Another picture that tells a story

Because it looks so dramatic, I thought to bring to the top the picture of US gasoline stocks, from the EIA.

The rest, in the same way as last time, follow below the fold.

Looking at the crude situation, first there are the current stocks:

Then crude production

And crude imports

The gas stock figure was given at the top of the post, but it can be followed by gas(oline) production

gas imports

And then demand.  I'll let you draw your own conclusions

And to round out the set, here are the stocks of distillate

Current domestic production

The volume of imports

Which can be, again, set against demand.

I think to a degree, they speak for themselves.

It would be way cool to see some of these charts with a vertical axis that describes number of days the stocks will last for the consumption rate at that time, e.g. by combing a particular stocks chart with the demand chart.
See below. The Chart Fairy strikes again.
Thank you Chart Fairy (or Oil CEO).  One other way cool consideration:  trend line (curve fit, least squares, whatever) along with the days of stock.  To highlight the overall trend (which certainly seems to be down).
Hello Tre,

If one considers the ongoing economic drive to optimize just-in-time [JIT] deliveries of fuels to maximize profits, it can be seen in these graphs as increased volativity; the ever wider swings to the outerbounds of normality.  The minimizing of fixed overhead costs; the reduction of the 'safety buffer' of storage facilities to ease the logistics of supply control has not yet been adequately offset by improved comprehensive JIT management.

Perhaps an aviation analogy can best explain the forementioned paragraph. A well-designed plane is aerodynamically stable; it safely flys practically hands-free because it automatically inherently seeks to adjust the control surfaces to reduce airborne volativity.  In contrast, a B-117 batwing stealth bomber is inherently unstable; the onboard computers are constantly adjusting the control surfaces on a JIT basis to keep the craft from rapidly losing control.  This can only be done if the feedback loop system is totally understood and coded into the computers' software.

The top graph [of the posted series of graphs by Heading Out] is the 'flying result' of insufficient JIT logistics management.  If market supply and demand were understood in totality: the 'gasoline plane' would smoothly fly thru the topchart with few undulations, instead of the wild roller coaster altitudinal gyrations we are now seeing.

The mandated switchover to new gasoline formulations, the rampup of ethanol and consequential trucking vs pipeline distribution, the ever-shifting variations of crude inputs to refineries, the erracticness of imports due to weather and scheduling difficulties, and on and on, are starting to overwhelm the 'invisible hand of the market' trying to 'JIT fly' through increasingly bad and evermore volatile conditions.

The ever-cascading feedbacks will eventually make the 'market B-117 pilot' loose control as evidenced by the other posters info where spot gasoline outages are occuring on the East Coast.  As time marches on into the postPeak reality, we can expect evermore gasoline volativity as unforeseen market downdrafts and windshear buffet the energy infrastructure.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

The gasoline stocks figure for the current year is like a roller coaster.  It gives you that tinglely feeling on the way down.
Must be ALOT of refinery capacity off line since Feb to have that kind of crude build with gas production plummeting, and crude imports and domestic prod flat. Will the refiners be able to "catch up" or will we be faced with boosting imports of finished product (i.e. unleaded)?

$3.50 here we come.

Geko45 said at that what happened was the quarterly recalibration.  He said that the weekly figures released are just an estimate, based on a fairly small survey of companies in the industry, which is then extrapolated to the whole nation.  And the companies themselves often have only preliminary data.  Not very accurate, but there's no other way to get a weekly report out.  

Four times a year, they calibrate these weekly estimates to known inventories.  That's what happened this week.  They had a reality check, and found they didn't have as much as they thought.  So much of that "build" may have been illusory all along.  

Total product inventories are down very slightly year over year.  More importantly, the overall trend is down.  

The Energy Bulletin just published an article I did, which I based on the previous technical work that Khebab did.

When I analyzed Khebab's HL data earlier this year, it seemed to me that a sharp decline in net export capacity was a mathematical certainty.

Energy Bulletin article:

By coincidence, I just posted your article to the front page of  :)
I shortened/rewrote it and sent it out to my coworkers and everyone else I thought might pay attention.

Oil and gasoline prices are up substantially since mid-February. In some markets, gas pump prices have increased twenty cents in a day! Most media pundits and financial "experts" attribute this run up in oil prices to geopolitical tensions - Iraq, Iran, Nigeria, Venezuela, etc.

