Hurricane Petroleum Recovery Thread

[BoeingBoy]

Update for Tuesday, 10/4/05:

* According to MMS, 1,349,617 barrels of oil per day were shut-in which equates to 89.97 percent of the normal daily oil production in the Gulf. Evacuations are equivalent to 41.76 percent of 819 manned platforms and 12.69 percent of 134 rigs currently operating in the Gulf. MMS reports 61 destroyed platforms and 33 damaged platforms in the Gulf of Mexico. The cumulative shut-in oil production for the period 8/26/05 -10/4/05 is 46,457,059 bbls, which is equivalent to 8.485 % of the yearly production of oil in the Gulf.

Gulf Coast refinery status:

* In the Port Arthur/Lake Charles and Houston/Texas City areas there is no change - of 4,713,676 bbls/day capacity, 2,152,700 bbls/day remains shut down.

* No change at the 4 refineries that remain shut down due to damage from Katrina - 879,000 bbls/day capacity.

* The Sun crude oil pipeline at the Nederland, TX, terminal resumed limited operations, opening its 20â€￾ (ExxonMobil) line on October 1. All lines are expected
to re-open soon. Three docks are ready to receive vessels. Repairs to the other four
docks are expected to be completed by Saturday, October 8.

Refined product pipelines:

* Explorer from LA to OH - newly received power generators have allowed Explorer Pipeline to pump all inventory from its Port Arthur, Texas break-out storage up the pipeline Monday night and early Tuesday morning; currently operating at 50 percent capacity.

* Centennial System from Beaumont, TX, to Creal Springs, IL, is operational.

* TEPPCO from Beaumont, TX to NY is operating at 65 percent capacity on 20â€￾ line; 14 and 16â€￾ line at 45 percent. No commercial power at Beaumont.

Several refineries are awaiting power to restart and some pipeline pumping stations are still without limiting capacity, so the next pertains to electricity restoration.

* Entergy is making progress in returning its fossil energy units to service. Of the 14 fossil units that Entergy owns and/or operates that were affected by Hurricane Rita, seven are now operational (both units at Lewis Creek, both units at Toledo Bend, and three units at Nelson) and seven are currently not operational. Of the seven units remaining impacted: two units are available once offsite power is restored (both at Sabine) and five units remain offline until storm damage repairs are completed (three at Sabine, two at Nelson).

Since colder temperatures are not far away in the northern parts of the country, a word or two about natural gas.

* On 09/30, 26 natural gas processing plants, with capacities equal to or greater than 100 million cubic feet per day in Texas, Louisiana, and Mississippi, were not active; now there are 21. Ten of these 21 plants with a total capacity of 5.4 billion cubic feet per day are not active owing to external factors, including lack of electric power or gas supplies. Eleven of the 21 plants are inactive because of damage to the facilities themselves. These plants have capacity of 7.7 billion cubic feet per day.

* The cumulative shut-in gas production 8/26/05-10/4/05 is 226.551 billion cubic feet, which is equivalent to 6.207% of the yearly production of gas in the Gulf (approximately 3.65 trillion cubic feet).

Last - tomorrow brings the weekly petroleum status report. I'll be off working, so will give an update on that when I return home.

Jim

 

[a320av8r]

"Since colder temperatures are not far away in the northern parts of the country, a word or two about natural gas.

* On 09/30, 26 natural gas processing plants, with capacities equal to or greater than 100 million cubic feet per day in Texas, Louisiana, and Mississippi, were not active; now there are 21. Ten of these 21 plants with a total capacity of 5.4 billion cubic feet per day are not active owing to external factors, including lack of electric power or gas supplies. Eleven of the 21 plants are inactive because of damage to the facilities themselves. These plants have capacity of 7.7 billion cubic feet per day.

* The cumulative shut-in gas production 8/26/05-10/4/05 is 226.551 billion cubic feet, which is equivalent to 6.207% of the yearly production of gas in the Gulf (approximately 3.65 trillion cubic feet)."

Better stock up on those sweaters and blankets- it's gonna be a cold and expensive winter!

 

[BoeingBoy]

As of 10/7/05:

* Entergy reports that electricity service to the ten refineries affected by hurricanes Katrina and Rita and served by Entergy in the Beaumont/Port Arthur, Lake Charles, and New Orleans areas is continuing and that refineries now have at least a single source feed for clean-up power and six have full operational capacity.

