Gas Prices -- Help at last?

"Dylan Smith" wrote in message
...
On 2005-10-12, Matt Barrow wrote:
refineries have been expanded (hence the 40% increase in production), but
how much is it feasible to keep running old technology? Old technology is
much less environmentally friendly? Remember, too, that these were built
using 1970s technology. How old is your computer?

Are the refineries really using old technology? New ones might not have
been built but old ones may have been upgraded with newer technology
(possibly how they have output increased per refinery).

They were originally built with old technology in place, but I can't imagine
they been completely retooled.


The guts of my computer are just under 3 years old. However, trivial
parts (case, CD-ROM drive, monitor, keyboard) are over twice this age.

How much could you upgrade a 16bit processor with a 64bit one given the
different data bus?

Is it not possible that refineries haven't undergone refits like my
computer has - so the ironwork might be from the 1970s, but the guts are
much newer?

Some machinery in any case is built to last. Railway locomotives, ships,
airliners,

Here's an example: the Boeing 737-100 engines compared to the powerplants on
the -300 and later series.
I figure that would be the appropriae analogy. Also, the comparison I used
with a 1970's automobile engine with current technology. You could
completely replace the engine, but the drivetrain would not be really
compatible.

power stations, telephone exchanges etc. are often built to
have a nominal life span of over 30 years. I would expect the same to be
true of a refinery.

Their servicability might be 30 years, but imagine a telephone exchange with
the old switching technology (mechanical). Or another analogy would be the
old copper wire being replaced with fibre optic.

There's a point when you just have to chuck the old stuff an build anew.
That's probably why the numbers have gone from 362 to 149.


Remember, too, that many of these were built using 1970s technology. How
old
is your computer?

You make that comparison again, but I don't think it's valid - Moore's
Law (really observation) which drives the computer market is really an
exception rather than the norm.

It's an analogy, not an example. Use my analogy of automobile engines as
another.

In any case as we're starting to run
into physical limits right now (and generally, desktop computers remain
useful for longer - for the typical office job - an 833MHz Pentium 3
computer made 6 years ago is still more than adequate, but using a 6
year old computer 6 years ago was often very painful).

For a desktop computer, sure. Now imagine running your servers with old
technology, especially with an increased load.

The company I worked for coming out of college in 1982 (MS program) was
running IBM 370's, then 3083's. The computer room was about 30'x24' . When I
left in 1998, they were running HP servers in one small corner of that room.
They replaced the old coax cables with FO cables.

In sum, there's probably much that can be upgraded in existing refineries,
but there are limits.At a certain point you meet the point of diminishing
returns. A further question is: how much regulation comes into play when
re-tooling or expanding a refinery?

"Matt Whiting" wrote in message
...
Sylvain wrote:
Matt Whiting wrote:

anyway. Lines will appear in the very near future, just as rolling
blackouts and brownouts began to appear a few years ago. We are running
out of energy generating capacity,


actually we weren't running out of energy generating capacity,
but the analogy is good since this is another example of
price gouging...

Sorry, but we are running out of electrical generating capacity and
gasoline refining capacity. You don't have to believe it now, but you
will in the not too distant future.

We won't run out and are not RUNNING out; the capacity can't keep up with
demand, and expansion is just about as heavily regulated as the initial
construction.


Matt

The other Matt

"Dan Luke" wrote in message
...

"Matt Barrow" wrote:

... I tend to lose it when people make foolish caveats especially ones
that are logical fallacies such as "without all this regulation we'd be
in (insert Armageddon class crisis)".

...or "without all this regulation we'd be in (insert free market
Utopia)."

Gee!! I've been a student of free markets (Chicago, Austrian, Hoover
under Sowell, Georgetown under Williams) for 25 years and I don't recall
any of them making anything even remotely similar to that claim. If
anything, it claims the opposite and refers to it as "chaotic" and a
great struggle to stay competitive.

As I'm sure you know, I'm not speaking of serious free market thinkers,
but rather the simplistic knee jerks who imagine that we'd have plenty of
cheap gasoline with no downside consequences if we simply eliminated
environmental protection regulations. My point was that such black/white
thinking is common on both sides of the environmental protection issue.

Well, it certainly is on the environmental side. Which "serious
environmental thinkers" have posited that many regulations are overdone? The
Free Market is NOT anarchy. Their position is market dictates and is
supported by tort law if necessary.