But look at the facts:  

Since the week ending 2/10/06, average daily US net petroleum imports have fallen about 15%, down about two million barrels per day. Since the week ending 2/24/06, on a smoothed, four week running average basis, average daily US net petroleum imports have fallen about 8%, down about one million barrels per day. (A comparable time period last year showed about a 2% decline.)

Prices began rising at about the same time that we began importing less oil and gasoline.

Why are we importing less?  Even though every country is demanding more oil, worldwide oil production has hit a plateau.  Behind all the headlines, oil importers are simply bidding against each other for less and less available total petroleum (crude oil + product) imports.

Everyone is jockeying for fossil fuels.  We're occupying oil-rich Iraq, we're rattling sabers at oil-rich Iran and Venezuela (aka Citgo) and Condi Rice is buddying up to the brutal dictator of Equatorial Guineau, Africa's third-largest oil exporter.  China's economy is growing twice as fast as ours, and they are playing hard to lock in long-term contracts for oil and natural gas.  Russia still has a lot of oil and natural gas, and Putin is using both as a negotiating tool with China and Europe. Now that their North Sea oil fields are almost tapped out, the UK is casting about for new sources.  

In my opinion, higher oil prices are causing the international tensions, not the other way around.  If oil production increases, we may see gasoline prices again stabilize at less than they are, but higher than they were.  If oil production stagnates or declines, gasoline will just keep heading up.

One guy wrote back, "For some reason, I keep seeing the "Mad Max" movies in my head when you talk about this stuff....."

I like this.  It isn't too technical that it will lose folks.

The prevailing attitude here?  Something's gotta give.  But when somebody says this, and I question them, the "something" they are talking about is gas prices, not their own driving.  Funny, that.

Agreed. Oil prices go up and discretionary consumer spending goes down. Perhaps no new HDTV? But supply and demand dictates(simple mass balance here) that oil demand must be cut. But where? I'd bet on recreational travel. Perhaps shorting some stock here would make sense. Airlines? RV manufactures?
To Ben:
      All Americans have had their balls(or ovaries)in a sling since the overthrow of coomon sense in the 1980 epoch.Our secret powers that be infused foreign oil(mideast)into our economy and made it most acceptable with a lot of PR.But I don't forget the foreign policy that murdered millions of Iraqi and Irani men ,women and children in that 10 year war,which was then capped off by Gulf War 1 or the 1st Battle Armageddon.In Viet Nam there was blood in the mud,then it was blood in the oil.Point is since Kennedy and Eisenhower our lust has been unmatched on the world stage.Our people are lost.Common Sense is hard to find and not often spoken of(by our leaders).It is most obvious that consumption is fostered by our elite and conservation is nasty dumb crap.In all things.The conspiracies are unbelieveable because they are so odd,or unthought of. Massive interlinked think tanks do our planning and have no relation to everyman's dreams.

The Norwegian blogspot has a colurful graph showing how net oil exports (believed to be all liquids) has developed for countries and regions based upon BP Statistical Review 2005 for the years 1985 through 2004.

An earlier version of the article, with more numbers, was published at:
These guys don't have real-time inventory control?  I find that hard to believe.  More likely it's a problem of getting the data out of them.
The Big Four: Saudi Arabia, Russia, US & China

As I have outlined previously, these are the big four regarding exports and imports.  Let's abbreviate them as SAR (Saudi Arabia Russia) and USC (United States China).  

SAR can, if they wish, export a volume of oil equal to domestic production less domestic consumption.

USC wants, if we can, to import a volume of oil equal to our domestic consumption less domestic production.  

Consumption in all four countries is increasing.  

USC's production is falling.

SAR's production is basically flat, and in my opinion, will start showing declines this year.  I predict that Russia's production will fall much faster than Saudi Arabia's production.  However, even if SAR's production stays flat (for a little while), their net exports are going to fall as their domestic consumption increases.

Therefore, the volume of oil that SAR can, or will, export is falling.  The volume of oil that USC wants to import is increasing.   The result?  A war for remaining export capacity, which we hope (and pray) will be fought with currencies (or something of value) rather than with nuclear weapons.