* According to MMS, 1,162,913 barrels of oil per day were shut-in which equates to 77.53 percent of the normal daily oil production in the Gulf. Evacuations are equivalent to 33.46 percent of 819 manned platforms and 4.47 percent of 134 rigs currently operating in the Gulf. MMS reports 65 destroyed platforms and 32 damaged platforms in the Gulf of Mexico.

Refinerie Status:

* Port Arthur/Lake Charles Area:

- Calcasieu refinery at Lake Charles, LA is operating at full rate of 30,000 bbls/day.

- Citgo refinery at Lake Charles, LA has power restored and is restarting - capacity 324,300 bbls/day.

- ConocoPhillips refinery at West Lake, LA has power restored and is restarting - capacity 239,400 bbls/day.

- 1,122,000 bbls/day of capacity remains shut down.

* Houston/Texas City Area:

- BP refinery at Texas City, TX remains shut down - capacity 437,000 bbls/day

- 5 other refineries are operating at full capacity and 3 are still operating at reduced rates.

* Katrina damaged refineries:

- Chevron refinery at Pascagoula, MS restarted October 6; estimate normal production by late October.

- Exxon Mobil at Chalmette, ConocoPhillips at Belle Chasse, and Murphy Oil at Meraux remain shut down.

* In total, 2,113,000 bbls/day of refinery capacity remains shut down.

Jim

 

[jimntx]

What needs to happen NOW, is that Congress
needs to make a law that freezes gasoline
prices at a pre-determined maximum any
time the gulf coast refineries are threatened
by a hurricane. That might be enough of an
incentive to get these crackpots in the oil
biz to look to the midwest to build refineries.

Now, I know you are joking! Price controls have worked SO well every time they have been used in this country.

I have an elderly friend who is my parents' age. She says that Americans are totally incapable of denying themselves anything. According to her, during WWII with all the flag-waving and troop-supporting and defending democracy wherever it was threatened, Americans cheated like bandits on their ration books.

Price controls and the resultant fuel shortages will not result in fewer Mercedes, Rolls, and huge SUVs taking the streets. Those with "connections" will still have a supply of whatever they need. They won't be hurt. It will be the poor and middle class who live 3 miles from the nearest bus line--thanks to the "I don't ride the bus; so, I shouldn't have to pay taxes to support bus lines" crowd--and who work in a suburban office park on the other side of their metropolitan area because their boss didn't want to have to drive downtown to work.

Now, I guess I'll be smeared as a "liberal who probably doesn't believe in God (who we all know is a tax-abhorring and homo-hating Republican). Have at it.

 

[FWAAA]

If record refining profits don't provide enough incentives to build more refineries, I don't see why price controls would have any different effect. In fact, SpinDoc's view is completely backwards.

 

[SpinDoc]

If record refining profits don't provide enough incentives to build more refineries, I don't see why price controls would have any different effect. In fact, SpinDoc's view is completely backwards.

[post="310856"][/post]​

I'm sorry. I must have missed that class
session in college on economics. If I
owned an oil refining and marketing
company, and I was making egregious
profits like the oil companies are right
now, I would invest the profits in expanding
my refining capacity. It only makes sense
that if I increase my production, I will
make even more money because I will
have more refined product to sell to
the market.

Even if the market price drops due to
adding more capacity, my egregious
profits would continue, only on a
larger scale.

It is time for everyone in this country
to understand that investors are making
an absolute killing off of the backs of the
common man, and it is unacceptable.
Capacity is being tightly controlled by
the refiners to keep the cost of oil
and refined product way above
where it should be. We are all at the
mercy of the sumbeetches, and I for
one am tiring of it.

 

[Busdrvr]

Now, I know you are joking! Price controls have worked SO well every time they have been used in this country.

Price controls and the resultant fuel shortages will not result in fewer Mercedes, Rolls, and huge SUVs taking the streets. Those with "connections" will still have a supply of whatever they need. They won't be hurt

Now, I guess I'll be smeared as a "liberal who probably doesn't believe in God (who we all know is a tax-abhorring and homo-hating Republican). Have at it.

While I know this is insulting to you, your above statements make you a conservative. Rejecting price controls? HERESY!!

But as you know, the red tape to build a refinery make it something most companies don't want to bother to do. I say the concentration of refinery capacity into the hands of fewer players is an even bigger factor. take this scenario as an example.

Let's say you own one refinery. It gets wacked by a hurricane. You get no revenue from it until it gets back up (no matter the cost of refining).

Now lets pretend you own 5 and one of them goes down due to the hurricane. As a result of the resultant shortage, the cost of refining a barrel of oil goes from an already high $10 a barrel to $50 dollars a barrel. IOW, you lose one of your five refineries, yet see refining revenue quadruple.

