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"Excess" US Refinery Products Need To Be Exported

General discussions of the systemic, societal and civilisational effects of depletion.

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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Sun 02 Jun 2013, 22:55:09

Not an "attack" on you Rockman, I know you just quoted a PR piece, but I gotta respond.

The 6,000 construction jobs and the 3,000 jobs for the on-going operation

That seems optimistic. Even if true, those numbers really aren't terribly impressive in a province with a population of >4.4 million. And the notion that a significant share of those jobs will go to First Nations people is fantasy.

The $3.75 billion in new tax revenue between now and 2020 the refinery would generate

Also sounds a bit optimistic. And tax revenue for whom? Not the province of BC I think. That's something the BC premier is insisting on, a piece of the pie, which Alberta is refusing to share. Whether that's extortion or good politics is probably in the eye of the beholder.

Environmentally, the use of new refining technologies will drastically cut emissions and shipping lighter refined products rather than heavier bitumen makes tanker transport safer.

The main worry is a spill along the pipeline and/or from tankers. No refining technology will prevent this.

A refinery on tidewater in B.C. gives Canada access to world markets, especially to the growing markets on the Pacific Rim. As long as Canadian energy is landlocked, the U.S. will continue to take advantage by paying well-below world prices.

In other words, the US will end up paying more for oil should Alberta figure out the export conundrum, whether the pipeline goes to BC or the Gulf Coast. And are we really paying “well below world prices” for Canadian tar sand oil? I don't know and can't be bothered to Google it for the next hour, but it sounds exaggerated.

And finally, the environment is no better off, as other countries will fill the void by producing carbon based-energy, often in ways that are less environmentally-friendly than is the case in Canada.”

Oh jeez, so burning every last drop of Canadian tar sands oil will be an environmental plus? Okey dokey. There's nothing “environmentally friendly” about the way Canada is developing its energy resources. Obvious greenwashing is obvious.

This much is clear: The whole energy situation is up in the air. Rockman, you've done yeoman's service in pointing this out to the board in your threads, particularly those concerning China's bid for power.

But “we'll just burn it all anyway, so who cares” is a popular meme around here. While I'm a determinist on some matters, I do think there are possible future scenarios where we won't “burn it all.” Blocking tar sands development and coal exports is a good place to start.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Mon 03 Jun 2013, 06:41:05

Loki - I intentionally put up the most extreme spin piece I could find to emphasize the difficulty faced with any effort opposed to the refinery and oil sands transport. Again not arguing right or wrong but pointing out the magnitude of the forces involved. What will or won’t be generated by the plant remains to be seen. But what isn’t unknown is the magnitude of the economic impact. If the plant actually processes the nameplate capacity it will purchase over $14 billion of oil sand production per year. So if the producers can squeak out just another $6/bbl above the low price they are selling to the US refiners that’s $1 billion/yr in additional income for those companies. Then add the guaranteed tax income to BC. And then add whatever jobs are created in an area with little opportunity for employment. So even if none of the other benefits develop are TPTB going to really care?

And what do the folks who oppose the plant and oil sands development have to offer? A potential spill and Increased air pollution regardless of how efficient the plant may be. The environmental impact of the oil sands extraction won’t change since that will carry on regardless of where the oil ends up. That’s what I meant by lopsided. Even the union is backing it. I couldn’t find a reference I saw earlier but one of the native tribes across whose lands a portion of the p/l would cross supported the plan because they would get a nice check in return.

As I said it’s not going to boil down to the subjective question of right or wrong IMHO but economics and politics. But understand there’s a lot of folks in the US that hope efforts to stop the refinery as well as development of the oil sands is successful. Mostly the US oil patch. It occurred to me that some might think I’m in favor of the plant. I just report the facts as they pop up. I’ve mentioned it before: 98%+ of the US exploration companies would like nothing better than to see the oil sands production stopped. We are not one big happy band of brothers. We are competitors. The vast majority of us are losing income thanks to the import of Canadian oil. There’s even a fairly large number of us (especially the Rockman) who would be very pleased if all frac’ng were banned in the US. The oil sands and frac’ng only reduce the cost to American consumers which is not in the best interest of most of the oil patch.

Nothing personal against our Canadian counterparts…just business. LOL.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Oily Stuff » Mon 03 Jun 2013, 10:07:54

Whew, Rockman! I am glad you said what you said about the Keystone before I had to. Producers along the Gulf Coast do NOT want that to happen; include my drop in the bucket in that statement. Thank you!