Paraphrasing Ayn Rand, there are two ways to allocate scarce resources, with dollars or with force.  

I continue to recommend that we fund Social Security/Medicare with an Energy Tax and that we abolish the Payroll Tax, combined with implementing Alanfrombigeasy's electrification of transportation proposal.

A glimpse of the future, if we fail(or at least try) to do something constructive:

From:  "Roving Gangs"

Another item that I mentioned on the Quayle show last night was the frightening mob beating that took place in Las Vegas this past weekend.  Apparently, a "spontaneous gang" of 10-15 people decided to "swarm" and took their vengeance on innocent people who happened to get in their path.

 What we have here is a prime example of what could turn into a widespread social disease in big cities when the shortages and high energy prices - almost undoubtedly accompanied by brown outs and power outages - arrive this summer.  A reader writes in:

"My newlywed pregnant daughter living in Montgomery County, MD (not a cheap place) called to tell me that gangs of youths, in broad daylight, are carjacking 10 or more cars at a time, also pistol-whipping the owners. She and her husband are looking to move as quickly as they can.

(This is reminiscent of the "wolf packs" of young children in post-War Germany who were a law unto themselves.)"

Strauss and Howe's Fourth Turning may offer the image of an evolving and cooperative lifestyle after "the turn," but we may have to go through a lot of ugliness to get there - and I look at the Vegas and Maryland cases as the leading edge of wolf packs of disenfranchised young men.  We may have only media to blame, for failing to put hard work and diligence out on screens and tubes as admirable values.  Instead we have a media-fiction world with uncountable do-overs, heroes that never get hurt, and the "something for nothing hype" from credit pimps who would have our young people buy their way into credit hell while still in high school.  Yah get whatcha sow.

At least Texas is a "conceal and carry" handgun state.  I think that I am going to sign up for a conceal and carry class this summer.  How about a thread on the best types of weapons for personal and home defense? (Grim post-peak oil humor.)
Actually, we DO need such a thread here.  IMHO, those who believe that we will somehow transition to a 1850's type of civilization (much lower population, local production of food and consumer goods, etc...) without going through an enormous amount of social upheaval - including lots of violence along the way - are simply deluding themselves.

You can't truly be prepared for Peak Oil until you have a battery of effective self-defence weapons, along with a hefty stockpile of ammunition for those weapons, and have taught yourself to use those weapons effectively.

It's most unfortunate that this is not more readily acknowledged here on this site.  Apparently, it's not "politically acceptable" to the predominantly liberal readership of this forum.

I think every forum can and should define a scope for its existence.  I argued long ago on that I felt discussions of self-defense, along with composting toilets and similar matters, are (a) worthwhile but (b) are not specific to peak oil.  An organization analyzing the impact of infectious diseases, or one focusing on global warming, need not include discussions of survival unless they are specific to the matter at hand, e.g. a discussion of infectious diseases may include how to ensure one is not infected, precautions, etc.

It's a matter of focus.  And, in addition, the survival discussions bring with them an element that I think is best disassociated with peak oil discussions.

Survivalism, including weapons, is a worthy topic, but should be considered within the context and within the many forums specifically devoted to that topic.

It's more efficient that way.

This is a pragmatic view.  Not a politically correct view.  Nor a liberal or conservative view.

I think you are right regarding focus and forum efficiency.

Discussing survivalism, guns, etc is like discussing the details of bicycle maintainance, railway building, home insulation and a thousand other topics that are influenced by peak oil.

I think it is good to mention such topics in a way that makes our readers notice that there are various solutions to all kinds of problems, especially if links can be provided to relevant information and forum debating these topics. Unfortunately I am not good at this. (embarrased cough)

I think one thing is important enough to mention manny times. The creation of social capital is essential, new friends, new relations, all kinds of cooperations and even new ways to meet people. It makes it easier to start new companies, make resources stretch further, get more security  and get a more joyfull life.

You are much more polite about this than I was. That's a good thing.
Assuming I wanted to learn about composting toilets, gun laws, etc, will any of you enthusiasts post good sites to learn about them here?
Try the board.  They've got a few sections specifically devoted to planning for the future, including self-protection, composting toilets, food supplies, etc.  I imagine there are a lot of good sources they can point you to.

