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Re: Sour Crude Traded as if it Mattered

Unread postby DantesPeak » Thu 31 May 2007, 09:26:16

evilgenius wrote:
What does this say about the future of refining in the US? Which way will Asia go as it invests for the future? Which way will Western capital go for that matter?
[hr]

Kuwait, Saudi Arabia, and other Gulf countries are in the process of spending huge amounts building refineries to use this type of crude for domestic purposes. To summarize what Rocdoc123 said yesterday, they are selling the good stuff to foreigners and keeping the sour stuff to use for powering their local economies.

As far as being important to the West, no it's not very important now but it is a developing market. The US and Canada are making significant efforts to upgrade refineries to process heavier crudes, especially that from Canadian tar sands.
It's already over, now it's just a matter of adjusting.
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Re: Sour Crude Traded as if it Mattered

Unread postby Gerben » Thu 31 May 2007, 09:42:09

DantesPeak wrote:
evilgenius wrote:
What does this say about the future of refining in the US? Which way will Asia go as it invests for the future? Which way will Western capital go for that matter?
[hr]

Kuwait, Saudi Arabia, and other Gulf countries are in the process of spending huge amounts building refineries to use this type of crude for domestic purposes. To summarize what Rocdoc123 said yesterday, they are selling the good stuff to foreigners and keeping the sour stuff to use for powering their local economies.

As far as being important to the West, no it's not very important now but it is a developing market. The US and Canada are making significant efforts to upgrade refineries to process heavier crudes, especially that from Canadian tar sands.


What it means is that they are running out of the good stuff. They know the good stuff has peaked and will decline. The market for sour crude will have to grow rapidly if we want to slow down the decline of oil production.
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Re: Sour Crude Traded as if it Mattered

Unread postby Pablo2079 » Thu 31 May 2007, 10:29:12

Would it be possible to run "upgraders" with the sour crude (like they do with the Canadian Bitumen)? Seems like they would have more markets for the sweet synthetic crude that result from the upgrading, rather than having to refine the sour crude.

Just a thought, but it seems like it would be a good way to utilize existing refineries throughout the world.
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Re: Sour Crude Traded as if it Mattered

Unread postby evilgenius » Fri 01 Jun 2007, 04:09:10

There are upgraders. Ivanhoe Energy is one small example I know of just off the top of my head. Upgrading might be the way for Western capital to answer the challenge. Another thing I thought of while reading this originally was that Western capital might respond to the world oil situation with a far more intense investing phase in Asia. Since Asia is being built and does not more expensively need to be re-built capital might find that there is a better return to go all out along the same already established economic lines.
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Oil industry scales back refinery plans

Unread postby DantesPeak » Sun 17 Jun 2007, 21:17:37

It seems that the energy industry and government will do anything to deny that the gasoline inventories are in perilous condition at this very moment. Lack of clear explanations has made the public skeptical of the industry - even when they are telling the truth.

In this case they are mostly not telling the truth, and I'm afraid that this is going to contribute to a big blame game when gasoline shortages likely start spreading accross the USA this summer.
It's already over, now it's just a matter of adjusting.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby shortonoil » Sun 17 Jun 2007, 21:38:12

Drifter quoted:

With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones.


It looks like they, the oil companies and the Bush administration, have been caught in their own lie. Since when did ethanol start contributing to the nations energy supply? Of course, Bush has been saying that it is going to save us (along with hydrogen) as they pump those subsidizes out to the ethanol industry, and the oil industry is saying, “we’ve got plenty of capacity”. Someone is going to have a lot of explaining to do; especially, right after the pumps run dry!
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Re: Oil industry scales back refinery plans because of ethan

Unread postby Blacksmith » Mon 18 Jun 2007, 01:56:18

It's purely economics and has nothing to do with the mith of ethanol.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby Twilight » Mon 18 Jun 2007, 16:42:02

shortonoil wrote:It looks like they, the oil companies and the Bush administration, have been caught in their own lie.

Someone is going to have a lot of explaining to do; especially, right after the pumps run dry!

People got promised a miracle, and they will demand to know what happened to it.

It's funny that high prices and localised shortages this spring got explained away as "lack of refinery capacity", even OPEC using that as an excuse. Then the oil majors say there's no need to build more capacity because the demand will go away. And there will be ethanol. And people kinda think, hey, I remember Bush saying we'd have ethanol.

And then the industry and government fail to deliver.

Man, people going to be pissed. What's more, the usual public outrage outlets like FOX and talk radio will be whipping it up.

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Re: Oil industry scales back refinery plans because of ethan

Unread postby basil_hayden » Mon 18 Jun 2007, 16:55:21

Just another product of our non-existent energy policy in this country.

The "It's easier to beg forgiveness than ask permission" paradigm is about to fail miserably.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby MacG » Mon 18 Jun 2007, 16:59:43

The Original Post really says it all.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby nth » Mon 18 Jun 2007, 17:19:12

This is a joke.

