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Do challenges for an industry mean hard times for ChEs?

By Rebekkah Marshall |

Given that readers of this magazine are employed across a wide spectrum of the chemical process industries (CPI), our editors go to great lengths to keep most of our content as broadly applicable as possible. In our technical articles, especially, we try to present information that focuses on unit operations, for instance, as opposed to a CPI niche, such as pharmaceutical processing or cement manufacturing. The reason for this policy is that it increases the likelihood that each reader will find more articles that appeal to him or her, whether in a current job or a future one.

Occasionally, however, our news department will focus on a significant trend affecting or coming out of one CPI segment or another. That said, there is one segment that we give attention to on a regular basis because it employs so many chemical engineers and has so much influence on the rest of the CPI. That segment is petroleum refining, which gets its annual update this month on pp. 19–22.

The headline of that story is “Challenges for U.S. Petroleum Refiners,” and since part of my job is to wonder how industry trends are affecting our readers, it makes me ask myself: Do challenges for a CPI segment — even an inordinately influential one — automatically threaten the job market for chemical engineers? The answer depends on what the challenges actually are: in this case, essentially the effects of high crude-oil prices and severe increases in the prices of rare-earth metals, which are used in fluid catalytic cracking (FCC) catalysts and FCC additives. At least three U.S. petroleum refineries on the East Coast have shut down since last fall, and one more is planned for July.

The news of multiple refinery closures alone could easily lead a person to argue that, yes, challenging times for U.S. petroleum refiners means hard times for chemical engineers. Indeed, for the chemical engineers employed at the closed facilities, there surely have been (or will be) hard times. But, stopping at that conclusion would ignore some other, very significant parts of the bigger picture.

The big-picture view is related to the fact that CPI plants spend money on capital equipment when profit can be made or costs can be saved by doing so. As a general rule of thumb, plants start spending significant amounts of money on capital equipment when operating rates (in terms of percent capacity) are in the high-80s. Today, U.S. petroleum refineries are operating at around 90%. On top of that, there is a decent possibility that a new pipeline could soon be approved and built to bring more low-cost, heavy crude oil to the U.S. Gulf Coast. Either situation on its own would signal the need for expanded Gulf Coast refining capacity and the additional need for chemical engineering prowess. One can only imagine what both would mean.

In fact, chemical engineers are already in short supply in that region, partly because of the demand for them in petroleum refining. From his plant visits with engineers and plant managers in and around Baton Rouge, Louisiana, Scott Jenkins, associate editor, reports that recruiting technically trained engineers, especially those with process experience is a significant challenge (for more, see Regional Plant Perspectives at www.chemengonline.com under the heading Web Exclusives).

All in all, it would be ridiculous to say that tough challenges for an industry never threaten the job market, but there is one caveat that should not be forgotten. It is safe to say that without significant challenges to solve, the CPI wouldn’t need as many chemical engineers.

Rebekkah Marshall

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