Cykoguy
Pre-takeoff checklist
Eisenhower (KICT) used to be Mid-Continent has a NOTAM that they are out of 100LL. First I have seen that especially at an airport of that size. Not sure if it is Harvey related or not.
Wichita Out of 100LL
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Clip4
Touchdown! Greaser!
Probably not storm related. Could be a someone didn't order in time or a EQ problem at the airport.
Cykoguy
Pre-takeoff checklist
Could be. I found a neighboring/competing airport and FBOs comment on their Facebook page interesting. "ICT out of 100LL! Folks this could be an issue for Months to come and prices to match!"
https://www.facebook.com/wellsaircr...77548544660/10155696988029661/?type=3&theater
FormerHangie
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Most avgas is produced by inland Texas and coastal Louisiana refineries. There should be some excess capacity available, avgas consumption has trended down about 3- 4% per year over the last decade.
3393RP
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3393RP
It's not avgas, but QuikTrip, a chain of large convenience stores in OK and TX with around 36 gas pumps per location is closing the pumps at half their locations in Dallas.
I know a kid that's a manager for them, his store sells 115,000 gallons per month.
My wife bought gas at our local supermarket's station earlier tonight and all 24 pumps were in use with 3 or 4 cars waiting at each island.
I know a kid that's a manager for them, his store sells 115,000 gallons per month.
My wife bought gas at our local supermarket's station earlier tonight and all 24 pumps were in use with 3 or 4 cars waiting at each island.
FormerHangie
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We have them here as well. If there's any sort of supply interruption, they are the first to run out of gas. I get the impression they run their inventories pretty lean.
There's one in Anderson, SC just off of I-85 that sells so much gasoline I think they need their own pipeline spur.
Here in Atlanta, no problems with supply, but prices did jump about 25 cents. My wife and daughter generally fill up every other week, my car is a plug in hybrid, if I don't go out of town I can go a few months between fill ups. I filled up the second week in July, and still have three quarters of a tank.
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Jim
I'm based in Houston and was thinking about flying to Austin this weekend, but was wondering about avgas supplies. Saw a news report somewhere in the last few days that ~50% of avgas in US is refined here in the affected area. With numerous plans and pipelines shutdown, there's going to be an impact to supplies.
SkyDog58
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Canis Non Grata
Amazing that we would put such a large percentage of any critical industry in one area, especially an area that should be considered prone to a natural disaster.
bnt83
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Just look at our Pacific NW & the ring of fire.
SkyDog58
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Canis Non Grata
bnt83
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Thankfull everything I fly burns mogas from my local station, tho it just jumped to $2.60/gallon.
SkyDog58
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Canis Non Grata
Up around $0.20/gal here at most places.
Clark1961
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Refinery and chemical industry site selection is/was largely driven by supply location with follow-on infrastructure built to support existing plants. There are a few exceptions to this observation but by and large it is correct. The other driver is proximity to market or transportation center. With refineries nobody wants one in their backyard so siting close to market is largely a non-starter.
Now add in the current regulatory environment which pretty much precludes building new refineries and we are for the most part stuck with the refinery and chemical plant locations that grew out of the first half of the last century.
With that typed, all the active refiners are screaming yahoo and maxing throughput. It won't last long but if they can increase margins even 10 cents a barrel then they will be in tall cotton for the quarter. Bonuses all around for senior management even though they do absolutely nothing more than telling ops to max everything.
FormerHangie
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Avgas production by region is here: https://www.eia.gov/dnav/pet/PET_PNP_REFP_A_EPPV_YPR_MBBL_M.htm
The regulatory environment isn't stopping refinery construction, economics is. There have been a number of refineries closed over the last decade. Delta Airlines even bought one from ConocoPhillips.
FormerHangie
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I hear that the Colonial pipeline has shut down. That's gonna hurt.
Clark1961
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lol. Sure, whatever you say. Just how many refineries, chemical plants, or gas treatment plants have you proposed or built in the past 10 years?
MBDiagMan
Final Approach
Yes, economics is preventing refinery. construction. Now.... why is that???? It is because excessive environmental regulation makes them so expensive to build that they can not be profitable. I dont blame anyone for not investing money with no hope for profit.
azblackbird
Pattern Altitude
There's plenty of refining capacity as is. In fact most domestic refineries only operate at 75% (or even lower) as they continually upgrade and maintain their infrastructure.
FormerHangie
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Or, it could be that we have ample capacity, since gasoline demand is just now getting back to 2008 levels: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS1&f=M. There's a reason so many of the major oil companies are getting out of the refining business, it's tough, competitive and mostly low margin.
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Aztec Flyer
Nor sure where you got your statistic, but any refinery running at 75% capacity is a loss making operation. Refining economics is very sensitive to capacity utilization.
