[frankthetank]

Considering 10 years from now you might not have to run all of them, getting rid of them while they are still worth something is probably smart.

[TexasEx2006]

These types of articles are completely off base if you have no industry experience. The same rhetoric is used constantly and without merit.

Our Thorny Oil Patch

Energy Policy: When America's biggest oil refiner contemplates putting almost a third of its refineries on the market, Congress should sit up and take notice. The business climate it has created is hurting our economy. ( 3 out of 17 isn't even 1/5th, let alone almost 1/3rd)

Valero Energy Corp. is an industry leader that refines more oil than any other in the U.S. The San Antonio, Texas, company had a good run in the stock market this decade, rising 1,400% before earnings topped last year. But it's no longer so easy for the company or any refiner. (This rise was due to the fact that 10 years ago Valero only owned 4 refineries, their growth has been through strategic M&A. They made a point to only acquire refineries that could produce heavy sour crudes. They have purchased under valued refineries, upgraded them and added capacity and then decided to either hold or resell for profit.)

Valero will probably sell three of its 17 refineries this year and maybe two more later to focus on its core operations amid what CEO Bill Klesse acknowledged on Tuesday is a weak economy.

But maybe that's because the environment for the energy business in the U.S. has turned downright hostile.

Upstream, oil drilling is off-limits, crimping supply and driving prices ever higher. Downstream, refiners are hit by not only high energy prices, but also bureaucratic regulations, environmental lobbies and special interests that make moving to Asia, where economic growth is still valued, more attractive. (The upstream reference in this article is out in left field, up and downstream businesses are managed completely separate. Yes higher fuel costs hurt the refiners, as it is their biggest cost, not operating, not employees, etc.)

The sorry fact that no new refinery has been built in America since 1983 has been cited so many times that we would have thought someone in Washington would have done something about it by now. But no — it just keeps getting worse. (This statement is spit out time and time again by clueless media types. Why would you build a grassroots unit when it is far more intelligent to expand existing facilities, or to debottleneck to increase throughput. Anyone working in anything equipment supply or service supply in the refining business will tell you that there has NEVER been a boom of upgrades and capacity expansions as big as today. Just because the big operators aren't pumping out new grassroot facilities in their entirety, it does not mean that people are not drastically increasing capacities, upgrading facilities, etc.)

Granted the media usually is oblivious to actual problems in the industry, but when they simply start making things up or writing editorially with no facts or history to back up their statements, they're simply spouting off the typical political nonsense.[b]

[pup55]

$this->bbcode_second_pass_quote('', 'T')he business climate it has created is hurting our economy.

[TexasEx2006]

Operators are building new refineries. Motiva Port Arthur is doubling capacity, as it Marathon Garyville. These additions will be larger than most of the current refineries operating. There is not a refinery in the country that isn't adding unit, upgrading units, debottlenecking units. This is the same thing as "building" a new refinery. Refineries are not single process units, they contain dozens and dozens of smaller processes throughout the "refinery". These processes are added on a continuous basis.

It is much easier to build on your current site than deal with all of the opponents who drive their automobiles to their Not In My Back Yard protests. People will complain that no grassroots refineries have been constructed and turn around and waive the environmental flag to prevent one from being built. The sad bottom line is crude oil conversion is a dirty business, but if one is going to complain about it, then let them be first to give up everything in their world that is derived from the stuff. There is not a physical item in ones possession that has not in some way shape or form been derived from, transported, or energized by oil & gas.

When Valero sells these refineries, they will be purchased and operated by a new company. This is in no way a bad thing, and will not change refining output in the country one barrel.

[TheDude]

Thanks for the replies. At least the writer wasn't complaining about oil going into the SPR driving up gas prices. People need to overcome the NIMBY attitude one way or another, whether refineries or Cape Cod windmills. Hearing about the Kennedys' opposition to the latter is good for a chuckle at least.

$this->bbcode_second_pass_quote('TexasEx2006', 'W')hen Valero sells these refineries, they will be purchased and operated by a new company. This is in no way a bad thing, and will not change refining output in the country one barrel.

[hope_full]

http://www.siouxcityjournal.com/article ... 110beb.txt

Yield is expected to be three or four billion barrels of oil. I was telling hubby, that's enough for a few weeks or maybe months at our current rates of consumption. Sounds like a lot, but when you do the math, it's not that much. It's taken some time, but he's starting to understand the size of the problem. Thank goodness for that.

ELK POINT, S.D. -- Flashing a smile, Joyce Bortscheller briefly hugged Hyperion Energy Center executive Preston Phillips as she greeted him in the backyard of her home here.

Bortscheller, president of the Elk Point City Council, had invited about 250 supporters to an outdoor barbecue Tuesday to await the returns for arguably the most important election in Union County's history. The big crowd didn't leave disappointed.

As midnight approached, they popped the champagne corks, celebrating a hard-fought victory that keeps alive the county's chances of landing the nation's first all-new oil refinery in 32 years.

[socrates1fan]

could this in any way lower prices? Even by a few cents?

[eastbay]

400,000 bbls/day of tar sand sludge. If this facility runs full-blast all the time, and after they squeeze the trash out they'll be lucky to add 2% to the nations daily gasoline and diesel supply.

