Any news on oil refineries in Gulf

[johngaltfla]

from http://www.theoildrum.com (an industry insider blog where many in the petrochemical industries come to post and chat)

(VERY) PRELIMINARY DAMAGE ASSESSMENT

-It is very difficult to assess refinery damage this early. It will depend on restoration of power, etc.; the situation could continue to worsen depending on how or if Katrina stalls or returns to the Gulf. Flooding could be major portion of this storm, not the hurricane winds. The KAC/UCF numbers (linked below in next section) predict damage to four refineries, totalling around 800-900k BOPD of capacity, but those are pretty experimental.

-There is also an SPR site (Big Hill) close to the damage swath. Won't be word on that for a while.

-Oil and Natural Gas production damage is a bit easier to estimate, thanks to the KAC/UCF predictions on the final hurricane data (linked below, which were quite accurate after Katrina, but do not account for two storms back to back...a lot of crews that were fixing Katrina damage will not be available to fix Rita damage as quickly as these numbers estimate, so I consider these numbers conservative): This is the percentage of capacity "shut in" or lost for <10days, 10-30days, 30-60days

Oil: 66.5%, 20.2%, 14.5%; Nat Gas: 58.2%, 28.4%, 18.1%.

And what does that mean you ask? That means that for 10 days or less, cumulatively from Rita and Katrina, we are predicted to lose around 1M BOPD of oil production and 5.8 BCFPD of Natural Gas production (GOMEX total capacity 1.5M BOPD of oil and 10.0 BCFPD of Natural Gas...for perspective, the US uses 20.4ishM BOPD of the world's 84M BOPD produced...yes, that's PER DAY). For over 30 days, the estimates indicate that, JUST FROM RITA, we will lose 225k BOPD of oil production and 1.8 BCFPD of NG. Add those to the BEST shut in numbers we were experiencing after Katrina (before Rita hit) which were 837k BOPD of oil and 3.375 BCFPD of NG, and, well...that's a lot of US production capacity, around 1M BOPD of oil and about 5.3 BCFPD of NG. Again, I want to emphasize that these numbers are estimates at this point...but those data were pretty darned good last time.

The real questions that press us now are these: how long will it take to get power back? how many rig repair teams exist? how much will flooding impact the refineries as well as the repair efforts? What happened to the LOOP, how much storm surge hit it? What happened to the pipelines in the area (no way to know until power is restored)? What is the status of inland energy storage, for example gasoline in NJ and winter heating oil inventories? (thanks for that bhyde). We shall see.

[NFLnut]

The hype and misinformation is, as usual, disturbing from ALL of the news outlets.

As to the "company line" regarding oil and gas, well, considering that there have been ZERO refineries built in the U.S. since the 1970's, well ..

Consumption has increased exponentially since then and yet we can't build any new refineries in this country because of environmentalists. We had better start thinking seriously about how we are going to fix this mess! It was only a matter of time before something like this happened. Add to that the wisdom of having a greater percentage of our oil production/conversion in one region of our country (Hurricane prone at that) and you have a serious issue we MUST deal with, NOW! As to alternative fuels, that's a great idea, but we are at best 15-25 years off.

Sorry, but you won't be drilling over off the coast of Florida... go to Alaska. State politics here won't allow that sort of thing to happen and threaten our tourist industry, and Jeb's time is almost up. Too bad so sad, but we like our fishing and beaches too much. Dealing with Hurricanes is making it miserable enough over here, without slimy, stinky beaches. Your right however we need more refineries, I would suggest building them along the north eastern shore the water stays cooler there, or use the inland water way system and transport crude up rivers.

Well, seeing how Florida is just as prone to Hurricanes, that isn't even an answer. That aside, Floridians like their cars just as much as any OTHER American. If no drilling off the coast of Florida was only decided because Floridians "like their beaches and fishing too much" ... well, sorry. That's NOT a good enough reason. I might add, I am a fourth-generation Floridian!

The answer is to find OTHER regions of the country to build refineries. Preferably NOT California since they have a tendency for earthquakes. There ARE plenty of other areas of the country where refineries could be built. One of the best ideas I heard was to build refineries in some of the places where military bases are being closed.