at permitting issues and asked the bulk storage company to move it um that stuff has been moved um so this was generally how it was happened but once again it was brought very much into the national spotlight um through these through these uh media attention and into that kind of conversation so that was the one way the other way I think petroleum coke has made its way into our conversation is uh more kind of intellectual and theoretical way and that was through the Keystone XL pipeline um in the Canadian oil sands and as the State Department for a lot of policy people who are looking into this issue is the State Department released its environmental impact statement one of the things that they looked at with respect to the Keystone XL pipeline was the cumulative and indirect impacts of the greenhouse gas emissions not just of the pipeline itself but of Canadian oil sands product writ large um and as they looked as the State Department looked into the the life cycle assessment of the greenhouse gases um they found that one of the interesting pieces of the puzzle um that various academic journals and the various researchers and the consultants that were looking into this the greenhouse gas signature that was in the one thing that nobody could quite wrap their hands around is what to do with this petroleum coke co-product that came from this refining process um and Tao did a wonderful job of mentioning all the various uses of this um so how does one think about the emissions that are released by the use of this co-product sometimes it's fired as an energy source in substitution for maybe coal maybe natural gas sometimes it's not fired sometimes it's used in industrial processes so how does one how does one get a sense of how this this material impacts our understanding of the life cycle greenhouse gas emissions of Canadian oil sands and to have an administration like President Obama stand up and say we will decide one way or the other on the Keystone XL pipeline depending upon um whether or not it exacerbates carbon pollution well then we need to really investigate whether or not this this does so and we start looking at these issues like petroleum coke and try and figure out try and unpack some of this puzzle so those were the two things that at least have brought it at least into our conversation here in Washington DC um Tao has done a wonderful job of talking about some of the issues of petroleum coke in China I just want to run through a few of the data points for the United States just to get a sense of what we produce here and what we do with it and then I have a few questions for Tao and we can kind of open it up and talk a little like I said we've been producing the United States have been producing petroleum coke since the 30s since we first built cokers there are 140 petroleum refineries in the United States right now by our estimates about 50 to 60 of them have cokers on them so about 60 petroleum plants here in America are producing petroleum coke right now the production of petroleum coke in the United States interestingly enough has stayed quite stable for several decades now I'm looking back at the Department of Energy's data about the past 15 years or so it's been pretty stable and that's by virtue of the fact that our refinery sector has been stable so we have about 60 million metric tons of petroleum coke produced per year that's been the same for about the past 15 years to put that into perspective also we produce the United States about 1.2 billion metric tons of coal so it is a small portion of that production um what does the United States do with the petroleum coke that it produces historically about half of it gets exported but that has been ramped up in the past five years as the United States has found less use for it and as there's been more demand outside markets so now about two thirds or maybe even up to three quarters of the petroleum coke that's produced the United States is now exported and it goes everywhere I just looked at the list yesterday and I counted over 70 countries the United States exported petroleum coke to the biggest ones last year were India was number one followed by it was in Japan China was third and Turkey was fourth each of them about what was it about four million metric tons a year or something like that about 10 for each of them are about 10 percent of our export but then I went to another you know which accounted for about 50 percent of our export but once again about 70 different countries this is being exported to of what's left in the United States about two thirds of what's left in the United States is actually understood to be catalyst coke which is what is produced at the refinery and used at the refinery so it doesn't move it is used at the refinery processes for the heat and the fuel and for a variety of other purposes at the refinery and so that leaves about one third of one sixth of what's produced right now that go to other other other industries here in the United States as Tao has mentioned there was there's not a lot of use in the power sector the american fuel and petrochemical manufacturers association has reported that power generation in the united states of all of our electrical power generation petroleum coke makes up two tenths of one percent of that generation so it's a very small percentage of our power generation but it also goes to a number of other industries this amendment such like that so this is the issue but we're here today to talk about the the chinese issue and that stretches back to our issue in much the same way that we're talking if we don't use it we export it if we are going to continue to demand light sweet gas lanes and diesel products liquid petroleum products to use in our cars and trucks and if we are going to continue to be supplied by heavy crude oils from canada or venezuela or other places and if that is in fact the direction that crude oil supply is going we can talk about bakken and ugolford too there's lots of questions and moving parts here but if that's the direction then petroleum coke will be produced and the question is if we do not under if this is understood to be a commodity and if it does have use what do we do with it and how do we deal with it well so those are some of the issues that are that are most interesting i um i don't have much more to say about the united states i have a few questions about frutal right now and perhaps you have a few questions for me sure um my first is that here in the united states at least and if we look at some of the new rules and regulations that are being rolled out by