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Originally Posted by jazzlover
Not true. They can shift the cracking ratio slightly, but not radically, without significant plant modification.
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Ah, someone who knows what they're talking about.
A good example would be ANWAR. Prudhoe Bay Heavy is 24 API so if ANWAR is 20 or 21 then West Coast refineries should be able to handle that with minor adjustments. They could probably even run ANWAR through TAPS which would avoid the need for a separate Alaskan pipeline just to transport ANWAR.
But, if ANWAR is 17 like a lot of the Canadian oil is, forget it. They'd have to build a separate pipeline. Refineries in Montana and Wyoming that are already processing/refining Canadian Super Heavy could handle something like that.
If ANWAR was really heavy, you could blend it with Prudhoe Bay, like Brent Blend which is intermediate oil of various weights from 7 different oil fields, but you'd have to do extensive modifications to the facilities and that would really mess with Hawaii who is the only state that uses fuel oil to produce electricity.
It's volume, so cracking stills are based on height, and then there's the issue of the catalyst and such.
If you remember, BP and Chevron each modified one of their light oil refineries to handle about 20% to 30% West Texas Intermediate respectively, but it took about 18 months to do that.
Quote:
Originally Posted by jazzlover
Worse yet, the American refinery system is heavily dependent on sweet, light crude--"West Texas Intermediate" being an example--but that is exactly the type of oil reserve that is rapidly declining in this country. Most of the remaining US reserves, including some of the ones supposed to "save us," are heavy and/or sour crudes that nearly all US refineries are not currently designed to refine.
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West Texas Intermediate is an intermediate grade oil, but it's very close to light oil and that makes it a little more versatile. You typically get 22 gallons of gasoline from a barrel of Bonny Light or Arabian Light, Tijuana Light etc and you get 19 gallons from a barrel of West Texas. Something like Illinois Intermediate you get 13 to 15 gallons of gasoline.
Quote:
Originally Posted by jazzlover
So, US refiners have little incentive to invest in modifying existing refineries reliant on declining reserves to produce a greater mix of medium distallates; nor do they wish to invest in refineries to handle heavy sour crude where the cost to remove the sulfur to comply with US ultra-low-sulfur-diesel fuel requirements is quite high.
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ExxonMobil has a refinery that handles Louisiana Sour, which is a light sour oil out of the Gulf, but it is the only refinery in the US that refines light sour. Most of that is petro-chemical feed stocks and the diesel they get is "red diesel" for ATVs, off-road bikes, and things like that.
That's the problem I have with drilling in the Gulf. You have East Texas Sour (an intermediate sour from guess where? Eastern Texas up to the Gulf Coast) and then Louisiana Sour (a light sour).
Duh, what else is in the Gulf? More sour oil.
They want to drill in the Gulf and they're already at max capacity for intermediate sour and light sour.
Quote:
Originally Posted by jazzlover
$4.00/gal. gasoline might not throw the country into a depression (like we're not near one already), but $4.00-$5.00/gal. diesel fuel absolutely will, and we are getting very near that point in many places right now. As an oil company guy I know says, "The US drives on gasoline, but the economy runs on diesel fuel."
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Wholesalers and Retailers will absorb increased transportation costs related to diesel fuel price spikes in the short term, but not the long tern.
Over the long term they will raise prices to offset costs. FedEx and UPS of course raise prices immediately.
Quote:
Originally Posted by jazzlover
Why the problem with diesel? Because:
1. Worldwide diesel fuel demand is exploding, especially in the developing countries.
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Developing countries use diesel to produce electrical power. That is why Iran is proceeding with its dual-reactors at Bushwehr. Iran has had perennial 20% unemployment (and no they aren't trying to find jobs so that 65% of Iranian households can have two wage earners, they're trying to get jobs so that 85% of households have a least one wage earner).
In order to do that, they need two things, more electricity and a helluva lot more water. Industrial processes, especially petro-chemical industries are water-intensive. Just look at the amount of water ethanol plants in the US suck up each day. That's on the high-side, but other petro-chemical processes are very close.
Nuclear power will allow Iran to shut down its oil-fired electrical plants and divert that diesel to transportation, which will eliminate the need for gasoline and diesel rationing, plus more oil can be diverted to the world market for sale to ease Demand issues for oil.
The other reactor at Bushwher will power desalinization plants so water can be transported to the interior of the Iranian Plateau to develop that agriculturally and create petro-chemical jobs.
While Iran is maxed out in hydro-electric production, other developing countries don't even have an hydro-electric option, so to produce electricity, they either need natural gas or diesel to power the turbines.