Under which scenario would you think the company would be working the hardest to get the refinery back up and running?

 

[Busdrvr]

I'm sorry. I must have missed that class
session in college on economics. If I
owned an oil refining and marketing
company, and I was making egregious
profits like the oil companies are right
now, I would invest the profits in expanding
my refining capacity. It only makes sense
that if I increase my production, I will
make even more money because I will
have more refined product to sell to
the market.

Even if the market price drops due to
adding more capacity, my egregious
profits would continue, only on a
larger scale.

Yes apparently you did miss that lesson. Try googling "monopoly", "Oligopoly", "Cartel", "price elasticity of demand" and "inelastic demand". Let us know what you learn. Maybe Jim could back me up on these numbers, but the revenue for the refineries to refine one barrel went from around $10 a barrel to $50 a barrel while capacity decreased by 10-20% (not counting the increase in imported refined products). Let us know what that means for the elasticity of demand and what it would do to the profits if someone did add capacity. I'll eagerly await your response....

 

[BoeingBoy]

Well, while no new refineries have been built in a long time, it's surprising what a look at total US refining capacity reveals......

In the last decade, total US refining capacity has increased about 1.7 million barrels per day through modernization and technology improvements. That's equivalent to the total capacity of the 7 refineries in the Port Arthur/Lake Charles area shut down by Rita. It's about 3/4 of the total capacity of the 9 refineries in the Houston/Texas City area. Just imagine what gas, heating oil, diesel, or jet fuel prices would be if those "greedy" oil companies hadn't made those investments.

The "crack spread" did go up to close to $50 - as long as you're talking about jet fuel FOB the Gulf Coast, which is a worst case example. I haven't looked at the numbers for other refined products.

Of course, that's just the price difference between the price of the raw material (actually WTI specifically) and the price of the finished product - jet fuel in this case. That's like comparing an airlines cost per ASM for airplanes to the revenue per ASM - it neglects all the costs inherent in production (or maybe the government should "force" the airlines to lower fares!!!)

Plus, at the time of the "crack spread" spike, a fair amount of jet fuel was being imported (3-5%) so you have to include not only the refined cost at the point of origin but transportation to the U.S.

Jim

 

[jimntx]

While I know this is insulting to you, your above statements make you a conservative.  Rejecting price controls?  HERESY!!

I am undone! You have found me out. Actually, you have pointed out the mistake in the liberal vs. conservative argument. In classic political thought, a conservative is not one who mistrusts government, he or she is one who mistrusts the ability of individuals to do the right thing--it is people that can not be trusted. A classic conservative believes in tight government control in every area where wild ideas might break out from the common herd and change things.

The oil companies do not want to build new refineries unless the government will exempt them from those pesky environmental laws and go back to the good ole days when men were men and refining wastes could be dumped on the ground. Yes, there have been productivity increases from technological improvements, but (and I know you will be shocked), the oil companies like high prices for their product just fine.

Would that we could do same in the airline business! I remember making a flight from Birmingham to Charlotte in the 1960's on Eastern. I paid something like $40 for a F/C one way ticket (a coach ticket was $25). The important thing is not even the inflation adjusted price. The "real" price of anything is how long I (or you) have to work to pay for something. I had to work almost a week to pay for that ticket--I was making $1.25/hr then. Today, something that costs $35 takes me a little over an hour to pay for. A roundtrip ticket on BHM-CLT in $317 on US Airways. At my current pay rate, it would take someone working 8 hours a day less than 2 days to buy the ticket. Granted, it is not F/C, but it also does not make 2 stops on the way either.

I am well aware that last paragraph is totally off the subject, but it is something I have been thinking about lately. We need to put the cost of things in perspective. In terms of the amount of work needed to pay for something, the 50 cent movie ticket of the 50's is more expensive than the $7.00 ticket today.

 

[FWAAA]

I am well aware that last paragraph is totally off the subject, but it is something I have been thinking about lately. We need to put the cost of things in perspective. In terms of the amount of work needed to pay for something, the 50 cent movie ticket of the 50's is more expensive than the $7.00 ticket today.

[post="311070"][/post]​

I agree completely. Your post points out why $1.00/gallon gasoline (not too long ago) was incredibly cheap and why $3.00 gas today isn't really so expensive, compared to energy costs over the entire course of the 20th century. Sure, there were gas wars when $0.169/gal was the price, but that was the exception over the last 100 years, not the norm.