the environmental protection agency and such um and those that are targeting power plants and electrical generating units um if we look under the definitions of these rules say for the new source performance standards for the new power plants or for the existing power plants petroleum coke is often understood to be in the same category that coal is um and a lot of the rules and the regulations that we have on our power plants are not non-discriminating if um if a fuel releases sulfur um dioxide through its combustion um it doesn't matter if it's petroleum coke or coal um there are control technologies that we use whether it be the cf uh be beds or the the lime scrubbers that we put on the other side of the you know to capture the sulfur dioxide and stuff so so here at least you know past regulations and proposed ones we kind of understand petroleum coke and coal to be in the same bailiwick um the the my question is as you've gone over your conversation um to what extent does china understand them to be the same thing or understand them in the same regulatory realm or do they get can can they be controlled in the same way or or they've been have but they've been separated out at this point okay um that's my first question i guess uh my second question then would be a larger kind of more and i think you've touched on it already um if we are producing the stuff and if we are doing and if there's an understanding that petroleum coke is being produced um what what can its uses be and what can its controls be and i think you've touched on it but i think it's worth us talking a little bit more about um if the united states is dealing with it potentially by exporting and if china then is to deal with it by exporting it what what is going to happen to this material and uh what are we going to do in the future about understanding it so certainly thank you all thank you rick that's um the second question is a much bigger issue and i think there's also something that i would like to discuss with the audience and other people's him other specialist uh on this in the future but it will be maybe put something as a as a food for thought and today i think the first one is actually quite interesting case i mean you are right it's pretty much in the same category as co same as in china or at least for now some of them didn't recognize that even the existence of the pedicogue being used as a few but now they recognize that and then they put them together as a code because it's more like a code and it's been used as a code the problem in china is that we also have identified the co power plant as one of the targets as i said before beijing particularly interested in controlling air pollution has passed some of the most stringent standards in terms of the co fire plant emissions and that is very high and has been heavily controlled and been uh closely monitored so that is okay but the problem is we don't really have much pedicogue in the power plant and that part is already been looked after what is really a problematic issue in china is those being used in this small and medium industries and they can't be helped by even local governments to get away with these provisions from the mep increasingly this is becoming more difficult but they still have time to release the emissions so for example i get the call recently from the mep one of the senior officers looking into the pollution issues in china they said they recently published some of the standards for glass industries so some of the glass industries especially in areas surrounding beijing they've been controlled with more stringent standards and they are starting to think about whether they can continue to use pedicogue and then disauthorize them in terms of emission or just simply switch to another few like the natural gas so this is slowly happening but outside of that region outside of those areas being paid much attention to by the central government there are still rooms for the local government for the industries to do and what is more important and difficult is some of the industries in their existing technology they do not even have the possibility to include or to install a dissaparition process take example of the metal as they the aluminum we now notice that aluminum is actually also releasing a large share of the sulfur dioxide through the electronic process but then it happened in the electronic process and there is no connection of all the emissions in the industry at the moment and most of that industries and the moment in China are running deficit because simply over capacity so they have no incentive to adding into another expensive equipment to reduce the sulfur dioxide or at least not in the recent terms and then it makes more difficult for us to control the emissions and another one is like the silicon metals and they are usually using the electricity the cheap electricity in China and those cheap electricity in China are mostly from the hydro so that means they are actually moving into inland of China far away from the coastal areas and the inland areas people are much less concerned about environment the good government is more poor and more rely on this revenues for the taxation so I would say the enforcement and implementations of that is one of the big issues and also there is economic sense for most of the industries if you really push them very hard then we probably will see a lot of those industries go out of business and then there is kind of collateral impact on both the social impacts in social stabilities and also employment as well as the finance incomes for the local government so it's not easy battle for the central government and for the MEP to win but I know they are trying to do it so that is the reason I think this is particularly difficult for China but I know that once we realize that once you categorize this as a very dirty few then maybe we will be taking some actions and that leads to the second question if we can succeed in taking actions addressing the self-reduced emissions from that then what would happen to the high sulfur pay could produce within China because we are also importing more and more of the heavy crude so that leads to the second question and I don't really have a very good answer at the moment I was thinking about the carbon tax that China is going to import and also the carbon trading schemes that we supposed to be upscale to the national level by 2016 will be able to include some of the carbon content of the pet coke and because it is so high so they will be able to change the distortion of the price to some extent but