[Blacksmith]

$this->bbcode_second_pass_quote('EddieB', 'T')his is only a tangentially related question, but here goes. I've heard that heating oil is essentially diesel fuel. Could I pump (untaxed) heating oil out of my house tank into my car without wreaking my car's engine? I know it would be illegal to do so, this is purely hypothetical mind you...

[Outcast_Searcher]

$this->bbcode_second_pass_quote('pstarr', '
')Haven't seen stocks this low since sometime around late 2013, the height of the Greatest Recession Ever.

[Tanada]

The end of 2013 Americans were not buying a lot of Diesel because prices were well north of $4.00/gallon in the midwest where I live. As a consequence because so much cargo shifted to rail transport where it legitimately belongs that the big producers made more by exporting that same Diesel overseas, which drove stocks down without changing much of anything else. This link from December 2013 shows the refiners were producing; 3.7 MM/bbl/d of distillate fuels .

This link from the same week of the year in 2017 just four months ago shows we were producing 4.0 MM/bbl/d of Distillate fuels.

However right now at the current sale price the refiners/wholesalers are making more money by selling that Diesel fuel domestically because demand is relatively robust while prices are still in the $3.00/gallon range. This makes it advantages to keep more Diesel here in storage rather than shipping it overseas for the world market. Econ 101.

[vtsnowedin]

This weeks weekly report has these two quotes about distillates (diesel).
$this->bbcode_second_pass_quote('', 'D')istillate fuel production
decreased last week, averaging 5.0 million barrels per day.

[ROCKMAN]

T – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls. Say the feds mandated that diesel could only sell for $0.75 per gallon. I doubt every buyer with funds to purchase the fuel could find all they wanted. IOW there would be a diesel shortage. In such a situation I’m sure refineries would adjust their blended oil to minimize the diesel yield. But there would still be some yield that would go to storage. Until it was no longer practical to build more storage. At that point there could be a movement to flare diesel production just as we flare stranded NG production today. But obviously not a very likely scenario to develop.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('ROCKMAN', 'T') – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls.

[EdwinSm]

OS, I think you are right in that the government would most likely want to first use price rises to 'ration' any diesel (or other fuel) rather than bringing in the type of rationing that at least Europe saw in World War II (ie ration cards, or smart apps as they would use today).

I think it would be politically easier to let the "market" do the rationing rather than the government, until the injustice of this is too obvious (eg ambulance services not able to afford fuel) when formal rationing might be brought in. Or at least a hybrid system with some fuel allocated to "essential services" at a controlled price and a price free-for-all for everyone else.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('EdwinSm', '
')I think it would be politically easier to let the "market" do the rationing rather than the government, until the injustice of this is too obvious (eg ambulance services not able to afford fuel) when formal rationing might be brought in. Or at least a hybrid system with some fuel allocated to "essential services" at a controlled price and a price free-for-all for everyone else.

[ROCKMAN]

Guys - Such a system has been in place for many years. Sun Coast is one of the largest (if not THE largest) fuel hauler in the country:

"Sun Coast Resources, Inc. is the leading emergency fuel response service provider in the country. We provide 24/7 generator fueling, on-site fueling and dedicated fuel trucks to companies and government agencies during emergencies including severe weather conditions, hurricanes, tornadoes, floods and other disasters. In the past, we have provided critical fuel supply services to governmental agencies, utilities, communication companies, hospitals, delivery services, grocery stores, restoration and other fleet and equipment operators."

https://www.suncoastresources.com/emerg ... y-fueling/

[StarvingLion]

$this->bbcode_second_pass_quote('Outcast_Searcher', '')$this->bbcode_second_pass_quote('ROCKMAN', 'T') – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls.

[M_B_S]

THESIS:

The real(important) reason behind the diesel car mobbing in the EU is not clean air.

https://www.fuelseurope.eu/wp-content/u ... FILE-1.pdf


It is a shortage of diesel=heating oil production capacity!

The major trade flows to and from the EU are a result of the gasoline/
diesel imbalance demand in Europe. As a consequence, significant excess
gasoline production capacity needs to be exported, while, to meet regional
demand for diesel and jet fuel, Europe became heavily reliant on other
countries for import, especially Russia, the Middle East & USA
***************

PEAK OIL!

