It’s about time certain people started to think about self-interest instead of dictat.
A letter distributed Friday by the Laborers’ International Union of North America (LIUNA) to the districts of 27 House Democrats calls for union members to make sure their representative “feels the power and the fury of LIUNA this November.”
I have a question. Why is it cheaper to ship crude to the Gulf Coast refineries from Alberta than it is to build a refinery in Alberta?
Call me crazy, but wouldn’t it be smarter to put the refinery where the oil is?
Not that I object to the union thugs going after DemocRats. I’m all in favor of friendly fire events when its the enemy having them.
Good idea. I think the reason you don’t have the refineries is that you have been too long under socialist rule. Socialists don’t like refineries because they have something to do with “big oil” and they are known polluters in librul circles. I suggest you do build a new refinery or two if you can get it/them by all the socialists, environmentalists, “first citizens”, NIMBYs, Luddites, Saudi money and other obstructionists you have been nurturing up there in Canukstan.
Open Questions for Leftards: How will stopping the Keystone Pipeline reduce oil consumption of Americans? Do you actually believe that if this oil pipeline doesn’t come into being that Canadian oil won’t make its way down to America?
It is common practice and much, much cheaper, to build a refinery as close to the end product user as possible. You ship one product, crude oil for instance, a long distance ideally through a pipeline at minimal cost. After refining, you have dozens of new products in much smaller quantities to ship to much smaller markets.
You would not want to have to ship eight different grades of gasoline via tanker truck from Alberta to feed the motoring needs of the major population centres much closer to Sarnia, Ontario. Better to just ship crude to Sarnia. Similarly, propane, fine oils, plastic elementals and many more important products are best extracted from crude close to markets.
In an analogous manner, we ship young cattle from the west long distances by rail or truck to feed lots closer to the meat packing plants and the consumer to be fattened up before slaughter. Easier and cheaper to ship one skinny cow a long way than the wide range of products that a modern packing house can create from it once it is fattened up.
Hope that helps.
Also, lot safer moving crude vs. gasoline. Think of throwing a match on motor oil vs gas (not scientifically accurate, but close enough for this comparison).
I have a question. Why is it cheaper to ship crude to the Gulf Coast refineries from Alberta than it is to build a refinery in Alberta?
Call me crazy, but wouldn’t it be smarter to put the refinery where the oil is?
It may be cheaper to put the refinery where the oil is, but if I recall correctly, it is safer, cheaper and easier to move a barrel of oil than it is to move the gas, diesel and other byproducts.
I believe the person suggesting building more refineries in Canada was really stating just that, although a subordinate clause suggested building them in Alberta. His suggestion is OK. We ship a myriad of refined petroleum products (I don’t know for sure but I suspect a preponderance of refined petroleum products)in the thousands of active pipelines in this country. The purpose of the keystone pipeline was to get the crude to the OK and TX refineries that can handle that particular product.
Actually, this does seem like a good idea, but I’ll bet if anyone tried it, the greenies would try to put a stop to it. They are out to destroy the oil sands and the Alberta economy with it.
Don’t forget, the UN is now looking at trying to put restrictions on the type of rail transport allowable for heavy crude. I am pretty sure someone’s interests are being served by the protests, the hold-up on keystone, and now the potential restriction to rail transport. It is for sure not about the environment, but who’s interests, I am not sure.
It does make sense and is very informative. I have not seen this point being made previously.
Bogie 1;
You beat me to it. Economics is on the side of a crude pipeline. One product flows but also significant reduction in storage facilities.
This is why IMHO Black’s idea of building a 500K bpd refinery in Rupert is a non starter. Refined product at tidewater is still a iffy situation. Are big importers like China, Japan or even the USA going to outsource their refining capability to Canada? Not only does this have national security ramifications for the importer but it limits the number of suppliers of crude to Canada.
I remember when I got in the wholesale fuel business there were refineries in Vancouver (5), Kamloops (1), and at least 6 in Alberta. Today I would estimate there are only 6 in western Canada. Probably only 3 are worth further investment.
Further to your point, Bogie, is the range of products produced. Diesel blends change between different jurisdictions and seasons. If a bulk-lot is made of a particular blend for a particular area, and other suppliers are equally over-building supply then some of the fuel will sit for years before use (effectively going stale as the volatiles evaporate off different components at different rates). This will lead to a more chaotic supply chain as central-planning estimates have had a poor record for correctly anticipating changing market demands. Doing the refining closer to the end market decreases the guesswork of what the demand will be.
Also, the refinery might want to mix products to make a stronger end product. I’m in the metallurgical coal business. Our coking coals could be coked near the site, then shipped as coke. The buyers don’t want that. The buyers want to blend 4-20 different types of coking coal together – mix this one with low sulpher with that one with a high coking strength and this cheap one that hardly cokes at all but contains traces of vanadium and chromium… all resulting in a mixed coke that will save the steel-making company a lot. If the coke is custom built and planned, then the refinery doesn’t have to add processes to remove impurities from the iron and add trace elements to improve the ultimate steel quality. It’s like the difference between building with individual stones and building with cement (a mixture of rock types, sand, water, and bonding agent). Cement is much more flexible in application and can be tailor mixed for a specific purpose.
Heh, epenthetic unions promoting a capital project and doing battle with official lefty Luddites – who’d a thunk it? I guess even a parasite knows if you kill the host you die also – putting the thinking of anti-capitalist Dems somewhere below that of a leech.
Moving crude through a pipeline is very much safer than ANY transport system. Look at the Alaskan pipeline. It was actually a boon for Alaska as the native animals found that the pipeline was physically warmer than the surrounding climate, so the Elk and other animals would nest or stay under the pipeline because is was warm.
On the other hand, I cannot imagine trying to move volatile gasoline, much less diesel, through a pipeline. Crude oil has a very high flashpoint, especially the heavy stuff coming from Alberta. Gasoline or diesel, not so much.
It will be interesting to watch the unions versus the greenies in the coming months….
There hasn’t been a major refinery built for more than 30 years in North America ,economics says no, funny thing that the oil companies have that figured but the pundits don’t
If I recall Irving empanded/built a new refinery in St.John’s inciting the fruitfly guy to mount his big diesel bus to cross Canada to protest it’s construction…..remember that?