Category Archives: Oil refineries

Exxon, other refineries affected as Louisiana waters rise

Repost from Bloomberg News
[Editor: You can count on the oil industry to prevaricate. The Baton Rouge Advocate reports that ExxonMobil released a statement disputing this Bloomberg report. “‘Contrary to some reports, the ExxonMobil Baton Rouge Complex is operating. It is our practice not to comment on specific unit operations at our facilities,’ the company said.”  – RS]

Exxon Said to Slow Louisiana Refinery as People Escape Flood

By Barbara J Powell & Brian K Sullivan, August 17, 2016 6:13 AM PDT, Updated 4:14 PM PDT

• Fourth-largest U.S. refinery affected as waters rise
• Louisiana is home to about 18% of U.S. refining capacity

Exxon Mobil Corp. curbed operations at the fourth-largest U.S. refinery as record flooding in Louisiana shut roadways, sent tens of thousands fleeing from their homes and threatened the state’s oil infrastructure.

The Baton Rouge refinery along the Mississippi shut four production units and idled others when the flooding threatened an offsite liquefied petroleum gas storage facility and pumping station, a person familiar with operations said early Wednesday. The refinery can process 502,500 barrels of crude a day into gasoline, diesel and other fuels.

At least 11 people have died, 30,000 people rescued and 40,000 homes have been damaged as almost 2 feet (61 centimeters) of rain fell in parts of southern Louisiana, the Associated Press reported Wednesday. Flood warnings extended across much of the southern portions of the state with many bayous and rivers still at dangerous levels. Louisiana is home to about 18 percent of U.S. refining capacity, according to Energy Information Administration data.

Pipelines, Terminals

Most in danger from direct disruption from flooding is the support infrastructure consisting of pipelines, terminals, salt caverns and above-ground pumping stations, said Andy Lipow, president of Lipow Oil Associates in Houston.

“Those that supply support services to refineries could be in danger of shutting down, and that could impact refineries’ operations,” Lipow said.

Todd Spitler, an Exxon spokesman, said the refinery is operating. The company doesn’t comment on specific unit operations and has continued to meet contractual commitments, he said

Through Tuesday, Baton Rouge had received 22.11 inches of rain since the start of August, more than 19 inches above normal, according to the National Weather Service. New Orleans got 7.46 inches, or 4.35 above normal; Lake Charles had 11.22 inches, or 8.69 above normal; and Lafayette logged 23.19, or 20.81 higher than the 30-year average.

Governor John Bel Edwards declared an emergency on Friday. Residents in 20 parishes are eligible for federal assistance and in two days 39,000 people have registered, the Governor’s Office of Homeland Security and Emergency Preparedness said.

Motiva Convent

Motiva Enterprises LLC said in an online message to employees Wednesday afternoon that it will staff its Convent refinery, about 38 miles southeast of Baton Rouge, with only essential personnel through at least Sunday. The company had previously said the restriction would last until Wednesday.

Angela Goodwin, a Motiva spokeswoman, didn’t immediately respond to a request for comment. She said Tuesday that operations at Motiva’s Convent and its Norco refinery, about 38 miles to the south, are stable.

Gulf Coast fuel prices climbed early Wednesday on the prospect of refinery outages. Ultra-low sulfur diesel strengthened 1 cent to 2.75 cents below New York Mercantile Exchange futures, the narrowest discount since November 2014, according to data compiled by Bloomberg. Conventional gasoline gained 1.88 cents to trade near parity with futures for the first time in four days.

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    Dakota Access pipeline to upend oil delivery in U.S. – Losers to include struggling oil-by-rail industry

    Repost from Reuters

    Big Dakota pipeline to upend oil delivery in U.S.

