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Monday, March 19, 2012

List of Refineries That Have Shut Down, More to Come -- Not About The Bakken

Updates

Later: a reader send me the link to an analysis by the US EIA of the potential impact of the shutdown of the three refineries in the Philadelphia area. This is the link: http://www.eia.gov/analysis/petroleum/nerefining/update/pdf/neprodmkts.pdf.

A long comment below also summarizes some of the high points of the article. Neither the EIA report nor the comment mentioned anything about the lost jobs. 

Oil and Gas Journal has a story on this EIA analysis

Original Post

List here.

Meanwhile, elsewhere:
The U.S. Congress' Joint Economic Committee will hold a hearing in April on the potential consumer impact of the shutdown of oil refineries, including three refineries in the Philadelphia area that represent half the refining capacity in the Northeast.

"Rising gas prices coupled with decreasing refining capacity on the East Coast raise serious questions about our ability to ensure an adequate supply of affordable fuel for American consumers," said U.S. Sen. Bob Casey (D., Pa.), the chairman. The hearing will be held at 2:15 p.m. April 26.
Maybe it's just me, but shutting down three refineries that represent HALF the refining capacity in the northeast suggests that the US has way too much refining capacity or .... nah, it must just be me.

The three under consideration for closing:
(I wonder if the administration has given any thought to nationalizing or buying these refineries, sort of like buying GM?)

Fewer refineries for Bakken oil? Short term pressure on Bakken pricing.

Shutting down refineries just as US goes into peak driving season. I guess that's an energy policy. Not one I would opt for, but an energy policy, nonetheless, I guess.

Oh, as long as I'm on the subject. These three Philadelphia-area refineries must have been completely automated, run by robots. I've not heard any concern about impact on jobs.

Next story: global oil supplies stretched by Chinese demand. And so it goes.

A Note to the Grandaughers

About a year ago my wife cut out a clipping from the Boston Globe Sunday magazine on Mt Auburn Cemetery, Cambridge, Massachusetts. The clipping included a full-page, color map of the cemetery. As mentioned earlier, my older granddaughter and I went birding there last Wednesday. The map came in quite handy. The cemetery is way too big to cover in one day. It was not a great day for birding; I thought it was too cool, but now I've learned the real reason. More on that in a moment. But we had a great day learning to recognize trees, or at least start learning to recognize trees. It will now be a lot easier when the leaves come out.

Now back to birding. Yesterday there was a long article in the Boston Globe on birding at Mt Auburn Cemetery.
Mount Auburn was founded in 1831 as the country’s first garden cemetery, a place of respite with rolling hills, ponds, flowering shrubs, and a mix of broad-branched trees that provided shade not only for those in mourning, but also for the public visiting with a picnic lunch. It would be such a success that it laid the groundwork for Frederick Law Olmsted to create the Emerald Necklace a half-century later.

Today, more than 200,000 visitors enter the gates of Mount Auburn annually. Sure, they might come to visit the final resting spot of a relative or to pay their respects to one from a long list of luminaries in American arts and letters such as Henry Wadsworth Longfellow, Winslow Homer, and Buckminster Fuller. Others like me follow in the footsteps of Roger Tory Peterson, the renowned 20th-century ornithologist who once led bird walking tours here in search of warblers, whom he called the “butterflies of the bird world.’’

.... As if on cue, a red-tailed hawk flew overhead, while to our left, a vibrant Baltimore oriole sat on a branch, twig in beak.

.... the orioles, scarlet tanagers, vireos, and the queen of neotropical migrants, the warbler, that had coaxed us to leave our pillows and arrive at this birding hot spot. Wintering in the Caribbean, Mexico, Central America, even South America, these enticing songbirds make their way north to New England and Canada to breed in the summer months. Mass Audubon schedules most of its spring walks at Mount Auburn the first two weeks of May, when the warbler migration reaches its peak.
So, my older granddaughter and I have a date to visit Mt Auburn during the first two weeks in May. I can hardly wait.