Another example: My new big screen flat panel TV is hundreds of times better than the television I purchased 20 years ago AND required fewer hours of work to pay for it.

My cable bill, on the other hand . . . :angry:

My deep discount advance purchase airfare LAX-JFK for $218 of which about 25% are various taxes is far too cheap compared to the old days. And likewise, P class LAX-JFK is a lot more expensive in relative terms than F in the old days.

 

[SpinDoc]

I agree completely. Your post points out why $1.00/gallon gasoline (not too long ago) was incredibly cheap and why $3.00 gas today isn't really so expensive, compared to energy costs over the entire course of the 20th century. Sure, there were gas wars when $0.169/gal was the price, but that was the exception over the last 100 years, not the norm.

Does anyone really care anymore
that we're taking it up the butt without
even a goodnight kiss?

It doesn't cost anywhere near $62
per barrel to explore for oil, set up
the extraction site, and staff the rig.
It's more like $13 - $15 per barrel.
There is a huge gap in this figure
which has been (no pun intended)
fueled by market speculation and
greed, and the oil exploration
companies are more than happy
to accept egregious profits based
on speculation.

The oil companies know that at
some point in the future, the crude
market will see a correction and
prices will fall back into the $25
to $30 per barrel range. Their
insurance policy is artificial
limitations on refining capacity.
If they can keep the refining
capacity lower, they can make
large profits even larger by
driving up the cost of refined
product.

Wake up fools. There is a large
conspiracy going on, and it is not
going to stop until enough
consumers draw the line with
their local politicians.

 

[jimntx]

I agree completely. Your post points out why $1.00/gallon gasoline (not too long ago) was incredibly cheap and why $3.00 gas today isn't really so expensive, compared to energy costs over the entire course of the 20th century. Sure, there were gas wars when $0.169/gal was the price, but that was the exception over the last 100 years, not the norm.

Does anyone really care anymore
that we're taking it up the butt without
even a goodnight kiss?

It doesn't cost anywhere near $62
per barrel to explore for oil, set up
the extraction site, and staff the rig.
It's more like $13 - $15 per barrel.
There is a huge gap in this figure
which has been (no pun intended)
fueled by market speculation and
greed, and the oil exploration
companies are more than happy
to accept egregious profits based
on speculation.

The oil companies know that at
some point in the future, the crude
market will see a correction and
prices will fall back into the $25
to $30 per barrel range. Their
insurance policy is artificial
limitations on refining capacity.
If they can keep the refining
capacity lower, they can make
large profits even larger by
driving up the cost of refined
product.

Wake up fools. There is a large
conspiracy going on, and it is not
going to stop until enough
consumers draw the line with
their local politicians. (emphasis mine)

[post="311273"][/post]​

Surely you jest. If by your local politicians you mean members of Congress, please try to remember that the Chairman of the House Energy Committee is Joe Barton of Texas; the chairman of the U.S. Senate Energy Committee is Pete Domenici, a Republican from New Mexico. Do you see a trend here? Republicans in general and Congressmen from the West and Southwest in specific are heavily supported by the oil company PACs. Follow the money, children.

A quote from the House Committee website from Sept. 20, 2005.

Chairman Barton said, ""I think it's a good thing we have tough environmental laws and a good thing we enforce them. But if you were to build a refinery overseas in certain countries, you don't have to do anything environmentally. I don't think that's fair," he said. "Let's say a new refinery costs $1.5 billion. If I add a half-billion dollars to that in this country it's because of the requirements for environmental quality, that is a good thing, not a bad thing. But that automatically creates a disincentive to build a new refinery in this country compared to overseas. So, we're going to work with the Ways and Means Committee to see if we can't come up with some incentives and some offsets to level the playing field."

Wait for it! Wait for it! What we have here is the first shot across the bow of "We need to exempt oil refineries from environmental laws. It's an issue of national security." If they can't make that fly, they will grant huge tax rebates to the oil companies to "stimulate construction." The fact that the oil companies can afford to build new refineries with all environmental and legal restraints in place is of no consequence. They could do it and still "light their cigars with $10 bills." But why should they, if they can do it for even less with the help of a Congress that is only concerned with getting re-elected. And it is not your vote that gets them elected, it is the money from the special interests.

Bear in mind folks, that SpinDoc is right on about the actual cost of refining (and the cost of crude oil vs. refined product for that matter). The normal price model where you take your cost of input + cost of production then add a "reasonable" profit does not apply. The oil companies charge whatever they want to, because they can.

