Our refineries are expensive, massive, and creaking into old age. How will they be replaced?

No one in finance wants to make a long term bet on what may be a short term game. If they put in a new refinery and place it on a thirty six month depreciation schedule instead of thirty six years people will get suspicious.

Is there room for relocalization here, too? Instead of finished products in pipelines we could see crude moving to smaller, regional refineries. Some preprocessing would be done at the head end but the final fractionation (is this the right way to use this word) would be much closer to the consumer and on a much smaller scale. Perhaps users of crude for other than energy would add crude processing to their plants; here I'm thinking of plastics and so forth, where they plants already have the intellectual property to handle petrochemicals.

We've going to see big car makers blow apart and in the aftermath all of these little custom motorcycle shops are going to migrate to building small kit cars ... why not the same principle in effect for oil processing?

A lot of good ideas, but with NIMBYitis and the needs of fuel "production" I suspect smaller will not happen. Also most of the folks that work at the refineries live close to them and pretty much live with less than ideal environmental concerns that most of us would not tolerate. John

I think the big oil outfits,as well as local anti-oil activists would strangle that baby in its crib,SCT.The mini-car co.might have a market,though,depending on their product.I just spent 4 grand re-building a 1986 toy tercel wagon....completely new power train sans tranny,and am now getting 35-37 miles per.I expect 100k out of the engine.This little beast will do me for the foreseeable future{wife and I have bought 3}It won't work for every one but I suppose this is one way of dealing with the current problems.

Snuffy said:

I just spent 4 grand re-building a 1986 toy tercel wagon....completely new power train sans tranny,and am now getting 35-37 miles per.I expect 100k out of the engine.This little beast will do me for the foreseeable future{wife and I have bought 3}It won't work for every one but I suppose this is one way of dealing with the current problems.

Who is greener? The guy driving a 2007 Prius or Snuffy driving his 1986 Tercel? You might answer: "Neither! Snuffy should be riding a bicycle." However if Snuffy lives 20 miles from work or needs to cart his children to school and back then riding a bicycle isn't a real option. Fixing and using old cars is actually much more greener than driving around in a Prius provided the old car is fuel injected with electronic ignition. The sweet spot for Snuffy's strategy is to own and maintain a 1996 Saturn SL-1 with a 5 speed transmission or better yet a 1996 Toyota Corolla. Either car if well maintained can get over 30 mpg on the freeway. Due to their age, both cars have depreciated to zero value (the depreciation is what kills the economics of a 2007 Prius and not the fuel cost). Cars made on or after 1996 have OBD-II power train control modules with electronic ignition and fuel injection. These features make the car very fuel efficient, produce low air pollution and reliable even after 10 years of use. The Corolla has the additional advantage of being repairable with used imported Japanese parts. The Japanese have draconian registration laws that sometimes force a Japanese car owner to junk a car with less than 50,000 km on the odometer (the engine is barely broken-in). The engine from that car can be purchased very inexpensively and used to replace a worn-out engine in an American owned Corolla. I have used this strategy successfully with a 1976 Toyota Corolla and a 1988 Toyota Tercel. Also, it is my understanding that complete used Japanese cars can be purchased very inexpensively in New Zealand (they are not street legal in America).

I will humbly suggest there will be a renaissance in carburetor based cars with small displacements. The intellectual property to build and maintain a distributor based vehicle is within easy reach, while electronic fuel injection is not something one can deal with under the shade tree. It is a bit less efficient in terms of fuel utilization but much, much safer as things unwind. The 1949 International Super M in the shed out back is something I can pretty much handle in terms of repairs, the 2006 Nissan Versa parked next to the shed is just so much scrap to me if it needs anything more complex than new wiper blades.

SacredCowTipper said:

I will humbly suggest there will be a renaissance in carburetor based cars with small displacements. The intellectual property to build and maintain a distributor based vehicle is within easy reach, while electronic fuel injection is not something one can deal with under the shade tree. It is a bit less efficient in terms of fuel utilization but much, much safer as things unwind.

To some extent, you're preaching to the converted. My wife drives a fuel efficient 1996 Saturn SL-1 while my daily driver is a 1964 Rambler American. My Rambler has a 6-cylinder flathead engine, a one barrel carburetor and conventional vacuum advance distributor ignition system. My Rambler is trivial to maintain (it comes from an era when many Americans repaired their own cars). Repair tasks for the Rambler that can be done in 5 minutes might require an hour for the Saturn, e.g. changing the oil filter. Unfortunately for me, the Rambler has only half the fuel economy of the Saturn. This is due to the Saturn's sophisticated fuel injection and overhead cam versus the Rambler's primitive flathead engine and carburetor.

