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Started By
Message
re: Queston for O&G people about subsidizing refineries
Posted on 6/24/26 at 6:10 pm to FliesByNight
Posted on 6/24/26 at 6:10 pm to FliesByNight
quote:
stop with your unoriginal ai slop
You may or may not be old and confused and out of sorts and fricked up in the head.
AI Slop has a digital connotation. Copy/pasting a large language learning model's answer to a complex question isn't AI Slop, genius
0
Posted on 6/24/26 at 9:15 pm to Violent Hip Swivel
Forget AI. The real world is that we changed in the early 80s from using cokers to squeeze the last drops of oil and diesel from a barrel of oil with coke as a byproduct able to break even with selling. In two years it became a profit center as a new market was developed in Europe by the German company Otto Wolf. Suddenly refineries WANTED heavy and very heavy crudes, California's refineries had been for heavy sour crude already do ample supply locally. With Venezuela a 4-5 day voyage it was cheaper than a 30+ day voyage from the Persian Gulf around South Africa on a VLCC or ULCC. Then by 1984, sulfur began to be more scarce globally as sulfur mines began to be depleted. Sulfur recovery for sour crude made money.
That is how we ended up with 11 major refineries on the Gulf Coast reliant on heavy and very heavy crudes from Venezuela and Mexico.
The refineries which closed in Louisiana at Convent and Belle Chasse were for Louisiana Light Sweet the premium grade of all crude oil. When Venezuela supply became unstable n 2003 with a 6 month long strike then all the white collar workers who protested Chavez handling of the PDVSA, they were replace 3-1 with Chavez supporters who didn't know crap. First Keystone Pipeline was built to Cushing then on to Wood River, IL across from St, Louis to P66 there. at Cushing some of it was split to Borger, TX. That Canadian blended crude was heavy sour and a stable supply.
The problem with much of the tight shale crude is light ends. It requires more heat to fractionate and light ends flood the top of the column. A refinery built for light sweet crude in OK, when bankrupt because this crap caused it to lose 30% throughput capacity,
To rectify this light tight shale crap which is technically condensate being over 45 API. Valero built condensate splitters to get rid fo the light ends, at Corpus and Mereaux, this was Eagle Ford first.
Kinder Morgan and BP JV and commercial condensate spltter in Houston around 45,000 BPD but it was uneconomical to operate. It might be running again but it shutdown after a year.
There are problems other than being light with some of these new crudes from TX. Drilling from the same pad into the same formation, one well might have excess ironm anther excess vanadium, and so on. The metals shorten the life of catalysts in refining processes. Many European refineries cannot even use them. Another with some of Eagle Ford is high paraffin wax content, even with 60 API "crude" which pipelines won't take due it plugs them up. It has to be trucked to where it can be sold or treated near the wellhead to drop the wax out, as slack wax.
Modern gasolines is a combination for several things blended together. These are naphtha, alkylate, reformate, and isomerate, olus required ethanol and the additives per each oil company. Many refineries have the additives for itself and competitors.
As for new grassroots refineries, they must have someone willing to guarantee buying what is produced before anyone will fund it. We have no refinery shortage for demand not only in the US but also demand exported mostly to Canada, Caribbean, Mexico and South America. That is why PEMEX bought half of Shell Deer Park in the hearly 90's and the rest of it a few years ago.
The new refinery to be built in Brownsville is actually owned by Reliant Industries and its products will mostly be exported.
Modern refineries need a symbiotic relationship with nearby chemical companies to actually survive. This is what killed the refining/petrochemical complex in Puerto Rico in the early 80's. Freight costs real money.
You won't get decent answers from AI because some of its sources are from bullshitters and far letists.
That is how we ended up with 11 major refineries on the Gulf Coast reliant on heavy and very heavy crudes from Venezuela and Mexico.
The refineries which closed in Louisiana at Convent and Belle Chasse were for Louisiana Light Sweet the premium grade of all crude oil. When Venezuela supply became unstable n 2003 with a 6 month long strike then all the white collar workers who protested Chavez handling of the PDVSA, they were replace 3-1 with Chavez supporters who didn't know crap. First Keystone Pipeline was built to Cushing then on to Wood River, IL across from St, Louis to P66 there. at Cushing some of it was split to Borger, TX. That Canadian blended crude was heavy sour and a stable supply.
The problem with much of the tight shale crude is light ends. It requires more heat to fractionate and light ends flood the top of the column. A refinery built for light sweet crude in OK, when bankrupt because this crap caused it to lose 30% throughput capacity,
To rectify this light tight shale crap which is technically condensate being over 45 API. Valero built condensate splitters to get rid fo the light ends, at Corpus and Mereaux, this was Eagle Ford first.
Kinder Morgan and BP JV and commercial condensate spltter in Houston around 45,000 BPD but it was uneconomical to operate. It might be running again but it shutdown after a year.
