7. Fuel oil and lubricating oil

7. Fuel oil and lubricating oil 7.1 Fuel oil 7.1.1 The trends of oil demand in the world; According to the report published by IEA (International Energy Agency) in December 2014, it is estimated that the oil demand will increase about 0.7 % compared with the result in 2013 and the demand will be 92.4 million barrel / day which will exceed the result of the previous year. This is due to the fact that the oil demand will increase in non-oecd countries, and, to put it more concretely, the increases of demand of each 200 thousand barrel / day in China, in other Asian countries and in Latin America are expected. On the other hand, as for the oil supply in 2014, it is estimated that the supply from non-oecd countries will increase by 1,900 thousand barrel / day compared with the supply of 2013, since the supply from North America will significantly increase by 1,600 thousand barrel / day. 7.1.2 The trends of crude oil price Looking at the transition of WTI crude oil price (Fig.7.1.1) 2) in 2014, the price has been around 100 dollars / barrel after March under the background of tensional situation of Russia and Ukraine. In Iraq the Islamic armed forces expanded their assault on the 13th June, which raised the oil price up to 106.91 dollars /barrel due to the fear of domestic battle and this price was the highest in Since then, the price transitionally moved in the level around 100 dollars / barrel in the way of now advancing and now retreating with the increase and decrease of oil stock in United States. In addition to the fact that the oil export from Iraq was favorably good in spite of the continuation of tension due to Islamic State brought in Iraq since July, the concern against geopolitical risk started to decline by the reason that Libyan oil production began to recover with the ports closed by counter-forces against the government having been freed. Coming into August, the crude oil price became under 100 dollars / barrel with the decline of business condition in China and Europe and the indication of drop of crude oil demand made by IEA and so on, and the price started to radically drop. Further, with the decision made by the general meeting of OPEC on 28th of November to maintain the total production volume of crude oil, the oil price went down below 60 dollars / barrel in December that was the lowest level since 2009, and eventually the trade was closed at 53.27 dollars / barrel, the lowest price in 2014, on the 31st, December. 140 Unit: Dollar/Barrel 120 100 80 60 40 WTI spot FOB Brent spot FOB 20 0 Fig.7.1.1 Trend 図 7.1.1 of WTI 原 Crude 油 価 格 の Oil 推 Prices 移 (ドル/バレル) in 2013 and 2014 1

Under these circumstances, the demand and supply of crude oil eased in second half of 2014, since the demand decreased in China and Europe due to the decline of economy, while the supply increased with the increase production of shale oil in United States and the restoration of crude oil production in Libya. There is a possibility that the production of tight oil in U.S.,which break-even point is said to be 60~80 dollars / barrel, may become stagnant in future depending on the price level of crude oil. Under the circumstances that the increase of demand is anticipated in new rising areas like Asia and Middle East, it is considered that the demand and supply of oil may become tight and the dependence on OPEC countries may be strengthened, in the event the investment for oil exploration would stagnate in future. It is desired that the stable price of crude oil will be maintained for the continuation of smooth investment in future as well. 7.1.3 The trends of domestic market According to the Resources and Energy Statistics 3), the domestic sales amount of whole fuel oils reached a peak of 250 thousand kl in the period between 1996 and 2005, and since then, the decreasing tendency has been continuing (Fig.7.1.2). The domestic sales amount of whole fuel oils during the period between January to December, 2014 was 185.4 million kl, which was the decrease of 4.0 % compared with 2013. As for every kind of oil, excepting gas oil that was almost equivalent to the level of the previous year, the results of all other kinds were below the results of previous year, namely gasoline decreased by 3.0 %, naphtha decreased by 3.7 %, jet fuel decreased by 7.0 %, kerosene decreased by 4.5 %, fuel oil A decreased by 5.1 % and fuel oil B and C decreased by 14.6 %. 