For now, developing countries are going to suck diesel off the market at an exponential rate until their production tops out.
So you'll see "demand plateaus." Demand for oil will increase as developing nations power up for industrial production. Once they reach that point, demand for oil will be constant.
Then demand will increase again as the power up to electrify the country, by providing electricity to homes and businesses. That will increase demand until that tops out, then demand will be constant again.
Then demand will increase again as they power up for commercial enterprises and as people begin using more power in the home because they have acquired some wealth and affluence from the jobs created through the process of industrialization and expansion.
You might not actually see these "plateaus" because every country is developing at a different pace, but you should see some brief periods were demand is constant.
Quote:
Originally Posted by jazzlover
2. The US refinery infrastructure is geared toward producing more gasoline rather than diesel fuel.
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Only by default.
There are refineries running flat out at 300,000 barrels per day and they produce no gasoline.
What they are producing is "your life." They're refining the oil for the food you eat (artificial colorings, flavorings and preservatives), the clothes you wear, all the soaps and creams and stuff you wash your body, hair and clothes with or put on your body or hair or in your hair, all of your pharmaceuticals -- life would be just terrible without Lipitor and Valtrex, plus many, many other things, like all the inks and dyes to produce all the pretty colors in your packaging, cosmetics (life would be just terrible without glossy lipstick that stays on even when swimming or performing fellatio) etc etc.
Even for the refineries that produce gasoline, it's more like an accident. Most of the diesel and aviation fuel comes from heavy oils (but you need heavy oil for birth control pills).
Quote:
Originally Posted by jazzlover
3. The US freight transportation system is so horribly dependent on trucks (which are only 1/3 as fuel efficient as rail transportation).
None of those problems can be solved quickly or cheaply, and there is almost no effort being made currently in this country to address any of them.
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Maybe one day, if you ever get a real president or even a real leader in the White House, the US will start the conversion back to rail.
If 85% of transport was by rail, and that is a figure that could realistically be achieved within 5 years, a lot of problems would be solved. Not one single job would be lost, and in fact, real jobs, good paying jobs would be created.
It'll take a real president, a real man-o'-the-people with a big brass pair of
cajones to tell the Teamsters and rail unions to ****.
Back when engines where boiler operated, engineers and the crew used to work 12 hours a day standing next to those boilers. It was a tough demanding job. The rail unions forced rail companies into concessions that the engineers and crew could only work 4 hours at a time because of the boilers.
Trains have been electric-diesel for more than 60 years, but unions will not let the clause be removed from the contract, so rail companies are effectively paying the engine crews 8 hours of pay for only 4 hours work. That, and goofy other union contract clauses, plus when they allowed municipalities to tax the property the rail companies owned where the lines run made rail very unprofitable. As you would expect, the Teamsters of course lobbied to get Congress to allow municipalities to levy property taxes on rail companies, because they knew it would make the rail companies unprofitable and drive (no pun intended) business their way.
Quote:
Originally Posted by Nor'Eastah
First, there is no economic "recovery".
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Of course there is. Recovery is GDP dependent, not job or unemployment figure dependent.
Show me were it is written that 65% of US households
must have a minimum of two wage earners.
If people who think they are entitled to a job or have a right to a job would stop looking for work your unemployment rate would only be 3.5%.
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Originally Posted by Jaggy001
Europe has known high energy prices for years and it has not hurt their economy appreciably.
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That's brilliant.
I've lived most of my adult life in Europe and I never owned a car except for about a year when I had a Ford Tanus (which is probably something you've never seen or driven and never will).
I've never needed a car. Everything I need is within walking distance. I can go to the National Theater to see the symphony or a play, drink, eat, shop for anything I want (and the shop-keepers know my name and greet me when I come in), play, work or whatever.
For everything else I just jump on a street car. If I want to go to the mountains or the beach, I jump on a train.
Europeans have cars, and they actually drive them, they just don't live in the cars like Americans do.
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Originally Posted by jtur88
Gas ws $4 before, and it had no real effect on the economy overall.
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Another brilliant comment.
You might want to actually read newspaper articles discussing studies published by policy centers at universities.
At $3.00/gallon, about 15% are affected and forced to cut-back spending or driving in order to "make ends meet."
Each $0.25 increase affects a larger segment of the population. At $4.00/gallon more than 50% are forced to adjust their spending habits in order to maintain even minimal gasoline consumption, and that is simply driving to and from work. Retail volume is also altered as people's habits change in order to adjust to the higher prices.
That is to say that retailers (and restaurants) are forced to alter scheduling which means hours are cut for employees.