Trouble in the fuel line

Random Numbers reminds us that a good chunk of the high gasoline prices we’re seeing are due to refining capacity limitations:

We have not built a new oil refinery in this country since Led Zeppelin was on tour. Combined with an expansion of the different types of gas formulations throughout the country, and there just isn’t enough to go around at any one time, and there is no reserve capacity to prevent wild fluctuations in price. Refineries and storage facilities can be built which meet clean air standards if only we allow it. Yet we don’t allow any new construction. It used to be the NIMBY (Not In My Back Yard) syndrome that prevented new construction of refineries and/or storage tanks, but it has evolved into BANANA (Build Absolutely Nothing Anywhere Near Anything).

And when a commenter (rightly) points out that increased demand for crude oil from India and China has a significant impact on prices, Random Numbers (rightly) points out that the refining capacity issue is something we can impact, demand from other nations is not.

Why not do what we can? I’ve long suspected that the calls for drilling in the ANWR were a chip to be bargained away for more refineries. That doesn’t appear to be the case, but the ANWR plan (with which I agree in principle) isn’t going to have a significant impact on the supply of crude when China’s growing appetite is factored in.

Additional refining capacity is needed. Even if we suddenly find a lot of cheap oil in the backyard while shootin’ at some food, it’s got to be refined. And right now we couldn’t really do it.


  1. Palm trees. Among the highest oil producing producing plants in the world. Diesel autos…modified with an extra fuel tank can run vegetable oil straight, given a start up with diesel. (tank warmers are also needed for cold climate) Thus little need for new refineries, just grow veggie oil.

  2. The USA isn’t the only country with rising oil prices though is it? However, your prices were very low to start with and have gone up a lot in the last few years. A few years ago, gaolene here was around 90c per litre. I seem to remember in the US it was around $1 per gallon (less than half the price). Now it’s around $1.15 per litre (although last week it was as low as $1.05). However, your price has gone to something like $2 per gallon right? So your fuel is still cheaper than ours by quite a bit, but the gap has closed significantly. I suppose that supports this hypothesis and gives you an idea how much of the change is due to crude oil prices/speculation and how much is due to refining capacity.

  3. Random#s, I have not looked into it in an expert manner, but…I am aware that 7 of every 8 arable acres of land in the U.S. goes to feed livestock. If the value of fuel oil grows enough, vegetable oil will begin to be in competition with meat. It’s just a matter of balancing the active market forces. Should happen around $70-80 per barrel. The logistics aren’t all that different, just ship much the same product to a different factory, and eat less meat. Similar thing happened with the transition from whale oil to kerosene, and leaded to unleaded. Oh and I am sure you know that gasoline engines can run alchohol at least in increasing manner. Ask the Brazilians.

  4. There are several issues with using ethanol and/or methanol for fuel: * Studies aren’t conclusive on whether it takes more energy units of fossil fuel to make a given amount of alcohol or not. Conservative estimates show that it takes a fair bit of fuel to make fuel this way. At the other end of the spectrum are people claiming it takes more fossil fuel than you get alcohol out of the process. Regardless, this immediately reduces the benefit – if it takes 1 gallon of fuel to make 2 gallons of fuel, you’re only improving the supply situation 50%, and you may actually make total pollution worse. * Engines require a fair bit of modification to run well on alcohols. It doesn’t vapourise as easily as gasolene so you have problems starting, especially when it’s cold (not so much of a problem in Brazil). You need to change the air/fuel ratio and you often need to widen the injector ports. In addition, many motors contain components that will be eaten away by alcohol (or damaged by the water it usually contains). In Brazil they use engines designed specifically for running on alcohol to solve these problems. * Especially because of the water absorbption issue, energy/L is lower than gasolene which means more fuel stops or bigger tanks. ‘A good rule of thumb is that methanol consumption is just about twice that of gasoline in a given engine and ethanol will be a few percentage points behind it.’ This also causes transportation problems – you burn up a lot more fuel moving it around. You might want to read this: I for one would love to run alcohol in my car *IF* it can be shown to be more environmentally friendly to do so (both in terms of total energy used to produce and transport it and in terms of total pollution generated). I don’t want to do it as a subsidy to farmers.

  5. actually bringing up Alchohol was dumb of me, as it’s not relevant to discussion, as they require their own refineries (the whole dilema). A better analogy would be to run something on liquid sugar or mash. Not doable with existing auto engines. Whereas veggetable oil both doesn’t require building refineries, and can work in a lightly modified existing diesel.

  6. Yes, Diesels are very flexible. You can run them on Propane too I believe. (You still need Diesel to start, and they won’t run on 100% Propane, but I think you can get it up to about 60-70% once the engine is warm). Someone drove a car using grease trap waste from fast food restaurants. Apparently everywhere they went it smelled like someone was cooking French^H^H^H^H^H^HFreedom Fries and hamburgers ;)