In general, I think emergency planning is good.  It's no different than insurance.  E.g. I was watching a show the other day on the possibility of a 8.0 quake in San Francisco.  People should plan to be on their own for at least a week, maybe more.

I think the NRA pretty much has that sort of thing covered. I come here for news about oil and energy, not for some kind of survivalist menu about firearms.

Subkommander Dred

There is a huge literature on this topic. In my opinion, the best is the classic by Massad Ayoob, "The Truth About Self-Protection," which encapsules as much experience and wisdom in 416 pages as I've seen in twenty times that amount elsewheere.

IMO civilians should not carry concealed handguns, for two main reasons:

  1. Carrying makes you stupid. Instead of putting all your wits into avoiding bad situations, you put some of your attention into trying to decide whether to draw your weapon, and few civilians have the basic training you must have to become profiecient.
  2. Proficiency in use of a handgun is largely a "use it or lose it" skill. Few of us have the time time and determination to put in hours per week--every week--to maintain proficiency.

My young active-duty and reserve friends all carry variations on the 19ll Colt A-1, cocked and locked. Even though they are proficient and highly trained and practice extensively, I think this is a mistake, but after serving in combat for years they just get nervous walking around unarmed.

If you really want to learn to use weapons, sign up for four years with the U.S. Army or U.S. Marines.

So-called self-defense classes (even the expensive ones lasting days and costing thousands of $) are, in my opinion, worse than useless, because they often instill a false sense of confidence.

I've lived in one of the most dangerous neighborhoods in the U.S., the south side of Chicago, a few blocks from the University of Chicago, at a time when it had one of the highest murder rates in the U.S. During the mid fifties, cops would patrol in fours--two on foot, two in car ready to thumb the mike for backup--because fewer than four police were likely to be attacked by the Blackstone Rangers. At no time was I ever in a dangerous situation, nor would my security ever have been improved by carrying a concealed handgun. Why? Because I knew the rules and I knew the territory.

On the other hand, Sailorman seldom leaves home without a knife, because (as the King of Norway once said, when somebody queried him about his carrying a big sheath knife concealed under his coat), "You never know when you might want a knife."    

Martial arts classes are good to build strength, agility, and concentration. My most effective personal defense is damn good "radar" that keeps me aware of what is out there and how to avoid bad situations. For example, there are large areas of Minneapolis I will not drive through at any time of day--and having a loaded pistol beside me in the front passenger seat would not increase my safety much in this neighborhood.

BTW, if you do kill a few attackers, you may well well end up doing time if the jury decides that your use of force was not reasonable.

I am ambivalent about handguns, but haven't murder rates gone down in the states with conceal and carry?  Of course, murder rates may have gone down anyway.

In any case, I think that the best home defense weapon may be a short barrel "Coach" double barreled shotgun.

I don't like exposed hammers on shotguns.

Also, a new single-shot 12 guage Made in U.S.A. shotgun can be purchased for for about $100. Leave the gun unloaded, but make a habit of carrying a couple of cartridges loaded with #4. Slugs and 00 buckshot have a nasty habit of going through walls and hitting innocent neighbors. If you ever have children in your house, disassemble all weapons and lock up all ammo.

Do not waste good powder and shot on elderly Republican lawyers;-)

I've hunted all my life (well from age 10). My home protection weapon of choice is the same thing I carry for bear protection: .12 ga pump, 18" barrell, 8-9 shot, stainless/synthetic (essentially a "riot" appropriate, eh?). Currently its a Rem. Marine Mag loaded #4, sabot slug, #4, sabot slug, #4, BB, #4, BB, all hand loads. This isn't a cheap shotgun...about $500, but not an expensive one either. Most will not need stainless/synthetic...I carry it in wet/rainy bush in Alaska. Also keep the bear spray between the nightstand and bed. I don't carry on the street. Even when living in midtown Atlanta  a block from the projects when it was the murder capital of country i didn't carry...partially stupidity of youth, but also knowing where and when you could go.

If price is an issue, forget the single shot, you can get a Mossberg version of a riot gun (.12ga pump, 8 shot, 18" barrel) for about $180 at most Wal Marts.