The issue of modern cars versus very old cars might actually be defined by external events. There isn't a single transistor in my Rambler but my wife's car is dependent upon a sophisticated Power Train Control module based upon the Motorolla HC6811 microprocessor. If the Iranians/Chinese/Russians/somebody decide to popoff a large nuke in space over North America, the electomagnetic pulse (EMP) would take out most integrated circuit based electronics in the US (our current economy would be turned off like a switch). Modern cars would cease to function but my old Rambler would still be rolling along. At that point (assuming I'm still alive), I'd have to build a still and convert biowaste into alcohol. The Rambler could burn pure alcohol or methane if I retuned the ignition and/or modified the fuel system.

Does your old Rambler have a DC generator? All newer alternators have diodes in them and I suspect that a strong
EMP (50,000 v/cm?) would kill the diodes. Any thoughts?

E. Swanson

Yes, I think you're right: The EMP will incinerate all nonlinear circuitry.

Big power diodes are pretty tough, they may survive, depending.

EMP produces stuff from DC to about 2.0 GHz and it does obey the inverse square law - double the distance, cut the power by 75%.

I have some knowledge of how radio works but I am no expert in the field, so I welcome correction, but I suspect the following is true: The higher the bomb, the more area it covers, but the greater the distance and attenuation due to distance as well as atmosphere. The longer waves will follow the ground and generate voltages only with things the right size to resonate while the shorter ones are lines of sight. The key to zapping electronics is having something somewhere in the vehicle that is resonant with the energy received.

EMP is not even a little bit funny, but I think the idea that one, high up, gets every bit of the country is not so believable. And no one triggers a nuke in space over the U.S. without getting a little one wrapped up in cobalt set off at a much lower altitude over their own capitol city.

This is really a back of the envelope remark, but still: an EMP will have an easier time frying things that are on the grid, since the grid has all these delicious copper loops, and anything that isn't shielded, which car engines generally are.

So it won't be 100% on things like cars.

EMP is not even a little bit funny, but I think the idea that one, high up, gets every bit of the country is not so believable

True.
I believe 4 would be necessary.
http://webpal.org/

Hi SCT,

This is a good summary article. The NA grids could be shut down with a single high-altitude nuke, and it might take months or years to restart it:

http://www.todaysengineer.org/2007/Sep/HEMP.asp

There was an article in IEEE Spectrum a few years ago on the same subject but I can't find it. I believe it estimated the damage to silicon devices in North America at something around 45 trillion dollars from one HEMP.

re: cars, I'm more pessimistic than before, it appears any cable with less than 100% foil coverage or any bad grounds are, er, "grounds" for failure.

NR

I guess car survival doesn't matter much if gas stations are all dead :-) I read here every day and I'm still auto-centric :-(

Black_dog asked: "Does your old Rambler have a DC generator?"

Yes, it's an old fashioned DC generator without diodes. The voltage regulators are mechanical relay type. The whole setup is electrically very inefficient. However it's based upon heavy gauge copper wire so there's no way an EMP could knock it out.

I'm a member of an old car club and sometimes the other guys suggest that I replace the voltage regulator with a solid state device. However I LIKE driving a car that's uses neolithic technology. I prefer to keep it simple and easy to maintain.

Older VW Beetles should also be immune to EMP.

They have mechanical regulators and DC generators and AFAIK no electronics to speak of.

I have three of them in various stages of viability but all are capable with a little wrenching of running..just that I have let them sit idle for a long time.

I used to get mpg in the high 30..sometimes around 38 mpg if I recall correctly.

A very tough little car but you needed to keep the solid lifters set correctly.

Very easy to pull the engines.

airdale

Airdale said:

"A very tough little car but you needed to keep the solid lifters set correctly."

My other old car is a 1968 Karman Ghia. My Ghia started to run bad, so I did a compression test. The #3 cylinder has zero compression. The exhaust valve on the #3 had been tight and I adjusted it, thinking I had caught it in time. I thought wrong (the valve is burnt) and now have to replace the head.

