After an explosing and fires in 2019, the PES refinery in Philadelphia closed for good. The Houston Oil refinery will close next year.
They aren't the only ones.
Refineries are neither cheap to build nor to operate. So when something happens at one that will cost a lot of money to fix, the owners have to ask themselves: "Is it worth putting in nine-figures' worth of money to get this plant running again?" When a company is making a huge investment to repair or upgrade a refinery, they are looking ten or twenty years out to see if they can recoup their investment.[1]
Increasingly, the answer is "no".
The reasoning is not hard to understand. More and more people are buying electric vehicles. EVs themselves are getting better.[2] More and more EVs means less and less demand for gasoline. More and more EVs means that more charging infrastructure will be built. More ease and capacity to charge up EVs will persuade more people to make the plunge.[3]
Having the infrastructure to recharge the vehicles is a major issue.[4] An alternate may be to engineer the vehicles for semi-easy battery changes. Imagine pulling into a robotic garage, where the battery is removed and a fully-charged one installed in a matter of minutes.
But all of that means that as the demand for gasoline begins to drop, then it will be refined in fewer places. The price of gasoline will then go up even more, which will create its own semi-death spiral. If you want to see an example of that, then look at the history of aviation gasoline, which has become a specialty product.
So how can this be somewhat abated? One answer is by using the Federal government to put its thumb on the scales of the market. If having gasoline available is a public good, the Feds could subsidize the operation, renovation and even construction of refineries.[5] The argument for doing so could be to have the ability to make far more JP-8 for wartime use.[6] Another answer would be to make it attractive for businesses and parking lots to install public-use charging stations. Or we can do both.
But if we do nothing at all, the cost of running a fueled vehicle will only increase, for you can drill your brains out and build more pipelines, but if there's no place to refine the product, increased levels of crude production won't matter one shiny fart.
__________________________________
[1] The irony of corporate leaders, who can't solve the problems confronting them today, planning twenty years out, is not lost on me.
[2] The difference between buying a Tesla and buying from the Big Three is that Tesla has a Silicon Valley mindeset that regards customers are unpaid product testers. The Big Three, on the other hand, test their products before selling them.
[3] There are two hard nuts to crack on this: Deeply rural areas and densely-populated urban areas. The answer to that is a topic I intend to explore at a later time.
[4] The reverse will also be true, if filling stations start to close.
[5] There is precedent for this. During the Second World War, the government's Defense Plant Corp. built aluminum plants.
[6] We may need it if Putler's War expands.
Subscribe to:
Post Comments (Atom)
11 comments:
But Brandon wants to make it HARDER to sell gasoline.
And he claims the Army and Navy will be fossil fuel free in 10 years.
The high prices are feature, not a bug, in the world he inhabits.
Even Barry said "Under my administration, energy costs will necessarily skyrocket. This is but a continuation of those policies.
Why would any company invest all that money when the current administration plans to outlaw your product?
If the US tax paying citizens get screwed in the deal, the folks in charge are willing to see that as a cost of doing business.
Any company thinking long-term knows that administrations are transient.
I'll stipulate to your hatred of Joe Biden, Barack Obama and all recent presidents other than the TOFF.
I'm pretty ambivalent about this just yet ... having given considerable thought: right now it could go either way, both under momentum. If we were to mass-transition to EVs (electric vehicles) faster than drawing down the stocks, so-to-speak, not just the on-hand inventories but everything that's between pumps - in the pipeline, between the well-head and the tailpipe - everything associated with it that is caught up in the entire production process, there could be enough of a glut to bring the prices down. If the oil companies can slow the transition enough they can continue to gouge comfortably. On-the-other-hand, it could go through the roof.
Let's bear in mind that prices are set by A-rabs, the Sauds and the Ruskies; the market is a global phenomenon, far larger than your average "American" pee-brains' imaginations. Plastics is the future of oil, the oil companies aren't going to lose anything. As is it is we are paying them for the pleasure of disposing of their toxic manufacturing by-product. And I can remember using it for parts cleanser at fifty-five cents a gallon.
Who the hell is Brandon and what the hell has he got to do with anything ... ?
