re: White House Weighs Defense Production Act as U.S. Refineries Maxed Out

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It was a medium sized plant that was old and only produced fuels. Shell took the gamble to work towards the chemicals side and lost bigly.

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Large by Russian standards, and a fairly modern one built in 1969.

It was Shell Chemical which bought St. Rose, LA, Saraland, AL and Yabucoa, PR to supply naphtha feedstock to its Norco ethylene cracker. The flood of NGL's into the market took away that advantage. St. Rose added a vacuum unit to make asphalt for Shell OIL which didn't work out and shutdown. Yabucoa was demolished after almost being purchased for relocation to Libya, but Qaddafy was overthrown. Saraland was sold to Vertex which converted it to renewable diesel and failed due no supply secured of tallow, used cooking oil, or seed oil and went to recycling used motor oil blended with vacuum gasoil in the new hydrocracker.

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No offense, but this is horse shite.

The refineries running at capacity+ means that the supply of oil is not an issue. They are obviously getting all they can use. This makes all the stories about the "strait this" and the "strait that" just hogwash. There is plenty of oil flowing.

The fact that the refineries are recording record breaking profit margins means that the cost of the oil is also not a problem. No company makes record profit margins when their raw materials costs are rapidly rising. They are most definitely not overpaying for the oil.

So if the supply of oil is not a problem and the cost of oil is not a problem, then where is the problem?

The only possible scenario is that somebody is buying a shitload of refined products from U.S. refineries that wasn't buying it before. I offer as exhibit "A", China.

I've been reading stories for months how global economists have been mystified how China has been able to slash their oil imports by as much as 60-70% for the last 6 months with no impact to their economy. Some theorist say they must have had a giant reserve somewhere, but there is no evidence of this. Other theorist say they must have massively gone "Green" and don't need oil anymore, which is idiotic. I think the most obvious answer is that they're buying refined diesel and gas from the U.S.
This smells like something that Trump and Xi worked out a long time ago to keep them out of the Iran conflict.

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HORSE shite

China had the largest reserve in storage, larger than the SPR. It cut back refining by 50% and banned exports of refined products. Their reserves are of crude oil for modern refineries and refined products desired most, not those grades for pre 1980 refineries like the US legally had to store in the SPR.

The US exports of refined products trucked along as usual, mostly to South America.

Refineries operate with sales to bulk buyers, not by selling to someone with a barge or even a ship.

As I've recently had a little education via experience by connecting an overseas gasoline components importer with a major refiner it takes months to get approved for sales. This is only for two blending components with a total of around 400,000 bbls per month. There is an entire "onboarding process" with checklists of documentation submitted and forms filled out to be approved by the legal department before any deal can be made. My client wants to buy a 1950s refinery not reopened post Covid, and relocate it to that country, but needs to build up its credit rating first with this monthly purchase.

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I've worked hands-on, nuts and bolts in the bowels of those refineries, and the scope of disassembling and moving one of those is mind boggling. I was always amazed at the effort required to create the innate power of this massive but relatively simple technology.

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There are specialty contractors for this. It's not exactly reverse of construction. In the 80s I have bid against major firms and went well under their bids and we still made a very nice profit. Back then the Bechtel's, Brown & Roots, and Fluor Daniels were very pleased when they made 8% profit on a project.

And the Climate Change - Global Warming Hate Conservatives Coalition have fought with a vengeance to prevent the building of more refineries. Then Greta Thunberg style they get in their gas guzzling LearJets and fly off to enjoy the adulation and love from the elites.

Absolutely, refining has not kept up with the travel demands of our growing population. But then what's the Climate Change loonies solution to the increased demand for cheap energy to power our vehicles? Sewing Machines we call Battery Power Electric Vehicles that take hours to recharge and leaves you desperate to find charging stations as you exit the interstate. Never mind the things aren't practical, these buffoons insist on shoving EV's down our throats. How lunatic are these environmetalist? They blame cow farts for global warming. Their answer to the cow fart global warming threat? Do away with beef, and replace with bugs. That's right friends and neighbors - bug burgers.

But but but Donald Trump is to blame and and and he's a meany.

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So if the supply of oil is not a problem and the cost of oil is not a problem, then where is the problem?

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The problem is that refined diesel fuel is not being produced in Russia like it used to be due to the war over there, and the war is also interrupting the shipment of refined fuel.

Therefore, global supply has been limited due to that conflict. Not of oil, of already refined diesel fuel.

So there's a global shortage.

Need to get that huge refinery on St Croix back up and running again

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The Iran war isn't impacting this problem.

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wackatimesthree

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Should be more.

We have two closed refineries in Cali because of insane Cali politics. Trump should federalize them and open them back up