Analyst says Chevron refinery may shut down

[Frank]

in mid 2008 oil was at $147 - $148 per bbl,,,a gal of gas was about $4 per gal maybe a touch higher,,,think i'm missing something?

[terracore]

The "top 10" list only lists conventional proven oil reserves which excludes shale oil and recoverable reserves. The 21 billion of USA proven "conventional" oil reserves do not make the top 10 list. However the USA recoverable reserves is 118 billion and the known shale reserves total 1.4 trillion barrels. I'm not going to do the math but it looks like as much as that top 10 list combined. In addition to the 1.4 trillion barrels of shale oil, the USA reserves of oil shale are estimated to be 2.175 trillion barrels. (shale oil and oil shale sound a lot alike, but oil shale cannot be commercialized by fracking).

Not surprisingly, the refineries in Alaska were constructed to refine Alaskan oil, not light sweet crude. Its shipped to the mainland because it's cheaper to refine it there.

[Jay Bondesen]

What struck me reading the post from terracore, and lends it credibility, is that refining crude oil normally produces numerous components used for making dozens if not hundreds of products. With no real manufacturing in the state doesn't the existing refinery need to ship out these other byproducts? Or can it all be used here somehow?

Jay

[terracore]

I didn't read this article until today, but it pretty much sums it up:

http://news.nationalgeographic.com/news/...saudi-oil/

In an indication of how "fracking" is reshaping the global energy picture, the International Energy Agency today projected that the United States will overtake Saudi Arabia as the world's largest oil producer by 2017.

And within just three years, the United States will unseat Russia as the largest producer of natural gas.

Both results would have been unthinkable even a few short years ago, but the future geography of supply has shifted dramatically due to what IEA calls America's "energy renaissance." The revival can be credited to controversial technologies such as hydraulic fracturing of shale and deepwater production that have enabled the industry to tap into abundant, unconventional sources of natural gas and oil. As a result, new energy frontiers have opened in Pennsylvania and North Dakota. (Related: " Natural Gas Stirs Hope and Fear in Pennsylvania")

The bottom line for the United States is fulfillment of a goal that eluded seven presidents over nearly four decades: energy independence. The U.S., which imports 20 percent of its total energy now, will become largely self-sufficient by 2035, concluded the IEA's annual World Energy Outlook, often viewed as the bible of the industry. Add in Canada, which has its own unconventional production boom in Alberta's oil sands, and the continent is set to be a net oil exporter by 2030. (Related Quiz: "What You Don't Know About World Energy")

"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world," said Maria van der Hoeven, executive director of the IEA, a Paris-based organization charged with maintaining global energy security.h

It all has happened so swiftly that world governments have not yet adjusted to the new realities, observers say.

Francis O'Sullivan, executive director of the energy sustainability challenge program at the Massachusetts Institute of Technology, says he doubts if Washington policymakers have yet "fully factored in the implications of the recent, quite dramatic, developments in the unconventional oil space, and what this might mean in terms of larger domestic oil resources, and the potential for greater energy security." (Related Interactive: Breaking Fuel From Rock)



Catching Saudi Arabia

U.S. imports of oil are on track to fall from 10 million to 4 million barrels per day, Fatih Birol, IEA's chief economist and the main author of the report, told a London news conference. However, he added, increased domestic production, including biofuel, accounts for only 55 percent of the huge reduction in imported oil. The other 45 percent is due to increasing federal fuel efficiency standards for cars and trucks.

(Related: "Pictures: A Rare Look Inside Carmakers' Drive for 55 MPG")

According to IEA, by 2020, America's oil production will reach 11.1 million barrels per day, up from 8.1 million in 2011. Saudi Arabia's production, meanwhile, will decline from 11.1 million to 10.6 million barrels per day. By 2025, IEA projects, U.S. production will slip back to 10.9 million barrels per day, but Saudi Arabia's will have increased to only 10.8 million barrels per day.

The picture on natural gas is even more dramatic. By 2015, the U.S. should be producing 679 billion cubic meters (bcm) of natural gas, up from 604 bcm in 2010. That will be enough to edge out Russia, where production will increase too, but is projected to reach only 675 bcm in three years. By 2020, the spread between the two nations will widen, with U.S. production of 747 bcm, well ahead of Russia's forecast 704 bcm. The U.S. should become a net gas exporter by 2020, the report adds.

No Country an Island

"The global energy landscape is changing rapidly, recasting the roles of countries and fuels," van der Hoeven said. What is happening in North America will certainly affect other countries worldwide, she added. "No country is an energy island."

That means the resurgence of American petroleum production won't make U.S. consumers any more immune to the often stomach-churning price swings of the international oil market. "Oil is more or less fully fungible," says MIT's O'Sullivan. And U.S. output will be poured into the global market, where demand elsewhere grows apace.