There are problems other than being light with some of these new crudes from TX. Drilling from the same pad into the same formation, one well might have excess ironm anther excess vanadium, and so on. The metals shorten the life of catalysts in refining processes. Many European refineries cannot even use them. Another with some of Eagle Ford is high paraffin wax content, even with 60 API "crude" which pipelines won't take due it plugs them up. It has to be trucked to where it can be sold or treated near the wellhead to drop the wax out, as slack wax.
Modern gasolines is a combination for several things blended together. These are naphtha, alkylate, reformate, and isomerate, olus required ethanol and the additives per each oil company. Many refineries have the additives for itself and competitors.
As for new grassroots refineries, they must have someone willing to guarantee buying what is produced before anyone will fund it. We have no refinery shortage for demand not only in the US but also demand exported mostly to Canada, Caribbean, Mexico and South America. That is why PEMEX bought half of Shell Deer Park in the hearly 90's and the rest of it a few years ago.
The new refinery to be built in Brownsville is actually owned by Reliant Industries and its products will mostly be exported.
Modern refineries need a symbiotic relationship with nearby chemical companies to actually survive. This is what killed the refining/petrochemical complex in Puerto Rico in the early 80's. Freight costs real money.
You won't get decent answers from AI because some of its sources are from bullshitters and far letists.
Posted on 6/24/26 at 9:18 pm to TigerTatorTots
quote:
They have been keeping the equipment preserved so maybe one day the thing will come back to life
Shell isn't selling is why.
P66 sold Belle Chasse to Harvest Midstream as a terminal. Harvest isn't interested in selling process units. I've tried.. They did look at putting in a Butamer unit I have for sale but nixxed that idea for now.
Posted on 6/24/26 at 9:24 pm to fightin tigers
quote:
Believe it had a visbreaker. It is "small" and doesn't fit Shell moving forward. Not a very complex refinery either.
A visbreaker is old technology. It does have a hydrocracker so it is a fairly complex refinery. Originally built by Texaco for Louisiana Light.
Posted on 6/24/26 at 9:24 pm to Violent Hip Swivel
quote:
why doesn't it subsidize the construction of new refineries
They don’t need to because the states slobber all over them enough. They’ll even take your land to give them a pipeline or expansion.
Posted on 6/24/26 at 9:31 pm to PCRammer
quote:
While I get the humor and spirit of your statement I do have first hand knowledge of Trump pushing presidents and CEO's to get new projects filed so his admin can get them approved.
There are several projects designed specifically for West Texas Extra light some already permitted but there is no funding for them because no market for their fuels Without funding it doesn't make a rat's arse what permits they have. Permitting is easier than you think. Two grassroots refineries were bult in ND during Obama. Both went belly up in the 2014 oil price collapse. Deman in ND wasn't there. One was converted to renewable diesel. The other is back operating again.
A brand new grassroots refinery was completed in Galveston in June 2020 specifically design for 56-60 extra light Eagle Ford. The owner got a great deal on heavy crude at bargain basement price so fricked it up. Polaris EPC has a lien on it and has won in arbitration but may never get paid.
Posted on 6/24/26 at 9:38 pm to CitizenK
Shell is looking for a buyer of that refinery FWIW.
Posted on 6/24/26 at 9:52 pm to TigerTatorTots
quote:
Shell is looking for a buyer of that refinery FWIW.
Someone was trying to buy it a few years ago. Maybe someone will.
Shell has been trying to sell the St. Rose refinery for several years. Just a crude unit with a vacuum unit, 50,000 BPD. They bought it, Saraland (Mobile) and Yabucoa, PR as Shell Chemical to supply naphtha feedstock to the Norco Ethylene cracker initially. Since that Ethylene cracker is quite flexible. NGL's are a cheaper feedstock these days. The Saraland refinery was forced to use some light hydrocracker reactors sitting as JSW in Kobe, Japan in 2005 for ULSD upgrade. They had been for sale since at least 1991 from a cancelled project. Rated for around 1800 psig They asked me to try to find a buyer back then when I was at the Carson site of the Wilmington, CA refinery
Posted on 6/25/26 at 12:34 am to CitizenK
Hell Shell has been trying for five years to find a buyer for the Convent refinery.
It’s is a small place for sure, but depending on the market that Heavy crude unit can make $$$$.
Shell doesn’t like that up and down profit margins and they feel anyone can take care of and run a refinery. They want the higher margin stuff that takes a lot more technology.
Shell also has been basically shopping for a buyer for Norco and that is the last refinery they have in the Western Hemisphere
It’s is a small place for sure, but depending on the market that Heavy crude unit can make $$$$.
Shell doesn’t like that up and down profit margins and they feel anyone can take care of and run a refinery. They want the higher margin stuff that takes a lot more technology.
Shell also has been basically shopping for a buyer for Norco and that is the last refinery they have in the Western Hemisphere
Posted on 6/25/26 at 7:15 am to notiger1997
quote:
It’s is a small place for sure, but depending on the market that Heavy crude unit can make $$$$.
