I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
If KSA isn't going to refine the heavy crude I doubt there will be many other takers.
I don't know. There could be refinery capacity opening up all over the place. Refiners may have no choice but to take what they can get, even if it means expensive new additions to handle the heavy metals.
That isn't entirely true. Here in the US, the vast majority of refineries were built to refine sweet crude. There a few refineries, like Valero (an independent refinery) in St Charles that can handle the heavier crudes.
I think it was BP and Chevron that made modifications to some parts of their refineries recently to handle the heavier crude oils.
In the US, refining capacity is part of the reason for high fuel prices. Refining capacity was maxed out around 1996 or so and the US hasn't built any new refineries for a few decades. The current estimated time to build a refinery is 25 to 30 years because of lawsuits and other legal actions by (mostly) environmental groups.
With intervention by the national government, it might be possible to build a new refinery in 15 to 17 years, but that seems pointless with PO coming.
Posted: Thu May 17, 2007 5:36 pm Post subject: Re: Peak Refinery Capacity = Peak Oil
The move BP and Chevron made regarding their heavy oil upgrading additions is also happening here in Alberta, Canada. I'm currently employed at a project at the Petro-Canada refinery in Edmonton and we are building a massive Coker and Crude Vac unit in order to upgrade tar sands bitumen to the point where the old light oil refinery can handle it. Shell did the same a few years ago by building the Scotford Upgrader next to their existing refinery to deal with their Albian Sands bitumen. Esso is planning to do the same thing with their Strathcona refinery in the near future. That's all three of the major refineries here converting to bitumen feedstock. Obviously we are running out of light sweet crude or these companies wouldn't be making the massive investments that they are...
edit: I should also mention that, as in the US, we haven't buit any new refineries from scratch in decades.
Posted: Mon May 28, 2007 6:56 pm Post subject: Re: Peak Refinery Capacity = Peak Oil
Mircea wrote:
In the US, refining capacity is part of the reason for high fuel prices. Refining capacity was maxed out around 1996 or so and the US hasn't built any new refineries for a few decades.
Not so.
Quote:
RED CAVANEY: A couple points I would make in terms of a lot of the claims that are out there and a lot of the activity: first of all, contrary to the claims that a number of critics are making, there is not any overwhelming evidence to indicate that refiners are withholding supplies or manipulating the market. In fact, if you look at the data, refiners are producing record amounts of fuel and they’re doing that in response to record demand. Refiners have, in fact, been expanding capacity for some time. If you look at the last decade, we’ve added the equivalent of 10 new refineries and if you look at the announced capacity expansions which are to come on line between now and 2011, you’re talking about an additional eight more refineries.
Since about 1976, all of our additions here domestically have been additions to existing capacity rather than green-field efforts and there’s a reason for that. First of all, they are much less costly on a per barrel basis. Number two, they can be brought in at least half the time or even more quickly as a result of the fact that they’re in environments and in areas where people are familiar with them and they understand the value that’s brought to the community and the like. And then, finally, when you take a look at all this, it’s the smart thing to do to be able to keep abreast of where the demand is, which is what we have been doing over the last decade. And the amount that’s been announced, if it all comes through, will, in fact, keep us slightly ahead of demand there as well.
While a new refinery has not been built in this country for decades, plenty of refining capacity has been added. The chart below depicts US refining capacity, which as grown steadily since the mid-1990s. US refiners are adding capacity and have significant projects planned out into the next decade.
Joined: Apr 09, 2007 Posts: 6285 Location: Alaska (its much bigger than Texas).
Posted: Mon May 28, 2007 10:51 pm Post subject: Re: Peak Refinery Capacity = Peak Oil
Great post, Monte.
I was wondering if the "refining capacity" scenario was just an excuse for rising oil prices. Thanks for providing some "real deal" information on current US refining capacity. _________________ "People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." -- George Orwell
Posted: Mon May 28, 2007 11:16 pm Post subject: Re: Peak Refinery Capacity = Peak Oil
Plantagenet wrote:
Great post, Monte.
I was wondering if the "refining capacity" scenario was just an excuse for rising oil prices. Thanks for providing some "real deal" information on current US refining capacity.
But this is not to say that in the US, refining capacity is not part of the reason for high gas prices, because it is...just not for the reasons most believe. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
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