Gas prices on the way back up

[widebody911]

Seems like whenever prices start to trend downwards, something like this happens
/tinfoilhat

[sammyg2]

Lots of people work very hard to try to keep that from happening but it's a very dangerous business, let's just hope everyone is OK up there.

[Rick V]

I was living in Philly back in the 70's when they had those two big refinery fires, that is a major mess.
Where is this one?

[widebody911]

Sorry, I meant to add this to the first post

Fire at Chevron refinery in Richmond - SFGate

[sammyg2]

Chevron in richmond Ca. (bay area)

It's a very large refinery. They were talking about closing it last year because of the enviro-wacko legislation ( California's version of cap and trade) that is going to force all refineries out of California and send them overseas by 10 years from now, this might be enough for them to pull the plug depending on how bad the damage is. If so that will really, really screw up the west coast market.

I looked at the pics on the interweb and it looks to me like it was centered around the vacuum unit fractionator tower.

They take crude oil and strip out water, sand, and some sulfur, and then distill it.
The really heavy tar that comes off the bottom is sent to the vacuum unit.
It's heated up again and sent into another still only this time it's under a vacuum near the top of the tower.
That causes further seperation by boiling point without having to heat it up so hot that it turns to carbon. It's a fairly low pressure process but very hot and nasty.

Imagine asphalt/tar heated up to 600 degrees under a couple hundred psi at the discharge of the pumps .....

[Zeke]

How would that plant proceed w/o the vacuum unit? Sounds to me like they are squeezing every drop of oil for use. If the processes are reduced, will the cap and trade be affected positively? Can they just truck this tar off to somewhere else? Or will it even transport in the state its in.

[A930Rocket]

I was going to post about gas prices going up dramatically in the past two weeks and ask why, when it had been on a slow downward trend all summer. It's gone up almost $.50 a gal in the past two weeks.

[intakexhaust]

Last week in Chicago, prices jumped 60 cents per gallon... almost overnight. $4.40 to $4.65 for regular. Apparently a line ruptured somewhere in Wisconsin and two refineries that provide 'special screw you guys only in Chicago' formula went down. Funny common scheme: always around family summer vacation time just before school starts. Guaranteed price will drop back down by early Sept.

[sammyg2]

Originally Posted by Zeke

How would that plant proceed w/o the vacuum unit? Sounds to me like they are squeezing every drop of oil for use. If the processes are reduced, will the cap and trade be affected positively? Can they just truck this tar off to somewhere else? Or will it even transport in the state its in.

The important thing is this: only one employee was injured and from what I hear it isn't serious. There are close to 1300 people working at that plant. Decent hard working people trying to earn a living and I'm glad they're all safe.
It sends shivers through the industry when we hear about stuff like this.
Refinery fires scare refinery people and it doesn't matter how far away it is.


In the olden days that tar was sold as asphalt for roads.
Then they figured out that they can further vacuum distill it and then "crack" the large heavy molecules and make gas oil out of it, which in turn gets changed into gasoline, diesel, and jet fuel. Much more valuble than asphalt.

As it turns out this fire was not in the vacuum unit, it was at the #4 crude unit which is right next to the vaccum unit.
With that crude unit off-line they will still be able to process crude into fuel but not as much as normal.
The difference will be made up by imported fuels so we won't run out.
There will be a large price spike on the spot market, prices will jump a dime or more at the pumps from profiteering from the station owners and managers (over 90% are privately owned or operated) and it'll gradually drop back to normal after labor day.

At least that's my guess.

[sammyg2]

Originally Posted by intakexhaust

Last week in Chicago, prices jumped 60 cents per gallon... almost overnight. $4.40 to $4.65 for regular. Apparently a line ruptured somewhere in Wisconsin and two refineries that provide 'special screw you guys only in Chicago' formula went down. Funny common scheme: always around family summer vacation time just before school starts. Guaranteed price will drop back down by early Sept.

If you live in chicago you pretty much screwed yourself
You can thank your politicians and evironmentalists for that 'special screw you guys only in Chicago' formula.

if you want to learn a little about the market and how it affected by supply and demand, there's lots of good accurate info here:
U.S. Energy Information Administration (EIA)

[goat]

Originally Posted by sammyg2

Chevron in richmond Ca. (bay area)

( California's version of cap and trade) that is going to force all refineries out of California and send them overseas by 10 years from now,

.....

