There should be no reason for a lack of oxygen supply, and the industrial and medical gases industry is taking every practical step to manage the stability and distribution of the supply chain.
The industry is also lending its support to the emergency production of ventilator systems and equipment.
That’s the findings of gasworld’s exploration into medical oxygen supply, following various concerning reports in mainstream media.
Reports have been proliferating that the fast-moving developments related to the continued outbreak of Covid-19 (coronavirus) are causing challenges in the medical supply chain where ventilators, other equipment and oxygen are involved.
This is the last thing that already strained, if not overwhelmed, healthcare systems need and especially so in Europe at the moment – now considered the epicentre of the pandemic. Quite apart from driving panic amongst the public, are such reports true of oxygen supply, a medical gas that is generally not considered a tight market?
Before we answer that, it’s worth first understanding the dynamics of both the medical oxygen market and the wider oxygen business.
One of the core air gases, the bulk of oxygen supplies for industry are produced via the air separation process in an ASU (air separation unit).
Generally speaking, the air all around is comprised of 78% nitrogen, 21% oxygen (approx.) and 1% of argon and other constituents (rare gases like krypton, neon and xenon, for example). An ASU takes this abundant atmospheric air and, through several stages of separation and distillation, splits it out into those individual components (oxygen, nitrogen, argon).
gasworld understands that in normal circumstances these ASUs or plants tend to operate at around 75-85% of their maximum capacity, an optimal operational balance between supply and demand. This means that the output of oxygen, a product not often associated with short supply, can be increased as demand requires and without the construction of any new plants.
Oxygen is one of the most important, life-saving gases used in medicine today. It has been used in medicine since the 1800s and has come a long way in terms of both its application and delivery systems.
As gasworld regularly charts throughout its coverage of this market ad its regular medical-themed print editions, we are still seeing important innovations in the delivery of oxygen to patients across a range of technologies.
Medical oxygen is used to restore tissue oxygen tension in conditions such as respiratory arrest, cardiac arrest, shock, carbon monoxide poisoning, and severe haemorrhaging, and has applications in both the hospital and pre-hospital (accident response) settings.
The use of medical oxygen extends outside of the hospital setting, with thousands of people dependent on portable medical oxygen technologies to function in their day-to-day lives. In addition, medical oxygen is critical in accident response units, first aid, resuscitation and life support equipment – even modern anaesthetic techniques rely on medical oxygen.
In this pandemic of Covid-19, we understand oxygen is being used in its most critical form in the medical sector – in respiration, incident response and life support. It’s about that getting that oxygen into patients and keeping their vital functions active.
Medical oxygen is essentially the same oxygen as that produced for industrial use in the air separation process as described above, but in the healthcare system it is considered as a drug or pharmaceutical product. Oxygen produced by air separation is acceptable as medical oxygen without any additional purification steps. The air separation process itself removes contaminates to levels typically below those required to meet medical oxygen specifications. Although some air separation facilities may divert a portion of the oxygen they produce into dedicated medical oxygen tanks, this is not a universal practice, nor is it necessary; oxygen produced by air separation is, by nature of the process, acceptable as medical oxygen.
Many air separation facilities produce oxygen into a common tank, then use in-facility testing equipment to verify the product meets the specification for its intended use. In the case of medical oxygen, this in-facility testing equipment is also used to produce the test results that allow a qualified person to release the product as acceptable for use as medical oxygen.
“The amount of oxygen can hardly be a problem. Any shortage might be caused by the delivery system, which can serve as a bottleneck between producers and patients”
Karina Kocha, Business Intelligence Manager, gasworld
European hospitals have typically had two choices for supplying medical oxygen to their medical gas network – depending on their consumption they could either purchase liquid oxygen stored in on-site in bulk cryogenic tanks and fed into the facility via its pipelines, or purchase cylinder supply and the regular refills required.
Karina Kocha, Business Intelligence Manager for gasworld, explained that it seems the challenge with this current outbreak of coronavirus is not so much in the supply of oxygen in the market, but rather the capacity of the hospital supply systems to cope with the sharp increases in demand as they become overwhelmed with stricken patients.
This is, therefore, more of an infrastructure challenge than it is pure product supply. Kocha adds, “The problem here may be in the capacity of the hospital supply systems, which could be not enough for increased consumption. The fastest way to increase it is to bring oxygen in cylinders. Medical oxygen cylinders are technically the same as for technical (industrial) gases, but do need to comply with various government regulations regarding testing and labeling.”
“The amount of oxygen can hardly be a problem. Any shortage might be caused by the delivery system, which can serve as a bottleneck between producers and patients.”
When speaking of hospital infrastructure, gasworld understands the capacity of hospital medical oxygen supply systems is determined by the sizing of one or more supply system components, such as tank capacity, vaporizer capacity, regulator or filter sizing. In many cases the capacity of the system is determined by vaporizer sizing; vaporizers convert liquid medical oxygen into ambient temperature gas usable by the hospital supply system. Changing any one of the elements in an oxygen supply system can dramatically increase system capacity.
gasworld further understands that both the Compressed Gas Association (CGA) and European Industrial Gases Association (EIGA) are studying ways to increase capacity of these systems, instead of relying on cylinders, which would have only minor positive impact on capacity.
No shortage of oxygen
The rise in the number of patients admitted with coronavirus will lead to an increased demand for medical oxygen at hospitals – and someone needs to deliver it.
Major gas companies and distributors are adjusting their production plans according to the development of the epidemic, focusing on the production of medical oxygen and ensuring adequate transport capacity.