Chump change.

[seldom_seen]

Whenever I hear "we haven't built enough refineries" caca doo. I reflect on the Exxon annual report I read a few year back that said all refinery capacity is being met by expanding existing refineries.

I'm sure the need to expand now is not quite so prescient.

[TheDude]

Cripes, mountain of comments to that story.

Corrections: this is rezoning land for a refinery which will "likely be built." The last US refinery was built in '76 so if they meet their four year build deadline it will be the first in 36 years, not 32. These things often run into snags along the way; who knows what will happen in the next four years? Although maybe by then we'll be expanding all things tarry, refineries, extraction, pipelines...beats trying to melt all that Green River source rock.

We leave it up to the Canucks to remove the sludge, too. Just 28 API crude IIRC.

[Sellis1012]

$this->bbcode_second_pass_quote('', 'I')s this proof that there isn't enough light sweet crude oil any more to fully supply US gasoline refineries?

[some_math_guy]

It is my understanding that the USA imports increasing amounts of refined petroleum products (like gasoline) from Canada.

[pup55]

I think the refinery output for unleaded "peaked" the day before Hurricane Ivan in 2004. For the brief period between November of '03 and that time, the system was functioning normally.

In essence the system has never come back up to the pre-Ivan levels.

As we know, and have been following for a long time, the two giant BP plants, in Texas City and Whiting IN have been running at half or less of their capacity. This amount of spare capacity would theoretically be enough to bring us up to the pre 2003-levels.

They have announced that both of these plants are ready to come back on line. At this point, though, no point in flooding the market with unleaded, with demand weakening a little bit, and refinery margins still not up to where they need to be for economical operations.

Speaking of refinery capacity, I still believe the main driver is money. The reinvestment economics in this industry have been really iffy for awhile. The cost of stainless steel and concrete have about doubled in the last 12 months, and we can only guess what is going on with refractory, electrical, and other materials needed to build a refinery.

On top of that, high feedstock costs, even for the heavy crude.

So, no profits, no new refineries. That's capitalism for you.

[SoylentGreen]

your chart just shows the % of gasoline refined out of a barrel?

[TheDude]

Here is a slide from the EIA's Ethanol, Gasoline, and Ultra Low Sulfur Diesel Supply Issues in 2006. You may need to actually open the page to get the legend, it's optimized for IE, not Firefox.



Top sources for US gasoline imports:

[aahala2]

$this->bbcode_second_pass_quote('Drifter', 'I') found this on EIA's site. The first chart is particularly interesting. It appears that total US gasoline refinery output peaked in 2002, and has been falling every year since. I find this interesting because US gasoline and diesel demand has been increasing every year since 2002. Is this proof that there isn't enough light sweet crude oil any more to fully supply US gasoline refineries? If the markets are 'saturated' with oil, then why has total US gasoline refinery output been consecutively falling off every year since 2002? Are fuel refineries shutting down? I don't want to jump to any conclusions with this information. Opinions?

[cube]

$this->bbcode_second_pass_quote('Drifter', 'I') found this on EIA's site. The first chart is particularly interesting. It appears that total US gasoline refinery output peaked in 2002, and has been falling every year since. I find this interesting because US gasoline and diesel demand has been increasing every year since 2002. Is this proof that there isn't enough light sweet crude oil any more to fully supply US gasoline refineries? If the markets are 'saturated' with oil, then why has total US gasoline refinery output been consecutively falling off every year since 2002? Are fuel refineries shutting down? I don't want to jump to any conclusions with this information. Opinions?
....

[vampyregirl]

Motiva Enterprises, a joint venture between Royal Dutch Shell and Saudi Aramco, are expanding the Port Arthur, Texas refinery in order to increase capacity from the current level of 325k bpd to 600k bpd and to decrease emissions from the refinery. Levels of Nitrogen oxide and other compounds will be reduced from current levels.
The expansion will include 725 pumps, 19 new compressors, 514 heat exchangers and 54 new tanks. A new Naphta processing unit will use a catalytic reformer to process 85k bpd into high octane gasoline.
The reason for the expansion is that Shell has the largest brand fuels distribution network in the United States and demand is exceeding production.
Construction on the expansion project is under way and expected to be completed by 2010.

[TheDude]

Explosion rocks Sunoco chemical refinery; evacuations averted | Philadelphia Inquirer | 05/18/2009

$this->bbcode_second_pass_quote('', 'A') massive explosion rocked the Sunoco refinery in Claymont, Del. late tonight, sending flames shooting into the sky and initially raising concerns about residents' safety in Pennsylvania, Delaware and South Jersey.

Shortly before midnight, a company official said Sunoco and local fire officials were fighting the blaze and that no injuries had been reported.

Although there had been early talk of possible evacuations, none have taken place.

Residents reported hearing one or two explosions that rattled car and house windows at about 10:15 p.m. Flames could be seen as far away as Philadelphia International Airport.

"All I know is that there are a million pipes down there and I did not want to wait for another explosion," said Debbie Collison, a resident of nearby Linwood who could see the flames from a window in her home. She fled that house in a car with her son, his girlfriend, a next-door neighbor, two cats and a dog. She described the explosion as a "ba-boom."

[AirlinePilot]

Rust never sleeps.