I guesstimate you're old enough to remember the old "phosphates" issue from
the early 60's. Well, long before regulations on phosphates were in place,
Proctor & Gamble and others came up with alternatives. It took only
publicity to get most in gear and P&G did well by announcing they were
changing their formulations. Their competitors had to keep up.

You are aware, I would guess, that much environmental regulation is
supported by business, not for the general benefit, but to quash
competitors, or for other self-directed benefits. The example I used of coal
fired power plants is one; the manufacturer of scrubbing equipment was a BIG
supporter. Theirs was not the best solution, but it was the political
cronyism solution.

"George Patterson" wrote in message
news:a7i3f.4957$KR1.4396@trndny06...
Matt Barrow wrote:

Would you run your engine just below redline for 30 years?

That has absolutely nothing to do with running a business or a plant. The
Japanese taught us well -- the idea is called "just in time." The general
idea is that you minimize inventory and don't keep idle machinery. You
*do* keep a margin which is called "percent fill at relief" in the telecom
world, but no sane person keeps nearly 20% of their plant idle (as was the
case in the early 80s).

Complete non-sequitur.


And, yes, if I owned a manufacturing plant, I would run it as close to
100% capacity as I could. That would make me the most money.

In the short run.

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...


Maybe because the US imports refined FINISHED products (much more costly
to buy as well as transport).

Not really true. The US only imports about 14% of its gasoline and US
gasoline production is up *not* down as your article implies.

The article doesn't make a distinction about type of fuel, only refinery
capacity. Also, the gasoline to other fuels mix has increased, correct? I
suspect the US produces much less heating oil than in the past, most
heating being done with natural gas or electric.

Total distillates (diesel, heating oil, kerosene) refined in the US have
increased 80% over the past 23yrs.


As well, what amount of finished product did we import in the past? AIUI,
it was zero until the past few years.
--
Gasoline imports have increased over time, but still remain at low levels.

When you take all the facts together, it seems that refining capacity over
the past 25yrs has been driven by economics not regulation. The "lack of
refining capacity" hysteria is simply the latest thing for pundits to talk
about. The conservatives want to blame the enviornmentalists and the
liberals want to blame the greedy oil companies. Hopefully the rules will
remain unchanged and economics will continue to drive decision making.
Refiners are flush with cash and don't need taxpayer handouts either
directly or indirectly through relaxed regulation. Putting things in
perspective: we had two "fifty year" storms in two weeks than directly hit
major refining areas, having a huge reaction seems unwarranted. One factor
that gets ignored is that, if you build new refineries, each one adds huge
amounts of capacity. It would only take a few new refineries to create a
refining glut.

Mike
MU-2


Matt

---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

Probably not that much difference when you are talking about tanker sized
quantities. Just fill it up and pump in CO2 above the gasoline. The CO2 is
heavy and doesn't require containment. I don't actually know whether they
do this or not but it seems fairly simple. It may be imported by pipeline
also.

Mike
MU-2


"Matt Barrow" wrote in message
...
"George Patterson" wrote in message
news:vN_2f.4165$vi2.342@trndny04...
Matt Barrow wrote:

As well, what amount of finished product did we import in the past?
AIUI, it was zero until the past few years.

Certainly not zero. Hess (for one) has been importing gasoline since the
mid 70s. Not sure when BP got their shoe in the door.

During the 1970's crunch? With the costs of transporting gasoline vs. raw
petroleum, that would not have made economic sense once the oil bust hit
in
the 80's.

How much more does it cost to transport gasoline (explosive) as opposed to
raw crude (merely flammable)? What would the economies be in importing
prior to the past few years?


--
Matt

---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

That total capacity figure might just be wrong. The DOE has every major
product up over the period.

Mike
MU-2


"Matt Barrow" wrote in message
...
"George Patterson" wrote in message
news:fK_2f.5263$Iq3.2156@trndny01...
Matt Barrow wrote:
"In 1981, the U.S. had 324 refineries with a total capacity of
processing
18.6 million barrels of crude per day. Today just 149 refineries have a
daily capacity of 16.8 million barrels."

Well, they said *output* is the important thing. Another post said that
in
1981 the refineries were producing at 81% of capacity and they are now
producing at 96% of capacity. That means that production has increased by
1.055 million barrels of crude per day.

The statement is "a total capacity".