Indeed, as America's need for imported oil declines, Asia is rapidly taking up the slack. The report estimates that by 2035, fully 90 percent of Middle East oil exports will head for Asia. That's a shift that will require Asian countries to put more resources toward keeping strategic shipping routes of oil secure. "There is a major new trade axis building between the Middle East and Asia," Birol said.

Indeed, Iraq alone will see its exports to Asia jump from 50 percent of output to 80 percent. (Related: "Iraq Poised to Lead World Oil Supply Growth, but Obstacles Loom") The IEA reiterated its forecast last month that Iraq's production of oil would jump from 3 million to 8 million barrels per day by 2035, helping the war-torn country leapfrog over Russia to become the world's second largest exporter of oil, after Saudi Arabia.

Another effect of the altered energy landscape is a large variance in natural gas prices. A few years ago, global prices of natural gas varied little from region to region. But natural gas prices in Europe are now five times higher than in the United States, and Asia's are eight times greater. However, van der Hoeven said, as more gas becomes available for global export, prices outside the U.S. should go down, too.

Demand Still Growing

The overall demand for energy worldwide should grow by a third between now and 2035, the report said, from 12,380 million tons of oil equivalent (Mtoe) in 2010 to 16,730 Mtoe in 2035, an increase driven by the rise in living standards in China, India, and the Middle East. The share of demand for energy in the developing world will jump from 55 percent in 2010 to 65 percent in 2035, powered by China, which will see its demand for energy increase by 60 percent over that period. (Related: "Pictures: A Rare Look Inside China's Energy Machine")

Demand for energy in the developed countries that make up the Organization for Economic Co-operation and Development (OECD) will essentially be flat, IEA projects. Use of coal and oil to meet that demand should drop to just 42 percent from 57 percent today.

The IEA chided world governments for failing to do enough to improve energy efficiency, saying that two-thirds of the economic potential to improve efficiency is not being realized. If those efficiencies were tapped, it said, total energy demand between now and 2035 could be halved, without any decline in living standards.

Globally, demand for fossil fuels will continue to grow in absolute terms through 2035, but together their total share of the energy mix should drop from 81 percent to 75 percent. Worldwide demand for oil is forecast to grow to 99.7 million barrels per day in 2035, up from 87.4 million last year, with China alone accounting for half that amount.

By 2035, the IEA said, the price of oil is expected to be $125 per barrel in inflation-adjusted terms, though the nominal price is enough to induce sticker shock in 2012: $215.

Global natural gas demand should increase by 50 percent to 5 trillion cubic meters (tcm) in 2035. Within OECD countries, gas is overtaking coal as the fuel of choice for generating electricity. In the U.S., for instance, the amount of electricity generated by coal has fallen from 50 percent to 32 percent in just a few years. Although use of coal will continue to fall in the U.S., Europe, and Japan, overall demand for coal should still grow by 21 percent through 2035, because of increasing use in China and India.

Although some OECD countries, particularly Germany and Japan, are cutting back on nuclear power in the wake of the 2011 accident at Japan's Fukushima Daiichi nuclear plant, nuclear power is still expected to account for 12 percent of global electricity generation by 2035, thanks to increased use of nuclear power in China, Korea, and Russia.

Electricity generation from renewables should grow from 20 percent in 2010 to 31 percent by 2035, IEA projects. Within OECD countries, most of that growth comes from increased wind-energy production, while in non-OECD countries, hydropower is the main source of clean energy. Growth in demand for renewables, including biofuels, is still largely driven by government subsidies, the report said. Last year, those subsidies totaled $88 billion, a 24 percent increase from 2010.

Overall demand for electricity will skyrocket by more than 70 percent by 2035, reaching 32,000 terawatt-hours (TWh), with almost all that increase coming from non-OECD countries, with China and India alone accounting for half. Prices for electricity overall should increase 15 percent by 2035, but some regions will pay much more than others. In the U.S., for instance, average household electricity prices in 2035 should be about 14 cents per kilowatt-hour (kWh), while the price in Europe will average closer to 25 cents per kWh. That big difference in the cost of electricity will likely give American industry a competitive advantage over European rivals, Birol said.

Amid its forecast for rising energy demand and production, the report, unsurprisingly, does not paint an optimistic picture of efforts to contain greenhouse gas emissions. IEA projects that energy-related carbon dioxide emissions will rise from an estimated 31.2 gigatonnes (Gt) last year to 37 Gt in 2035, which could cause a long-term average temperature increase of 3.6 degrees Celsius.