the price has to be very high because at the moment the pet coke is way cheaper compared with other technology cutting energies like natural gas and wind and so the only thing recently changed the category or calculations with pet coke is because of the collapse of the co-price in China and that is not a good sign and you are actually choosing between two evils neither is too good so I think in terms of the collaborations between us and China I don't know but this may be something we can do in terms of how we are going to limit the export of certain product based on their potential environmental impact or maybe there could be a certain tariff been charged not from not at the export or border of China because that will be somehow I guess violating the ways the WTO rules but countries could take more responsible actions themselves in terms of limiting and requiring more tariff in terms of exporting certain dirty industries products but this is only a just starting point I think to think about that but I think what is also important for China is to learn from you as how to use electronic sorry economic instrument to limit the use and also increase the stringency of the of the regulations so pet coke is not going to be a creative options for the small industry users now the the industries to the west that you had mentioned that in the east there has been a more focus on the regulations and some of the rules on some of the power plants of Beijing and such like that excuse my ignorance but if industry moves to the west at least here in America things to the west of things to the east the things to the east catch the downwind so there's the you know cross-state discussions and where pollution moves does moving does moving industry to western China remove those impacts from the east or will the east still feel those impacts actually this is very interesting they moving industries to the west already happened and what happens in China today if you look at the air pollution issue and also because of the over capacity in the heavy industries they are already spring out to the west so when we look at the air pollution issue in China if you have a map of the air pollution index you realize of course Beijing and surrounding areas very poor and Shanghai is probably not so good but the Pearl River Delta close to Shenzhen because of the climate because of the wind they are actually much better but then the whole inland China is also very bad so the western city some of them used to be very clean and supposed to be nice place to do you know travel and tourism they are also suffering from the pollution so it's not the issue that you can continue to move this and to release the issue of the west of the east in fact you're actually polluting the whole country and the movement and that is giving much less room for the for the industry to move around but the problem is the western country part of the country are not so aware or at least they are less determined to pay price to fix the issue they have more constraint in terms of what actions they can take in Beijing people are rich and people mostly care about the environment they can support the actions by the local government by closing down all the coal fire plants and replaced by gas and also the other issues pay higher price to the electricity etc but to the west they cannot afford that change and also many people are still working in those industries that's supposed to be the only industry they can to get the income so there is a huge reliance on the both employment and also the taxation to the local government and local government are now facing huge pressures to provide the welfare to the citizens this is one of the very important income for them they cannot just simply take it off without additional income so this become a real issue and challenging tasks for the local government to make their decision if many of you probably know now more or even came into the room with questions about pet coke so first just identify yourself Anisha has a microphone and a microphone here and your affiliation and let's open up for your questions Peter Gross from Energy Information Administration I have a question about your just kind of quantitative about your pet coke consumption and you mentioned you showed that chart where you had light crude medium crude and heavy crude the light crude having no pet coke in the barrel but I would assume that some of that some cat coke some catalyst coke is produced even from the light crude so do your pet coke numbers include catalytic coke catalyst coke that 33 million tons you I think you quoted in your paper for 2013 does it include that and my second question is what do the Chinese refineries do they consume I mean they have to consume their catalyst coke I don't know what else they do with it like everybody else but but do they also consume some of their marketable coke pet coke okay and I think this first question is probably down to Debbie to answer the catalyst coke because that is actually directly taken from their research but this is mostly a typical refiner process so you we will have some of the catalyst coke I assume in even in the lighter ones but the pet coke will be almost nothing of course some of them will have some but the typical process of refiners you have very little so this is just indication of how the pet coke production will increase when you get heavier crude so what amount of that in their 33 million times in China that is mostly pet coke majority of them yeah but but again this is the issue in China we didn't really I don't think that we have separated that catalyst coke from that so there is no separations to get from the refineries at the moment to your second question yes some of the refineries special center packs themselves produce some such a huge amount of the pet coke they also need huge amount of their electricity and steams for the refinery themselves so they will use some of the pet coke themselves to produce the heat and electricity but the amount is too small in terms of the productions so they still have to sell the rest of them to the market and and I could just add on the first question because it was a part of the oil climate index that we developed that the light crudes that that rick was referring to which are now largely coming from fracking in north dakota and in texas but also formerly had been coming to the u.s. from nigeria and other places those are going through hydro skimming refineries so they don't have coking capacity in them so the lightest of light oils many of which are now you know growing in the