Posted on 08/07/2013 10:06:21 AM PDT by thackney
U.S. refineries are expanding their diesel-production capacity, not so much for truckers in the U.S., but for drivers in places like Mexico City and Santiago, Chile.
Already running at their highest levels in six years, U.S. refineries are finding strong demand for diesel fuel, used widely in cars outside of the United States, and other distillates, like jet fuel.
"All these companies are expanding their export terminals— Valero, Shell, Marathon Petroleum, all of them," said Fadel Gheit, senior energy analyst at Oppenheimer. "Any companies with refining assets on the Gulf Coast are expanding their export terminals…The profitability is not that clear, but the trend is very clear."
The U.S. became a net exporter of petroleum products just two years ago and is now the largest exporter in the world.
The product of choice for export is diesel because the margins are much higher and demand is growing, and U.S. refiners have an advantage over foreign counterparts. Natural gas to fire up refineries is abundant and much cheaper in the U.S., and the expansion of U.S. oil production has made oil more plentiful and cheaper than if refiners had to buy it on the world market. In fact, the U.S., while still the world's largest importer of crude, this year eliminated most imports from Africa.
As of mid-year, margins on U.S. Gulf Coast-produced diesel were running just above $16 barrel, while the margins on finished gasoline were much lower at just under $8 barrel, and that trend is not new. The data were provided by Valero in a recent investor presentation.
So the race is on to add capacity, and mainly for diesel. Diesel demand is growing at twice the rate of gasoline, demand for which has been declining in the U.S. Gasoline demand has been declining... expected to continue declining...
(Excerpt) Read more at cnbc.com ...
Do libs include the quantity of oil we import for refining and ultimate exportation as part of the total to illustrate what dirty oil addicts Americans are?
In the meantime they are jacking up the price for Diesel in America and raising the price of everything shipped by train or truck.
Makes sense to me.
A fair number of diesel users (especially ones with daily routes from a home base) are taking a good look at nat gas. Hang in there a while.
I’m amazed they can repair, operate, maintain and upgrade refineries at the 38¢/gal the industry charges for conversion to diesel let alone make a profit and pay the taxes from the same amount.
And the gasoline portions is currently 19¢/gal.
Yep.
As soon as we put in that stupid ULSD mandate, suddenly our #2 was fungible all over Europe and the UK.
And our prices went skyward.
Someone has to come up with a way to change the 3-2-1 or 5-3-2 crack splits. Diesel is far more useful in the world than gasoline, IMO. It stores longer, is safer to transport and is more useful in more applications.
I was part of the early design team for new refineries going into Brazil. They are designed to produce diesel and natural gas as their only products. Lighter and heavier products were consumed as fuel or continued to be cracked until they were part of those two streams.
Also electricity was to be produced in excess of the refineries’ need and sent to their grid. Four of these are being built. The units are designed to be “modular” so that the initial to final size stepped up usually by thirds.
Output of only fuels and electricity?
No lubricants? No plastics? No pesticides? No paving? No pharmaceuticals? No pigments???
The US has the technical and economic ability to be one of the largest producers of diesel and bio-diesel in the world. The tax revenues would do a great deal to offset the Obama spending campaign.
If it were possible and I could have my way diesel would be the only transportation fuel. Gasoline is junk when it comes to my needs.
ULSD is close to junk as well but it will do.
Why is it, with Europe having air quality rules as bad as ours, that they can use diesel for almost everything?
Yep. There are other streams, but they are routed to crackers to get to those commodities. The rest is consumed with the plants. There is a significant amount of petroleum coke produced. The power plant(s) necessary to consume the full flow amount is significantly above the full refinery needs, including the "city" that is built for the hundreds that work in the relatively remote locations. A couple of these are already under construction. The dollar value of Europe grade ULSD exceeded their economic model of producing all the normal products and the associated transportation of them to distant markets.
It is a unique set up. It also includes some social engineering to bring jobs and power to remote areas.
Diesel also has a higher energy density per unit volume, and Diesel engines are more efficient than gasoline engines because they operate at a higher compression ratio.
The wide availability of relatively inexpensive turbochargers has helped get the power/weight ratio of small Diesels up into the neighborhood of gasoline engines.
I think that a Diesel aircraft motor has been demonstrated.
Because the diesel engine is the most efficient engine on the planet, for the job is does.
Socialist hate it. California is in the process of purging most diesel engines.
Yeah, ya gotta o with the customer’s needs!
Hell, that’s perfect.
Let’s build about two dozen of them.
Yup, a diesel aircraft engine was not only demonstrated but commonly used more than 70 years ago!
Read and weep.
Our local garbage company, Waste Management, has recently converted all its fleet of trucks to natural gas, and built a new re-fueling terminal right next to where I work in the industrial park.......
There is nothing to ‘weep’ about. Our production of diesel is expanding. At this point it’s primarily for foreign markets, but it won’t be long before it’s use here in the US will take off in the private automobile/truck sector.......
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