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+--- Thread: Analyst says Chevron refinery may shut down (/showthread.php?tid=10626)
Analyst says Chevron refinery may shut down - pahoated - 01-18-2013
All the gasoline and most of the diesel in Hawaii comes from imported foreign oil distilled at two refineries on Oahu, Tesoro and Chevron. Tesoro is shutting down in April after no buyers. Now, an oil industry analyst thinks the Chevron refinery may shut down in 2015. This will mean Hawaii will have to import refined gasoline and diesel at even higher costs than the imported oil is costing now. There is a rapid movement to start importing LNG (liquified natural gas) but this isn't immediately feasible for rapid transportation conversion. Also, due to the Jones Act, the surplus of natural gas on the mainland may not be available, so more expensive natural gas from Australia will have to be imported. The loss of the Chevron refinery may be an economic disaster for Hawaii, with gasoline and diesel possibly doubling in cost, with the subsequent effects to transportation costs, food, construction, goods, etc. The thumb twiddling inertia approach to energy sources in Hawaii means it may be too late to avoid what is coming.
http://www.bizjournals.com/pacific/blog/2013/01/east-west-senior-fellow-predicts.html
East-West senior fellow predicts Chevron will close Hawaii refinery by 2015
"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"
RE: Analyst says Chevron refinery may shut down - SBH - 01-18-2013
Not everyone is "twiddling their thumbs". Pacific Biodiesel just built a 12 million dollar biodiesel plant in Keaau now supplying our community with biodiesel from homegrown stock and recycled french fry oil.
I use their B100 biodiesel in my Jeep and it runs cleaner, runs better with improved lubrication, the fuel is cheaper, it creates jobs in our community and is helping lead Hawaii to become a more self-sufficient state as it should be (and as the biodiesel bumper sticker says "no war required").
RE: Analyst says Chevron refinery may shut down - kalakoa - 01-18-2013
I think biodiesel is a great idea.
All I need is some kind of subsidy for a car that can burn biodiesel.
It's a real shame about the Jones Act -- the Canadians have amazing quantities of natural gas, and most propane appliances are trivially re-tuned for NG...
RE: Analyst says Chevron refinery may shut down - Frank - 01-18-2013
Shipping crude to our Islands for refining to get gas and diesel.
Refining costs in Hawaii are expensive.
Shipping refined products to our Islands may be less expensive.
Hard to get around the shipping part.
RE: Analyst says Chevron refinery may shut down - kalakoa - 01-18-2013
Shipping everything makes great economic sense when fuel is $1/gallon. Those days are gone, we need to adjust.
This is why I keep saying things like "instead of widening the highway to fit more cars, let's restructure around having less cars" -- and I believe an economic crash is the fastest way to get there, because the entrenched oligopolies refuse to let go of their precious profits.
RE: Analyst says Chevron refinery may shut down - Carey - 01-18-2013
The highway thing is more relevant than you may think, as our highway tar is a refinery byproduct... just think what the costs of road paving will be when we have to ship that from Indonesia, & other refinery areas, as a separate line item...
RE: Analyst says Chevron refinery may shut down - Obie - 01-18-2013
The refiners on Oahu quit producing road oil in 2010 so it has been imported for the last 2 years.
RE: Analyst says Chevron refinery may shut down - pahoated - 01-22-2013
It looks like they are in full scale panic mode on Oahu and trying not to show it. Tesoro was also providing natural gas as a distillation byproduct, so they are trying to get an alternative LNG supply in place in two months (apparently the Jones Act was waivered).
http://www.lngworldnews.com/hawaii-gas-wins-ferc-approval-to-bring-lng-to-state/
http://www.civilbeat.com/articles/2013/01/17/18106-heco-company-will-need-waiver-from-epa-rules-for-lng-switch/
HECO: Company Will Need Waiver From EPA Rules For LNG Switch
This isn't even dealing with HECO just converting the diesel-electric generators to natural gas. HECO is estimating that at $1 Billion just for the plants on Oahu and probably not until 2019, although the fuel cost will be 20% cheaper compared to imported oil. It sounds like the back up plan is just import diesel if needed. The little talked about fact about oil refineries are they are expensive to maintain and operate, eventually needing total overhauls at huge costs. So, in the case of Tesoro, it probably holds more liability than its worth. The same for Chevron, although it might be possible to find a buyer.
