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86 comments on This Week In Petroleum (TWIP)

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Rethin on June 21, 2007 - 3:30am Permalink | Subthread | Parent | Comments top

Memmel was correct.

http://tonto.eia.doe.gov/dnav/pet/hist/wpuleus34.htm

Utilization rates of over 90% are very common during the summer for the last 15 years. Its no where close to the mid 70's that you claim.

You're lucky RR is on vacation.

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PartyGuy on June 21, 2007 - 3:38am Permalink | Subthread | Parent | Comments top

Where is the data for the years prior to 1991? 2 or so decades goes quite a bit further than you are letting us all onto.

http://dnr.louisiana.gov/sec/execdiv/techasmt/oil_gas/refineries/refinin...

(1) Overcapacity

    There is currently significantly more refining capacity in the U.S. than there is demand for refined products.

This has been the major cause of the rash of shutdowns across the U.S. It is the independents that have been hardest hit by closures in Louisiana. Although refinery closures have slowed over the past year, there will probably be more until supply comes more into balance with demand.

Now, haven't we been through this subject before? Please, watch what you say :)

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OilcoEx on June 21, 2007 - 4:26am Permalink | Subthread | Parent | Comments top

we added refinery capacity like crazy in the 70's when crude was $4/bbl and people thought crude demand worldwide would be 100 MMBD by now. Bad call. that left a ton of mangy capacity unable to compete once crude jumped up dramatically. That capacity remained operable, just utterly un-economic. They were units designed to make gobs of fuel oil for thermal electricity generation which made no sense once crude became expensive relative to coal or gas. Also their own energy efficiency was horrid as they were optimized for crude at $4/bbl. No payout for air preheaters, feed/effluent heat exchange etc at that low price.

No refiner will be happy with 70% op factor. They want to run full all the time as the last bbls are the most profitable since the fixed costs are already covered.

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Rethin on June 21, 2007 - 4:50am Permalink | Subthread | Parent | Comments top

You claimed:

Remember guys, 90%+ utilization is NOT normal, nor is it healthy!

I presented you with eia data that shows 90%+ utilization is very much normal and has been for 15 years not the 2 years you claimed.

It is very clear that you were wrong.

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PartyGuy on June 21, 2007 - 4:57am Permalink | Subthread | Parent | Comments top

I think there is a little disconnect here, Rethin. Perhaps you would care to actually READ the article that I linked? There is a wealth of information out there that shows we had far too much refinery capacity in the 70s and 80s. With the over capacity, margins were thinner, but a mechanical problem at one refinery wouldn't cause any systemic shortage of gasoline. What we find ourselves in today is a wonderful conundrum sponsored entirely by Big Oil's greed via shutting down a large number of our refineries in the past to shore up low profit margins.

So no, 90% is not 'normal' from an historical stand point. Perhaps its 'normal' in our Just-In-Time gas distribution system we now find ourselves in :)

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Rethin on June 21, 2007 - 5:01am Permalink | Subthread | Parent | Comments top

You are clearly just trolling.

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PartyGuy on June 21, 2007 - 11:37am Permalink | Subthread | Parent | Comments top

I don't understand why you think that, and I don't think that is fair at all. You seem to be the only person that is unwilling to acknowledge that we did utilize far less refinery capacity during peak months in the not so distant past. How sad that instead of examining the data for yourself you simply decide to engage in name calling.

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OilcoEx on June 22, 2007 - 12:11am Permalink | Subthread | Parent | Comments top

nope. he's not trolling. You are clearly wrong.

Yes there was a period with a great deal of "operable" capacity that in truth never operated again. 70% OP factor is NOT in any way acceptable or normal. No refiner could make money like that. What you had was 12 MMBD of capacity that ran 85-95% of the time and another 5 MMBD in mothballs.

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Rethin on June 22, 2007 - 12:44am Permalink | Subthread | Parent | Comments top

Hang on a sec here.

Perhaps you are confusing who's who here.
I, Rethin, am presenting evidence that 90+% utilization is normal and desired.
Partyguy, Troll, is claiming 70% is desired and the past 15 years of utilization rates are both unhealthy and not normal.

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OilcoEx on June 22, 2007 - 5:04am Permalink | Subthread | Parent | Comments top

sorry. I'm with you 100% (well maybe with a 95% op factor) ) on this one. I question whether he's a troll though either. Pig headed I'll agree to ;).

lots of non technical people here with weird ideas of how the industry really works. And quite a bit of "don't confuse me with facts, my mind's made up".

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Rethin on June 22, 2007 - 6:30am Permalink | Subthread | Parent | Comments top

By his comments here alone, I agree troll is a little bit of a harsh label.

But I think I know this guy by his MO. An old troll that went by the name hothgor. I suspect this isn't his only sock puppet either, but have no way of knowing for sure.

Also, reading though your comments I'm impressed with the depth of knowledge and experience you bring. Please don't be put off by the ignorance some of us show here (my self included unfortunatly). I'm sure I'm not alone in appreciating your input.

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memmel on June 22, 2007 - 1:00am Permalink | Subthread | Parent | Comments top

He is claiming this is normal its far from normal. 80-85% with burst above 90% is normal for most chemical plants. Most cannot even operate as low as 70% capacity the plant simply won't function correctly. I don't know about refineries in particular but I can't see them being much different from any other chemical plant I think they are fluidized bed reactors for their crackers from what I can tell these have to run at a certain load factor which is basically full or it does not function. The hydrogenation steps are also probably constrained to a load range. Cokers etc etc. It does not seem feasible to run a plant except at 80% plus capacity unless you take down a whole train.

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OilcoEx on June 22, 2007 - 5:51am Permalink | Subthread | Parent | Comments top

we used to design for about a 60% min operating level when we could. Modern distillation equipment can do that. Some fixed bed reactors need enough flow to get a decent pressure drop to ensure everything spreads out -- don't want areas with no flow leading to coke balls etc. But you can keep gas recycle rates up at a cost in energy. I doubt there are very many fluid bed FCC's any more. They mostly used very short residence time reactor designs to maximize gasoline yield while minimizing gas yields. The regenerator side is still fluid but nothing keeps you from tweaking air rates up a shade. many plants have 3 X 50% pumps instead of 2 X 100% which makes turndown easier.

And I'll say again, the low op factors in the 80's came from many many ragged old plants not running at all and then being dismantled (see Wyden's list of dead refineries -- mangy old pieces of shit that were horrible neighbors, tiny tea kettles or just ancient and uneconomic). Those that were running were running with high op factors and throughputs as the refiners played "who will crack first and cut runs". The biggest and best never backed off (eg Chevron Pascagoula after their $1 billion revamp 1980-83). Terrible return on that capital, but with the costs suck, they ran full.

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wideblacksky on June 21, 2007 - 11:34am Permalink | Subthread | Parent | Comments top

How far do you want to go back? 1600?

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