In the last 18 months I have observed many operational difficulties getting oil moved in a timely manner and now I am being told that no crude oil buyer in my neck of the woods wants to term up volumes based on a LLS to WTI premium. Oil Hotels along the Gulf Coast are hanging no vacancy signs everywhere. Cushing is stuffed. Producers in the Permian Basin that were taking a 12-14 dollar loss to WTI, if they could sell it, are now moving oil thru Seaway and getting back to WTI parity. The Longhorn Pipeline reversal will add more Permian barrels to the equation, now take a look at this: http://business.financialpost.com/2013/ ... =3bb5-ee91.

All this means one thing for producers in Texas and Louisiana. Everything is headed south. The langniappe for EF production is going to shrivel up like a raisin.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Pops » Mon 03 Jun 2013, 11:45:50

In the OP it said a million barrels a day of exports in 2012, looks more like the entire capacity of 3.3mmb/d


Image
http://www.eia.gov/dnav/pet/pet_move_wk ... blpd_w.htm


Something happened in 2006 to make imports drop and exports rise right at the very time the big price runup happened even though overall US production didn't begin to increase until 2009 and only jumped big time last year.

Interestingly this is about the time of the Cheney/Haliburton administration's energy policy act, otherwise known as the Haliburton Profit Recovery Act...


Not that the current administration is any different, you've heard of the Emergency Powers declarations, here from the "legal authority" finding of this year- p46, (f)) although if one had the time to track it down. I'd bet the wording originated back in the Cheney/Haliburton administration:
(f) Certain Petroleum Products.-- Petroleum
products refined in United States Foreign Trade
Zones, or in the United States Territory of Guam, from
foreign crude oil shall be excluded from any
quantitative restrictions imposed under this section
except that, if the Secretary finds that a product is in
short supply, the Secretary may issue such regulations
as may be necessary to limit exports.


A few "Foreign trade zones":
FTZ No. 115 Beaumont
Grantee: Foreign-Trade Zone of Southeast Texas, Inc.
EXXON Mobil Port Arthur


FTZ No. 116 Port Arthur
Grantee: Foreign-Trade Zone of Southeast Texas, Inc.
Motiva Enterprises
Total Petrochemicals & Refining USA, Inc.
Premcor Refining Group

Grantee: Foreign-Trade Zone of Southeast Texas, Inc.
Port Arthur
122D Gulf Marine Fabricators
122E Bay Ltd.
122H TOR Minerals Intl
122I Citgo Refining & Chemicals
122J Valero Refining Co.
122K Sherwin Alumina, LLC
122L Flint Hills Resources LP
122M Valero Three Rivers Refinery
122N Equistar Chemicals
122O International Resistive Company
122P Kiewit Offshore Services
122Q Baker Hughes, Inc.
122R Halliburton Energy Services, Inc.

FTZ No. 149 Freeport
Grantee: Port Freeport
149C Phillips 66 Company
149F Equistar Chemicals
149G Dow Chemical Freeport

...the list goes on

I'd like to dig further but I gotta work...
If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen we must live through all time or die by suicide.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Mon 03 Jun 2013, 12:15:11

Pops – I think you’ve done some fine dot connecting. “Something happened in 2006 to make imports drop and exports rise right at the very time the big price runup happened even though overall US production didn't begin to increase until 2009 and only jumped big time last year.” Interesting observation. Just shooting from the hip but I’ll guess it was a combination of declining US demand and higher international prices for products. As been said: follow the money. With post like yours I suspect folks will began to realize that such terms as “American oil” or “American gasoline/diesel” are a tad outdated.

So all together now: “We are the world……”
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Loki » Mon 03 Jun 2013, 21:38:16

ROCKMAN wrote:And what do the folks who oppose the plant and oil sands development have to offer? A potential spill and Increased air pollution regardless of how efficient the plant may be. The environmental impact of the oil sands extraction won’t change since that will carry on regardless of where the oil ends up. That’s what I meant by lopsided. Even the union is backing it. I couldn’t find a reference I saw earlier but one of the native tribes across whose lands a portion of the p/l would cross supported the plan because they would get a nice check in return.

What the opposition has to offer is protection of BC's tourist and fishing industries, both of which are much larger than any tar sands-related activity will ever be. If some small town on the northern coast doesn't get a pipeline pumping money into Alberta, I can guarantee you 99% of people who live in the Fraser Valley won't care.