This morning on the way to school, the younger granddaughter, age 5, and I played 20 questions, "animal, plant, or mineral." She drives me nuts with that game. We have to play it every day on the way to school. Today, her winner was the "red-tailed hawk."

Sometime ago, when playing the same game, the older granddaughter's "animal, plant, or mineral" was oil. I was unable to guess it in 20 questions. Go figure.

7 comments:

  1. What good will it do to open the strategic oil reserve if we don't have the refining capacity, it might lower the price of a barrel of crude a couple of dollars but won't change the price we pay for gas at the pump. This is a clearly stated energy policy of the current administration.

    Ernie

    ReplyDelete
    Replies
    1. You are correct. It defies common sense; I alluded to that in an earlier post.

      It's an extremely complicated question. Despite all the time I put into following the oil industry, I am unable to explain oil prices when they start to trade outside the "normal range," unless there is an obvious explanation, like a shooting war in the Mideast.

      I can only assume that by "flooding" the market with oil, refiners will exact lower prices from suppliers as suppliers desperately try to get rid of excess oil. But, there are contracts in places to be honored. There are huge logistical issues.

      And moving the price of gasoline from $4.50 to $4.15 hardly seems significant. Sure, $4.15 is a lot less than $4.50 but $4.15 is a lot more than $1.98 -- where it was under previous administration.

      An anti-oil policy, over time, will eventually move price of gasoline to $5, all things being equal. And after three years of anti-oil, it will take a year or so to turn the ship of state, if not around, at least, to a different heading.

      For all the bright Harvard-trained folks in the administration, somehow they missed the insatiable demand of China, India, and post-earthquake Japan, and so they shut down the Gulf, killed the Keystone, and now talk about opening the SPR. Makes sense to me.

      Delete
  2. Time-it Lube leads the way!

    http://www.bossierpress.com/index.php?option=com_content&view=article&id=6433:time-it-lube-jumps-into-cng&catid=7:other-opinion&Itemid=144

    anon 1

    ReplyDelete
    Replies
    1. It looks like we've reached the tipping point now that Time-it Lube has endorsed CNG!

      Delete
  3. Wow, I'm going to have to tone down my comments regarding the president. This post regarding the refineries had absolutely nothing to do with the administration (except the facetious remark about nationalizing the refineries).

    A reader thought I was blaming the shut down of these refineries on the Obama administration. Absolutely note. These were business decisions.

    Although .... no, I won't go there.

    ReplyDelete
  4. Since I happened to be reading this report yesterday, I thought I would pass it along.
    "Potential Impacts of Reductions in Refinery Activity on Northeast Petroleum Product Markets"
    http://www.eia.gov/analysis/petroleum/nerefining/update/pdf/neprodmkts.pdf

    It's the EIA's impact analysis and projections on crude/gasoline/ULSD/Heating oil prices, supply/demand, etc. in the NE (as well as the other PADDs) from these refineries shutting down.

    It's not a small issue. If the Sunoco refinery shuts down, along with the two idled refineries, Marcus Hook and Trainer, they're projecting a shortfall of 90K bbl/d of USLD, 30K bbl/d of heating oil, and 160K bbl/d of gasoline for 2012. Next year it's even worse with a projected shortfall of 180K bbl/d of USLD, 30K bbl/d of heating oil, and 240K bbl/d of gasoline for 2013. That's in addition the amounts that have been supplied historically already. (This is, in part, due to the fact that New York State is requiring that heating oil meet the same low sulfur levels as ULSD starting in July 2012, effectively increasing USLD consumption by 70K bbl/d).

    The few pipelines which might be used to transport products over there from the Gulf or Midwest are already near capacity, and the docks and tanks at ports which serve the Philly area refineries are not equipped to handle waterborne products (whether from the Gulf Coast or foreign imports). In the short term, this leaves transport by rail (for which, capacity is limited and insufficient), and transporting the product via trucks from the Midwest.

    This doesn't look pretty.

    ReplyDelete
    Replies
    1. Great post. Again, railroads become an interesting play. Warren Buffett buying BNSF turned out to be a huge deal.

      The shortages that you mention are very, very interesting. If I have time, I may come back to your comment.

      Delete

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