    By Catherine Ngai and Liz Hampton | NEW YORK/HOUSTON, Aug 12, 2016 12:46pm EDT
    Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen
    Dead sunflowers stand in a field near dormant oil drilling rigs which have been stacked in Dickinson, North Dakota January 21, 2016. REUTERS/Andrew Cullen

    It may seem odd that the opening of one pipeline crossing through four U.S. Midwest states could upend the movement of oil throughout the country, but the Dakota Access line may do just that.

    At the moment, crude oil moving out of North Dakota’s prolific Bakken shale to “refinery row” in the U.S. Gulf must travel a circuitous route through the Rocky Mountains or the Midwest and into Oklahoma, before heading south to the Gulf of Mexico.

    The 450,000 barrel-per-day Dakota Access line, when it opens in the fourth quarter, will change that by providing U.S. Gulf refiners another option for crude supply.

    Gulf Coast refiners and North Dakota oil producers will reap the benefits. Losers will include the struggling oil-by-rail industry which now brings crude to the coasts.

    The pipeline also will create headaches for East and West Coast refiners, which serve the most heavily populated parts of the United States and consume a combined 4.1 million barrels of crude daily. They will have to rely more on foreign imports.

    The pipeline, currently under construction, will connect western North Dakota to the Energy Transfer Crude Oil Pipeline Project (ETCOP) in Patoka, Illinois. From there, it will connect to the Nederland and Port Arthur, Texas, area, where refiners including Valero Energy, Total and Motiva Enterprises operate some of the largest U.S. refining facilities.

    “That’s a better and cheaper path than going out West and down through the Rockies,” said Bernadette Johnson, managing partner at Ponderosa Advisors LLC, an energy advisory based in Denver.

    CHEAPER THAN RAIL

    Moving crude by pipeline is generally cheaper than using railcars. The flagging U.S. crude-by-rail industry already is moving only half as much oil as it did two years ago: volumes peaked at 944,000 bpd in October 2014, but were around just 400,000 bpd in May, according to the U.S. Energy Department.

    Rail transport has become less economical for East and West Coast refiners when compared with importing Brent crude, the foreign benchmark, because declining supply out of North Dakota made that grade of oil less affordable.

    “If you look at the Brent to Bakken arb, it’s tight,” said Afolabi Ogunnaike, a senior refining analyst at Wood Mackenzie in Houston. “If you look at the spot rate, it’s uneconomical to move crude by rail right now.”

    Ponderosa Advisors estimated that the start-up of the pipeline could reroute an additional 150,000 to 200,000 bpd currently carried by rail to the U.S. East Coast and Gulf Coast.

    Crude imports into the East Coast are now on the rise, averaging 788,000 bpd this year, with nearly 960,000 bpd in July, the highest level in three years, according to Thomson Reuters data.

    On the West Coast, refiners like Shell, Tesoro and BP may have to commit to some railed volumes for longer because of shipping constraints, although it will largely depend on rail economics. They also face declining output from California and Alaska.

    Tesoro’s top executive Gregory Goff told analysts and investors last week he expects rail costs to drop as much as 40 percent from the current $9-to-$10 barrel cost to compete with pipelines, in order to move Bakken to its Anacortes, Washington, refinery.

    CHANGING TIDES

    Rail companies have been trying to adapt. CSX Corp, which runs a network of lines in the eastern part of the country, said it was evaluating potential impacts of the pipeline. BNSF Railway declined to discuss future freight movements, but said that at its peak, it transported as many as 12 trains daily filled with crude, primarily from the Bakken. Today, it is moving less than half of that.

    In a recent earnings call, midstream player Crestwood Equity Partners said it was working to capitalize on the pipeline and not be dependent on loading crude barrels onto trains. That includes building an interconnection to its 160,000 barrel-per-day COLT crude rail facility in North Dakota.

    As refiners bring in more barrels from overseas, Brent’s premium over U.S. crude will eventually widen. On Thursday, December Brent futures settled at a 97-cent premium to U.S. crude, one of its widest premiums this year.