As for trade unions, some of them have also backed coal exports here in Oregon. Not surprising, coal exports will increase the number of jobs in their very specialized trade (Longshoremen, etc.). But as far as I know, the state AFL-CIO hasn't come out one way or the other about coal exports. Not that trade unions matter anymore anyway.

But this:
The environmental impact of the oil sands extraction won’t change since that will carry on regardless of where the oil ends up.

is what I really take issue with. This is the determinism I was talking about. If they will “carry on regardless,” why do they need to build these pipelines and new refineries? They want to build them because they can't expand production otherwise. Ergo, blocking these developments will prevent further expansion of tar sands, at least for a time.

Even if we do live in a deterministic world, we shouldn't be fatalists about it :wink:

This I did not know, though:
I’ve mentioned it before: 98%+ of the US exploration companies would like nothing better than to see the oil sands production stopped.

Interesting. You American oil guys should start a “social welfare” non-profit and spread the word about the evils of Canada's tar sands. Hopefully the IRS will process your application in a timely manner :lol:
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Tue 04 Jun 2013, 07:17:28

Loki – valid points but specifically; 1) How much money will the tourism and fishing industries lose? There’s one problem: you can’t put a number to the possibility while the other side can add of many hundreds of $billions in specific benefits for a variety of folks. IOW: lopsided. 2) “Ergo, blocking these developments will prevent further expansion of tar sands”: From what I can tell so far none of the words or actions have prevented a major expansion of oil sand development. Can you point to a specific reason why this dynamic would change? Again, a very lopsided ledger IMHO. Simple economic pressure: $trillions of actual revenue vs. a theoretic possibility of a loss. I understand the concern: I had a front row seat to the Macondo spill in the GOM. And yet the vast majority of the US public has offered zero opposition to more DW drilling out there. When it comes to the self-interest of the majority of the population vs. environmental protection there are some rather clear precedents IMHO. I’m not saying you and the others should give up the fight. I just lay out the ground rules as I see them developing. It appears to be a very one-sided battle at this point IMHO. Like many I have a tendency to pull for the underdog even if I don’t fully agree with them.

As far as the US companies vs. the oil sands this has been a very hot topic in the oil patch for some time. It has already cost US oil producers 100’s of $millions in revenue. This is where folks get confused. The refiners love the oil sands: less expensive oil typically allows for better margins for them. For the rest of us the dynamics are rather simple when you think about it: we sell a commodity. Why would we support any effort to bring more of that commodity to the market place if we weren’t involved in that process? It’s really very simple economics. We’re not in the business of “energy independence” or national security. We in the business of selling a commodity to make a profit. That’s the reality you won’t hear in those cutesy Chevron TV spots.

And the IRS would shut us down faster than the Tea Party: the politicans want that cheap oil...now. LOL.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Thu 06 Jun 2013, 09:12:17

U.S Gasoline Exports to Venezuela Hit Record High in November

--Gasoline exports rise to Venezuela amid refiner snags
--U.S. imports of Venezuela crude climb as imports from all countries drop

“U.S. exports of gasoline to Venezuela climbed to a record high of 85,000 barrels a day in November.
The volume of gasoline shipped to the South American member of the Organization of Petroleum Exporting Countries was more than double the October level of 39,000 barrels a day and topped the previous record of 68,000 barrels a day set in September. EIA data show the U.S. has been exporting gasoline to Venezuela in nearly every month since December 2011, when the first shipments since March 2003 occurred.

The exports of gasoline come as Venezuela has suffered persistent operating problems at some refineries. The country's largest refinery, Amuay, still has recovered only a little more than 50% of capacity since it was shut down after an August accident. EIA data show that in addition to the gasoline exports, the U.S. has been exporting MTBE to Venezuela since 2005 and shipped 25,000 barrels a day in November, making it the biggest customer for U.S. exports of gasoline additive, ahead of Mexico.

From 1993 until early 2011, the U.S. was a net importer of modest volumes of gasoline from Venezuela.
The higher gasoline exports to Venezuela came as U.S. net exports of gasoline to all countries increased modestly in November from October, but fell by 18,%, or 100,000 barrels a day , from a year earlier, to 452,000 barrels a day. The U.S. became a net exporter of gasoline in 2009 and volumes have increased steadily, before easing a bit from the December 2011 peak of 556,000 barrels a day. Net U.S. export of distillate fuel (diesel and heating oil) to all countries averaged 872,000 barrels a day in November, down from 960,000 barrels a day in October and the lowest month rate since August, EIA data show. November net exports were 8.3% above the year-earlier level. Mexico, the Netherlands and Brazil were top destinations for U.S. distillate exports in November. The U.S. has been a net exporter of distillate since late 2007.