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 Fuel Oil B C Fuel Oil A Gas Oil Kerosene Jet Fuel Naphtha Gasoline 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 図 7.1.2 石 油 製 品 国 内 向 け 販 売 数 量 の 推 移 (kl) Fig.7.1.2 Trends of Fuel oil sales in Japan (Unit: kl) Table 7.1.1 Heavy Fuel Oil demand in Japan (Unit: thousand kl) FY 1990 1995 2000 2005 2008 2009 2010 2011 2012 Industrial section 43,922 37,906 29,564 25,328 21,673 15,415 15,763 22,361 25,221 Electric Power 22,959 18,260 11,628 11,922 12,795 7,561 8,185 14,434 18,679 Pulp, paper 4,916 4,823 4,503 3,336 1,797 1,367 1,179 1,241 1,080 Chemical 4,925 5,864 4,635 3,135 2,188 1,735 1,837 1,667 1,620 Chemical fiber 1,255 1,570 1,438 894 468 423 442 399 361 Ceramic, stone and clay 2,139 2,312 1,536 1,170 848 732 742 681 635 Steel 1,607 1,378 1,097 993 637 537 521 477 346 Others 6,916 4,679 4,726 3,877 2,940 3,061 2,856 3,462 2,501 Consumer section 298 537 561 379 258 228 181 136 101 Transport section (Marine) 2,942 3,207 3,201 2,933 2,616 2,439 2,499 2,475 2,535 Total 47,162 41,549 33,326 28,640 24,547 18,082 18,443 24,971 27,857 In order to look at the trends of demand of heavy fuel oil (fuel oil C), the author summarized in 2

Table.7.1.1 the variation of heavy fuel oil demand by every use over the period from 1990 to 2012 on the basis of Energy Balance Table 3) of the All-round Energy Statistics. Although the decreasing tendency has continued every year as to the demand of heavy fuel oil for electric power generation which occupied greater part of the demand, it has been shown that the fuel oil has borne the important function to supplement the electric power after the Great Earthquake. Heavy fuel oil for use of marine field has also tended to decrease, however, the transition of demand has been within the level of 2,400~2,500 thousand kl since 2010 and the drop of demand has not been so significant compared with the fuel oils of other categories. Taking into account the spreading atmosphere of de-energy of oil represented by the changeover movement of energy from heavy fuel oil for power generation, the structural change of society like the decrease of population brought by decreasing birthrate and aging and the trends in which the more improvement of energy consumption rate has been pursued under the background that some countermeasures would have to be taken against the earth warming, it is anticipated that the consumption of fuel oil will be continuously decreasing in future. In order to meet such decrease of demand, every oil company carried out the reduction of crude oil treatment capacity at the end of March, 2014 in compliance with the Law Concerning Sophisticated Methods of Energy Supply Structures, however, the new judgment standards have been disclosed in July, 2014, which means that the further examination of improvement of production facilities would be required. Taking the opportunity of occurrence of the Great East Japan Earthquake 4 years ago, the importance and the strength of fuel oil as the energy of independent and distributed type was recognized again, and the oil has been ranked as the important energy source to be utilized in future as well and valuated as the last fort of energy supply upon disaster in the New National Energy Basic Plan (the 4th plan) decided by Cabinet Meeting in April, 2014, and so, the maintenance of the continuous and stable supply system of fuel oil is desired not only in daily life but also in case of emergency. 7.1.4 Marine fuel oil On the 26th September, 1997, Protocol of Annex IV of 1997 added to the MALPOL 73/78 Convention for the Prevention of Pollution from Ships of 1973 was adopted (Effective since May 19, 2005). By this Annex, the emission control of NOx and SOx from the ships has started. As the control of SOx, it has become necessary to use the fuel which sulfur content is below 4.5 mass % in global sea areas and also below 1.5 mass % in SOx Emission Control Area (SECA, Baltic Sea and the sea areas designated by IMO) or to install the cleaning device of exhaust gas. Further, in November, 2007, North Sea and English Channel were designated as the exhaust control areas of SOx. Since then, the agreement was made on the control of sulfur content of marine fuel oil in MEPC57 held in March, 2008. Then, in MEPC58 held in October, 2008, the regulation for sulfur content of marine fuel oil was adopted as described in Table 7.1.2. Table 7.1.2 MARPOL Annex VI regulations for fuel sulfur content Limit on sulfur in marine fuels Global 3.5 % : 2012, 0.5 % : 2020 or 2025* Emission Control Areas 1.0 % : 2010, 0.1% : 2015 * subject to a feasibility review to be completed no later than 2018 As an alternative to use low-sulfur fuels, ships are allowed to use exhaust gas cleaning systems (e.g. scrubbers) or use other methods to limit their sulfur emissions. The Emission Control Areas (ECA) in Europe are Baltic Sea, North Sea and English Channel as 3

