Category — Oil Refining
Imagine you live nearby a pharmaceutical factory. Decade after decade, it creates wealth and jobs in your area by producing life-saving products. Then, one day, there is a fire at the factory, damaging a component upon which half the output depends. The company puts out the fire soon as possible so that no nearby residents are likely to suffer any long-term health consequences.
Obviously, the appropriate response to such a situation would to be to both investigate the cause of the fire and to let the company fix the damage as soon as possible, so it can get back to its important work.
This also should have been the response of the residents of Richmond, California, to last year’s fire at the local Chevron oil refinery, because oil refineries are no less valuable than pharmaceutical factories. In fact, they produce the amazingly versatile materials of which pharmaceuticals–and thousands of other crucial products–are made.
Oil refineries transform oil, an essentially useless natural substance made largely of dead plants, into fuel and synthetic materials–into the fuel that drives a firetruck to your home, into the hose that allows the firefighter to save your home, into the flame-retardant jacket that allows the firefighter to survive his dangerous job.
Unfortunately, our educational system does not teach the value of oil refineries. Thus, ever since a fire at Chevron’s Richmond, California, refinery last August, the company has been pilloried by the local community to the point that it has not been allowed, reports the New York Times, “to rebuild a critical unit damaged in a major fire in August. Chevron says it wants to complete repairs this month at the refinery, where production has been cut in half since the fire. Not so fast, the city says.” [Read more →]
January 4, 2013 7 Comments
A market-driven revitalization of the world oil refining sector is the best and fastest way to reduce both oil demand and related air emissions, including CO2. A combination of market-based pricing–absent from foreign refineries (most politically owned and/or managed)– and new investment brought forth by the improved profitability of such pricing, could reduce the demand for crude oil by between eight and twelve million barrels per day, or about 10–15 percent.
A Bold Hypothesis
This rather astounding assertion can be educed as follows:
- Most countries subsidize refined oil product consumption, usually middle distillates (diesel and kerosene) at the expense of gasoline and other products;
- Owing to the price controls on heavily used middle distillate products, most oil refiners outside the U.S. and a few other countries lose money;
- The subsidies to middle distillate users, at the expense of gasoline and LPG consumers, creates an “unbalanced” demand barrel – one that defies both economics and chemistry; [Read more →]
April 23, 2009 3 Comments