    Separately, Bakken crude, a light barrel, could rise further due to the additional competition, especially as production is still falling. Bakken differentials hit a six-month low earlier this week of $2.65 a barrel below WTI, according to Reuters data, but rose to a $1.80 a barrel discount by Thursday.

    (Reporting by Catherine Ngai in New York and Liz Hampton in Houston; Editing by David Gregorio)
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      CLIMATE ACTION: Protesters Block Train Tracks to 2 Washington Refineries, 52 arrested

      Repost from ABC News
      [Editor:  This article reports no arrests.  A later report in the Washington Post: 52 climate activists arrested in Washington railroad protest.  – RS]

      Protesters Block Train Tracks to 2 Washington Refineries

      By Phuong Le, AP, SEATTLE — May 15, 2016, 12:13 AM ET
      Anti-Oil Protests
      Members of the Seattle Raging Grannies sit in their rocking chairs chained together on the Burlington-Northern Railroad tracks at Farm to Market Road in Skagit County on Friday evening, May 13, 2016, in Burlington, Wash. From left are Deejay Sherman Peterson, Anne Thureson, Shirley Morrison and Rosy Betz-Zall. Hundreds of people in kayaks and on foot are gathering at the site of two oil refineries in Washington state to call for action on climate change and a fair transition away from fossil fuels. (Scott Terrell/Skagit Valley Herald via AP)

      Hundreds of climate activists on Saturday marched to the site of two refineries in northwest Washington state to call for a break from fossil fuels, while a smaller group continued to block railroad tracks leading to the facilities for a second day.

      Protesters in kayaks, canoes, on bikes and on foot took part in a massive demonstration near Anacortes, about 70 miles north of Seattle, to demand action on climate and an equitable transition away from fossil fuels such as oil and coal.

      A day before, about 150 activists had pitched tents and set up camp on nearby railroad tracks to block the flow of oil flowing to the nearby Shell and Tesoro oil refineries.

      “We can’t wait anymore. We’ve got to do things now,” Clara Cleve, 76, of Edmonds, said Saturday. “Direct action is very effective. My grandchildren are not going to have a place to live unless we move quickly now.”

      Cleve said she plans to spend another night in a tent on the tracks and is prepared to be arrested for trespassing if necessary.

      The protests are part of a series of global actions calling on people to “break free” from dependence on fossil fuels. Similar demonstrations are taking place in Los Angeles and Albany, New York, on Saturday and in Washington, D.C., on Sunday.

      In upstate New York, climate activists gathered at a crude-oil shipment hub on the Hudson River in an action targeting crude-by-rail trains and oil barges at the Port of Albany. A group of activists sat on tracks used by crude oil trains headed to the port. Police did not report any arrests as of midday Saturday. Albany is a key hub for crude-by-rail shipments from North Dakota’s Bakken Shale region.

      In Washington state, organizers are targeting two refineries that are among the top sources of greenhouse gas emissions in the state. Tesoro has started shipping Bakken crude oil to its refinery, and Shell is proposing an expansion project that would similarly bring in Bakken crude oil by train.

      Officials with both Shell and Tesoro said in earlier statements that they respect the right of people to demonstrate peacefully, and that safety is their highest priority. A Shell spokesman also noted that the company, which employs about 700 workers at the refinery, is proud to be a part of the community and the refinery is a vital part of the region’s energy infrastructure.

      BNSF Railway spokesman Gus Melonas said no trains are scheduled through Saturday but he declined to say whether any are expected to run Sunday.

      “We had anticipated this and therefore adjusted scheduling with customers,” Melonas said. “At this point, we’re allowing the protest on our property.”

      There had been no word of any arrests during the day, Given Kutz, a spokesman for the Skagit County Emergency Coordination Center, said late Saturday night.

      The tracks, which connect BNSF’s mainline to Anacortes, serve the two refineries, as well as other customers who ship animal feed, steel and lumber by rail, Melonas said.