Meantime, separate EIA data showed the U.S. imported the most crude oil from Venezuela in November since June 2009. U.S. crude oil imports have been declining overall, as output of light, sweet crude oil from shale oil fields in soaring, pushing domestic output to the highest level in decades. November crude imports were 8.724 million barrels a day, down 6.8% from a year earlier, while domestic output rose 14.6% to 6.893 million barrels a day, the highest level since 1993. But many refiners are still configured to run the heavy sour crudes produced in Venezuela, or need to mix such crudes with lighter crudes to get an optimal balance for refinery operations. Venezuela ranked as the third-biggest source of foreign crude supplies to the U.S. in November, the first time it edged Mexico from that spot since July 2012. Venezuela accounted for 12.7% of total U.S. crude imports, its biggest share since December 2007.”

It’s interesting to note that while some of the optimists like to include the refinery volume gains in their stats they also don’t seem to reduce those numbers by the exported volumes giving the impression that all those fuels are consumed domestically. Exporting 800k to a million bbls/day seems significant to me.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 07 Jun 2013, 21:20:13

Another interesting potential for unintended consequences. As African crude exports to Canada diminishes somewhat it allows the Chinese to move in as a white night to help those countries capture more revenue from refining their own oil as well as having a ready buyer for the crude and a willing participant in developing more of their reserves. From:

http://www.processingmagazine.com/artic ... ts-from-us

“While historically the average monthly export of crude oil from the United States to Canada stood at 24,000 barrels per day, mostly delivered to refineries in central Canada, over the first three months of 2013 the average daily export skyrocketed to almost 100,000 barrels per day.

The figures released by the U.S. Energy Information Administration highlight the trend for increased demand for cheaper U.S.-sourced crude, as opposed to more costly exports from the North Sea, the Middle East and Africa. One of the refineries that is using far bigger amounts of U.S. crude is based in Quebec and is operated by Valero Energy Corp. It has a capacity of 265,000 barrels per day and is currently actively seeking a way to switch to cheaper crude from North America, rather than continue to import more expensive products from overseas. He explained that at present the company is licensed by the U.S. Department of Energy to ship not more than 90,000 barrels per day of crude produced from the Eagle Ford shale. A test of crude extracted from Eagle Ford proved that the refinery can process it very well, so the refinery is hoping to increase the amount it can ship soon. Day stated that, until now, the entire amount of crude processed at the refinery has been coming from overseas.”

How very nice of the Dept of Energy…thank you. Anything that reduces the amount of oil in the US market place and helps to keep prices higher is much appreciated. Well...by some of us anyway.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Sun 09 Jun 2013, 20:35:00

You can’t fault Bloomberg when it comes to cheer leading the US economy. From:

http://www.businessweek.com/articles/20 ... d-gasoline

“You hear all the time that America is too dependent on foreign oil. According to the EIA, crude oil imports fell to 8.9 million barrels a day in 2011, the lowest level in more than a decade. Since 2005, foreign imports have dropped from 60 percent of U.S. consumption to 45 percent last year, according to U.S. Department of Energy data.”

That’s right folks: our economy has gone from being dependent on imports from 6 out of every 10 bbls we use to a little less than 5 bbls. Thank goodness for the demand destruction brought on by those higher prices as well as what assistance we got from that recession thingy. And less not forget the reduction in workload so many Americans have experienced as a result of those two factors. And of course, let’s not forget the secondary assistance from the increase in US production thanks to those higher prices our citizens have paid.

“In December 2011, for example, the U.S. imported 1.3 million barrels a day from Saudi Arabia, compared with 1.6 million in December 2007. The decline in imports from Venezuela has been even steeper—just 860,000 barrels per day compared with 1.3 million four years earlier, although Venezuela’s declining production capacity has also been a factor in the drop.”

Yep…reduced exports from those two countries which China has been more than willing to now tie up under long term contracts. Thankfully the US won’t be tempted to renew those oil imports now that they have been removed from the open market. Fortunately we can now deplete our own resources instead of those other countries. I expect a nice Hallmark “Thank You” card from China in the mail any day now.