I think I'll replace the head with the engine remaining in the car. Is that a dumb thing to do?

Yeah EP , you waited too long..however a new rebuilt head?

Not a biggie , or didn't use to be.

Ahhhh,,replace without pulling the engine? Yes I think that can be done. Don't see why not..In fact I think I have pulled them before that way.

1968? Mine are all early 70's with the dual port headers.
Keeping the right 'lash' on the lifters is important. If they start sinking in the head then you got problems. Heat is your big enemy so make sure you never blow a belt..I did once and it toasted my engine on the next big hill.

Be sure to use some oil on the cam and other bearing surfaces as you reinstall. While the head is off you can check wear on your cyclinders by checking the cyl ridge for an approximate idea.

BTW setting the valve clearance is tricky if the stems are snarly on the tips.

airdale

Airdale,

Thanks for the comments. This is my fouth Karmann Ghia. I've probably adjusted the valves on my Ghias over a hundred times. I bought this latest engine with the burnt valve from GEX and found out afterwards that GEX makes the worst VW engines in the world. GEX has an "F" rating with the Better Business Bureau and a long list of unhappy customers. GEX has these nice full page glossy ads in the VW magazines and supposably guarantees their engines. Unfortunately the guarantee is worthless and never honored. Supposably getting ripped off by GEX is the mark of being a clueless newbie (GEX is notorious within the air cooled VW community). I've owned Ghias for over 30 years so I can't claim being a newbie (my only excuse is simple stupidity).

The valve tightened and burned with incredible speed. The engine has probably less than 30,000 miles on it. Normally I check my valves every 2000 miles but was complacent and let 3-5 thousand miles go by without checking (it was a new engine). So I'll pay for my stupidity by spending the weekend replacing the head (it's a one port). Fortunately one port heads are cheap.

SCT, The US had many thousands of motorcycle makers and over two thousand auto makers before Henry Ford put them out of biz with his streamlined and efficient operations.

The machines that brought motorcycling back to life in the US were made in Japan. Honda with their small cc 'Dream', Passport and Trail 90, 110 were big sellers here and continue to sell well almost everywhere but here. Remember the Honda sales pitch, 'you meet the nicest people on a Honda'? I suspect that Honda will dust that one off for reuse.

When fuel prices get high enough we will once again see people on small motorcycles. Unlike big bikes, small ones are easy on tires/maintenence and will deliver 70-110 mpg. When over weight, out of shape Americans are confronted with a choice of a bicycle or a small cc, very economical motorbike, most will go for the motorbike.

Like Alan, I believe that rail is the way to go for longer trips and commutes in poor weather. When I arrived in Japan for a four year stay in the mid fifties it was bikes/motorbikes/rail. Untill the car craze hit SE Asia that was the model for every country. Cars have got to go or become as efficient as small motorbikes.

Ya...and now that loan requirements are getting tougher and harder to come by for residential properties...are commercial properties/capital next in the credit fallout? What banks are going to give HUGE loans on risky commercial investments? There was an article not too long ago stating that this phenomena could be hitting the smaller oil companies trying to get loans to run their operation.

Commercial property most certainly.

It's already starting, only reason they are finishing current projects is because they are committed past the point of no return.

The banks will lend to someone that has other hard collateral, question is why would someone with the assets invest in something that's far from a sure thing going into an unpredictable storm.

And that's without considering the coming elections, IMO we will see a lot of capital flight from US citizens.

Let's not get too silly about this. 'Small is beautiful' would be an emotional statement about romanticism, not a descriptive statement about the real world.

Refineries are virtually required by law to be "expensive, massive, and creaking with old age". Yes, in the 1920s, they built small refineries - which only needed to distill the crude. But these days, you need desulfurizers, catalytic crackers, cokers, waste-gas collectors, control and reporting systems - endless miles and miles of equipment and wiring required by law. A thing like that can't be done on a small local scale. And when the law allows any congenitally obstructionist NIMBY nebbich to singlehandedly block any expansion, renovation, or new project, no matter how vital it might be, then of course everything will be old. How could it be otherwise? But not to worry. Since we can't build anything here in the USA, the rentiers of OPEC are already building it for us on their turf and their terms. We will simply pay through the nose for our snootiness.