u.s. are not really going to provide any coke I mean other than what you clean off of catalysts and build up that happens in the refineries so some of this coke comes from actually build up in the refining process but if you don't have a coking unit you're and you're not a medium heavy or extra heavy especially extra heavy crude you're all of the residuals can go into bunker fuel and then various other residuals you're not going to get really any coke out of those oils other questions this is bill brown also from the EIA also was just curious you mentioned that china was looking at you know the carbon tax and that kind of thing and in this context you know cat coke potentially does become more important particularly as you say it's fairly clear that they aren't including it in any of the official statistics and I think that's that's prevalent in pretty much all of the the non-oedc countries whereas the opposite is true for the oedc countries pretty much the u.s. and most of the europeans and the largest refineries in the world now but as a developing world is it going to become a greater and greater share of refining and we are processing less of the light you make a very good point that hydro skimming refineries don't produce any code of any type but even at present they are a minority even in um you know asian and the asian in the united or excuse me europe where they're most prevalent um there still is you know an overwhelming majority that do have an FCC unit in them and are producing cat coke and there's a significant amount of carbon associated with that combustion i'm curious is there uh any research that you guys have come across in your studies of this topic that shed any light on the volumes of the catalytic coke that would be uh combusted or do you see any um value in bringing more of this information to let particularly in the the developing world sorry for that somewhat rambling question can you repeat that again and i think i'm not really capturing there okay so you mentioned two things that caught my attention yeah um first uh china does not really have any ability to capture the amount of catalytic coke uh produced and consumed at its refineries um second for my own research i've seen that that's a trend very prevalent for most of the developing world uh very few of the developing nations do uh any kind of accounting of catalytic coke and prior to a concern in carbon prior to that it really didn't matter you know you burned it you consumed it who cares if it does if it is combusted uh in the FCC uh during the regeneration cycle you are actually producing carbon emissions from this source are you aware of sources that appears most of the governments aren't collecting this but i was wondering if in your own research you have done any um ability to take a look at this and do you believe that it is uh an important issue going forward particularly as we're looking closer at co2 emissions from um developing nations thank you um i have to admit that the catalyst the coke is not an issue that we look that much into in china and especially there is also not much information being become available uh when we talk to the refineries on that i think there are maybe some works done uh in terms of research to get the amount of that but i think in china the most of the concern and also focus has been given to the major uh consumptions of the um refuse so pet coke even itself it's it's still quite unnoticed so catalytic coke probably will be later yeah even later after this but you mentioned about the carbon tax and or even um carbon market in china there is potential ways that you will be able to include it depend on whether you include or impose the tax um to the producers or to the consumers there's different challenges if we do that at the producer level and producer end you probably could be quite easy to capture the pet coke being produced in china uh because their refineries there the information is more available but then if you go to the consumer side as i said before most of the small and medium industries they are off the reader and they are they are very unreliable in terms of the accuracy of the data and the consumptions then there will be a doubt to how much you can really trust them and include them into the either a carbon tax or a carbon market and of course if you include them at a refineries the refineries also would have say well i think maybe half of them or even more of them is not supposed to be burned because this goes to a numinance so there is also a challenge to that this is this is exactly why we need to figure out more in details how this is being used in china and then they will be able to somehow be addressed by the policy it's a challenge in here and then kandil and sciencia press is there currently any organization or initiative that has a responsibility of addressing on a global basis the problems of pet coke and if there aren't such initiatives or organizations aside of course from karnagy endowment should should what what form could such an initiative take we see that there are several issues that arise from speaking about pet coke i was intrigued by tau's conversation because one of the biggest focus at least on china and then your research is on the sulfur dioxide emissions this has become the most at least secretly pressing issue for you folks at the moment and maybe one kind of telescopes back for the united states and realizes that more more than the carbon dioxide more than the greenhouse gas emissions and what that might do there it's the sulfur dioxide emissions that comes comes first in some ways that has generally been understood to be more of a national issue controlled by national policies national laws as most of you know here in the united states we we targeted sulfur dioxide emissions from power plants quite powerfully during the clean air act amendments of the 1990s we instituted a sulfur dioxide trading program that actually did a very well a very good job at at controlling for sulfur dioxide from power plants and now most most power plants that one sees has has those controls on them have the have the whether it be the technologies on the front end or the scrubbers on the back end so whether one deals with sulfur dioxide in an international arena i don't know that appears to be something that's dealt best with at at least the you know from the chinese government or even from the local and the provincial kind of governments if one were to turn their attention to the metals or the carbon dioxide that would be something that potentially is more international there are