“While the U.S. is becoming less reliant on foreign crude, the world is becoming more reliant on gasoline and diesel fuel refined in the U.S. This week, we learned that in 2011, the U.S. became a net exporter of gasoline, diesel and other fuels for the first time since 1949. Such refined products were the top U.S. export in 2011, beating out such staples of U.S. manufacturing as Detroit’s autos and Boeing’s (BA) airplanes.”

Yes indeed. Instead of exporting as much of those American made products we can now export motor fuels we refined from oil purchased from other countries. They get the fuel and we get the credit for adding a bit more CO2 to the atmosphere. Win-win.

“We have become the China of refined products,” says Gheit, with Oppenheimer. “We’re dumping product into other countries’ backyards.”

Thank goodness we’re not dumping all that fuel in the US and driving down costs here. ExxonMobil et al will be forever grateful.

“As Chinese manufacturers are able to make many products for a cheaper price due to lower material and labor costs, U.S. refiners have two key competitive advantages over foreign rivals: cheaper natural gas and access to a cheap, abundant supply of oil. Natural gas is a key raw material for refineries, which use it predominantly as a source of fuel to operate.”

Certainly a great advantage to use up our huge (though finite) NG resource to improve the profit margins of the refining industry. BP et al are also forever grateful.

“This cheaper supply of crude has given U.S. refineries a tremendous competitive advantage over their competition,” Gheit says. “Just like China, we are using cheaper raw materials to sell a product priced in a global market.”

The cheaper raw materials being our NG and not oil, of course. And now Americans can truly feel like one with the rest of the world’s citizens: we get to now pay for motor fuels priced according to the global market. All together now: ”We are the world….”.

I suppose this piece was running a tad long so they had to cut out the section describing the great advantage Americans have been offered to conserve thanks to motor fuel prices doubling in the last 10 years and currently selling near record high levels. And it is only extracting about $250 BILLION more each year from gasoline/diesel consumers in the US. If we can just get fuel prices up another $1 or two just think how much less oil we’ll have to import. I’m certainly crossing my fingers
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Mon 10 Jun 2013, 14:01:50

I’ve gotten some messages expressing confusion about what can and can’t be exported with respect to oil and refined products. I mentioned earlier that oil imported from another country, like Canada, isn’t restricted the same as oil originally produced in the US. But here’s the clearest explanation of the current dynamics dealing with “product” exports which in reality are more oil than refined products. From "Crude Export Ban No Match for Lightest U.S. Shale Oil":

http://www.bloomberg.com/news/2013-02-2 ... nergy.html

A glut of shale oil in fields from Texas to North Dakota is forcing producers to find ways around the U.S.’s three-decade-old ban on crude exports in order to seek higher prices in foreign markets. Kinder Morgan Energy Partners LP (KMP) is among companies setting up mini-refineries to process certain grades of crude just enough to qualify them as refined fuels, which are legal to export. Ultra-light oil, which is so abundant in shale rock, has flooded the Gulf Coast and traded for a record discount to global benchmark Brent crude last quarter. Potential revenue for exports is $40 billion a year based on global prices, or about $9.7 billion more than what the same oil fetches in the U.S. “It’s going to get exported in one way, shape or form or another,” said Ed Hirs, a professor of energy economics at the University of Houston. Producers will sell it abroad “as a product in its own right, or it’s going to be exported as a finished good, having become diesel, plastic or fertilizer.”

Ultra-light oil, known as condensate, may make up as much as 14 percent of U.S. crude production in 2013, or almost 1 million barrels a day, about 66 percent more than its level three years ago. Because there are not enough buyers where it’s pumped, the easy-to-refine crude has become the vanguard of an effort by the oil industry to get Congress to further weaken U.S. limits on most crude oil and natural gas exports that have been in place since the early 20th century. The government last year began approving plants to liquefy and ship natural gas overseas on tankers. That was the biggest policy change since the rules were tightened in the 1970s, when securing domestic supplies got priority after Middle East turmoil led to shortages and long lines at filling stations. With a burgeoning output from shale having reduced U.S. oil prices, Congress is being asked to weigh the benefits of cheaper gasoline and diesel for consumers against higher profit for energy companies that want to export part of their output.

