Fuel Industry Veteran Opines On Technology Patent Dispute

Case Overview

This case involves an intellectual property dispute between two fuel companies over gasoline blending. The patent in question allowed for the accurate blending of the gasoline at the point of distribution based on its volatility level. An expert in the field of gasoline blending with considerable experience in designing and engineering similar technology was sought to discuss the extent of the patent infringement.

Questions to the Mechanical Engineering expert and their responses

Please describe your experience with blender systems as it relates to gasoline distribution.

As an operations director, I oversaw the operations of several different blend systems including a blend into a refined products stream. I also worked with a small company that reviewed the patents and application in this area and developed alternatives to the patent for potential customers. I have created relevant intellectual property as part of a small team that developed a potential alternative to a fueling logistics patent. In addition, I have run the economic models for blending, and I have developed and estimated butane blending products for several terminal companies.

Can you provide a detailed overview of the history and development of blenders in the bulk petroleum distribution space?

Butane blending has been going on for a long time. A lot of it was in-tank or by process modifications. Recently, there has been some intentional direct blending of butane into motor gasoline. There are two large primary operators in the blend space. I believe others are blending on a terminal-by-terminal basis.

Can you explain how operations and industry standards have changed since the Federal Clean Air Act and Renewable Fuels Standard regulations were enacted?

Since the 1990s, the volume of environmental paperwork and documentation have increased greatly. Agencies have imposed stricter standards on equipment that releases emissions into the air. BACT (Best Available Control Technology) was implemented on most large operators, and documentation and permitting requirements have increased.

About the expert

This energy executive has over 30 years of experience working with natural gas, refined products, natural gas liquids, and petrochemicals. He earned his B.S. in Chemical Engineering from Virginia Tech and an M.B.A from the University of Houston before beginning his career as an Engineer with Amoco Chemicals Company in Texas. The expert spent the majority of his career, 25+ years, with Enterprise Products Company, a leading provider of midstream energy services. He spent several years as a Process Engineer and an Engineering Manager, and eventually served as an Operations Director responsible for the day-to-day operations of 3 butane isomerization units and one refined products terminal. In a recent position, the expert explored possible ways to work around Sunoco's butane blending patents, and as a result he is very familiar with the butane blending approaches that can and cannot be used.