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To: thackney
"Today we have a surplus of refinery capacity. The economics of building a new one likely mean closing down another that already has the infrastructure in place. In the Houston area for example is also a hydrogen pipeline delivering to many refineries for a better price than they can build their own hydrogen generators."

I'm very well aware of all these factors (I worked in the chem industry in Louisiana for decades, and one of my sisters-in-law works at Exxon). That said, the notion that we have a surplus of refineries is a new one on me. In fact, you're the only person I've ever heard say that. Certainly "a shortage of refineries" and "no refineries have been built in the USA in "X" years" are two of the common statements made by the oil products companies whenever the price of gas goes up.

And I think you have the chicken and egg thing going on. The presence of many refineries was what drove companies like Air Products (and similar suppliers) to build pipeline-based infrastructure around Houston and in the Gulf Coast area. The refineries came first. I'm sure Air Products would be willing to build an "outside the refinery fence" hydrogen plant and run a short pipeline in at a ND refinery. They were certainly willing to do that when the company I worked for needed a large amount of pure oxygen.

But the potential synergies that existed due to the unique juxtaposition of factors in the Tx-La area exist nowhere else that I am aware of.

I'm just interested if anyone has actually "run the numbers" on a refinery in ND. Once upon a time, quite a few refineries were built here in Washington State to make use of Alaskan crude, and there is no significant pipeline infrastructure up here to handle transport of those refinery by-products. Those refineries are still up and going strong (along with the concomitant increase in gas prices whenever one of them has a shutdown).

11 posted on 08/13/2012 1:02:59 PM PDT by Wonder Warthog
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To: Wonder Warthog
Number and Capacity of Petroleum Refineries
http://www.eia.gov/dnav/pet/pet_pnp_cap1_dcu_nus_a.htm

Current Refinery Capacity in in US = 17,322,178 Barrels per Day

Petroleum Product Supplied (sold) in US
http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_m.htm

Current US consumption of refined products = 16,539,000 BPD

We haven't built any new refineries lately, but we have been expanding and upgrading the existing ones for decades. It is far cheaper to do so.

Combined with our fallen demand, it has lead the US to become a net exported of refined products. We import more crude than we use, refine it (keeping jobs and spare capacity in the US), then export some products to improve the trade balance.

U.S. Net Imports of Total Petroleum Products
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTPNTUS2&f=M

And I think you have the chicken and egg thing going on.

Please understand that the economic comparison needs to be based upon existing infrastructure already in place, only needing additional crude transportation capacity to the refineries. We don't need additional capacity, just replace the crude imported from overseas with more North American produced crude.

The Washington example was to meet a refinery shortage, not just a new supply of oil.

12 posted on 08/13/2012 1:21:09 PM PDT by thackney (life is fragile, handle with prayer)
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