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Diesel shortage?

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

Re:

Unread postby Blacksmith » Sat 21 Feb 2009, 20:08:53

EddieB wrote:This is only a tangentially related question, but here goes. I've heard that heating oil is essentially diesel fuel. Could I pump (untaxed) heating oil out of my house tank into my car without wreaking my car's engine? I know it would be illegal to do so, this is purely hypothetical mind you...


It's #2 oil no additives, but if you can use biodiesel also untaxes why not #2 heating oil I would mix 50/50 and see if it effect preformance.
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Re: Diesel shortage?

Unread postby Outcast_Searcher » Thu 26 Apr 2018, 03:02:36

pstarr wrote:Haven't seen stocks this low since sometime around late 2013, the height of the Greatest Recession Ever.

Except late 2013 was over 4 years AFTER the end of the "great" recession.

https://www.statista.com/statistics/188 ... ince-1990/

https://www.thebalance.com/us-gdp-by-year-3305543

https://www.thebalance.com/2008-financi ... is-3305679

Hint: In the real world, a recession means real GDP is falling, not rising.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Diesel shortage?

Unread postby Tanada » Thu 26 Apr 2018, 08:23:13

The end of 2013 Americans were not buying a lot of Diesel because prices were well north of $4.00/gallon in the midwest where I live. As a consequence because so much cargo shifted to rail transport where it legitimately belongs that the big producers made more by exporting that same Diesel overseas, which drove stocks down without changing much of anything else. This link from December 2013 shows the refiners were producing; 3.7 MM/bbl/d of distillate fuels .

This link from the same week of the year in 2017 just four months ago shows we were producing 4.0 MM/bbl/d of Distillate fuels.

However right now at the current sale price the refiners/wholesalers are making more money by selling that Diesel fuel domestically because demand is relatively robust while prices are still in the $3.00/gallon range. This makes it advantages to keep more Diesel here in storage rather than shipping it overseas for the world market. Econ 101.
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Re: Diesel shortage?

Unread postby vtsnowedin » Thu 26 Apr 2018, 09:55:33

This weeks weekly report has these two quotes about distillates (diesel).
Distillate fuel production
decreased last week, averaging 5.0 million barrels per day.

And further down the report.
Distillate fuel product supplied averaged over 4.0 million barrels
per day over the last four weeks, down by 2.5% from the same period
last year. Jet fuel product supplied is up 6.2% compared to the same
four-week period last year.

Now producing 5 while selling 4 each day should equal a build but that does not appear to be the case with a decline in stocks of 2.6mb for the week.
I suspect a deeper look into the whole status sheet will explain that but at any rate we have about a thirty day supply on hand and steady production so there is no problem with the current supply status.
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Re: Diesel shortage?

Unread postby ROCKMAN » Fri 27 Apr 2018, 13:55:52

T – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls. Say the feds mandated that diesel could only sell for $0.75 per gallon. I doubt every buyer with funds to purchase the fuel could find all they wanted. IOW there would be a diesel shortage. In such a situation I’m sure refineries would adjust their blended oil to minimize the diesel yield. But there would still be some yield that would go to storage. Until it was no longer practical to build more storage. At that point there could be a movement to flare diesel production just as we flare stranded NG production today. But obviously not a very likely scenario to develop.
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Re: Diesel shortage?

Unread postby Outcast_Searcher » Sun 29 Apr 2018, 03:06:15

ROCKMAN wrote:T – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls.

Absolutely right. When the US government tried price controls in the 70's during the big oil price spikes due to the Middle East turmoil, we got long gas lines and "out of gas" conditions, as people resorted to hoarding, etc.

Unless ETP theory turned out to be magically correct and suddenly producers couldn't "afford" to produce oil and consumers couldn't "afford" the necessary price raises needed to fund producing it EN MASSE, simple economics re competitive markets and the pricing function takes care of the "problem".

Now (for one example) idiots who bought a $50,000 huge diesel guzzling truck they can't afford, and can't afford rising oil prices at some point -- the result is kind of harsh on them.

Doomers would claim that's a sign of doom. Others would call that a "teaching moment" for the idiots (and if in a pinch, cheap used, high MPG sedans do exist).
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Diesel shortage?

Unread postby EdwinSm » Sun 29 Apr 2018, 05:15:02

OS, I think you are right in that the government would most likely want to first use price rises to 'ration' any diesel (or other fuel) rather than bringing in the type of rationing that at least Europe saw in World War II (ie ration cards, or smart apps as they would use today).

I think it would be politically easier to let the "market" do the rationing rather than the government, until the injustice of this is too obvious (eg ambulance services not able to afford fuel) when formal rationing might be brought in. Or at least a hybrid system with some fuel allocated to "essential services" at a controlled price and a price free-for-all for everyone else.
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Re: Diesel shortage?

