Optimal design of advanced drop-in hydrocarbon biofuel supply chain integrating with existing petroleum refineries under uncertainty

Abstract

This paper addresses the optimal design of an advanced hydrocarbon biofuel supply chain integrated with existing petroleum refineries. Three major insertion points from the biofuel supply chain to the petroleum refineries are investigated and analyzed, including bio-intermediates co-processed with crude oil, bio-intermediates co-processed with refinery intermediates, and finished biofuels blended with conventional petroleum products. A multiperiod, mixed-integer linear programming model is proposed that accounts for diverse conversion pathway, technology, and insertion point selections, biomass seasonality, geographical diversity, biomass degradation, demand distribution and government incentives. This model simultaneously optimizes the supply chain design, insertion point selection, and production planning. In addition, the conversion rate, operation cost associated with insertion points in petroleum refinery, as well as the biomass availability and product demand are modeled as fuzzy numbers to account for the data uncertainty. A fuzzy possibilistic programming approach is applied to this model, where possibility, necessity and credibility measures are adopted according to the decision makers' preference. This model is illustrated by the county level case study of Illinois. Compared to traditional biofuel supply chains, advanced hydrocarbon biofuel supply chain integrating with existing petroleum refinery infrastructure significantly reduces capital cost and total annualized cost.