Posted on 04/11/2012 5:00:38 AM PDT by thackney
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http://www.adn.com/2012/04/10/2416196/tuesdays-oil-gas-gold-and-zinc.html#storylink=rss
North Slope oil yesterday was $118.77 a barrel.
So while refineries using natural gas as an energy source see prices of under $2 per million BTU, this refinery was paying over $21 per million BTU.
No one in Wichita could ever understand why Charles agreed to buy this dog...
Good! I wish that all the oil companies would destroy the essential parts along with the blueprints for them,destroy their refineries and let these bastards that are always griping about “big oil” destroying the environment,making outrageous “profits” could go back to living like they did in the middle ages. Let them see who would pay their welfare checks them. Whether it is form a government funded university professorship or in “public” housing fornicating and doing dope.
If the gas pipeline was in now, either to Canada or to Valdez, this plant would have all three units running today.
Depending on Alaska politicians is a very risky business.
The comments at ADN show how clueless many are and incapable of doing math.
North Pole ping
As a reference point, I’ve seen older refinery use 0.7 million BTU per barrel of oil processed in South Texas.
Newer or upgraded refineries can reduce well below that, but some are even worse.
If the raw energy cost alone of refining the crude oil are $15 a barrel, there is no way to be cost competitive, even against refineries barging fuel up from Washington State.
I did not know the refinery burned crude oil to operate.
That’s gotta be a huge disadvantage.
No natural gas in the area has been commercially produced.
The pipeline does have the advantage that they don’t have to deal with their residual oil. They just put it back into the pipeline and it is blended in with the crude sold to the rest of the West Coast. The pipeline gets the advantage of significant added heat at this point.
They could sell that resid in the USGC for more than WTI (if they could get it there.)
It adds to the pipeline. I’m sure it is not a free give-away.
I recall the NP refinery once had a hammer lock on the jet fuel biz but some new entrant took away most of this business.
how far is the round trip..?
thanks in advance.
It is most likely moved on barges from Washington State. All of the other refineries in Alaska are rather small.
http://www.eia.gov/petroleum/refinerycapacity/table3.pdf
Jet Fuel is big business in Alaska. Lots of Cargo 747 going stopping for a fill up between Asia and Lower 48. They sell about 3 times as much Jet Fuel in Alaska than Gasoline OR Diesel, Fuel Oil and Kerosene combined.
http://www.eia.gov/dnav/pet/pet_cons_prim_dcu_SAK_a.htm
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They should hired me as a consultant. I would have told them that transportation and freight costs would have killed them.
And you would have been wrong.
This plant is not economical due to requiring North Slope Alaskan Crude as their power source as well as their feedstock.
If they were using Natural Gas for heat and electrical power, they would be doing just fine.
The market is in Alaska and the feedstock is in Alaska. They are losing out to refineries that actually take Alaskan crude, ship it to Washington, refine it and barge it back to Alaska.
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