“This is all new ground,” said Scott Schwind, an attorney at Jones Day in Houston who regularly handles fuel supply and delivery contracts. “We’ve been hearing about energy security for all of our lifetimes, so to even talk about exporting is a major shift that will bring about some weighty political questions in Washington.” Allowing exports could narrow price disparities between U.S.-produced oil and imports such as Brent by opening new markets outside of the refineries on the Gulf Coast. U.S. condensate sold for a record average of $26.47 a barrel less than Brent oil in the fourth quarter of 2012, compared with an average difference of $6.70 in the same quarter of 2010. Valero Energy Corp. (VLO), Kinder Morgan and Marathon Petroleum Corp. (MPC) are spending $850 million to build mini-refineries or upgrade existing plants to process the ultra-light crude. The soonest to come online is Kinder’s, set for the first quarter of 2014. The plants will do little more than heat oil and condensate to a boiling point and distill them into separate fluids. Prices for condensate average about $4.57 less per barrel than heavier U.S. crude, crimping producer profits by as much as $1.7 billion a year. Kinder Morgan, which has returned 9.2 percent for its investors in 2013, will process condensate for companies and won’t control where the products are shipped, Don Lindley, a vice president in the company’s refined products pipeline division said in a Jan. 30 interview.


Condensate “used to be the backwater of the backwater, and it hasn’t mattered until now,” said Rusty Braziel, president of RBN Energy, who predicts that the growing volume of condensate swamping the Gulf Coast market will be exported to Canada or elsewhere. “All of a sudden we’ve got a lot of it, so it matters now.” Condensate can flow from both oil and natural gas wells. The processing units envisioned by Kinder Morgan and others can convert low-cost condensate to petroleum products for as much as $1 to $2 cheaper per barrel than a conventional refinery, said Alfred Luaces, senior director of global petroleum markets at IHS. The units, called splitters, may be able to process as much as 300,000 barrels of crude a day, Luaces said. The mini- refineries being built “split” the condensate into naphtha, a feedstock for making plastic and other chemicals, and kerosene, which can be exported to markets in Asia and Latin America, he said. Those chemically simpler products may not fetch as much as finished gasoline or diesel fuel, but the lower cost of running the splitter makes it attractive to sell them on international markets. “It’s a cheap way around the export limitation,” Dwarkin said in an interview.

Limited demand for expanding light oil supplies among Gulf Coast refiners configured to handle heavier crude led the Commerce Department last year to approve more exports of condensate and light oil for companies including BP and Royal Dutch Shell Plc. (RDSA) Crude exports rose to 73,000 barrels a day in November, the highest total in that month since 1999, according to the U.S. Energy Information Administration. There are no limits on refined products. U.S. fuel exports reached an all-time high last year of an average 2.6 million barrels a day. “Some molecules are painted with a no export sign,” said Braziel, of RBN. “Other molecules are painted with the OK to export sign, and there doesn’t seem to be any rhyme or reason as to why some molecules are OK and some aren’t.”
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Tanada » Mon 10 Jun 2013, 17:50:49

I thought Condensates were Ethane, Propane, Butane and Pentane and that they were combined over a catalyst to make Octane among other longer chain products? The way your post reads they sound more like long chains that have to be cracked to Naphtha and Kerosene range lengths to be sale-able.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Mon 10 Jun 2013, 20:51:09

Tanada – There’s no simple and quick answer. This is the best I can offer: a fair bit of reading. RBN seems to present the best clarification I could find – “ Fifty Shades of Condensates – Which One Did You Mean?”:

http://www.rbnenergy.com/fifty-shades-o ... d-you-mean

There are actually 3 different sections to this link you might want to read. Warning from the Rockman:

"You're traveling through another dimension, a dimension not only of sight and sound but of mind. A journey into a wondrous land whose boundaries are that of imagination. That's the signpost up ahead - your next stop, the Condensate Zone!"

“What Makes A Condensate A Condensate? - Condensates are a group of hydrocarbons that don’t fit easily into mainstream product categories. In the blog “Neither Fish Nor Fowl” we defined condensates as liquid hydrocarbons somewhere between crude oil and natural gas liquids (NGLs). But now that we are getting into the nitty gritty, this is much too simplistic a definition for our purposes. The reality is that most condensates differ significantly from crude oils. And condensates are not like all NGLs – they are similar only to natural gasoline, the heaviest of the NGLs.

So what makes a condensate a condensate? Here lies the heart of the problem because the term condensate can refer to a number of products made up of somewhat similar hydrocarbon compounds.”