shown in Fig.7.1.3, where the emission of SOx is controlled. As one of strategies of EC Committee for reducing the air pollution, the sulfur control of European own has been enforced under the obligation of sulfur control of fuel oil (EU Directive 2005/33/EC). Under the above circumstances, the ships that anchor at ports and navigate through inland channels within EU area have been now controlled to use the fuel oil which sulfur content is below 0.1 mass % since January, 2010. Fig.7.1.3 ECA in Europe (Baltic Sea, North Sea and English Channel)) 1.1~ Fig.7.1.4 ECA in America and Canada In MEPC59 held in July, 2009, the proposal of amendment of Annex VI of MARPOL, which designated the area within 200 nautical miles of coasts of United States and Canada as the designated area where the NOx emission and sulfur content of fuel oil shall be controlled (Emission controlled area of NOx, SOx and PM), was formally adopted and the control in this area has started from August 1, 2012. In addition, MEPC62 held in July, 2011 adopted the proposal of amendment of the Convention to designate Caribbean Sea (the sea around Puerto Rico) as ECA as per the proposal from U.S.A in MEPC61, and this amendment has come into effect on January 1, 2014 (Fig.7.1.4) 4). Also, under the control of marine fuel oil of the State of California, the use of marine fuel oil is limited only to distillate fuel oil (MGO or MDF) of sulfur content less than 0.1 mass % and the use of residual oil (HFO) has not been approved after January 1, 2012. 4

In Japan, the government started in 2010 the investigation to designate a part or all of coastal area of Japan as ECA, however, in the 5th Technical Committee on the Emission Control Area (ECA) of Air Pollutant from Ships held in July, 2012, the introduction of ECA to Japanese water has been decided to be shelved for the time being. 5) In the global sea area, the sulfur content of marine fuel has been prescribed to be less than 3.5 mass % since 2012. Although the upper limit in global sea area will be lowered to below 0.5 mass % on the 1st of January, 2020, it is scheduled that the review of the availability of fuel supply will be carried out until 2018 and the enforcement time may be postponed until 2025 from 2020 depending on the result of such review. In MEPC66 held during the period between March 31 and April 4, 2014, the examination on the start of review was conducted, and as a result, it was agreed that a correspondence group to debate the review methods etc. would be established for carrying out the investigation among the countries having interests thereof and the result of investigation would be reported in MEPC68 (scheduled to be held in May, 2015 5). References 1) Petroleum Industry in Japan 2015, Petroleum Association in Japan. 2) U.S. Energy Information Administration HP 3) Agency for Natural Resources and Energy, HP 4) IMO, HP 5) Ministry of Land, Infrastructure, Transport and Tourism, HP (Written by Masahiko Shibuya) 7.2 Lubricating Oil 7.2.1 Crosshead engine a) Cylinder oil The most new main engine of energy saving type, which specifications fully comply with the environmental regulations, to be installed on newbuilding ship has progressed in the realization of further super-long stroke and has been in the tendency of increase of the maximum combustion pressure. In these main engines, it has become to make it possible to improve the fuel consumption by choice of low rating output point and the most suited engine tuning, and further, at the same time, the reduction of NOx emission has been achieved by the control of compressing temperature and rise of scavenging pressure with Miller cycle operation 1). However, these alterations of design have significantly influenced the lubricating condition of cylinder. With pressure rise in combustion chamber, the dew point temperature of sulfuric acid also rises. The sulfuric acid gas produced in combustion process has become liquid phase under existence of water vapor and has been condensed 2), which has emerged as a problem of the markedly low temperature corrosion of liner wall surface. In some ships on which the new type main engines of first stage were installed, the excessive wear caused by low temperature corrosion at the upper part of cylinder liner was recognized during the sea trials 3). In addition to the improvement of engine design, the high base number cylinder oil of 100BN has been recommended to be used for cylinder oil of the most new type main engine, when the highly sulfuric fuel oil is used 4) 5) 6). Every oil supplier has been expanding not only the supply system at main ports but also its network to supply high base number cylinder oil of 100BN. Also, They have been carried out on some limited ships the onboard method to blend the cylinder oil having base number suitable to the operating conditions and the sulfur content of fuel oil to be used (Blending Onboard) 7). As for the ships already engaged in operation, the slow steaming which started mainly in operation 5