At the time of writing (18thMarch), gasworld understands that oxygen supply – or more to the point oxygen supply by cylinder – is becoming challenging in Europe but unlike the well-documented problems with ventilators, is actively being managed and not a cause for concern yet.
“The security of supply for existing customers is not currently at risk, and new customers (emergency hospitals) are being supplied in the best possible way,” affirmed Diana Buss,
Senior Vice-President of Corporate Communications at Germany-based Messer Group GmbH, to gasworld.
“We maintain close contact with local authorities such as health authorities and when it comes to individual cases, these health authorities have agreed that we also supply customers with technical oxygen instead of medical oxygen (yet with the same quality standards and controls).”
“Ultimately, we do everything which is possible and even more.”
Asked about any shortages of certified medical cylinders or logistical challenges in actually getting the oxygen to the healthcare facilities that require it, Buss added that from the Messer Group’s point of view, “The procurement of new cylinders and cylinders in the service department is being rescheduled, with the aim of having sufficient cylinders and equipment available for the medical sector.”
“We try to protect our employees through different methods, as well as paying special attention to production, filling and logistics [of medical oxygen] in order to supply our customers safely too.”
A similar picture exists in the UK, where there is known to be a concerted effort right now to engage various companies in the technology and manufacturing industries to mass produce ventilator systems and associated equipment. There is not, however, a fundamental problem with oxygen supply itself.
“There are no fundamental supply issues with oxygen,” explained Doug Thornton, Chief Executive of the British Compressed Gases Association (BCGA). “It is made in a multitude of large air separation units (ASUs) in mega-tonnages quantity. A tiny proportion of the oxygen is then further processed and supplied, under licence by the MHRA, to stringent quality control processes as medical oxygen.”
“The majority of oxygen supply into hospitals is delivered by bulk road tanker, but there are also supplementary supplies in cylinders to think about. We therefore envisage that limiting factors to consider – in the event that there is a major upturn in medical oxygen demand – will be if illness or self-isolation impacts significantly on the number of correctly trained tanker drivers or cylinder filling operatives.”
Thornton assured, “We and our major members are in active discussions with the Government to manage that the probable worst-case scenario could be catered for.”
In light of the fast-moving developments relating to covid-19, the BCGA has been working on updating guidance issued on 3rd March, as well as talking to several government departments about the importance of the industry as a whole, not just where oxygen is concerned.
Some of these updates include additional suggestions for best practice working, based on government advice, while the BCGA has also had discussions with the Department for Business, Energy and Industrial Strategy, the Department for Health, and the Department for Transport. “We have had productive discussions with them about supply chain resilience, as well as going through scenario-planning to ensure that there will be business as usual for members,” Thornton added.
“The BCGA will continue having an open-dialogue with these Government departments and if any members are approached directly by government, the BCGA would be happy to be involved in these discussions and elaborate further on our talks with officials if desired.”
In addition,gasworld understands the supply chain workers involved in medical and food gases are already recognised as ‘key workers’ by the UK Government, rendering their work activities essential to be maintained during any lockdowns.
Thornton noted that the BCGA is also lobbying Government to help it understand that some industrial gases are also key to maintaining national infrastructure. Examples could include acetylene for welding work and cryogenic gases in the nuclear sector.
Ellen Daniels, currently Co-Chief Executive of the BCGA and successor to the retiring Thornton, added that “Government have been responsive on all of these issues and really engaging with us, something the BCGA really welcomes in these times.”
North American supply
With the US widely thought to be around the same stage in this coronavirus pandemic as the UK, for example, and now also expected to become the new epicentre of this pandemic as its cases soar across the 50 states, oxygen supply will inevitably become a talking point across the country.
Airgas, an Air Liquide company, has already been clear that it is prioritising medical customers in North America. The company revealed on 18thMarch that this would be the case, with CEO Pascal Vinet commenting, “Knowing that the oxygen we deliver daily to hospitals and other aspects of our business are vital to our collective Covid-19 response, each part of our organisation is primed and implementing business continuity measures based on local needs.”
“Please be advised that in such emergencies, priority will always be given to medical facilities and first responders.”
Messer Americas announced the following day (19th) that none of its operations had been adversely impacted by coronavirus to date, so its ability to supply gases and products to its customers in the Americas remained unchanged.
“Due to the recent outbreak of the coronavirus, we want to let you know about Messer’s contingency plans to ensure reliability in the event of regional escalation of the current COVID-19 global health emergency,” the company said in its customer statement.
“Messer leadership continues to closely monitor the status of the outbreak and has taken proactive measure to ensure business resiliency and supply continuity in the event of heightened spread of the virus in this region.”
“Our business plans are focused on supply stability and exist in a relatively flexible state, ready to meet our customers’ needs.”
According to gasworld Business Intelligence, the production capacities of liquid oxygen in the US allow for the production of around 23-26,000 tonnes per day (tpd) of liquid oxygen, with a utilisation rate of 75-80%. As much as 2,600 tpd of oxygen is consumed by the healthcare sector, including hospitals and homecare (in normal conditions). Catering for increased oxygen consumption may require an additional 300-350 tpd of oxygen, we understand, which represents around 12-14% of current medical consumption or 1-2% of liquid oxygen produced.
“We believe that an additional amount could be obtained through increasing the utilisation rate, as well as the fact that industrial consumption is expected to be decreased to some extent – releasing spare volumes of oxygen for medical usage,” Kocha affirmed.