The Oil Drum | Implications of a Ten Day Refinery Outage

411 comments on Implications of a Ten Day Refinery Outage

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ryvr on September 13, 2008 - 7:53pm

But is that why the mass media is not reporting this impending shortage? Are they hiding news to prevent us from panicking?

They need to report the news accurately, and it is our job not to panic, but instead be constructive and elect leaders who may be capable of dealing with a crisis without just blowing it up. The polls I read don't give me the comfort I wish I could have for that.

Do any of you think it is better for the media to keep it quiet to delay and perhaps slightly smooth the shortfall?

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Spaceman on September 14, 2008 - 7:29am

They need to report the news accurately

LOL!

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Leanan on September 14, 2008 - 7:52am

CNN is covering it. They have been covering the oil infrastructure angle, and have been since Gustav. They actually sent Ali Velshi, their oil guy, to report from the heart of the storm for both Gustav and Ike. (He usually reports on oil prices and such from the studio. I didn't know he even had legs.)

This morning, they are talking about how the refineries are shut down, and how they won't know how badly they are affected until the electrical infrastructure is inspected, which might not be for awhile.

They are also reporting that gas prices may rise due to these refinery issues - for weeks or months. But they're telling people not to panic, that by rushing to the gas stations now, they're saving only a few bucks at most.

They are downplaying the idea of actual shortages, and that's probably the responsible thing for a worldwide news service to do. If people panic and rush to fill up, it would suck the system dry, even if there were no production issues.

One of their talking hairdos (based in CNN headquarters in Atlanta) said she's running low on gas. She looked for a gas station on her way to work this morning, but couldn't find one with gas. She said she passed 12 of them, and all had their signs blacked out. Some had yellow police tape tied around the pumps. She said she has enough gas to get to work tomorrow, but isn't sure what she'll do after that if she can't get a fillup.

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expat on September 14, 2008 - 8:29am

But is this a positive or a negative?

How many talking heads do we really need?

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Bryant on September 14, 2008 - 10:36am

He usually reports on oil prices and such from the studio. I didn't know he even had legs

LOL

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NeverLNG on September 14, 2008 - 12:45pm

I thought that post was pretty funny, too. And look what time it was posted!!

Leanan gets more work done in a day than any three people, seems never to leave the computer terminal, and now we see, doesn't sleep.

Is this a human being?

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Bryant on September 14, 2008 - 8:42pm

So I guess the question should be: "does Leanan have legs?".

:-)

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whit on September 14, 2008 - 11:06am

If people panic and rush to fill up, it would suck the system dry, even if there were no production issues.

Does someone have the calculation on this? For instance, I filled both cars yesterday. Both were half-full to begin with. If cars on average are half full (which seems about right except for those too poor to put in more than a few dollars gas at a time - who mostly won't be finding extra dollars to fill up today either), and the average car is driven 1,000 miles per month, then if it's getting 20 m.p.g. that's 50 gallons, or 1.67 gallons per day. Assuming a largish tank, that's 3 fillups a month. So everyone topping off their tanks should use up about 5 days' forward supply.

However, once that's done, you're looking at the normal rate of consumption - or lower, if prices really surge, since people will conserve. In fact, people are likely to delay their next fill up until they see prices falling again. So on the back side there will be a lot of people running with less-than-half-full tanks.

Looks to me like the main effect of filling up now is getting ahead of the gas stations posting higher prices on what's the same gas whether I put it in my car yesterday, or four days from now when I would anyway. The belief that good citizens should wait to buy when prices go up strikes me as the opposite of good economics, except of course for those selling the oil.

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expat on September 14, 2008 - 11:19am

The general assumption here is that 96 hours is what the system can handle - and your figures, which sound quite reasonable, lead a one day shortfall.

We will be able to see how it works out over the next couple of weeks.

Driving will be cut back, but I don't think 'conservation' will be the prime element. It will be a lack of gasoline that will lead to driving being cut back - not exactly a replay of 1979, but along those lines.

Edit - the shortages causing cutting back being primarily the southeast/mid-Atlantic. Regions such as California and Pacific Northwest shouldn't have any problems in terms of supply.

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stiv on September 14, 2008 - 2:42pm

people are likely to delay their next fill up until they see prices falling again

http://blogs.wncn.info/betweenthelines/files/2008/05/gas-shortage-1979.png

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stiv on September 14, 2008 - 2:27pm

They are downplaying the idea of actual shortages, and that's probably the responsible thing for a worldwide news service to do. If people panic and rush to fill up, it would suck the system dry, even if there were no production issues.

Yes, this is a sort of Social Darwinism. Let the people who read The Oil Drum rush out FIRST and buy gas and fill up some 5 gallon containers. They can sell the 5 gallon containers for $100. You read it first here.

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