Refineries

[Geronimo4497]

So, where are the major Jet and 100LL refineries in the US? I would imagine that if over, say, 20% of our refining capacity WAS in the Gulf states, that we are ALL going to be in a world of hurt. Would this mean the shutdown of the smaller corporate flight departments. I can just imagine what is going through the minds of the owners of the mom and pop flight schools right now. I don’t think that this is going to be pretty, for any of us.

 

[Flying Illini]

It was reported that Bush has released oil from the Strategic Oil Reserve but that that move did not cause prices of gasoline to lower and it also hasn't stopped the prices from rising.

What's the deal?

 

[AeroBoy]

Uh, you can have all of the oil in the world, but without any refining capacity you're SOL. With about 20 percent of our refinery capacity currently down, demand will surely outstrip supply to the point where you'll see fuel shortages, a la early 1970s.

 

[Flying Illini]

Uh, you can have all of the oil in the world, but without any refining capacity you're SOL. With about 20 percent of our refinery capacity currently down, demand will surely outstrip supply to the point where you'll see fuel shortages, a la early 1970s.

I should have finished my thought...

Oil companies have been clamoring that they need oil from the reserves released, that by doing that, prices wouldn't continue to rise.
I was in the same boat you are, thinking that they need more refining capacity.

The only thing that I can think of is that the refineries that are still operable are not able to produce their maximum output b/c they don't have enough crude oil coming in on a daily basis. If that's the case though, and the refineries are now able to get maximum input to produce maximum output (back to the same levels as they were before Katrina), why haven't prices stabilized?

 

[Fat Tire Rider]

I once heard that only 6 refineries in the U.S. produce 100LL.

As stated before, plenty of crude supply, not enough refining capacity.

Just my 2 cents worth...

 

[AeroBoy]

When Sir Richard Branson talks of having to open his own refinery to keep jet fuel prices down for Virgin Atlantic, you know something's wrong with the refinery picture. Linky

 

[VampyreGTX]

Refineries prior to Katrina were already near maximum output capacity, I believe in the upper 90th percentile. Now 50% of the refinies on the Gulf Coast are out, so overal capacity is down about 20% for the whole US. There is no way the remaining refineries can cover that shortage, so the extra oil will not help. The oil inventory will increase, but the gasoline inventories will drop quickly.


Imagine if you have a factory producing at 98%, with enough raw materials, half your factory burns down, but your raw materials are untouched. You still can only put out half the final product, even though you have excess parts. That's the situation here.

 

[Mason]

Correct, we could have a sea of crude oil but it is worthless without the ablility to refine it. Right now at least eight refineries in the LA/MS area are offline, in addition, even if it could be refined they would be very limited in how it could be transported. A major pipeline carrying refined products (including jet fuel) that runs from South Louisiana is out of comission because there's no power to run the pumps. Several gas stations in central Georgia are already out of gas.

 

[cforst513]

does this storm mean that the airlines will FINALLY raise ticket prices and pass some of the fuel headache onto the customer instead of sticking it to their employees?

 

[PurpleInMEM]

We can all thank the Econuts, the NIMBY crowd, and past affordability of imported refined products for no new refinery construction and VERY limited expansion of existing facilities.

Here are a few good articles.

http://www.eia.doe.gov/oiaf/aeo/conf/pdf/leister.pdf

http://www.chron.com/cs/CDA/ssistory.mpl/special/04/toxic/2990832

http://www.theinternetparty.org/commentary/c_s.php?section_type=com&td=20040525000122

From the last article:

"The bad news is that the number of refineries producing petroleum products has dramatically declined. In 1982 there were 301 refineries in the United States producing 6.4 million barrels of gasoline (and seven million barrels of other petroleum products) each day. Twenty years later there were half that number, just 153, but they are more efficient, producing 8.2 million barrels a day of gasoline. But current gasoline consumption is about nine million barrels, so consumption substantially exceeds our domestic refineries' output.