In a nonbinding accord signed in 2009 in Copenhagen, nations agreed to the scientific view of limiting temperature rise to 2 degrees Celsius, but efforts to forge a global agreement to cut fossil-fuel emissions have been unsuccessful. (Related: "IEA Outlook: Time Running Out on Climate Change")

[terracore]

Turns out that Australia recently discovered 233 billion barrels of shale oil in the outback:

"Trillions of dollars worth of oil found in Australian outback

Up to 233 billion barrels of oil has been discovered in the Australian outback that could be worth trillions of dollars, in a find that could turn the region into a new Saudi Arabia".

http://www.telegraph.co.uk/news/worldnew...tback.html

[pahoated]

One of the byproducts of distillation is fertilizer. And fertilizer is used for what? Hmmm... So, fertilizer will also have to be imported, at higher costs.

There is no direct coupling between oil economics in Hawaii with mainland oil economics. There is a translational coupling with the price of a barrel of oil, as long as it was being refined locally. This coupling will be lost if no oil is being refined locally. Here is some simple math. International crude oil is $96 per barrel (light, sweet crude). There are 42 gallons per barrel. That makes crude oil roughly $2.29 per gallon. Gasoline and diesel are now roughly $4 per gallon or $168 per barrel.

You can go on about Big Oil everywhere, and keep supporting Big Oil, at all costs. This is just a heads up about what is going to happen locally. Yes, it is going to happen because it is too late to do anything about it. The bumper stickers informing you "This isn't the mainland" never seems to get through to some transplants, so they constantly relate Hawaii conditions with mainland conditions. People can believe whatever they want to believe but they should also realize their beliefs may be totally wrong.

Even before Chevron shuts down, as it is looking more likely now, distilled diesel and gas will start having to be imported in large amounts. Everybody has been going along thinking, yes, some time in the future, the situation must be faced. That "some time in the future" is going to start occurring in a few months and become undeniably obvious in about 3 or 4 years. Here are more indicators of what is coming ahead:

http://www.staradvertiser.com/business/2...=188627311
Jet fuel imports expected to rise as Tesoro closes

"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"

[Frank]

slight correction...there are 42 gal. of oil in a bbl of crude, making the price go up a bit

[pahoated]

quote:

---

Originally posted by Frank

slight correction...there are 42 gal. of oil in a bbl of crude, making the price go up a bit

---

Holy ****! That is imperial gallons. I was referring to American gallons.

As for the gas price in 2008, it was getting close to $5 per gallon, and was well over $5 on the west coast. It was like the final straw that broke the back of the economy. The demand plummeted, along with about $7 trillion of the US economy disappearing. If there are going to be some revisionists coming on here and claiming there was no recession, then I say FU.

BTW, Tesoro is almost twice the size of Chevron. The next question is where Pearl Harbor is getting their diesel, gas and kerosene. Carriers and subs are nuke but the entire rest of the fleet are huge oil burners, and not that concerned about mileage. It's funny how this news is being kept so low key, just like tourists being swept away with the undertow, when there must be huge scrambling going on with contracts and supply sources.

"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"

[Obie]

Aloha has a contract to supply the military and they don't have a refinery here.They import refined products.

[Frank]

quote:

---

Originally posted by pahoated

quote:

---

Originally posted by Frank

slight correction...there are 42 gal. of oil in a bbl of crude, making the price go up a bit

---

Holy ****! That is imperial gallons. I was referring to American gallons.

As for the gas price in 2008, it was getting close to $5 per gallon, and was well over $5 on the west coast. It was like the final straw that broke the back of the economy. The demand plummeted, along with about $7 trillion of the US economy disappearing. If there are going to be some revisionists coming on here and claiming there was no recession, then I say FU.

BTW, Tesoro is almost twice the size of Chevron. The next question is where Pearl Harbor is getting their diesel, gas and kerosene. Carriers and subs are nuke but the entire rest of the fleet are huge oil burners, and not that concerned about mileage. It's funny how this news is being kept so low key, just like tourists being swept away with the undertow, when there must be huge scrambling going on with contracts and supply sources.

"It was a majority decision to descend into the Dark Ages. Don't worry, be happy, bang on da drum all day!"

---

taken from http://en.wikipedia.org/wiki/Barrel_%28unit%29

Oil barrel

Oil barrel, (abbreviation bbl): a legacy volume measure of 42 US gallons (34.9723 imp gal; 158.9873 L).[7] It can also mean 35 imperial gallons (42.0332 US gal; 159.1132 L). Commonly a barrel is regarded as 159 L volume.

See caveat below regarding considerations for conversion to metric units.

The standard oil barrel of 42 US gallons is used in the United States as a measure of crude oil and other petroleum products. Elsewhere, oil is commonly measured in cubic metres (m3) or in tonnes (t), with (metric) tonnes more often being used by European oil companies. International companies listed on American stock exchanges tend to express their oil-production volumes in barrels for global reporting purposes, and those listed on European exchanges tend to express their production in tonnes. There can be 6 to 8 barrels of oil in a ton, depending on density. For example: 256 US gallons [6.1 bbl] of heavy distillate per ton, 272 gallons [6.5 bbl] of crude oil per ton, and 333 gallons [7.9 bbl] of gasoline per ton.[8]