"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"
RE: Analyst says Chevron refinery may shut down - terracore - 01-22-2013
I came here from Alaska. Yeah, Alaska produces oil. It was piped thousands of miles, then barged thousands of miles to the gulf coast,refined in the southern United States, turned into gasoline and other products we could use, and then barged back to Alaska so we could buy it "our" own oil byproducts. There is a refinery in Alaska but it produces AV fuel, and even those operations are getting mothballed because it takes a lot of energy to operate a refinery, and the cheapest energy to operate a refinery is natural gas. It was cheaper to barge the fuel back and forth a distance much further than the one way trip from the mainland to Hawaii than to refine it in Alaska. The natural gas in the continental USA is cheaper. To operate a refinery in Hawaii, you have to import the crude PLUS the fuel to refine it. It's cheaper to pay the fuel to import only the refined product versus importing everything and creating the refined product locally. It makes a LOT of sense to close the Hawaii refineries.
The United States sits on the largest discovered oil reserves in the world and love it or hate it, fracking is bringing that oil to the marketplace. Alaska slipped quietly from the 2nd largest oil producing state (behind Texas) to the third, and it will soon slip to 10th. The International Energy Agency (and others) predicts that within 7 years the USA will be producing more oil than Saudi Arabia and that by 2035 the USA will be one of the largest oil EXPORTING countries in the world.
Most people don't know that the USA exports coal. They also don't know that the several companies have filed for permits to start exporting liquified natural gas. The USA is already an energy exporting country.
Mitt Romney said that if we vote for him, we would be North American energy independent within 4 years. What he didn't say was that would also happen if he wasn't elected.
Some predict that the oil and gas fields coming online in the USA and Canada will send the price of oil down to the $30/barrel level. While I think its on the low side, one can't dismiss that the prices are going down.
These are the reasons why the refineries in Hawaii are closing. It will be a lot cheaper to refine cheap mainland drilled oil next to the gas fields to power the refineries than to import all that crap over here and do it.
RE: Analyst says Chevron refinery may shut down - pahoated - 01-23-2013
There are several inaccuracies in this post. The US is not even in the top ten for proven oil reserves:
quote:
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2178rank.html
1. Saudi Arabia 262,600,000,000
2. Venezuela 211,200,000,000
3. Canada 175,200,000,000
4. Iran 137,000,000,000
5. Iraq 115,000,000,000
6. Kuwait 104,000,000,000
7. United Arab Emirates 97,800,000,000
8. Russia 60,000,000,000
9. Libya 46,420,000,000
10. Nigeria 37,200,000,000
The situation with Alaska oil is that it is very high in sulphur (not light sweet). This requires specific refineries to process, therefore why it is being transported for refinement. The refineries that have this capability are all down by the Gulf, the reason for the Keystone pipeline. Also, Alaska is running out of oil, explaining the production shift. The oil industry has known about the tar sands and shale oil in the midwest for a long time. It wasn't economically feasible (=profitable) when oil was $20 per barrel (under Clinton's last term, gasoline was $.95 per gallon). Now, around $100 per barrel, and with fracking, it is profitable. The latest projections are for a "stable" price of $150 per barrel. This is a 50% increase over what it is now. For us here, early last year, oil hit $110 per barrel and we were paying $5 per gallon of gas. There was some economic turmoil that brought the price down to $80 per barrel but the price of oil has been steadily climbing since then. By importing refined gasoline and diesel, there isn't going to be some magic to suddenly make their cost go lower than the crude they are being derived from.
If the Chevron refinery does shut down, it is easy to see Hawaii enter a 50% inflation rate with gas and diesel going to $8 to $10 per gallon. It will mean a lot of people will have to leave Hawaii.
"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"