And just to make it a bit more complicated the legal definition varies between states. And one more complication: due to changes over the course of the productive life of a well in Texas it may go from being legally classified as a condensate producing well to an oil producing well
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Thu 13 Jun 2013, 15:47:58

Was wondering who the big exporter of refined petroleum products was now that the US is increasing their share. Turns out the US (2.3 million bpd) has already been the big dog for a while right up there with Russia (2.2 million bpd). In comparison the rest of the countries have a very small share individually.

http://www.eia.gov/cfapps/ipdbproject/I ... d=54&aid=4


This seems to offer even greater concerns over China’s expansion into refining JV’s especially with oil exporters. Elsewhere someone offered that all this excess refining coming on line in the next several years would lead to a glut in refined products. Unfortunately the amount of products coming to the market isn’t determined by refining capacity but by how much oil there is available to refine. If the Chinese expansion increases capacity 50% it doesn’t mean extra 30 or 40 million bopd will suddenly show up in the market place. It means that a large percentage of capacity won’t be used at that time. Just a guess but it looks like the US and/or Russia might be losing the biggest chunk of markets share. Right now all the refineries on the planet are processing the 86 million bopd or so right now. Adding another X million bopd capacity means someone will end up with their refineries being underutilized since there doesn’t appear to be an extra X million bopd coming on line anytime soon. Given the Chinese are building their refinery JV’s with oil exporters it doesn’t sound like they’ll be the ones coming up short.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Tanada » Mon 01 May 2017, 16:17:29

ROCKMAN what do you think of this development?

America's largest oil refinery is now fully owned by Saudi Arabia.

Saudi Aramco, the kingdom's state-owned oil behemoth, took 100% control of the sprawling Port Arthur refinery in Texas on Monday, completing a deal that was first announced last year.

Port Arthur is considered the crown jewel of the US refinery system. The Gulf Coast facility can process 600,000 barrels of oil per day, making it the largest refinery in North America.

Aramco previously owned 50% of Port Arthur through a joint venture co-owned with Royal Dutch Shell (RDSA) called Motiva Enterprises.

But the two oil giants had a rocky relationship and reached a deal in March 2016 to separate their assets. Shell put out a statement on Monday confirming the "completion" of that break-up.

In addition to Port Arthur, Aramco is acquiring full ownership of 24 distribution terminals. Aramco also gets the exclusive right to sell Shell-branded gasoline and diesel in Georgia, North Carolina, South Carolina, Virginia, Maryland, the eastern half of Texas and the majority of Florida.

Aramco's deal allows the oil giant to shore up one of its best customers -- the US -- ahead of next year's planned IPO. Now that it controls the largest American refinery, Aramco can send more Saudi crude into the US for refining to sell to North American drivers.

Saudi Arabia is already America's second-largest source of crude, behind only Canada. The US imported 1.3 million barrels of Saudi crude a day in February, up 32% from last year, according to the Energy Information Administration.

Saudi Arabia is hoping the Aramco IPO will be valued at a stunning $2 trillion. The kingdom continues to grapple with low oil prices and a bloated budget, making it critical that the Aramco IPO goes off without a hitch. Saudi Arabia, the largest oil exporter in the world, dramatically slashed taxes on Aramco in March in an effort to quell concern about the oil giant's valuation.

Even as Saudi Arabia extends its reach in the US, the Trump administration has pushed for American energy independence by unleashing the domestic energy industry. Trump said in a May 2016 speech that he wants to bring about independence from "our foes and the oil cartels."

Trump also threatened before he was elected to halt imports of oil from Saudi Arabia and other Arab countries if they didn't commit ground troops to fight ISIS.

After Trump was elected, Saudi energy minister Khalid al-Falih later warned that blocking the kingdom's crude could backfire.

"Trump will see the benefits and I think the oil industry will also be advising him accordingly that blocking trade in any product is not healthy," Falih told the Financial Times in November.

Despite that rhetoric, relations between the US and Saudi Arabia appear to have improved under Trump. Saudi Arabia's powerful deputy crown prince Mohammed bin Salman met with Trump in the Oval Office in March, a meeting heralded by the kingdom as an "historic turning point" between the two countries.


http://money.cnn.com/2017/05/01/investi ... rt-arthur/
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Mon 01 May 2017, 17:01:58

T - Yep. Just part of the KSA effort to develop revenue streams NOT DEPENDENT upon its oil exports. And given our political stability compared to much of the world a relatively safe harbor for a multi $billion asset.