Worse, America built its last oil refinery in 1976, and there are no current plans to build more. Without new refineries the increased volume of gasoline we need each year will have to come from increased imports --by pipeline, truck or marine tanker from Venezuela, Canada, the Caribbean and Europe (no, there are no exporting oil refineries in Arab nations)-- not always an easy thing, particularly in a time of terrorism. The reason no new refineries have been built is the burden of regulation, first on the permitted emissions of any new refinery, and second on gasoline formulation. Existing refineries are now working to comply with 14 new environmental regulations that come into effect this decade."

-- Pete DuPont, Former Delaware Governor

 

[macfly]

There is a massive run on gas in west Ga. Our local gas stations are PACKED. It looks like a scene from a movie. And so it begins.

 

[Dangerkitty]

There is a massive run on gas in west Ga. Our local gas stations are PACKED. It looks like a scene from a movie. And so it begins.

Same scene in Alabama. A family friend called to tell us to fill up as quickly as we could. He said that gas would be gone by tommorrow. Word must have spread quickly because 20 minutes later I was at the gas station and the place was packed. Had an officer there to keep the peace.

 

[SouthTex]

Maybe now the liberals and enviro-nazis will wake up and realize the need for energy reform (no new refineries in 25+ years) instead of silly protests while filling up their micro-busses and suburban assault vehicles.

Uh, you can have all of the oil in the world, but without any refining capacity you're SOL. With about 20 percent of our refinery capacity currently down, demand will surely outstrip supply to the point where you'll see fuel shortages, a la early 1970s.

 

[wrxpilot]

Fox news just showed a BP station in Atlanta charging $5.40/gal!!

 

[NuGuy]

There is a massive run on gas in west Ga. Our local gas stations are PACKED. It looks like a scene from a movie. And so it begins.

Heyas Mac and others,

I understand that a significant portion of gasoline and jet fuel gets to ATL by the MS pipeline, which is now out of service.

There are VERY few refiners of AVGAS in the US. But the critical component of AVGAS, which is the lead additive, is only made at ONE place in the entire word...a production facility in England. AOPA pointed this out a while ago, and basically said that "we're one plant shutdown away from having NO AVGAS".

Jet fuel was $2.20 on the spot market today. Up from $1.85.

Nu

 

[Dodge]

PurpleinMEM said it all. You can thank all the hippies and environmental wackos for the lack of oil and the extremely high prices. No new refineries built in 30 years.

Yeah, liberals are the smart ones. They definately know what is best.

 

[dash8driver]

As stated before, plenty of crude supply, not enough refining capacity.

Just my 2 cents worth...

if there is plenty of crude, why is the price of it so high?

this problem is twofold.. the rest of the world's demand is making crude scarce therefore higher priced, and the lack of refining capacity is only pushing it up even more.

 

[atrdriver]

if there is plenty of crude, why is the price of it so high?

this problem is twofold.. the rest of the world's demand is making crude scarce therefore higher priced, and the lack of refining capacity is only pushing it up even more.

The lack of refining capacity is our current biggest problem. Add to that the differences in gas that they must put out for all the EPA laws and we really ahve a problem. It's just amazing that the tree hugger crowd has kept a new refinery from being built for 30 years. That's something that needs to be changed, and yesterday.

 

[NuGuy]

The lack of refining capacity is our current biggest problem. Add to that the differences in gas that they must put out for all the EPA laws and we really ahve a problem. It's just amazing that the tree hugger crowd has kept a new refinery from being built for 30 years. That's something that needs to be changed, and yesterday.

ATR,

Funny you mention that. You are correct in saying that there are litterally dozens of gas formulations that oil companies must produce to comply with the various EPA restrictions in different locations.

Today, the EPA issued a moratorium on all such restrictions in a effort to easy supply issues. They also dialed back sulfer content restrictions on diesel fuel.