Some Taurus or Keltec niners come with composite body and up to
ten round capacity.  Buy used pump shotgun ($100?) and saw off
(Barrel > 18" and total length > 27" in most states), then remove the
magazine plug for up to six or seven rounds (plug removal may be
illegal in some states).  Alternate tracer plug ammo with true 00
Hi Sailorman.

I agree with you to an extent. I am pro gun. However, I always suggest that if someone is going to carry a weapon, they have to know if they are willing to pull the trigger. It does know good to get a permit and carry a weapon if when the situation arises, one freezes and doesn't use it.

Blackstone Rangers in the fifties? Hmmmmn
In the sixties and early seventies there were large areas of Chicago's South Side where police did not go at all except by absolute necessity, in numbers. in daylight. The same neighborhoods of course had the best jazz and blues and really fine marijuana. And if your heart was not stone, walking through those 'hoods would break it.
If some white boy were fool enough to carry a gun down there it would have been quickly confiscated and resold.
Good neighbor policy generally works until you meet someone who's just crazy. Crazies are everywhere, not just cities. And when you meet a crazy is the most important time to have neighbors and not act crazy yourself.

Think for a minute of all the physically challenged, old, sick people who live in the most dangerous places imaginable, who can't afford a PoS gun, and who couldn't handle one in their dreams. They get by.

We may have set young Americans up for a hell of a fall...all with the best of intentions.

Why are younger Americans so miserable?

A psychologist has written a book called Generaton Me, about why Americans born after 1970 are more confident, assertive, entitled - and more depressed than ever before.

She argues that American young people, unlike their elders, have been raised to value self over family or society. They are told from the time they are small children how special they are. They have very high expectations. But when they leave home, they are often in for a rude surprise.

This is a time of soaring expectations and crushing realities. Joan Chiaramonte, head of the Roper Youth Report, says that for young people "the gap between what they have and what they want has never been greater."

So many people are teaching their kids that the world revolves around them.  They aren't disciplined like kids of older generations were.  They are often home-schooled, to spare them from teachers who "don't understand them" or who might "break their spirits."  I look at how my friends are raising their kids and wonder what's going to happen when those carefully coddled kids have to go out into the real world.

I've got one friend who was doted upon by her parents to an extreme degree.  (A natural reaction, after her parents lost her older sibling.)  She's bright, talented, has a PhD in one of the hard sciences from Harvard, a loving husband and adorable children...and is so depressed she often can't get out of bed.  Has been for years.  She admits that one reason is that no one out there in the real world treats her like mom and dad did.

Leanen:  I would add a different perspective to this interesting idea:  the "city on a hill" cornucopian vision of plenty, the one that rode roughshod over the "limits" ideas of the 60s, 70s, and early 80s;  the libertarian concept of selfism as the only good (all other goods derived from it); the "culture of complaint" in which all problems must be blamed on some person; these could also explain a mismatch between expectations and reality.

Though it's hard to extrapolate what is often anecdotal experiences into broad cultural themes.

Signs of depression are increasing in the upper classes of China, I recently read.  One chinese physician said it makes sense.  You don't have time to be depressed when you're trying to survive.

Depression is primarily a symptom of boredom, for the most part.
Or a sense of meaninglessness, which is perhaps the same thing as boredom, but on a deeper level of consciousness.
Put them to work on farms.  

Joke from the oil patch bust days:  

A geologist applies for a job at a Seven Eleven.  Manager says no; they already have too many geologists, but they would like some more petroleum engineers.

Post-Peak Oil:

Yale law school graduate applies for a job on a farm.  Manager says no.  Too many Yale graduates, but they would like more Harvard law school graduates.

Another job for outdoor activity.  Hiking uses the big leg muscles and pumps anti-depressants into the blood.  It puts you in mind that you are just another creature out there like all the rest.

If you hike someplace where there is a very small (but real) chance of being eaten, a pleasant moment of frisson may drive home your place on the planet and food chain.

  Can you cite any specific sources for this (either episode, in NV or MD). I have seen no reference of it in the media, and though I am hardly surprised that media would miss important stories (such as peak oil) something like this would certainly have made the rounds of the 24 hour news channels. Indeed, they live to cover such things.

Subkommander Dred

The NV was widely reported (it was on the Drudge Report).  In regad to the MD report, that was just posted on Urban Survival, insofar as I know.
The bigger question is "What's up on the East Coast"?  Look at the EIA data figures for the east coast.