You are correct that there is plenty of refining capacity. The USA is an exporter of refined products, mostly to Latin America. And gasoline demand in the USA, in particular, has been in a fairly steady decline since 2005.
But, among other things, the economics of refining and the steadily increasing regulatory environment (environmental and other) has been the main driver to shut down small refineries that were scattered around the country, and a concentration of upgrade and expansion capital into a smaller number of large scale refining centers, such as Texas City.
azblackbird
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Just going by what I heard through the grapevine from my cohorts in the oil business. Between ongoing maintenance, infrastructure upgrades, and lower product demand. The modern oil refinery these days is running at about 75% of capacity or lower. You want see 95% to 100% utilization, you're probably going to need to start a major war somewhere.
The reason they make so much refined fuel in this area is its close to the raw materials,has the technology to handle sour crude very well, and the bi-products of the production process are used to make downstream products at co-located facilities. Getting the entire production cycle set up in colcated faclilties means very low transportation costs, the ability to use just-in-time inventory control methods to minimize the wasted time and expense by not having to stock large quantities of raw materials.it also saves millions by reducing the number of air permits that are required because the entire site's emissions are factored in, not just your unit. That gives some economy of scale and also gives a much more comprehensive look at how the site is doing in terms of emmisions. Finally it gives a very large pool of highly technical people that can pool resources to find ways to further improve the ene-to-end process from raw materials to finished goods
Not having all those advantages makes it hard to compete if you aren't at the same level so the high end products tend to be produced in areas like the Golden Triangle
Gary
Not having all those advantages makes it hard to compete if you aren't at the same level so the high end products tend to be produced in areas like the Golden Triangle
Gary
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Aztec Flyer
Just going by what I heard through the grapevine from my cohorts in the oil business. Between ongoing maintenance, infrastructure upgrades, and lower product demand. The modern oil refinery these days is running at about 75% of capacity or lower. You want see 95% to 100% utilization, you're probably going to need to start a major war somewhere.
There is not a single refinery in the republic that is anywhere close to profitable at 25% downtime. Your grapevine cohorts are either BSing you or don't really know the economics that drive that part of the hydrocarbon business.
tspear
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Timothy
I have read articles that state most refiners are not at capacity and have not been since gas production peaked around 2008.
We recently opened up more exports of refined products which is helping, but does not deal with how much lower demand is compared to predicted.
Tim
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tspear
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Timothy
Gary,
That was true in the 70s. Now a majority of crude oil is shipped or piped in to the gulf coast. It would be cheaper from a transport cost to have the crude delivered to either the west or east coast. The problem is the cost to build or move the refinery is prohibitive and with a decreasing or flat demand curve does not make business sense.
Tim
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Lachlan
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So you're saying it's a Vx climb, then best angle of glide pricing scheme?
azblackbird
Pattern Altitude
If a refinery is rated to processes 100k bbl per day. Does that mean they have to actually process 100k bbl per day to remain profitable? Think about it...
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Aztec Flyer
If a refinery is rated to processes 100k bbl per day. Does that mean they have to actually process 100k bbl per day to remain profitable? Think about it...
They have to process close to that capacity to be profitable because the fixed costs of running the refinery are such an overwhelming proportion of the total OPEX. I don't have to think about it too long. This is my 40th year in oil and gas industry, and I spent the first 18 of those working for one of the top two capacity refiners and product retailers in the Lower 48.
azblackbird
Pattern Altitude
Let me ask you this. Does a refinery make more profit when oil is at $40 bbl. or $100 bbl.?
MBDiagMan
Final Approach
The refinery gets pId to refine. If crude costs ten dollars a barrel or $100. Barrel, the cost to refine is the same. To some extent the profit will vary with pump prices because of supply and demand. Generally speaking though they make the same.
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Aztec Flyer
Refinery economics are extraordinarily sensitive to capacity utilization. Any time it falls below about 90% its almost certain that refinery is losing money. Operators will shut down entire refineries and rationalize capacity instead of running at low utilization for extended periods. Here's a chart from the EIA of USA domestic capacity utilization. You will see the 75% capacity usage cited on another post is not correct.
The USA has been an exporter of refined products for decades. The ramp up in product exports is being driven by the dramatic increase in domestic light crude production from the shale plays. The export of raw crude oil, which was restricted in the aftermath of the OPEC oil embargo shortage in the winter of 1973/74, have also increased for the same reason - in first half 2017 the USA exported close to one million barrels per day of raw crude oil. There is a mismatch between the quality of domestic supply of crude and the type of oil required as input to the current USA refining system. This is because for decades the global crude supply slate was gradually shifting from high quality light, sweet oil to heavier, higher sulfur crudes, as the upstream exploration and production companies worked their way down the quality pyramid of reservoirs available to exploit.