Unread postby Outcast_Searcher » Sun 29 Apr 2018, 18:30:32

EdwinSm wrote:I think it would be politically easier to let the "market" do the rationing rather than the government, until the injustice of this is too obvious (eg ambulance services not able to afford fuel) when formal rationing might be brought in. Or at least a hybrid system with some fuel allocated to "essential services" at a controlled price and a price free-for-all for everyone else.

Since the reality for medical services in the US, at least thus far, seems to be they charge whatever they want and generally get away with it, I would think ambulance services would be about the LAST entity to give up buying fuel because "they are unable to afford it".

OTOH, I think your idea of a hybrid system where the taxpayer is left to fend for themselves seems likely. After all, who ever cared (in reality) about the taxpayer, representing the halls of government (beyond lip service to buy votes)?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Diesel shortage?

Unread postby ROCKMAN » Tue 01 May 2018, 11:07:36

Guys - Such a system has been in place for many years. Sun Coast is one of the largest (if not THE largest) fuel hauler in the country:

"Sun Coast Resources, Inc. is the leading emergency fuel response service provider in the country. We provide 24/7 generator fueling, on-site fueling and dedicated fuel trucks to companies and government agencies during emergencies including severe weather conditions, hurricanes, tornadoes, floods and other disasters. In the past, we have provided critical fuel supply services to governmental agencies, utilities, communication companies, hospitals, delivery services, grocery stores, restoration and other fleet and equipment operators."

https://www.suncoastresources.com/emerg ... y-fueling/
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Re: Diesel shortage?

Unread postby StarvingLion » Mon 07 May 2018, 19:45:16

Outcast_Searcher wrote:
ROCKMAN wrote:T – Good point. But the thread title brings me back to the same point I’ll forever keep beating on. Which is: define a shortage. For the Rockman it’s simple: when there are buyers who can afford the price of diesel but there’s not enough to satisfy all those potential buyers. And that would be a very rare condition to develop: sellers wold simply raise prices and eliminate those potential buyers. IOW raise prices until supply equals demand. With demand defined as the volume of diesel buyers can afford to buy.

The most like scenario for a diesel “shortage” would be govt price controls.

Absolutely right. When the US government tried price controls in the 70's during the big oil price spikes due to the Middle East turmoil, we got long gas lines and "out of gas" conditions, as people resorted to hoarding, etc.

Unless ETP theory turned out to be magically correct and suddenly producers couldn't "afford" to produce oil and consumers couldn't "afford" the necessary price raises needed to fund producing it EN MASSE, simple economics re competitive markets and the pricing function takes care of the "problem".

Now (for one example) idiots who bought a $50,000 huge diesel guzzling truck they can't afford, and can't afford rising oil prices at some point -- the result is kind of harsh on them.

Doomers would claim that's a sign of doom. Others would call that a "teaching moment" for the idiots (and if in a pinch, cheap used, high MPG sedans do exist).


Here is why you are hopelessly doomed, Outcast_Searcher. You'll be worm food by 2023. I call it The Oil Apocalypse:

http://peakoilbarrel.com/open-thread-pe ... /#comments

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05/07/2018 at 12:45 am

Pretty good, if a little slanted towards the economist’s view rather than petroleum engineer’s – I guess they are some kind of investment firm are they? I always like the price predictions that show things historically swinging all over the place and then a nice smooth linear or exponential trend off into the future, but that’s been avoided here (just showing actual futures).

I think he didn’t make the case for the drop off in recent discoveries being as important as it is going to prove; I think he probably thinks everything gets solved there at the right price level.

There is the assumption of 19 mmbpd new production to 2022 from in-fill drilling. I don’t know how that is arrived at. In-fill wells accelerate production but don’t do so much to grow reserves. They can also be used to get round surface constraints like water injection/processing limits, but there’s a limit, especially on mature fields. A lot of the low hanging fruit was picked in the high price years. In-fill wells on deep water fields can be very expensive, and on recent projects that have been more optimally designed with latest seismic data and often have production heavily front loaded, may not not yield so much. If that amount of in-fill is achieved then I’d suggest production will drop like a stone after 2022, when there are no more opportunities in mature fields and relatively fewer new fields that might be receptive to it (he almost touches on this in the slide on accelerating decline rates). The drop off in discoveries also means there are fewer short cycle tie-back opportunities – the very last ones with around 10 mmbbls are just being used up in the North Sea, smaller ones don’t produce much and might be marginal at any oil price.
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EU: Diesel = Heating Oil shortage !

Unread postby M_B_S » Wed 03 Oct 2018, 05:48:07

Image
THESIS:

The real(important) reason behind the diesel car mobbing in the EU is not clean air.

https://www.fuelseurope.eu/wp-content/u ... FILE-1.pdf


It is a shortage of diesel=heating oil production capacity!