Capacity, the 18.6Mbbl and 16.8Mbbl, is measured at 100%. Overall capacity
has dropped around 10% and the # of refineries has dropped about 55%.
Thus,
the refineries are running about 40% more product, but with little
allowance for downtime or maintenance. As the article states, the existing
refineries have been expanded (hence the 40% increase in production), but
how much is it feasible to keep running old technology? Old technology is
much less environmentally friendly? Remember, too, that these were built
using 1970s technology. How old is your computer?

In the 1970's, a powerful automobile engine was 350-450 cubic inches and
250-300HP (using today's calculations); today, a 3.5L (217 c.i.) generates
the same HP, gets about double the MPG and has a fraction of he emissions,
The refining technology is likely on parallel.

Would you run your engine just below redline for 30 years? For 30 years
without oil changes (no pun intended) or overhauls?
Remember, too, that many of these were built using 1970s technology. How
old
is your computer?

Also, the trend is downward regarding number of refineries. More will
close
in the coming years. Remember , too, what happened when Katrina hit a
localized area and took out 20% or so of the overall capacity.


--
Matt

---------------------
Matthew W. Barrow
Site-Fill Homes, LLC.
Montrose, CO

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...

"Mike Rapoport" wrote in message
ink.net...

"Matt Barrow" wrote in message
...


Maybe because the US imports refined FINISHED products (much more
costly to buy as well as transport).

Not really true. The US only imports about 14% of its gasoline and US
gasoline production is up *not* down as your article implies.

The article doesn't make a distinction about type of fuel, only refinery
capacity. Also, the gasoline to other fuels mix has increased, correct? I
suspect the US produces much less heating oil than in the past, most
heating being done with natural gas or electric.

Total distillates (diesel, heating oil, kerosene) refined in the US have
increased 80% over the past 23yrs.

And gasoline is up 25% (6600-8800Mbbl).



As well, what amount of finished product did we import in the past? AIUI,
it was zero until the past few years.
--
Gasoline imports have increased over time, but still remain at low levels.

14% of US usage.

When you take all the facts together, it seems that refining capacity over
the past 25yrs has been driven by economics not regulation.

I never said otherwise. I also never said our capacity was down. What I'd
said was that capacity growth was consrained, that we were becoming too
centralized in our geographic dispersment (see the results of Hurricane
Katrina).

The "lack of refining capacity"

That's your point, not mine nor the point of the IBD article. The point is
that our capacity is constrained and cannot grow enough to meet growing
demand.

hysteria is simply the latest thing for pundits to talk about.

The article I linked to was hardly hysterical. The hysteric were from Reid
and Waxman coming from the other direction. As much, I would hardly say
those two bozos had any grasp of the situation.

The conservatives want to blame the enviornmentalists and the liberals
want to blame the greedy oil companies. Hopefully the rules will remain
unchanged and economics will continue to drive decision making. Refiners
are flush with cash and don't need taxpayer handouts either directly or
indirectly through relaxed regulation. Putting things in perspective: we
had two "fifty year" storms in two weeks than directly hit major refining
areas, having a huge reaction seems unwarranted. One factor that gets
ignored is that, if you build new refineries, each one adds huge amounts
of capacity. It would only take a few new refineries to create a refining
glut.

Well, let's let the market decide how much is enough, okay?

"Mike Rapoport" wrote in message
nk.net...
Probably not that much difference when you are talking about tanker sized
quantities. Just fill it up and pump in CO2 above the gasoline. The CO2
is heavy and doesn't require containment. I don't actually know whether
they do this or not but it seems fairly simple. It may be imported by
pipeline also.


Believe me, transporting hazard material is never "simple", especially when
it jumps from "Flamable" to "Explosive". Check what tanker trucks go through
in the final miles from pipeline head or refinery to the gas stations.

But, yes, our biggest source of refined gasoline is from Canada which is
likely pipelined rather than shipped over water routes.

Of course, think how much EPA regulations cover gasoline pipelines.


"Matt Barrow" wrote in message
...
How much more does it cost to transport gasoline (explosive) as opposed
to
raw crude (merely flammable)? What would the economies be in importing
prior to the past few years?

"Mike Rapoport" wrote in message
nk.net...
That total capacity figure might just be wrong. The DOE has every major
product up over the period.


The DOE is measuring output, not capacity. Capacity is measured at the 100%
level, but only a fool runs long-term at or near 100%.

Historically, heavy equipment runs at 65-80% of capacity, so as to allow
maintenance and fallbacks in the event of a partial system failure. There
are strategic issues as well.