Skip to comments.The fall of fuel oil in the US
Posted on 05/07/2014 9:59:09 AM PDT by thackney
Introduction: US residual fuel oil demand recently hit a record-low 154,000 b/d less than a decade after demand was closer to 1 million b/d, according to US government statistics. The precipitous decline is a direct result of refineries looking to maximize production of high-value products such as middle distillates and gasoline and minimize production of low-value products like fuel oil, which typically sells for less than the crude oil used to make it. Rising natural gas production also has lead to a greater reliance on that product for power generation at the expense of fuel oil.
However, there appears to be a floor to how far demand will fall. Demand for natural gas in the US Northeast has outpaced the building of pipelines to move the product, leading to gas curtailments, volatile natural gas prices and utilities taking a second look at fuel oil. New York Harbor fuel oil traded within a $2.50/MMBtu range during the first quarter compared with a nearly $125/MMBtu range for regional natural gas prices (see story and chart). This feature pulls from some of the latest news stories about fuel oil in the US.
April 29, 2014 - US residual fuel oil demand averaged 207,000 b/d in February, the second-lowest demand figure on record despite repeated cold snaps across the Northeast that increased demand for the product, according to Energy Information Administration data published April 29.
The data are monthly figures released with a two-month lag and separate from the EIA's weekly petroleum status report that is typically released on Wednesdays.
The February average marked a 62,000 b/d decline from the January average. The February figure was also down by 97,000 b/d year on year.
The first quarter of the year was marked by several cold weather events that increased demand for fuel oil for use in US Northeast power generation, a sector whose demand for fuel oil has waned since natural gas production has become the preferred source for generation.
Even so, nationwide fuel oil demand in February was the second-lowest figure in statistics available from EIA that date back to 1936. The record-low demand of 196,000 b/d was set in December 2012, data shows.
The reason for the recent decline was a nadir for demand in the West Coast region, which saw demand fall to 78,000 b/d, a new record low. West Coast demand averaged 139,000 b/d over the past five years.
US fuel oil imports rose by more than 80% to 221,000 b/d while exports also jumped to 446,000 b/d, a nine-month high. Exports have been higher than imports for 34 consecutive months.
Fuel oil production fell to 428,000 b/d compared with the five-year average of 537,000 b/d.
Fuel oil days of supply was 177 days, data shows.
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A general classification for the heavier oils, known as No. 5 and No. 6 fuel oils, that remain after the distillate fuel oils and lighter hydrocarbons are distilled away in refinery operations. It conforms to ASTM Specifications D 396 and D 975and Federal Specification VV-F-815C. No. 5, a residual fuel oil of medium viscosity, is also known as Navy Special and is defined in Military Specification MIL-F-859E, including Amendment 2 (NATO Symbol F-770). It is used in steam-powered vessels in government service and inshore powerplants. No. 6 fuel oil includes Bunker C fuel oil and is used for the production of electric power, space heating, vessel bunkering, and various industrial purposes.
A sample of residual fuel oil
Looks like the coffee at a restaurant I used to work at as a teen.....................
It’s the mother’s milk of the refining process.
(and my bread and butter.)
In Australia, they call it Vegemite...
Its the mothers milk of the refining process.
- - - - - - - -
Also known as “refinery leftovers” and “the bottom of the barrel”.
Lots of BTU’s however in those long-chain hydrocarbons.
Negative gravities—some as heavy as -6 API, are becoming commonplace. Some BTU gallons are measured as 165,000 per gallon.
A few yrs. ago I had a client that had a dual fuel boiler. Natural gas and fuel oil.
We ran it on natural gas normally, but he had a buried tank w/ some fuel oil he wanted to burn.
We changed a few settings and fired it up.
Wow, what a difference in output. I’d forgotten how much hotter oil burns v natural gas.
Road tar that they use to mix with stones ? or is that of a heaver grade ?
Your thinking of liquid asphalt.
Much more viscious, and much higher flash.
Was this using the same burner tips for the drastically different fuels?
Who still uses fuel oil to heat their home? Seems it’s only in the Northeast. Funny how the “global warming” idiots in the NE use the most inefficient form of fossil fuel in their decades old heating systems.
Talk about hypocrites. Too cheap to buy a heat pump?
Don’t say that too loud or you’ll have Shuck Chumer and company passing a law to give everybody a free groundwater heat pump system.
I plan to switch to natural gas, now that the choice has become available. Fuel oil heating costs this winter were over $600 a month for four straight months. Electricity costs have been rising steadily over the years, the water heater is a nice big old electric one, dropping that during the winter (and summer, for that matter) will offset the continued cost of running the blower (an unavoidable expense in the winter, regardless of the fuel, unless one lives in a one room cabin with space heater).
Much of New England has sky-high electric rates. And if most switched to electric heat, it would go far higher with rolling blackouts.
Heat pumps become less effective delivering heat when temperatures get colder. They would also required significant resistance-type heaters to keep houses warm.
So they don’t have the ability for the low cost of heating via only a heat pump like Tennessee.
By the way, if you had read more than just the headline, you would find this article was not talking about the light fuel oil used in residential. This is the thick heavy stuff that normally requires heating just to make it flow decently.
I think it was the same burner tip because switching from one fuel to the other was a minor change.
Here in Northern Nevada there are many oil fired furnaces. Heat pumps don’t work well. #2 off road is WAAAYYY cheaper than propane per BTU. Not so many natural gas delivery systems in the spread out areas.
I don’t think you could buy it that way today. I might be wrong, but I would expect two different sets of burners for two different fuels.
From a different perspective, after being without utilities due to the storm in the northeast, storage of fuel oil or propane seems more attractive than natural gas which may or may not be available.
Still being sold. Check it out.
Thanks for that link, I didn’t realize the capabilities existed for such turndown ratios.
I was thinking much more simplier units like the burners on stove. Most of those even switching between propane and natural gas require changing the burner, or at least nozzle tips.
Normally here on the Gulf Coast, when hurricanes knock out the power our gas is still available.
Almost all Natural Gas distribution systems get their pressure requirements from the mainline transmission line. They only use regulators to take pressure cuts and do not need compressors to maintain pressure.
The mainline transmission pipelines normally cover large areas and will not lose but one or two stations in the big hurricanes. At the same time, knocking down the electric lines reduces the power demand and actually reduces the Natural Gas demands on the pipelines until the power is restored.
Yes, the system overall is reliable. I work for a gas utility, we had several local interruptions from damages and water getting into some old low pressure systems. Some we could repair immediately, others took days to weeks. One section had many homes with natural gas backup generators that were useless.
The one major loss was on the coastline where the barrier island’s feeding main was washed out, a few thousand without service for months, at least half of those homes weren’t touched by water and were inhabitable.
Thanks, I couldn’t tell what they were writing about.
:’) I hope it’s fairly easy, and doesn’t take all year to get going on it. I’d like to change furnaces while it’s still relatively warm, and not be caught with no heat source (oil tank and no gas, but a gas furnace, for example). :’o
Having an assured supply of fuel in when there is major destruction is difficult.
Following Hurricane Ike, our street was about a week without power. By the end of that time, most of the homes on our street were left empty. I and a few others had gasoline generators. But by the fifth day, I was driving over an hour to find fuel then spending another hour in line.
If I buy another generator, it will probably be a Honda Tri-fuel unit (gasoline, propane & nat gas). As for now, I own a lot of 5~6 gallon tanks.
Many people in this area invested in natural gas generators afterwards. Most of our area kept the gas up. That was probably not the case in a few lower areas.
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