Maybe the US should build some new/more refineries....er...:hmm:...NVM.
So if we make gas more expensive via increased gas taxes or carbon tax in the name of "Global warming" that's good. If they rise naturally on their own via routine maintenance events and other short term factors, that's horrible and something we should investigate straight away.
The BP Whiting Refinery in northern Indiana shut down the largest of three crude distillation units Saturday for what the company calls “unscheduled repair work,” according to a statement. BP said the rest of the refinery is operating at reduced production.
HOUSTON, Aug 13 (Reuters) - The discovery of leaks in piping, which could pose a fire hazard, caused Saturday's shutdown of the largest crude distillation unit at BP Plc's 413,500-barrel-per-day (bpd) refinery at Whiting, Indiana, two people familiar with plant operations said on Thursday.
The leaks were found in overhead piping leading to heat exchangers on the 240,000 bpd CDU called Pipestill 12, said the sources, who requested anonymity because the information is not yet public.
The leaks may be in piping throughout Pipestill 12, which is configured to run crude oil from Canada's tar sands fields in Alberta. BP was continuing inspections on Thursday to determine the extent of the leaks.
Currently, repairs are expected to take at least a month, sources have told Reuters. But until the inspections are finished, it will not be clear how long it will take to repair damaged piping, the sources said on Thursday.
BP is also trying to determine if Pipestill 12's piping is more susceptible to corrosion from the crude or other substances running through the unit, the sources said.
BP continues to run the refinery at about 165,000 bpd or 40 percent of its rated capacity as two smaller CDUs remain in operation.
Pipestill 12 was the centerpiece of a $4 billion refit of the refinery to run more sour crude from Alberta's tar sands fields. The rebuilt Pipestill 12 came online in July 2013
A couple points....
Refiners usually plan shutdowns for the winter due to lower crack spreads (lower profit) and avoid shutdowns in the summer like the plague. In-fact we have had a couple clients push back summer planned T/A's this year because some crack spreads are quite favorable right now. The crack spread prior to the shutdown was obscenely high at $26 (per Reuters), people get fired for losing production during such a favorable environment. Post- emergency shutdown the crack spread only increased to $28, a temporary 8% increase for BP Whiting's competitor's while a 100% decrease for them.
Secondly, unplanned emergency shutdowns cost absurd amounts of money. Maintenance is usually planned 2-3 years in advance for a T/A, having to bring contractors on-site immediately and respond to an emergency requires intense premiums.
Finally, there are at least 59 refining corporations in the USA, a significant number of which have no upstream production whatsoever and therefore are not directly effected by your extraction cost discussion. I'm referring to parent corporations, there are even more individual companies and then again even more individual refineries. If you want to include chemical plants and other associated facilities, the number increases dramatically. Furthermore, these 59 corporations operate in a number of more or less isolated regions, there are quite a few crack spread metrics because it varies so dramatically around the country.
Now I've never met with executives from any of the 59 corporations, but having been in meetings with engineers whom are refinery managers the idea that there is collusion between these 59 corporations to the extent that someone is willing to break their facility during a $26 crack spread environment to give their competitor's an extra $2 spread is laughable.
Feel free to ignore any/all of the above and continue along with conspiracy theories.
http://www.reuters.com/article/2015/08/11/refinery-operation-bp-whiting-idUSL1N10M15N20150811
Here in the Chi. - I want to say the price increase happened Tuesday night going into Wed.
I would agree that collusion under the circumstances you describe would be laughable.
But isn't there a locational aspect to this? Do refiners in Indiana sell product in Colorado?
There's no doubt that it's a "complicated" industry. Nor would it be easy to prove collusion at a level in the industry among the handful of large companies -- it never is.
What I intended or tried to say about plant maintenance and prices at the pump -- what I thought I said -- is that these suspicions had been raised here in my state over recent months.
Around late 2002, the price/gallon here in So-Cal was about $1.60. After the Iraq intervention of 2003, the price quickly climbed above $3.00/gallon here. Certainly demand has increased, but one would expect that factor to arise more slowly. There IS at least one explanation behind the prospects of the Iraq war in the world market: one group of neo-conservatives thought that the market would be flooded with oil, decreasing gas and other prices; another group wanted to control the world price.
We've seen a bit of fraying in European resolve over Ukraine, owing to the dependency of some countries on Russian natural gas. As I recall, some countries like France purchased a lot of Libyan oil. All of these factors continue to make fossil fuel a strategic resource.
And that's a problem. It's a problem to me when a Congressman stands up in 2010 in the wake of the Macondo blowout to accuse the Pres of "shaking down" the industry, but as time goes forward, the Gulf fishing industry is showing more indications of stress from that accident.
I think sometime in the last five years, when the price per barrel was at a record high, Exxon-Mobil recorded the highest profits in US history at something like $60 billion. One partial explanation there would be that EM is involved through the whole chain of production from extraction to end-product. On the same day that one major newspaper in my region announced that Exxon was ignoring infrastructure in Angola, another newspaper run out of a Dallas company with board representation from oil interests posted an editorial "Hands off Big Oil!"
Mining operations of any kind are becoming problematic: we have another thread recently created here about the Animus River disaster. Blame EPA all they want: the problem was there long before they decided to try cleaning it up. And there are also "conspiracy theories" afoot about that.
Here in the Chi. - I want to say the price increase happened Tuesday night going into Wed.
Oil costs did not jump from "Big Oil". Gas costs did because of perceived supply issues in area served by the refineryGas here in central IL went from 2.09 to 2.89 in 2 days. When I was coming into work the other morning I noticed the 2.09 price and by 6pm it was up to 2.49, and the following day it jumped another .40
Hooray for big oil!
Still no change in gas prices here. Guess "Big Oil" loves us more than those who live in the Midwest.
And why would a refinery in Indiana disrupt oil in Texas?
Gas here in central IL went from 2.09 to 2.89 in 2 days. When I was coming into work the other morning I noticed the 2.09 price and by 6pm it was up to 2.49, and the following day it jumped another .40
Hooray for big oil!