That's what I try to tell people who depend on Google and AI to get bullshite answers. There is little money in gasoline to make any money with next to no margin. However, Marathon's Garyville refinery is a profitable gasoline machine on heavy crude. It's not just the API gravity but the fractions in the assay.. Garyville loves Mars platform intermediate on the heavy side because high residuals content.
Let's take a refinery from SoCal built in the 1950's and shutdown in 1989 due regs on refining would have required it to have redundant sulfur units. I had just installed a new hydrocracker to go along with cat cracker and coker refining typical Cal crude 18.5 API with 3.5% sulfur. It's capacity was 55,000 BPD. I looked at it in 1992. (the plant manager owned a pair of original Shelbys he kept garaged and alternated which one he drove on weekends) . The coker was sold in the 90's as was th hydrocracker. The rest of the refinery was purchased around 2007/8, dismantled and shipped to Houston for refurbishment for a project in East Europe funded by a German bank and refining Russian intermediate crude. At over 80% refurbished the project was cancelled and bankrupted. It could only refine 50,000 BPD so a reduction of 10% going from heavy to intermediate.
I looked at this equipment around 2019 for a proposed refinery in Guyana which never materialized. It makes more sense to ship that crude to the US and have it refined on a toll basis with products shipped back.
Posted on 6/25/26 at 7:19 am to CitizenK
That crazy you can ship both ways and have it refined cheaper than doing it local.
Keep US refiners busy though.
Keep US refiners busy though.
Posted on 6/25/26 at 7:34 am to Violent Hip Swivel
No need to subsidize building of refineries. None whatsoever.
They are very profitable. Problem is the environmental red tape, environmental impact studies, the hundreds of reviews over A 10-16?year period, and permitting processes.
Since it is oil & gas related a lot of investment groups are automatically out. The political climate here is so fricked it is completely writhin the realm of possibility that investments in the hundreds of millions could completely stall out.
Who is going to be in power in 10 to 13 years? Obama effectively killed coal and it has taken 8 years to bring it partially back.
It’s financial risk from an investment standpoint. Build a refinery in Mexico. It will be cheaper and much faster with little difference in technology. Our bloated government is the problem. It’s not a lack of money.
They are very profitable. Problem is the environmental red tape, environmental impact studies, the hundreds of reviews over A 10-16?year period, and permitting processes.
Since it is oil & gas related a lot of investment groups are automatically out. The political climate here is so fricked it is completely writhin the realm of possibility that investments in the hundreds of millions could completely stall out.
Who is going to be in power in 10 to 13 years? Obama effectively killed coal and it has taken 8 years to bring it partially back.
It’s financial risk from an investment standpoint. Build a refinery in Mexico. It will be cheaper and much faster with little difference in technology. Our bloated government is the problem. It’s not a lack of money.
Posted on 6/25/26 at 7:44 am to GREENHEAD22
quote:
That crazy you can ship both ways and have it refined cheaper than doing it local.
It has to go by ship to Guyana from FPSOs already. There is more to crude oil than gasoline and diesel but no market in Guyana except those two. It's not worth the capital expense to build on a mangrove swamp.
Posted on 6/25/26 at 8:07 am to Violent Hip Swivel
The fact remains that the US has enough refining capacity and most refineries lose money as many years as they make a small profit. They serve as an outlet for the owners of crude oil production That is why Hunt Oil built Placid in Port Allen. Trading of products is where money is also made, things like Asphalt (not the road stuff but the tar like bottoms) gases like propylene from cat crackers, petroleum coke, etc. They do make a little money on diesel, but not gasoline.
FWIW, the grassroots integrated refinery built was in 1969 in Convent, by Texaco. The Garyville refinery was built as an entitlement refinery in the 1970s at 10,000 BPD, so just a topping plant which got paid over $20 per bbl every month just on throughput by "big oil". One month the check would come from Texaco, another from Shell, another from Exxon, etc...A lot of these popped up with 2,000 BPD capacity and they mostly bought slop oil. It did not matter if they lost money, that was made up by the monthly payments. One of the first things Reagan did was stop this.
FWIW, the grassroots integrated refinery built was in 1969 in Convent, by Texaco. The Garyville refinery was built as an entitlement refinery in the 1970s at 10,000 BPD, so just a topping plant which got paid over $20 per bbl every month just on throughput by "big oil". One month the check would come from Texaco, another from Shell, another from Exxon, etc...A lot of these popped up with 2,000 BPD capacity and they mostly bought slop oil. It did not matter if they lost money, that was made up by the monthly payments. One of the first things Reagan did was stop this.
Posted on 6/25/26 at 10:33 am to Trevaylin
quote:
Citizen K could explain that question.
He’s too busy pushing the bullshite carbon capture to steal our taxes for air we exhale
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