      Skagit County spokeswoman Bronlea Mishler said authorities are monitoring the situation. Crowd estimates of the march range from several hundred to about 1,000 people, she said.

      Bud Ullman, 67, who lives on Guemes Island, participated in the march, which he described as good-spirited, peaceful.

      “The scientists are right. We have to get away from our dependence on fossil fuels, and it has to be done in a way that takes into serious consideration the impact on workers, families and communities,” he said.

      The three-day event ends Sunday and has included “kayaktivists” demonstrating on water, community workshops and an indigenous ceremony.

      “I’m here because there’s nothing more important to me than protecting the Earth,” said Elizabeth Claydon, 24, who lives in Seattle. “This is an urgent matter, and traditional ways are not working.”

      Many of the nearly 40 groups involved in organizing the event were also involved in large on-water kayak protests against Shell’s Arctic oil drilling rig when it parked last year at a Seattle port.

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        Washington refinery project dead in the water

        Repost from Oregon Public Broadcasting

        Port of Longview Rejects Plan For Refinery, Propane Terminal

        By Tony Schick and Conrad Wilson, Feb. 23, 2016 3:08 p.m

        The Port of Longview is the state's third largest port, after Seattle and Tacoma.
        The Port of Longview is the state’s third largest port, after Seattle and Tacoma. Allison Frost/OPB

        Port of Longview commissioners voted unanimously Tuesday morning to end talks with an energy company that wants to build the first oil refinery on the West Coast in more than 25 years.

        The $1.25 billion proposal from Texas-based Waterside Energy touted 700 construction jobs and 180 full-time jobs. Waterside’s plan detailed a facility capable of refining 30,000 barrels of oil and 15,000 barrels of biofuel each day. The proposed project also included a propane and butane terminal handling 75,000 barrels per day. The plan also called for three additional trains per week carrying crude oil along the Columbia River.

        The combined crude and biofuels refinery was an attempt to capitalize on the West Coast’s demand for cleaner-burning fuels.

        That clean fuels component initially intrigued many, including some environmental groups and top state officials in Washington, but the financial and environmental fallout at the project backers’ failed biofuels venture in Eastern Washington ultimately raised many doubts about their latest proposal.

        Longview Port Commissioner Jeff Wilson indicated the port shared doubts about the financial situation of Waterside Energy and its two subsidiaries.

        “Financially I’m not comfortable with the three entities,” Wilson said.

        Port commissioners said the company missed deadlines and failed to fulfill its obligation to the port.

        A signed letter of intent between Waterside and the port required the company to provide certain financial information within 30 days. Port staff said those disclosures were intended to determine whether Waterside Energy had the financial backing to complete the project.

        “This decision is not about fossil fuels,” Port Commissioner Doug Averett said. “It’s about the proponent not living up to his requirements and fulfilling his obligations.”

        After the meeting, Longview resident Les Anderson said he was pleased with the commissioners’ actions. Anderson serves as vice president of Landowners & Citizens for a Safe Community, which has opposed other fossil fuel projects in the region.

        “The community now can take a huge sigh of relief because this project was poorly conceived and pushed forward by bad actors with bad intentions,” Anderson said.

        Kelso, Washington, resident Linda Horst referred to the project backers’ track record in Washington in praising the decision to reject the project.

        “Bad people, bad partners for the port,” she said. “What they proposed to bring in here is something that could either kill us immediately outright through an explosion or over time, incrementally by pollution.

        Waterside CEO Lou Soumas said the company had already spent $1.7 million on the project.

        “We’re disappointed in the commission’s decision,” Soumas said. He added that he thought port commissioners had made their decision before they voted at Tuesday’s meeting.

        “They didn’t go into the meeting without a decision in mind,” he said. “They’re doing this stuff behind closed doors.”

        Soumas said Waterside was pursuing other ports and landowners in Washington and Oregon in an attempt to move the project forward.

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