Refinery mishaps hamper oil output (press release)

Wednesday, September 14, 2005 by Mike Adams, the Health Ranger Editor of NaturalNews.com (See all articles...) Tags: health news, Natural News, nutrition

https://www.naturalnews.com/013557_oil_explosion_fuel.html

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A series of refinery mishaps in recent weeks has jarred the oil market, crimping output in an industry running flat out to meet surging demand. Some U.S. refineries are operating at up to 99% capacity, according to Bob Slaughter, president of the National Petrochemical & Refiners Association.

"There is less room for error when you're running at high utilization rates for a very long time," he says.

The most recent incident occurred July 28 when an explosion and fire shook a BP refinery in Texas City, Texas. In March, 15 people were killed and 170 injured in an earlier explosion there.

Troubled refineries are a global worry. On July 26, an explosion shuttered a Russian refinery in Novo-Ufimsk. And Europe faces a shortage of diesel fuel by 2015 unless new refinery investments materialize, according to consultants Wood Mackenzie.

U.S. refiners expect to spend $20 billion on equipment from 2000 to 2010. But that won't expand output much. Most investment is equipping refineries to produce cleaner, low-sulfur fuels mandated by Congress, Slaughter says.

Still, with oil prices hitting a record $66.86 a barrel Friday, refiners have been enjoying fat profits. Valero, of San Antonio, reported record net income for the quarter ending June 30 of $847 million vs. $633 million last year.

Refiners remain unwilling to gamble the multibillion-dollar investment needed for a new plant in the face of local opposition and regulatory hurdles. Only one planned refinery is moving forward: a $2.5 billion facility 100 miles outside Phoenix.

"Everyone from the man in the street to the White House is talking about the need for more capacity," says Glenn McGinnis, CEO of Arizona Clean Fuels Yuma, which has been pushing the plan for five years.

Earlier this year, the company secured a major environmental permit from the state. But additional regulatory hurdles remain, and it will be 2010 before the new facility produces its first drop.

In a market that can't wait, most refiners instead are embracing technology to improve existing facilities. ExxonMobil adds the equivalent of a new 200,000-to-300,000-barrel-a-day refinery every three years thanks to new technology and greater efficiency, says spokeswoman Lauren Kerr.

One beneficiary of the industry drive: Emerson Electric, which markets a network of digital sensors for refineries. By alerting technicians to problems such as clogged lines, the PlantWeb sensors let refineries avoid costly downtime. "We give them some extra eyes and ears," says John Berra, head of Emerson's process management division.