“In July of next year Cosmos Oil will shut down its refinery in Sakaide, Kagawa Prefecture. With a production capacity of 3,000 tons a month, this refinery is the only production facility in Shikoku for liquid carbon dioxide. Production of liquid carbon dioxide will be terminated due to the shutting down of the refinery, and the Shikoku Region will lose its only source of liquid carbon dioxide. Shikoku will now be depending on supply by liquid gas tank trucks from Mizushima and Ube located on the shore opposite Shikoku.

The demand for oil products such as gasoline has been decreasing, as an environmental countermeasure and also due to the slump the economy. As a result, facilities at oil refineries in Japan are being shut down, and others closed and consolidated. One major reason for this is that one after another, large new refineries are being built in the Middle East and in Asia, and as a result refineries in Japan are having a harder to compete. Oil refineries are an important source of liquid carbon dioxide, so that what has been happening will definitely have an impact on the supply of liquid carbon dioxide and dry ice.

What lies behind the move to restructure oil refineries on the part of Japanese oil producers is having to deal with legal regulations, in addition to the slump in demand mentioned above. The Ministry of the Economy, Trade, and Industry (METI) has established a new law for energy companies to bring about efficient use of energy (creation of high added value). It is asking them to strive for efficient use of oil resources with improving the ability of facilities to changeover from heavy oil to high added value light oil such as gasoline and light fuel oil. This means installing facilities to crack heavy oil and increasing their ability to change over to light oil. According to the new law, the oil companies must raise the current ratio of 10% accounted for by facilities for cracking heavy oil to over 13% by 2013. This ratio is arrived at by dividing the capacity of the facilities to crack heavy oil by the treatment capacity of the ambient pressure distillation facilities.

To meet this standard, a capital investment of several hundred million yen will be required to expand the number of facilities used for cracking heavy oil. Amidst the slump in the demand for oil products, it will be hard for oil refineries to go so far as to make huge capital investments. Therefore, without expanding facilities, and by making the denominator smaller, in other words by cutting down the capacity of the ambient temperature distillation facilities, the ratio of the facilities increases, making for a true countermeasure.

Already Idemitsu Kosan, to cope with this regulation, has announced that it would stop its Tokuyama refinery from treating heavy oil. Cosmos Oil too has now taken the means to cope with this law.

As mentioned above, oil refining accounts for half of the production capacity of liquid carbon in Japan, making it the largest source. If oil refineries which have facilities for producing liquid carbon dioxide become targeted for shutting down, the supply capacity of the sources will gradually decrease, and there is concern that this will hinder a stable supply. As already reported by GASMOS, producers of liquid carbon dioxide and dry ice in Japan, such as Seibu Sekiyu in Sanyo Onoda, Yamaguchi Prefecture (January 2013), Ube Industries in Ube, Yamaguchi Prefecture (summer of 2013), Nippon Shokubai in Kawasaki, Kanagawa Prefecture (spring of 2014) are already heading toward he developing of new sources. However it will be necessary to watch out for trends to shut down oil refineries.”