Even if the oil companies want to build/expand their refineries, they will not be able to do it. The waiting list for many crucial parts are three years out.

We already got a new refinery permitted in Yuma, AZ and yet, no construction due to unable to secure crude oil to get banks to release the money.

Kuwait has canceled oil refinery contract bids earlier this year due to submissions were proposing costs of 15billion. Somehow Kuwait thinks the price has gone down and reissuing the proposal for companies to submit new bids.

If ethanol is really going to make that big of a dent, then why is not the oil companies diving into ethanol? Instead, they are shying away from it and preventing ethanol pumps from being installed in their gas stations.

This is just a big farce.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby UncoveringTruths » Mon 18 Jun 2007, 17:24:43

Muddy up the waters and the sheeple won't know who to blame or believe. This just makes the issue that much harder to understand. Everyone in the industry standing in a circle pointing their finger at the next person.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby threadbear » Mon 18 Jun 2007, 17:31:29

They may be stalling building new refineries in the US until such time as a major crisis hits, at which time, the federal govt steps in, supercedes state and local govts and streamlines the permitting process in the interests of "national security" (or some such bull)

That would save them a bundle. If they dispurse most of their profits, raising yeild rates, that encourages their stock to further skyrocket, at which time they can plead poverty and have the govt subsidize the effort, in "the interest of national security"
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Re: Oil industry scales back refinery plans because of ethan

Unread postby emersonbiggins » Mon 18 Jun 2007, 18:00:55

threadbear wrote:...streamlines the permitting process in the interests of "national security" (or some such bull


I'll go one better than that. I've pointed out the possibility of the U.S. government contracting out and building state-run refineries, to "quell the demand" for refined supplies, and to do so in the light of the inability and/or unwillingness of the major players to get in the refinery expansion game. When it can't make money, but it's absolutely essential to process of modern civilization, leave it to the state to build and operate, right? Right?!? 8)

It's not like there's not a precedent -- highways, FAA, National Weather Service, etc., etc...
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Re: Oil industry scales back refinery plans because of ethan

Unread postby Bioman » Mon 18 Jun 2007, 18:08:30

Wow, I didn't realize biofuels were already having this big an impact.

A few weeks ago, the chief of OPEC said the same thing: biofuels threaten us. The IEA chief quickly said: dude, not so fast, don't worry, there's enough oil and you've made enough profits, so invest in expansion, dude.

I knew biofuels were huge, but that they were going to influence the behavior, thoughts and decisions of Big Oil is new to me.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby threadbear » Mon 18 Jun 2007, 18:14:03

Emerson, Why would the corporatocracy not socialize the cost, by having the govt build the refineries, but privatize the profits? That's how they operate. Demand for oil isn't going to completely evaporate. There are years and years of profits to be squeezed out of govt compliance to corporate dominance
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Re: Oil industry scales back refinery plans because of ethan

Unread postby DantesPeak » Mon 18 Jun 2007, 18:31:10

The US government already proposed building government refineries after Hurricane Katrina, but Congress rejected that idea.

I'm not saying it was a good idea or not, but if it wasn't in the national interest then for the government to step in, how can many in Congress blame the refining industry now for not doing more? Despite much talk about not building a new refinery, refinery capacity has been steadily expanded anyway - including over the last few years.

Again, I don't like this excuse (scaling back because of ethanol)
and this kind of talk will make things worse for all concerned later on.
It's already over, now it's just a matter of adjusting.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby pip » Mon 18 Jun 2007, 19:25:41

I work for an unnamed US refiner, and several months ago the regional vice-president came in and presented a slide show to the entire plant work force. The presentation he showed us was about the next 5-10 year projection for supply/demand etc that had been done by the company’s planning dept. The presentation had evidently been made to all the company’s plant managers earlier.

For those calling conspiracy or dishonesty, you’re giving the oil industry way too much credit. The presentation predicted gasoline demand continuing upward into the future in a consistent manner. Ethanol production to continue to increase into the future taking a larger and larger slice of the gasoline demand. The VP expressed concern about our future competition with the ethanol industry implying margins would likely decrease.

As strange as it seems, I would not assume the refining industry knows any more about peak oil than the average joe. I certainly haven’t met anyone here who would even recognize the term.
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Re: Oil industry scales back refinery plans because of ethan

Unread postby emersonbiggins » Mon 18 Jun 2007, 19:31:30

threadbear wrote:Emerson, Why would the corporatocracy not socialize the cost, by having the govt build the refineries, but privatize the profits? That's how they operate. Demand for oil isn't going to completely evaporate. There are years and years of profits to be squeezed out of govt compliance to corporate dominance


But of course. Hey, that's the American Way™, right?
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Re: Oil industry scales back refinery plans because of ethan

Unread postby TheDude » Mon 18 Jun 2007, 20:13:09

Who ever heard of a state run oil company? 8)

Or a company that runs the state for that matter.

Pip, you should hand out copies of Simmons's or Deffeyes's books to your colleagues.
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