of container ship has now become very common in operation of many kinds of ship in order to curtail the operation cost and improve the transport efficiency. The proper measures for slow steaming against the original specifications have been commonly taken in the existing ships, excepting the case that the modification has been made to main engine specifications 8). Each ship operator has endeavored to collect and analyze the actual results of slow steaming and to establish the maintenance and management system of main engine through survey of trouble case examples 9) 10) 11). There is a report that the incidence of main engine trouble has trended to decrease by making clear the matters to be paid attention during slow steaming 11). On the other hand, it has been reported that the excessive corrosion wear on upper part of liner were discovered in some ships operated under low load with cut mode of turbocharger 12). Also, the use of ultra-low sulfur fuel oil (below 0.1 %) has been obligated in ECA (Emission Control Area) from 2015. The ingredient of alkaline additive is originally added to cylinder oil for neutralizing sulfuric acid, however, the alkaline additive is not consumed for the neutralizing reaction when fuel oil of ultra-low sulfur is used. There is a fear that the deposits on piston top land caused by chemical lubricating excess of surplus additive may cause bore polishing and scuffing of cylinder liner. Therefore, each engine maker has issued the guideline of the most new type lubrication in December, 2014 and recommended to use the cylinder oil of low base number like BN 15~25 5) or below BN40 6) 13). Each oil supplier has started the sale of new product that satisfies the new requirement for lubrication. Since the trends of designation of ECA has become complicated in the various areas of the world 14) and the applicable kinds of fuel oil have become diverse 15), it will be important to pay attention to the trends of environmental control in future. The cylinder oil is produced as per original combination technology of each oil supplier, and so, there are so many kinds and performances as to the base oil and additive. There is a case that the comparison and valuation of each cylinder oil product through laboratory analysis was made from the standpoint of user 16). On the other hand, there is a report related to the quality of base number made with the object of the effect of ash softening by combination with ashless dispersant 17). Although the base number has been exclusively used in the present market of product as a standard index for choosing cylinder oil, the research of quality improvement has been continuously carried out also in the technical aspect of prescription of lubrication oil. In the side of lubrication management, the reinforcement of continuous surveillance of cylinder lubrication of every voyage has become the urgent necessity of users through the design trend of the most new type engine and the diversification of marine navigation pattern. The continuous analysis of drain oil from scavenge space, which main purpose is the optimization of cylinder oil feed rate, has been also recommended by engine makers at present 4) 5) and it has been used in many ships as a condition surveillance tool during navigation with the reinforcement of scavenging port inspection by effective use of various kinds of wear measurement instrument. Especially for the control of corrosion and wear, the test kit by which the quantity of corroded and wore iron in drain oil from scavenge space can be measured during navigation has appeared in the market 18) 19) and therefore, the author would like to recommend effectively to utilize such kit for marine safety management. b) System oil As regards system oil, there has not been any big change of technology in In the matter of some main engines, there was an instance that a small minute fatigue damage was recognized at the middle part of crosshead bearing in the low load operation region under the cut mode of turbocharger, and it was reported that the necessary steps was taken by the alteration of bearing design 3). It will be possibly considered that the function to be required for system oil is changed as per the trend of future engine design and change of operation conditions. 7.2.2 Trunk piston engine; 6

