Refinery Outages and Pipeline Problems 2007 -08

pup55 · Expert Joined: May 26, 2004 Posts: 3597

Here is my spreadsheet

I subtracted out the three refineries that said last week they would be coming back online the 24-25. The BP Texas City plant will come back up to half production. Dantespeak is correct, they are not always too good about announcing when the refineries are coming back online.

The Belle Chaise and Sunray downtime roughly makes up for the ones that came back.

The current total is still about .5 mbpd.

DantesPeak · Wall Street Journal May 25, 2007

Thanks pup55 for the summary.

bullplug · Tar Sands Joined: May 25, 2007 Posts: 21

The states have no new oil refineries. Yet, our demand has increased. Think about it. If you live in any town or city that has grown in the last 35 years, you probably have more grocery stores correct? Not so with Refineries. They are getting older and break down. I know, I work at one. If the refineries can run the Tar Sands, the very heavy sour crudes, they make more money. The margin is better than refining the sweeter crudes. Yet, the sour crudes are very hard on pipe and equipment. So as units break down, often they are replaced with alloys that can handle it. But where is all that metal? It is in very high demand all over the world. So, lead times to get equipment and vessels is outrageous. And along the way, the refineries are still making money and the consumer will always pay the price.

Because of BP's Texas City incident. Refiners are under intense scrutiny. The "Cowboy" days are going away. Some units were able to be brought up in rates in one shift. Now it can take days, weeks, months to properly manage all the red tape.

There is no easy answer to our dependence on oil. It is so enmeshed with the world's economy and politics. The thing I don't get is why people think biofuels are really going to help. We don't have enough land or can grow things quickly enough to feed our demand. I think we need a bit of everything. A few more refineries, biofuels, tax gasoline use more heavily. Reward commuters etc... but I think a lot of it is like world peace...we're going to go through a lot more pain and anguish before we get there...just my two cents.

pup55 · Expert Joined: May 26, 2004 Posts: 3597

Welcome, Bullplug:

It is great to hear from someone that is in the refining end.

Please do let us know if we are too far off from reality on all of this.

bullplug · Tar Sands Joined: May 25, 2007 Posts: 21

Thank you Pup55.

I was thinking about some of the past posts I was reading through and Refineries having outages.

Typically, a Refinery will have planned "Turnarounds" or Shutdowns. These usually are all put into the volumetric equations. Put more often than not these days we are having unplanned ones, just for the reasons I mentioned in my last post.

Presently, we have a unit in our facility that is down. It was not a planned shut down. Consequently we cannot run as much high sulfur Crude. And that is what we have scheduled in the mix to run. This means the refinery has to back down on its overall rate.

Refineries are also self reporting. They don't have to report to the public when there will be a shutdown planned or unplanned. With the exception of EPA violations. This includes fires or other incidents where an individual might be hurt or killed. These get press when it is usually visible to the community. If there is a hugh fireball or smoke in a refinery it's pretty hard to miss, so the PR department will usually issue some sort of statement.

DantesPeak

Welcome bullplug. It's nice to get real world confirmation of what even refinery executives are saying from a man or woman on the ground.

You note two important points. 1) Refineries don't always recover quickly from unplanned outages, and also, might use higher quality oil at first to get going again. 2) Unplanned outages and recoveries from those outages are not always announced.

The large number of unplanned outages this year may explain why oil input into US refineries this year are of higher quality, while import quality keeps falling. I suspect the good stuff in inventories is being used first, while the accumulation we see in crude inventories is intermediate grade.

The higher demand around the world for a diminishing amount of light sweet crude will eventually break out into a worldwide bidding war, once we past this shoulder season of low demand.
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AirlinePilot

Welcome Bullplug!! Its realy insightful to have someone who is involved with the refining side of this big nightmare. If it doesn't bother you too much, and I understand If you say no, could you let us know which refinery you are working at?

I think over the next few months you are going to be our "go to guy" when it comes to questions concerning the refining end of this thing. Another question..If youve been lurking what do you think personally about this website and PO in general? I'm just curious.

I'm an airline pilot and it concerns me greatly right now.

bullplug · Tar Sands Joined: May 25, 2007 Posts: 21

Sorry pilot. I don't feel comfortable identifying which refinery I work in. And the whole downstream world of refining is quite complex and I would be egotistical to present myself as being an expert. I know what I know, from years in the field and working with several disciplines.

I think it somewhat funny when my neighbors give me a questioning baffled look and comment on gas prices. I fill up my tank just like everyone else (although I drive a fuel efficient car). And the whole world of margins, futures etc. is quite confusing. The gas that you and I are buying today was bought as crude awhile ago. So, present prices don't necessarily reflect what's going on. And depending what state you reside in, add the tax and for some it's quite a bit. Yet again, depending where you are situated in the states will also reflect price. For example, the west coast has limited refining compared to say the gulf region. Although the upcoming hurricane season should be interesting this year. TXC was hurt by recent storms on top of the explosion and will be slow in coming back, especially being under the regulatory microscope. Gas stations also have their role, especially if they are leased.

As for this website, I think it's great. There is a lot of information with plenty of diverse opinion.

Airline pilot, we will always fly, so there will always be planes and guys like you that fly them. But let's face it, the airline industry is very cyclical along with jobs and wages. Hopefully you are high enough up the food chain and have enough seniority to where you are somewhat protected. To be honest, I probably have the best job around. The oil industry is very cyclical too, a lot of upsizing and downsizing along the way. But as my buddies and I say, it's always better to be "close to the pipe." And as the energy sector reflects, all the experience is retiring. Knowledge transfer cannot be accomplished quickly enough. So these refineries have a lot of inexperience running the show, from Engineers, Project managers and the crafts.

Troyboy1208

Welcome aboard and thanks for your insight. It seems the Mass media is basically clueless about the subtleties of the problems that refineries are dealing with. Thank you for your contribution

AirlinePilot

No sweat Bullplug! Egos? We got our share in here. Just don't be bashful about setting folks straight. Every now and then your going to get someone to raise the bulshit flag, but like others in here, I trust that you do what you say.

Luckily, I am fairly high in the seniority order so I am fairly well protected unless there is a catastrophic economic breakdown. I guess we will all see about that.

Most in here will greatly appreciate your take on anything to do with the topics here.

roccman

"Luckily, I am fairly high in the seniority order so I am fairly well protected "

Translation please

eastbay

Airline pilot, we will always fly, so there will always be planes and guys like you that fly them.

Bullplug, nice to have you here offering some nicely needed 'inside' perspective. We can't have enough of that.

I couldn't resist adding that, yes, we'll always fly but at some point in the not-too-distant future it'll be at 31 mph lumbering along under giant airbags. Hey, someone's gotta fly 'em!! Very Happy

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AirlinePilot