Refinery Outages and Gas

[Red Harvest]

This is going to get worse in a hurry. The analysts are way behind the curve. I've been watching the prices move in Houston: from 2.45 (it had declined) to 2.65, to 2.78, and now 3.30. As each store refills the prices go up.

I don't think we've seen anything yet. There are 14 refineries effected as far as I've heard. 5 or 6 are only at reduced rates and should come back up fully (if they haven't already) but the other 8 or 9 have bigger issues...even if they had electricity, water, and other resources, they would most likely be quite short handed. I can't imagine that most of their employees are really available. Even then, cleaning up and recommissioning is going to take time (and it is labor intensive.) I haven't had direct contact with any of them so I'm just guestimating, but I expect some long outages.

[Don Corleone]

Here in North Carolina, Governor Easley has asked everyone not to drive unless it's essential. We haven't received refined gasoline since Sunday (when the storm hit) and they estimate that we'll be out of gas by Sunday afternoon (some places already are). Gas is currently $3.75/gallon and climbing steadily.

[Aenlic]

The problem isn't supply. The problem is refining can't keep up with demand. And since a large percentage of this country's refining takes place in and around the Louisiana and Mississippi Gulf coast, we're in a world of hurt. Opening up the SPR is a meaningless gesture. Saudi's saying they'll increase production is a meaningless gesture. The oil doesn't do any good until it is refined. Even refining it in other countries first and shipping it here as gasoline won't help. Guess where the United States receives such shipments of pre-refined petroleum products? Louisiana, just south of New Orleans.

A quick way to solve this country's insatiable appetite for gasoline is to issue shoot to kill orders for anyone seen driving their gas-guzzling SUVs. Anyone in a non-military Hummer, shoot to kill. Anyone in a Ford Excursion or a Lincoln Navigator. Shoot to kill. If they're seen driving to a store only a block from their house in such a vehicle shoot to kill and hunt down any remaining family members and sterilize them so the moron genes aren't passed along. Garage all limousines and make the self-important idiots carpool on pain of death. For good measure, any oil company execs seen being chauffeured around in a gas-guzzling armored limo will be shot on sight, their relatives and pets shot, their houses razed and the land sown with salt and their neighbors sterilized.

And last, but not least, bring our troops home from Iraq, where they waste gas driving about imposing democracy on people who should decide for themselves whether or not they want it (or whatever the raison d'jour for the War is today). Use those troops to restore order on the Gulf Coast. Any idea how much of this country's refining capacity goes to support military operations in Iraq? Look it up. Consider it an object lesson.

[Don Corleone]

Glad to see you're being fair, calm and reasonable about all of this, Aenlic. Shoot anyone that engages in policies you don't agree with. Hmm...

[Aenlic]

Glad to see you're being fair, calm and reasonable about all of this, Aenlic. Shoot anyone that engages in policies you don't agree with. Hmm...

Thus the smilies, sport. Maybe you missed them. If you specify which threads you intend to misread, I'll gladly flash sarcasm warnings all over any posts I might make in such threads - just for you. I'm helpful that way.

[Don Corleone]

Thus the smilies, sport. Maybe you missed them. If you specify which threads you intend to misread, I'll gladly flash sarcasm warnings all over any posts I might make in such threads - just for you. I'm helpful that way.

Oh, okay. You can make any over-the-top, offensive statements you like, so long as you put a smiley at the end of it. Gotcha. I missed that rule in the Forum Rules. Thanks for the update, sport.

[drone]

President Bush has actually used the word "Conserve".

http://money.cnn.com/2005/09/01/news...reut/index.htm

Now we know it's serious.

[Red Harvest]

President Bush has actually used the word "Conserve".

http://money.cnn.com/2005/09/01/news...reut/index.htm

Now we know it's serious.

Yep, so much for "conservation is not the answer."

In fairness, refineries are going to try to run at 90% of capacity most of the time for competitiveness reason, and this is peak season which means it should be 95% plus. So any outage is going to effect the gas price. A big one will effect it more, especially after 9 weeks of inventory decline because it is peak season.

It is the disconnect between oil and gasoline price that illustrates *this* event as being a disaster induced refining limitation.

[drone]

http://money.cnn.com/2005/09/01/news...ex.htm?cnn=yes

Looks like Colonial Pipeline and Plantation Pipeline are slowly getting services back up, as the power gets restored. Don't know what good this is going to do once they have drained their existing stock, if the refineries can't resupply them.

[Red Harvest]

http://money.cnn.com/2005/09/01/news...ex.htm?cnn=yes

Looks like Colonial Pipeline and Plantation Pipeline are slowly getting services back up, as the power gets restored. Don't know what good this is going to do once they have drained their existing stock, if the refineries can't resupply them.

It will relieve some of those areas that have lost all gas supply in the short term. So regionally it will help.

[Gawain of Orkeny]

This goes right nack to the hypocisy thread. For ever thirty years the left has oppossed increased drilling and new refineries or atomic powerplants. For these same amount of years those of us on the right have been saying this could happen . Well now it has . Talk about not being prepared. All these years weve been operating at the limit of what was being produced yet made no real attempt to address the issue. In fact we did all we could to facilitate the problem. Releasing the strategic oil supply wont help as the refineries cant refine it. I swear I didnt no this was going to happen when I started that thread.

How is it every gas station has jumped up 50 cents a gallon overnight? This is a supply and demand problem and always has been. The problem for the most part has been an artificial short supply. If we had built the refineries that we asked for and started drilling in the artic and off the coast we wouldnt have the problems we have today. But of course its all Bush's and the conservatives fault.

This is not directed at you Red I know you didnt bring politics into this.

[Red Harvest]

Yes, it does go back to hypocrisy, but not like you think. Where would you put a refinery? The oil is offshore. You are going to build anything new along the coast if you build it. And in fact, that is where capacity is being added. The refineries inland where the oil is depleted have mostly shut down or are not expanded.

So your are looking at a few regions along coasts doing the bulk of the refining and will still be if new ones are built. If any one of these regions takes a major hit, supply will be cut. That's how "market efficiencies" tend to work, gigantism and infrastructure is favored over dispersed production.

I will also point out Gawain, that refineries have not been the limit (until the storm) because crude prices and gas are *now* moving idependently. They were not before, which is economic proof of what I was saying. I'm not sure of the percentage of refining that is out (on a bbl/day basis) but is looks like over 10% to me.

[Big King Sanctaphrax]

At least you can take solace in the fact that you still only pay about half as much as us Europeans.

[Aenlic]

For ever thirty years the left has oppossed increased drilling and new refineries or atomic powerplants. For these same amount of years those of us on the right have been saying this could happen .

What, exactly, does nuclear power have to do with a current gasoline shortage? Or drilling for that matter? Nothing. The only part of your statement that has any relevance to the issue was the part about refining capacity. And I agree with you on that part. You also failed to mention that the left has been screaming about the need for conservation and sensible consumption and reducing demand all that time as well. And the right has been sticking their collective head in the sand and ignoring the whole issue of consumption. Typical of supply-sider insanity, I suppose.

Do you suppose, thinking about it just a little, that the fact that this country consumes more than twice what it produces has anything at all to do with the problem? That we consume more than three times more than the next highest oil consumer? That if we lowered our demand to just the same as the next highest consumer, then we'd actually produce a 25% surplus and be able to export oil and have a positive trade surplus?

Nah. It's much easier to blame it all on supply of oil. After all, the oil companies make their profits from our consumption, not our conservation.