In the field of system oil for trunk piston engine (TPEO), no big change has been reported in this market. In the field of technical development of prescription method, there were reports related to the description of trial TPEO by use of base oil of group II 20) and the result of research that the friction modifying agent (FM; Friction Modifier) had been compounded for improving fuel consumption 21). In the matter of marine TPEO product, the prescription of product, for which the conventional group I base oil is used, is the main current, however, it is observed that the base oil has been shifting to the group II base oil, which excels in oxidation stability, mainly in automobile engine oil in the global market. In the research in which group II base oil was applied to trial TPEO prescription, the control of black sludge originated from the solubility of asphaltenes contained in heavy fuel oil has been raised as a subject to be studied, and it has been brought up that it would be needed in future to improve the performance by technical improvement of prescription method of additives 20). It is highly expected in future that the further technical improvement will be made for realization of practical use of TPEO product and the performance verification will be carried out by use of actual engine. 7.2.3 Environmentally accepted lubricants (EAL) By 2013 Vessel General Permit (2013 VGP) made effective by US Environmental Protection Agency (EPA), the use of environmentally accepted lubricants (EAL) has become obligatory for all parts of sea interfaces (Oil to Sea Interfaces) of every ship to navigate in the designated sea areas of U.S. excepting the technically infeasible case (Technically Infeasible) 22). The necessary conditions of EAL are biodegradability, not bioaccumulative and minimally-toxic and EAL products, which are mainly categorized to 1: Vegetable oil, 2: Synthetic oil of poly-glycol (PAG) 3: Synthetic oil of ester-base (saturation or unsaturation) have been now sold in the market 23). These EALs are the lubricants which have completely different composition compared with the conventional mineral-based oil. The proper attention shall be paid upon the application of the product to actual ship, as there are the cases that it is needed to change main parts like sealing materials etc. Specially, as for the important machinery engaged in the ship propulsion, some machinery makers have showed their cautious attitudes for the investigation of use of EAL from the standpoint of attaching great importance to the safe navigation of ship 23) and therefore, it is important to obtain the information of recommendable EAL whenever occasion arises. It has been obligated to make report about the using state of EAL through the annual report of the relative ship, and so, the author would like to recommend for users to carry out the thorough management and reinforcement of the each ship report and documentary works 24). References 1)T. Fujii et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.2, pp.58-60, 2)L. Garcia et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.100-106, 3)S. B. Jakobsen et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.43-51, 4)MAN Diesel & Turbo A/S, Service Letter SL2014-587, March 5)Wartsila Switzerland Ltd., Data & Specifications RT-138, December 6)Mitsubishi Heavy Industries Ltd., Service Information MSI-1159r5, December 7)R. Holtbecker, Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.52-60, 8)J. Yanagi, Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.61-68, 9)A. Otsuka, Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.69-73, 10)M. Kobayashi et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.74-80, 7

11)J. Sasaki et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.1, pp.82-87, 12)M. Kobayashi et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.26-28, 13)MAN Diesel & Turbo A/S,Service Letter SL2014-593, December 14)The Motorship, 95-1116, June 2014, p.20. 15)CIMAC Guideline, Future Fuel Scenarios and their impact on Lubrication, May 2014 16)K. Okazaki et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.20-25, 17)S. Takeshima, Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.14-19, 18)The Motorship, 95-1114, April 2014, p.28. 19)V. Luc, Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.96-99, 20)S. Leblanc et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.35-44, 21)Y. Morita et al., Journal of the Japan Institution of Marine Engineering, Vol.49, No.3, pp.45-51, 22)United States Environmental Protect Agency,Vessel General Permit for Discharges Incidentals to the Normal Operation of Vessels (VGP),March 2013 23)The Motorship, 95-1112, February 2014, pp.23-25. 24) Class NK, Technical Information, TEC-0986, May 2014 (Written by Hiroshi Murai) 8