Nu

 

[atrdriver]

ATR,

Funny you mention that. You are correct in saying that there are litterally dozens of gas formulations that oil companies must produce to comply with the various EPA restrictions in different locations.

Today, the EPA issued a moratorium on all such restrictions in a effort to easy supply issues. They also dialed back sulfer content restrictions on diesel fuel.

Nu

Too bad it took this to get it done.

 

[Vector4fun]

Deleted

 

[Vector4fun]

Seems to be a dozen "primary" reasons for no new refineries. Two that I personally know of were closed when competitors bought them, then phased them out as being too old to economically modernise and clean up. That is, if you believe the competitor that bought them.

While it may seem comforting to some to simply believe that Martin Sheen and a few thousand of his kind have such complete control of National Energy Policy, there are all sorts of market issues at play here. And the old money Conservatives of West Palm Beach don't want a refinery there any more than the Liberals of Malibu Beach.

Interestingly, I filled up a rental car in Iowa last week, and premium fuel, which I believe was 10% ethanol, was actually cheaper than regular by a dime. Don't know if that's because of a subsidy, a tax break, or what? I've heard that it's a wash though, because the ethanol blend fuel doesn't give as good milage.




http://slate.msn.com/id/2102031

 

[atrdriver]

One of the main reasons is the same as the reason that we haven't built a nuke plant for 20+ years. The enviromental regulations have become so onerous that it isn't feesable to build them. Between that and the "i don't want it in my backyard" people it has become close to impossible to get things done in this country.

 

[dash8driver]

The lack of refining capacity is our current biggest problem. Add to that the differences in gas that they must put out for all the EPA laws and we really ahve a problem. It's just amazing that the tree hugger crowd has kept a new refinery from being built for 30 years. That's something that needs to be changed, and yesterday.

very true and i agree with that....the cost of crude doubling is not a minor impact either.

to say there is a whole bunch of crude waiting for us to ramp up production is quite inaccurate. if that was the case, sauds wouldnt have been considering to try to increase crude output, the strategic oil supply wouldnt have to be considered and the price of crude wouldnt have doubled. those are all crude related solutions.




.

 

[Flying Illini]

Yes, refinery capacity IS the reason for the high fuel prices, we are operating at maximum capacity in that regard.

The reason for the petroleum being released from the reserves is this:
N.O. is where nearly 15% of our crude comes into this country (The LOOP alone brings in 11%). Now that N.O. is out of commission, we don't have enough crude COMING INTO the country to feed the operating refineries. Due to this, output at many refineries is dropping.
When we had enough crude, possible output is 100% and these refineries were operating at near 100% output.
Now these refineries aren't recieving enough crude to operate at 100% output, their possible output has now dropped meaning 50%-80% output is their new maximum.

By releasing oil from the reserves, many of these refineries are able to bump production back up to above 85%, thus easing some of the problems.

 

[ChrisNNJ27]

Wow I am actually surprised none of the doomsday folks posted anything regarding Peak OIL in this thread....

 

[bugchaser]

Just wait, they must be too busy collecting grease from Micky D's.

 

[Icelandair]

Stupid environmentalist wackos i honestly dont give a hoot about the environment i just want cheaper gas now!

 

[PCL_128]

if there is plenty of crude, why is the price of it so high?

Because a bunch of nutjob speculators have driven the price to a point way above where the fundamentals suggest it should be. If you want another example of this, look no further than Google shares. The stock market and futures markets are not efficient. They fluctuate based on supply/demand, not fundamentals. Based on fundamentals, a barrel of oil should cost in the $25-$30 range right now. Oil prices will crash. You can count on it. It's just a matter of time.

 

[keith]

New refineries ??

Why would any successful business, with very little competion, ever want to do anything that would lessen their profits? Fuel prices will have to increase dramatically before the demand in the U.S. ever decreases. If we reach that point oil companies may build new refineries. Competition is what we need.

-Keith