[Tanada]

What heating oil shortage are you referring to?

The graph you posted shows supplies are substantially UP over the last 12 months and on page 15 of the PDF you linked to is a graph showing that EU heating oil demand has fallen by 37% over the period of 2006-2016, even though prices were pretty low in 2015-2016.

[ROCKMAN]

T - I think part of the confusion is the distinction between diesel and heating oil. In fact, no where in the link is the term "heating oil". And the appear to use diesel only in the context as a motor fuel. In that regards the show "diesel" demand to have reached an all time high in their latest statistic. They do have stats on "gasoil" which as far as I know is actually diesel which has not been added the dye t show it has been taxed as a motor fuel. So like in the US heating oil = gasoil.

But there are times when it shows "diesel/gasoil" and says that "the EU is unable to meet regional demand". But that doesn't necessarily mean it can't meet "gasoil demand." But I found where Pratts reports that "Europe’s middle distillate deficit balloons to 1.6 mb/d by 2019". But then you have to take "middle distillates" = diesel and gasoil. Basically it sounds a if the EU can decide what it runs short of: motor diesel or home heating oil. Depends on what they don't dye and tax as motor fuel and what the want drivers to be short of. Or what they tax as motor fuel and leave some folks to suffer in the heart of winter.

[dolanbaker]

Oil fired heating systems have been in decline in Ireland for decades now, every year fewer new houses are having it installed and many others are replacing oil with gas. So there is no heating oil shortage on the horizon here, that's for sure.

Barring a catastrophic failure in the supply lines that is. The biggest issue here is that with the recent increases in oil prices, poorer households are going to struggle to afford to adequately heat their homes this winter.

If weather forecasts are correct, this year could have several days of extreme cold, something that is uncommon in Ireland.

[ROCKMAN]

Donlan - That's the real danger to your poor families: if heat oil demand drops to low many of those distribution companies might close shop. Which means the remaining ones could charge what they wanted. Unless the govt institutes price controls which might put the remaining companies out of business. Which means no heating oil unless the govt supplies it. And where would it get it: it would take from your motor fuel supplies, maybe. Maybe causing a supply shortage/price hike there.

And what happens when all petroleum, including NG, runs short? Back to burning coal, maybe? Or might see a lot of wind turbines on the west coast, maybe? Lots of temporary fixes available. Not so much being done for the long term, eh?

[KaiserJeep]

The latest/greatest on Nantucket is heat pumps with ground source heat. This has become popular since the mainland power feed cut the price of electricity by 1/3rd. There appears to be a glut of heating oil, my 500 gallon tank was less than 1/4 empty after 12 months of thermostat at 50 degrees, plus about six weeks total domestic hot water consumption. A lot of island homes like mine are occupied a few weeks per year.

Backup heat in case of an oil shortage has long been on my mind, especially after we move to the island. My best idea so far is a medium wind generator, sized for 4 homes, all with heat pumps. (That would be me, the Brother-in-Law, my nephew, and my rental property.) My current oil burner would become the backup, with a full 500 gallons of oil, enough for a heating season with a severe Winter.

New England is not the EU, of course. But demand for heating oil - and prices - appear to be remaining around $3/gallon, delivered, for the last 5 years. (Retail price on Nantucket.)

[M_B_S]

@ Tanada

The EU has a diesel=heating oil production /demand gap.

The gap is filled with imports from Russia etc.

https://www.fuelseurope.eu/knowledge/ho ... imbalance/

M_B_S

[Outcast_Searcher]

This would have been relevant, say, in the 70's when natural gas was becoming frighteningly expensive rather quickly.

But let's not pretend that 40+ years later, natural gas isn't highly efficient and available as an energy source to replace a "shortage" of heating oil -- IF that becomes necessary despite market pricing adjustments to adapt.

For the "zillionth" time -- some inconvenience or need to change/adapt is NOT an economic catastrophe, much less a sign of "doom" no matter how many times the usual suspects try to imply it is so.