Its coming and we can either get with the program willingly or get left in the dust. Holding onto last the century seems sort of popular in some quarters just now, but that doesn't make it viable for the future. We're about as far out in the boonies as you are likely to get and we have a charging station eight miles down the mountain, and one of our new neighbors drives a white Tesla.
Almost all of the newer cars up here are hybrids, and nobody seems put out by the electrification of cars out here in the hinterland.
Maintaining the profits of the goddamn fossil fuel industry would cost more than full electrification on a 20 year scale, so why slop the hogs for more decades while the planet burns?
Facing the fact that we have had artificially cheap gas for decades is necessary, and if our fuel prices were more in line with the rest of the world, we would abandon fossil fuels more quickly.
This shit should have started twenty years ago when we still had time to implement it before the worst effects of climate change, but instead we installed the goddamn Bush/Cheney oilmen in the white house and now we pay the price.
-Doug in Sugar Pine
Couple of considerations:
1) The size of the necessary “changeout” battery stock, both in monetary cost and used elements, is likely to kill the robotic battery changeout routine once the EV stock is large enough.
2) The repurposing of gasoline stations to recharging points is a partial solution.
3) The necessary power infrastructure needs to be being installed NOW, and it isn’t…
4) For the rural areas, EV’s with auxiliary motors, possibly hydrogen cell powered, to charge the batteries are a solution.
So you really think that another Biden administration or whomever replaces him will not continue the agenda?
Nice how you bypassed all of my points and relegated it to Hatred of Biden and Obama.
But you can't seem to refute the points I stated.....
You seem to believe that I take you and your comments seriously. I do not. For example, your claim that Biden plans to outlaw refined petroleum products is, at best, risible.
CP88
Battery swapping depends on standardization of the battery boxes and the mounting points. The Chinese are doing it now within brands.
Most people are charging at home over night. They start every day with a full battery and a 250 mile range.
Rural areas will have less issues adapting than urban ones as they have the space to park and charge .
The biggest road block to adopting EVs is NTSA . There are a lot of perfectly good cars out there that are kept out of North America by non tariff barriers .
Ten Bears, if I remember correctly Brandon is a racist NASCAR driver. Or am I being redundant?
B, were you talking about this?
There’s no question that curbing greenhouse gas emissions would bring about higher energy prices. Obama, speaking to the editorial board of the San Francisco Chronicle on Jan. 17, 2008, said electricity costs (not gasoline prices) would “necessarily skyrocket” as a result of capping emissions levels, and that his job as president would be to convince the public and Congress that benefits outweigh costs. “If we can’t make that argument persuasively enough, you can be Lyndon Johnson, you can be the master of Washington, you’re not going to get that done.”
On June 26, 2009, the House passed the American Clean Energy and Security Act (H.R. 2454), a greenhouse gas cap-and-trade bill, by a vote of 219-212. The bill included allowances to electric companies to protect consumers from increases in electricity bills. But the bill died in the Senate. And so, of course, it couldn’t have driven up gasoline prices. Romney has lifted Obama’s quote out of context and applied it to a wholly different topic, gasoline prices.
https://www.factcheck.org/2012/03/obama-wanted-higher-gasoline-prices/
As for Biden, we’ll, he’s asked the exact opposite of what B has asserted he wanted:
https://www.google.com/amp/s/www.cnbc.com/amp/2022/06/15/biden-tells-oil-companies-in-letter-well-above-normal-refinery-profit-margins-are-not-acceptable.html
President Joe Biden on Wednesday called on U.S. oil refining companies to produce more, saying they need to help alleviate the burden of high prices on consumers.
"At a time of war – historically high refinery profit margins being passed directly onto American families are not acceptable," the president said in a letter to oil companies including Exxon Mobil and Chevron.
Next time, B, bring some facts and citation for them to the table instead of the latest Fox version of “Telephone”. It might even enhance your credibility, which is moving quickly on an asymptotic path to zero.
When B invoked "Brandon", it rendered the entire line of discussion moot, dismissible. One wonders why.
Troll? False flag? Genuinely deluded?
Modern political "discourse" is very confusing!
Post a Comment