The major trade flows to and from the EU are a result of the gasoline/
diesel imbalance demand in Europe. As a consequence, significant excess
gasoline production capacity needs to be exported, while, to meet regional
demand for diesel and jet fuel, Europe became heavily reliant on other
countries for import, especially Russia, the Middle East & USA

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Re: EU: Diesel = Heating Oil shortage !

Unread postby Tanada » Wed 03 Oct 2018, 09:24:31

What heating oil shortage are you referring to?

The graph you posted shows supplies are substantially UP over the last 12 months and on page 15 of the PDF you linked to is a graph showing that EU heating oil demand has fallen by 37% over the period of 2006-2016, even though prices were pretty low in 2015-2016.
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Re: EU: Diesel = Heating Oil shortage !

Unread postby ROCKMAN » Wed 03 Oct 2018, 13:13:45

T - I think part of the confusion is the distinction between diesel and heating oil. In fact, no where in the link is the term "heating oil". And the appear to use diesel only in the context as a motor fuel. In that regards the show "diesel" demand to have reached an all time high in their latest statistic. They do have stats on "gasoil" which as far as I know is actually diesel which has not been added the dye t show it has been taxed as a motor fuel. So like in the US heating oil = gasoil.

But there are times when it shows "diesel/gasoil" and says that "the EU is unable to meet regional demand". But that doesn't necessarily mean it can't meet "gasoil demand." But I found where Pratts reports that "Europe’s middle distillate deficit balloons to 1.6 mb/d by 2019". But then you have to take "middle distillates" = diesel and gasoil. Basically it sounds a if the EU can decide what it runs short of: motor diesel or home heating oil. Depends on what they don't dye and tax as motor fuel and what the want drivers to be short of. Or what they tax as motor fuel and leave some folks to suffer in the heart of winter.
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Re: EU: Diesel = Heating Oil shortage !

Unread postby dolanbaker » Wed 03 Oct 2018, 13:27:07

Oil fired heating systems have been in decline in Ireland for decades now, every year fewer new houses are having it installed and many others are replacing oil with gas. So there is no heating oil shortage on the horizon here, that's for sure.

Barring a catastrophic failure in the supply lines that is. The biggest issue here is that with the recent increases in oil prices, poorer households are going to struggle to afford to adequately heat their homes this winter.

If weather forecasts are correct, this year could have several days of extreme cold, something that is uncommon in Ireland.
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Re: EU: Diesel = Heating Oil shortage !

Unread postby ROCKMAN » Wed 03 Oct 2018, 13:53:48

Donlan - That's the real danger to your poor families: if heat oil demand drops to low many of those distribution companies might close shop. Which means the remaining ones could charge what they wanted. Unless the govt institutes price controls which might put the remaining companies out of business. Which means no heating oil unless the govt supplies it. And where would it get it: it would take from your motor fuel supplies, maybe. Maybe causing a supply shortage/price hike there.

And what happens when all petroleum, including NG, runs short? Back to burning coal, maybe? Or might see a lot of wind turbines on the west coast, maybe? Lots of temporary fixes available. Not so much being done for the long term, eh?
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Re: EU: Diesel = Heating Oil shortage !

Unread postby KaiserJeep » Wed 03 Oct 2018, 15:38:18

The latest/greatest on Nantucket is heat pumps with ground source heat. This has become popular since the mainland power feed cut the price of electricity by 1/3rd. There appears to be a glut of heating oil, my 500 gallon tank was less than 1/4 empty after 12 months of thermostat at 50 degrees, plus about six weeks total domestic hot water consumption. A lot of island homes like mine are occupied a few weeks per year.

Backup heat in case of an oil shortage has long been on my mind, especially after we move to the island. My best idea so far is a medium wind generator, sized for 4 homes, all with heat pumps. (That would be me, the Brother-in-Law, my nephew, and my rental property.) My current oil burner would become the backup, with a full 500 gallons of oil, enough for a heating season with a severe Winter.

New England is not the EU, of course. But demand for heating oil - and prices - appear to be remaining around $3/gallon, delivered, for the last 5 years. (Retail price on Nantucket.)
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Re: EU: Diesel = Heating Oil shortage !

Unread postby M_B_S » Wed 03 Oct 2018, 15:47:39

@ Tanada

The EU has a diesel=heating oil production /demand gap.

The gap is filled with imports from Russia etc.

https://www.fuelseurope.eu/knowledge/ho ... imbalance/

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Re: EU: Diesel = Heating Oil shortage !

Unread postby Outcast_Searcher » Wed 03 Oct 2018, 17:52:10

This would have been relevant, say, in the 70's when natural gas was becoming frighteningly expensive rather quickly.

But let's not pretend that 40+ years later, natural gas isn't highly efficient and available as an energy source to replace a "shortage" of heating oil -- IF that becomes necessary despite market pricing adjustments to adapt.

For the "zillionth" time -- some inconvenience or need to change/adapt is NOT an economic catastrophe, much less a sign of "doom" no matter how many times the usual suspects try to imply it is so.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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