Just part of the dynamic that's exporting refinery products made from 1.7 BILLION BBLS of oil every year. A big refinery for sure. But close to where the Rockman is now typing (about 80 miles from Motiva) there have been $50+ BILLION of expansions of a number of refineries (including #2 ExxonMobil) underway for a couple of years.

Of course, it was such a stupid move by the Saudis, right? After all, as has been reported here, refineries are losing money on ever bbl cracked. And it will be even worse in just a few years when the entire petroleum industry collapses, according to "informed sources".

Dumb f*cking rag heads. LOL.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 05 May 2017, 05:58:18

And while it is small compared to Motiva it's a very significant change in the US refining industry:

The Davis Refinery: the biggest new refinery in 40 years in the U.S. will process Bakken production.

"The plant is currently in the design phase with groundbreaking set for summer 2017. Plant completion is expected by 2018. Meridian will use state of the art equipment and processes to construct one of the first greenfield fuels refinery in the U.S. in four decades. The plant is being designed to be highly efficient and will be capable of producing nearly zero sulfur diesel and jet fuels years ahead of EPA mandates. Operating on natural gas will provide many advantages, including low operating costs, low emissions and no need for EPA permitting.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 05 May 2017, 22:36:22

A really odd report given some here constant beat the drum that refineries are losing money on every bbl they crack. Must be making up for the loss by selling more volume. LOL.

World Buying American Diesel as Fast as Refiners Can Make It

The international market has a message for American refiners: Stay calm and keep turning crude into diesel. While a global glut has pushed crude prices down to five-month lows, producers of middle distillates can’t make enough to satisfy demand. A combination of seasonal events is giving refiners on both the Atlantic and Gulf coasts a chance to boost exports to Europe and South America.

“Everybody is freaking out about high refinery rates” in the U.S., said Robert Campbell as plants in the U.S. processed record levels of crude into refined products last month. Domestic demand for gasoline may be slipping in the U.S., but there’s no reason to panic when it comes to distillate.

Preliminary weekly data from the EIA show that exports of US distillate advanced to a record in mid-April. U.S. refiners were shipping 1.42 million barrels a day, or roughly five medium-sized tankers, abroad, mostly from the Gulf Coast. These shipments are run-of-the-mill for facilities in Texas and Louisiana, but it’s less common to see deliveries leave from the Atlantic Coast, which sent at least 1.55 million barrels to Europe and Algeria since April.
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby ROCKMAN » Fri 05 May 2017, 23:16:58

And even more fools planning to expand further into the money losing business of oil refining:

Iraqi's oil ministry on Thursday asked foreign companies and investors to bid for a project to build and operate a 300,000 barrel-per-day export-oriented refinery near the southern city of Basra.

Pemex is producing more gasoline and diesel at its six refineries across Mexico, reducing fuel imports and leaving less oil available for export.

Commodities trader Vitol has agreed to buy an 85,000 bpd condensate splitter in the Netherlands from Koch Supply and Trading. The world's largest oil trader has been expanding in the downstream and retail sectors over the last few years as it seeks outlets for its growing traded volumes.

Net profit at Saudi Basic Industries Corp (SABIC), one of the world's biggest petrochemical producers, jumped 80% from a year earlier.

BP Sells Stake in China Petrochemical Venture to Sinopec for $1.7 Billion. The sale represents BP's first major divestment of a year in which it expects to sell assets worth between $4.5 billion and $5.5 billion this year.

Russia resumes refinery shipments to Cuba, helping to fill the Venezuelan gap. A Russian oil tanker with 249,000 barrels of refined products is due to arrive in Cuba on May 10 bringing back memories of when the Soviet Union supplied all of the island's energy needs.

A crowd gathered in front of the Tesoro Oil Refinery to protest the California facility’s planned expansion. Actress Jane Fonda, environmental activist Robert Kennedy Jr. and state Senate President Pro Tem Kevin de Leon are among the speakers scheduled. They’re protesting a plan to double the importation of crude oil from Canada and North Dakota.

Hanwha Total Petrochemical, a 50/50 joint venture in S Korea between Hanwha and Total will invest to expand its Daesan refining facility.

{There are more fools out there thinking they can turn a profit in the refinery biz but I'm tired. LOL}
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Re: "Excess" US Refinery Products Need To Be Exported

Unread postby Squilliam » Sat 06 May 2017, 01:07:29

Well there is that old saying. "we're losing money on every unit we produce, but we'll make it up with volume"
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