Meat+Poultry - July 2020 - 97

ADVERTORIAL

Chilling
options

Answering questions about CO2
availability and applications
Q: SHOULD THE INDUSTRY BRACE
FOR A CO2 SHORTAGE?
There is high potential for a nationwide,
or a regional shortage of CO2. However,
due to processing plant closures and
reduced retail utilization resulting from
COVID-19, observers are hopeful there will
only be limited interruption. Since March,
we've seen rationing and volatile pricing
in some regions, as well as outages and
complete CO2 plant closures in others.
Conversely, there is also over supply in
other regions where there has been a
concentration of processing plant shutdowns and volume reductions.
Q: WHAT ARE THE MACRO FACTORS
DRIVING THE POTENTIAL CO2
SHORTAGE?
Since February of this year, Russia and
Saudi Arabia have been in an oil war. Russia
increased production, thereafter Saudi
Arabia followed suit, generating heavy
downward pressure on the Brent Crude oil
price. As the Brent Crude price dropped,
the demand for more expensive US oil

virtually disappeared to the point that
futures for West Texas crude traded in
the negatives shortly for the first time
in history.
Reduced demand for US oil combined
with dramatic reduction in consumer
demand due to COVID-19 caused oil
reserves in the US to hit record highs,
shuttering production across the country
and creating concerns about the impact of
a prolonged surplus of oil and ethanol.
Q: WHAT'S THE CORRELATION
BETWEEN GLOBAL OIL PRICES
AND CO2 AVAILABILITY?
Ethanol is mixed with crude oil as a
low-cost additive for fuel. However, when
production of US crude dropped, so did
ethanol demand, causing the cost for both
crude and ethanol to drop dramatically.
Ultimately, the cost of the ethanol additive
was higher than the oil itself. Ethanol
production is one of the most efficient
sources of CO2. Because there have been
substantial interruptions in the ethanol
industry, the stage has been set for a
potential and sustained CO2 shortage.

Q: GIVEN THE VOLATILITY OF CO2 ,
DOES CONVERTING TO NITROGEN
CHILLING MAKE SENSE?
For the primary meat and poultry markets
CO2 is generally cheaper than nitrogen
generating lower long-term operating
expense (OPEX) by using CO2. Tomco
recommends being "Nitrogen Ready" by
converting freezers and blenders to facilitate
dual gas use (CO2 or liquid nitrogen).
The cost to fully convert a processing plant
from CO2 to liquid nitrogen (LIN) can be
more than $1.5M. That cost can be tempered
by making LIN-Ready changes. Using dual
gas nozzles, installing vacuum jacked pipe,
or hangers for easy installation if needed are
good preparations to ensure portable LIN
storage that can be deployed if/when needed.
Due to the considerable cost, there are few
good arguments for fully converting a facility
to LIN. Meanwhile, Tomco recommends
sourcing CO2 from a diversified provider.
Avoiding reliance on ethanol-only supply
when possible is also advisable. Ethanol is
usually the cheaper CO2 source, but there
are others and reputable suppliers can advise
customers on the best choice.

For more information, contact TOMCO Systems at: www.tomcosystems.com


http://www.tomcosystems.com

Meat+Poultry - July 2020

Table of Contents for the Digital Edition of Meat+Poultry - July 2020

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