In 1982 there were 254 operating refineries in the USA, with a total capacity (atmospheric distillation) of about 15.5 million barrels per day. Today there are 137 refineries operating in the USA with a total capacity of about 18.5 million barrels per day. Regulations and economics forced operators to consolidate their investments in better emissions controls, automation, higher product specifications (e.g. diesel de-sulferization), OSHA staff training/protection and so forth into a smaller number of larger capacity refining centers. In addition, the USA refining upgrades and expansions, including those on the the Gulf Coast, were increasingly geared towards processing those lower grade, lower cost and more available heavier crude inputs. The new domestic crude supply from shale plays is light, sweet crude and Texas, for example, now produces more of that grade than the entire Texas refining complex can take as input. That is why refining companies such as Valero are barging light sweet crude from the Texas Gulf Coast all the way up the Atlantic seaboard to its refinery on the St Lawrence seaway. That domestic light sweet crude is backing out similar grade crude supply, mostly imported from Nigeria. In the meantime the Texas refining complex, which is geared for heavier, sour inputs still needs oil imported from Venezuela and bitumen from the Canadian oil sands.
With regard to US domestic gasoline consumption, there was a drop in consumption starting in 2005, which accelerated during the '08/'09 financial crisis, but as you can see below a growing economy and a growing population (not to mention record new vehicle sales volumes) has reversed that trend somewhat.
Info from the Dept of Energy, Energy Information Administration
How much gasoline does the United States consume?
In 2016, about 143.37 billion gallons (or about 3.41 billion barrels1) of finished motor gasoline were consumed in the United States, a daily average of about 391.73 million gallons (or about 9.33 million barrels per day). This was the largest amount of annual motor gasoline consumption on record.
(The EIA uses product supplied to represent approximate consumption of petroleum products. Product supplied measures the disappearance of these products from primary sources, such as refineries, natural gas processing plants, blending plants, pipelines, and bulk terminals)
In 2016, about 143.37 billion gallons (or about 3.41 billion barrels1) of finished motor gasoline were consumed in the United States, a daily average of about 391.73 million gallons (or about 9.33 million barrels per day). This was the largest amount of annual motor gasoline consumption on record.
(The EIA uses product supplied to represent approximate consumption of petroleum products. Product supplied measures the disappearance of these products from primary sources, such as refineries, natural gas processing plants, blending plants, pipelines, and bulk terminals)
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Aztec Flyer
Refineries work on the spread between crude input cost and wholesale product prices.
What happens to product prices over time when crude oil prices rise or fall?
Its a fallacy to think refining profits are somehow linearly related to any given level of crude price.
Changes in crude oil input price afford short term opportunity for refineries to increase margins or lose money depending on which way that price is moving, but margins converge pretty quickly because inventory of both crude and products is continuously being consumed in large quantity and is comparatively price inelastic.
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tspear
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Timothy
Here is a little data.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTRX_NUS_1&f=M
I will let someone else do the math on current production compared to 2005.
Tim
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTRX_NUS_1&f=M
I will let someone else do the math on current production compared to 2005.
Tim
tspear
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Timothy
Not based on public company financial reports. They make a margin which is percentage based; and the higher the price of crude, the higher the profit...
Tim
azblackbird
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Explain to the viewers here how a refinery can throttle their production down, or even go off-line for a month or two and still make a profit.
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Aztec Flyer
BTW, in general the refining business is a capital intensive, low rate of return business. I know we pilots who pay through the nose for avgas often don't believe that, but it really is a lousy business. It is heavily regulated, has required continual heavy investment to meet new operating and product standards and has to respond to rigorous safety requirements (its a dangerous environment with the periodic explosions and fatalities, as the BP Texas City fiasco demonstrated). On the retailing side the companies make far more margin selling coffee and bottled water out of their convenience stores than they do peddling gasoline or diesel.
The integrated operators such as Exxon or Shell benefit because when the price of crude rises and their refining and retailing arms start haemorrhaging large cash losses their upstream production operations are wildly profitable. The "pure" refiners such as Valero and Tesoro don't have that offset, and the joke in the industry is over every 10 year cycle there's one really good year, two okay years, followed by the biblical 7 bad years.
If refining was such a great business you wouldn't see the integrated international oil companies steadily carving off or selling off their refining and retail operations.
The integrated operators such as Exxon or Shell benefit because when the price of crude rises and their refining and retailing arms start haemorrhaging large cash losses their upstream production operations are wildly profitable. The "pure" refiners such as Valero and Tesoro don't have that offset, and the joke in the industry is over every 10 year cycle there's one really good year, two okay years, followed by the biblical 7 bad years.
If refining was such a great business you wouldn't see the integrated international oil companies steadily carving off or selling off their refining and retail operations.
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Aztec Flyer
Sorry but I've put about as much time into this as I can afford.
Let's get back to airplanes.