You have to be kidding! Yes the whole thing is not too eco friendly, but good grief more jobs lost.

[sammyg2]

Originally Posted by goat

You have to be kidding! Yes the whole thing is not too eco friendly, but good grief more jobs lost.

I wish I was kidding.
I know of one refinery in California that was nearly closed down last year after prop 32 was defeated but the plant manager convinced the board of directors he had a 5 year plan that would make the refinery profitable, but only for 5 years.

they bought it and the plant is still operational, for a little while longer.

They'll start closing in about 4 or 5 years, one at a time, and I seriously doubt that there will be any of the 13 large refineries left in this state by 2022. estimates list 100,000 jobs lost when they factor in all the support companies, contractors, vendors, machine shops, etc.

We'll be getting all our fuel from overseas.
Hey, what could go wrong?

All in the name of global warming. But herer's the part I don't get:
isn't overseas still part of the same globe?
the refineries in California are the cleanest refieries in the world by a very wide margin. the refineries overseas? HA! Over there as long as it isn't on fire it isn't leaking bad enough to worry about.

So they close down the clean refineries, put lots of folks out of work, and send our dollars to India and indonesia where the pollute the living crap out of the world.
Genius!

[goat]

Wow. quite an eye opener.
So they will have to start posting where the gas is produced. Hmmm do I pick China or singapore.

[speeder]

I just read in LAT that this fire should be good for 30 cents a gallon increase in gas. Just when it was shooting up anyways. Great.

[trekkor]

What's the difference, environmentally speaking, if it burns in the refinery or out the tailpipe?


About 25 minutes from my place.


KT

[sammyg2]

Originally Posted by speeder

I just read in LAT that this fire should be good for 30 cents a gallon increase in gas. Just when it was shooting up anyways. Great.

That's possible, I wouldn't be surprised if a handful of stations will jack up their prices that high for at least a little while, but I doubt the wholesale spot price will go quite that high.
There seems to be plenty of excess gas available right now, and they can have more imports here in a couple weeks so I don't see that high of an extended increase. 10 cents, probably. 20 cents? maybe, but not much past labor day.
Just a guess on my part tho, no one really knows for sure.

As of end of bidness yesterday 8/6/12 the OPIS spot price of unleaded regular in the bay area was $2.981 and in LA it was $2.951

We'll hafta watch it and see where it goes.


BTW yesterday in Phoenix it was $2.8502 and in SLC it was $2.8096

[Shadetree930]

Don't forget the impact that ethanol prices have on the price of gas as well. As the price of corn goes up due to the drought, the price of ethanol will go up, thus the price of gasoline will go up because the government has mandated that ethanol must be in gasoline.


http://money.cnn.com/2012/08/06/news/economy/ethanol-drought/index.htm?iid=HP_LN

[mikeesik]

But why is there an increase in price when something like this happens?
Does it help pay for the damage? Does it make people squander about buying fewer gallons and to share?
The fuel will be there from other refineries to gas stations.

I guess it only protects the fuel producer them/itself on continuing a profit that stays steady.
This has always bothered me.

[Wilhelm]

Originally Posted by mikeesik

But why is there an increase in price when something like this happens?
Does it help pay for the damage? Does it make people squander about buying fewer gallons and to share?
The fuel will be there from other refineries to gas stations.

I guess it only protects the fuel producer them/itself on continuing a profit that stays steady.
This has always bothered me.

I guess they raise the prices just because they can. I have suddenly realized..when something like this happens the price of gasoline can shoot up 10, 20 30 cents per gallon in a matter of days. When the price of oil drops...it takes weeks to see a decrease of a few cents in the price of gasoline. I dont understand it.
But...I aint too smart. Maybe Sammyg2 can explain it in simple terms to all of us.
Sammyg2 seems to know a lot about this sort of thing.

[SCcaretaker]

Having been informed many years ago to only use Chev___ in my SC, I have loyally used this brand without any exceptions. In fact, if memory serves there was an article in a Pano that addressed this subject. Now, my concern is that just maybe the formulations have changed making this brand loyalty foolish. What is the current thinking on paying the extra 20 to 30 cents a gallon? Price is not the concern, but I know I am out of the loop on current thinking regarding fuels. Any input????