However, it is not really the oil companies that are the culprit. It is us, the consumers. We have the money to pay whatever the producers charge (in any number of product categories), and so they do. In addition, we seem to think that depriving ourselves of anything we happen to want is somehow un-American, and to be told that I can't drive a vehicle that burns more fuel than a Sherman tank is a violation of my Constitutional Rights, by god.

If we could carry one butt from JFK to LAX for $3.52 and yet charge $3,520 for that seat, why wouldn't we? The value of any commodity is the price that someone is willing to pay.


Cynical? Moi? How dare you say such a thing!

 

[BoeingBoy]

Update for Frinday, 10/14/05:

* According to MMS, 1,008,909 barrels of oil per day are shut-in which equates to 67.26
percent of the normal daily oil production in the Gulf. Evacuations are equivalent to 28.33 percent
of 819 manned platforms and 1.49 percent of 134 rigs currently operating in the Gulf. This past week, cumulative shut-in exceeded 10% of annual production in the Gulf.

* Of the 7 refineries in the Port Arthur/Lake Charles area, 1 is operating at full capacity of 30,000 bbls/day, 4 are in the process of restarting and have combined capacity in excess of 1,000,000 bbls/day, and 2 are attempting to restart with a combined capacity of over 600,000 bbls/cay.

* Of the 9 refineries in the Houston/Texas City area, 1 is shut down with a capacity of 437,000 bbls/day, 3 are operating a reduced rates. The remaining 5 are operating at full capacity.

* 36 refineries remain shut down from Katrina damage.

* A total of 1,070,500 bbls/day of refining capacity remains shut down. This does not count capacity reductions at refineries operating below full capacity.

* Colonial Pipeline announced on October 13th that commercial power has been restored to
all Colonial facilities, allowing its gasoline and distillate mainlines to operate at full rates,
subject to product availability.

* Port of New Orleans notes that last week the port handled 9 ships; this week the port has
handled 14 ships. Before the hurricanes, the port normally handled 40 ships per week.
Trucking capacity is up to 40 percent.

Jim

 

[BoeingBoy]

It's not exactly related to hurricane recovery, but cable news is reporting an explosion at a Pasadena, TX facility the "produces jet fuel". Presumably, it's a refinery that specializes by producing a larger percentage of jet fuel and smaller amounts of other distillates like diesel or heating oil.

Jim

[Edit to add following]


One person injured in explosion and fire at Lyondell plant

(10/16/05 - KTRK/HOUSTON) - At least one person was injured in an explosion and fire at the Lyondell plant on Lawndale at Allen-Genoa Sunday afternoon.

The explosion and resulting fire happened around 12:30pm Sunday in an area of the plant that makes jet fuel. The Houston Fire Department responded to the fire and was able to quickly bring the blaze under control.

One person was transported to Memorial Hermann Hospital with burns over 15% of his body. We don't have his condition at this time, but we're told the injuries are not life-threatening. All other workers have been accounted for.

There was not a shelter-in-place issued and we've been told that there are no air quality concerns.

For the latest on this explosion and fire, watch ABC13 Eyewitness News today at 5:30pm. Reporter Laura Whitley is on the scene and will have the very latest in a live report.
(Copyright © 2005, KTRK-TV)

-------

One injured at plant explosion in Houston

Associated Press

HOUSTON - One person suffered burns after an explosion at a Houston refinery Sunday afternoon.

The blast happened around 12:15 p.m. at the Lyondell-Citgo plant, in southeastern Houston, said Jack Williams, a district chief with the Houston Fire Department.

"The fire was contained by the time we got there. We just assisted Lyondell," he said. "There is still a lot of heat in the plant. We're putting water on the plant itself to get it cooled down."

An unidentified person injured in the blaze was taken to Memorial Hermann Hospital, Williams said.

The fire was extinguished about 1 1/2 hours after it was reported. Firefighters are working to cool down the sitee so Lyondell-Citgo workers can go in and assess the damage, Williams said.

"It will probably be a couple of days before they can go in and see what happened," he said.

The cause of the explosion was not immediately known.

A spokesman for Lyondell-Citgo did not immediately return a telephone call from The Associated Press seeking comment.

The refinery covers nearly 700 acres along the Houston Ship Channel and has about 875 employees. It manufactures such petroleum products as gasoline, diesel, heating oil, jet fuel and lubricants.

The plant is a joint venture between Lyondell Chemical Co. and Citgo Petroleum Corp., both headquartered in Houston.