various international for to deal with does the UNFCCC understand and talk more about emissions of petroleum coke you know the carbon emissions for petroleum coke that's probably the venue for it at the international level there are international conventions for mercury now so here's an arena to which to control that or some of the heavy metals perhaps that's where one looks are there others does the world bank look into these issues perhaps you know there are avenues to which these international consortia are trying to deal with the emissions of carbon dioxide and some of the other heavy metals and the things that are that impact the environment globally and i don't know i guess that would be the first place to turn i think so yeah most of that issue will be mostly in china for example on sulfur dioxide on the air pollution so there's more localized and not even nationalized sometimes but the national government will have the most say about requirements but in terms of the carbon dioxide greenhouse gas emissions i think that's probably something we can look forward to see more road to be played by UNFCCC and other organizations in there i still have not clear clue whether or not all those pet coke combusted in industries been put into the inventories of the carbon emissions in in china in other places so this is could be something that we may address because at the end it may not be as good as large as code but it's still quite considerable emissions uh so that could be something we we address the only thing i'll add to that in addition to the fact that it's not necessarily in the inventories is is the black carbon issue of pet coke which has not been raised today as a major climate forcer from pet coke because it is basically 92 to 96 carbon so when you burn it especially for power generation in less controlled situation you end up with a lot of black carbon basically is is an unknown a big unknown for pet coke and let's do not burn any questions so last through last question oh thank you uh sir i'm andre sozo and i'm the uh partner and director for vietnam southeast asia and washington dc for the interstate travel company which is designed and is looking for money for a prototype now a magnetic levitation hydrogen-filled solar powered high-speed train now your china and and the united states signed a historic agreement on reducing you know pollution and by 2030 or something like that so my question is does does this historic agreement impact and enhance your work on pet coke and all the things you've been discussing related to that and a related question is does um does something like we we want china we want to be a project in china in other words do do um industries or technologies that reduce pollution overall uh also enhance your project or relate to it or they're separate from it thank you certainly i think that will be a huge boost for our work i mean they join announcement by china and us on the climate change um that gives the uh targets for picking the emissions and the carbon emissions is also released from the pet coke so certainly there will be included but i think at the moment the thing is um we may not have noticed this increase in trend and also have not included them but then once people start to realizing and and and i said mep already realized this issue so in the future they will be included and there will be part of the efforts that we have to put into to pick the carbon emissions in china but i think this is more um of the air pollution issue and to china i think china this will get more enhanced um or support from people's demand to clean air than to get the support from the climate change requirements because people are really um quite concerned about the sub-reduct setting emissions from all sources of sources so this is certainly something pay attention worth paying into and thank you anything else anything else to add to close with other than a lot of these issues do start at the local level and then expand to the global and we see now that as i mentioned in my introduction are our introduction to petroleum coke here in the united states a few years ago was very much the local at the local level of community and stakeholder concerns of the part of what was affecting looking outside their window and seeing something and and how does that impact them as you look into the the issue a little more you see how the problem or the issue broadens to include a larger kind of discussion whether it be uh regional quality or global carbon dioxide emissions so so yes another another instance of the environmental is starting at the local and expanding to the global um and and encapsulating all of those kind of issues so maybe just add a last point i think they are since this announcement um and also even before that there is a lot happening between us and china in terms of climate change and energy corporations technology as well as investment so there is working group on climate change and also the working groups on clean energy research all this should have i mean we are all trying to get maybe pet coke into one of those categories so people will be able to look into the experiences and technologies then us china could work together to address this issue i think this may be a good platform for us and china to work together apart from for example shiokas and and and ccs and uh electric vehicles so there could be another good platform for us to work together well thank you very much for coming the the issue of pet coke i think as you've heard couldn't can on the one hand appear as if it's you know you're going down a rabbit hole on something that's relatively small and maybe not a tremendous global consequence on the other hand it's kind of a window into the fact that oil is really changing and we can either remain responsive and reactionary to things that change in the oil field or we have to get out in front of issues before they become problems and really this new new facilities are built and new new export lines are drawn so to my mind pet coke is really an example of what's to come and how important it's going to be to monitor and to be aware of of what what's ahead of us and thank you very much rick and tal thank you coming all this way from beijing and thank you all for coming today i'm so sorry about this reference problem thank you well it's quite a lot of things yeah you can find them actually it's it's in the state department's website they have that is a website they have that's a china us um economy change working group thank you sir thank you sir thank you thank you thank you for joining us