Never mind refineries, it costs somewhere north of $500,000 just to buy all the stainless steel and whatnot required by law to open a 'simple' local ice cream shop these days - which is why chains dominate. But Joe Sixpack, egged on by media hysterics, squeals with delight, as vast arrays of metastasizing obstructions convince him not only that he is "safe", but that his Congresscritter is avenging him against Evil Big Business for delivering the unwanted news that Joe actually has to work for a living and pay for what he consumes.

Absent a Mad Max future, all this will probably become ever worse. So there's really very little chance that big carmakers in general will blow apart (even if the domestic ones do.) Unless you're willing to go for far less meddlesome government - which would make you an outlier around here - you might as well get over it.

The Japanese are sensible, our auto makers are not. I didn't mean to suggest auto building would blow globally, but a compaction of the big three into the smaller one and the survival of the Chevy Aveo as one of their larger offerings seems likely.

I will.

Autos are gone in 5 years.

Depression by XMas for all to see.

Bush went on TV yesterday to call
Putin out.

Putin and China (see Zemin 5 Year Congress
for details) aren't blinking.

Rice's trip to Russia was a disaster.

"Clowns unto ages of ages"

http://d-n-i.net/lind/lind_9_25_07.htm

"A basic rule of history is that the inevitable eventually happens. If you keep on smoking in the powder magazine, you will at some point blow it up. No one can predict the specific event or its timing, but everyone can see the trend and where it is leading.

In the Middle East today, as in Europe in the decade before World War I, the desperate need is for a country or a leader to reverse the trend. Then, the two European leaders most opposed to war, Kaiser Wilhelm II of Germany and Tsar Nicholas II of Russia, were able to do little more than drag their feet, trying to slow the train of events down. That was not enough, and it will not be enough today in the Middle East either."-Lind

Arkansaw of Samuel L Clemens

I admire your willingness to make concrete predictions in public.
But depression by Christmas? You mean 2007?

If I were an exporting NOC, I'd be thinking to myself:

"Why export crude? Why not build a refinery and export the refined products instead? Value added equals higher profit margins. The importers don't want to build more refining capacity, so the demand will be there. Why not refine it ourselves?"

I helped sell organic soft-churned ice cream at a farmers' market in Oakland this summer with my friends. They spent less than $5k on all manner of equipment, half of which they probably didn't need.

You don't need "$500,000" to open a simple ice cream shop--there's a local place called Ici on College Ave that opened on far less. Most expensive and well-done bakeries on a small scale require no more than $250,000 tops!

And let's not talk about the lemonade stand :P

True--requirements and regs do add cost, but usually make a hell of a lot of sense. It keeps you from getting sick, or too much polluted air and water around your house.

Cheers.

And when the law allows any congenitally obstructionist NIMBY nebbich to singlehandedly block any expansion, renovation, or new project, no matter how vital it might be, then of course everything will be old.

It might be that this congenitally obstructionis NIMBY nebbich has looked at the statistics of higher cancer rates and higher lung disease rates (not to mention very stinky air) near a refinery and made an intelligent decision to oppose one in 'his backyard.'

When it's all said and done, we're going to be gratefull that all those regulations and NIMBYs throttled oil consumption by limiting refinery capacity. By putting the breaks on the uphill ride to Hubbert's Peak, they caused more oil to still be around for the downhill slide.

Yes, of course. The world would be just perfect if there were no govmint regulation.

Yes, so long as there is no need for 'em - what with all the honest actors we had before regulation.

And all the honest ones now.

it costs somewhere north of $500,000 just to buy all the stainless steel and whatnot required by law to open a 'simple' local ice cream shop

Citations on the 1/2 a million for Stainless Steel please.

At the beginning of the Chechen Rebellion-ongoing BTW
-I remember a story about the Chechens "home brewing" gasoline.

I wonder if it was unleaded? ;}

Arkansaw of Samuel L Clemens

mcgowwanmc,

The simplist kind of refinery is a tank to heat up the oil. The oil seperates into various components' of which napthe, or gasoline is generally about 40 to 60% of light, sweet crude. There are other products too like kerosene, fuel oil and asphalt. This isn't very complicated.

But, its a competitive business, and where they make their best money is taking the residual products and making them into saleable petrochemicals of one kind or another.

Ebersole

Anyone who has taken a few chemistry courses knows about fractional distillation. Team them up with a plumber and I suppose they could rig up a column that could actually produce some product. How long they could go before they blew themselves up is another question. . .