Total Gasoline stocks
Location  2006    2005
US        202.5   211.6
East Coast 48.4   58.6

The other regions saw slight declines or slight builds

Drilling Down, the reformulated gasoline looks like the main component.

Location  2006    2005
US        10.8    25.1
East Coast 5.6    14.9  

almost 10 million barrels lower...

Looking at the Conventional stuff now

Location  2006    2005
US       105.5    112.9
East Cst  23.1     28.2

That's 5 more million barrels down too. But add that together. Its over 14 million barrels lower than last year.  Thats more than the TOTAL gasoline stocks, which presumably these two add up to form (in addition to other refined gasoline products)

Looking at the blended components, part of the answer may be here.

Location  2006    2005
US         86.2    73.7
East Coast 19.8    15.5

4.3 Million more in stocks does explain this somewhat.

STill, whats going on here?

How much work is being done on east coast refineries?
Your guys' stock draws are affecting the rest of the country.

At first glance, I am lead to wonder if several refineries are retooling (stainless steel pipes & valves vs. carbon, etc.) to handle heavy sour crude instead of their orginal design for light or medium sweet crude.

Also, desulphurization requirements for gasoline & diesel could be making for protracted maintenance outages in order to bring new units on-line.

I also noted that SU consumption has barely been phased, US production is down 1/2 million b/d and imports are lagging.

You need new unit ops for sour crude, not SS pipes.  High sulfur destroys most catalysts used downstream of the fractionating column.  Upgrading is a big deal and takes planning; I can't see that the refineries just decided to squeeze it in.

When you consider that during the summer the mere presence of a Cat 4-5 hurricane in the Gulf is going to shut down a lot of the refineries for a couple of weeks this could get interesting.

Spending very little on gasoline every month, I look at these figures with joy. Why, you ask?

1)Well...hopefully these high gas prices will be a slap in the face for the American public so they can wake up to the reality of our precarious energy situation.

2)The GOP will suffer in this year's elections. Although, I say this with a caveat. Because I really believe that most Dems are as misguided as the Republicans. Was it not Schumer and other democrats who were infuriated because oil companies were "fixing" prices to make their profits? The sad state of politics in this country is such that politicians will say anything to appease the public...Complaining about high gas prices always scores political points.

3)It lessens the chance of any US military attack on Iran. Perhaps the neo-crazies are really realizing that in fact an attack could cause oil prices to explode making today's gas prices seem like a downright bargain.

4)The whole ethanol in gasoline business. Ethanol now costs more than gasoline per gallon, yet we view it as a panacea to our energy and environmental problems. Eliminate ethanol from the gasoline supply and send all the surplus corn to people starving in Somalia. Ridiculous, we are burning away food while hundreds of millions still suffer from malnutrition. Simply mind-boggling.

That's it for now.

Here's to $4/gallon this summer!


The whole ethanol in gasoline business. Ethanol now costs more than gasoline per gallon, yet we view it as a panacea to our energy and environmental problems.

Ethanol has always "cost" more on the spot market than gasoline. There have been very brief periods where gasoline has been more expensive, but the average annual cost of ethanol has always been more. It is just that the subsidies bring the price down. You can see the spot history of ethanol versus gasoline here:


Comrade Robert;
   Since you seem to be rather educated regarding oil refinery production and the costs associated with such, I have several questions I would like to pose.

  1. How much more expensive is it to refine heavy sour vs light sweet? From what you have said in the past, I understand that most refineries can process it, but only with a significant investment of money and infrastructure. Does this lead to higher cost of refining overall (ie the process is more involved, thus more expensive, causing an even further increase in the cost of refined products), or is the expense only in the capital layout for changing over from one grade of crude to another?

  2. What are the other costs associated with gasoline, such as transport and profit markup? I understand that the federal gasoline tax is 18.3 cents/gallon, and my state (the Commonwealth of Virginia) has an additional tax of 17.5 cents/gallon. I am trying to figure the final cost of retail gasoline based the wholesale price ($2.23 a gallon and rising...).

  3. Will we see significant shortfalls in other fuels, specifically jet fuel (non-military use) and diesel? One of my concerns is that the local air medical evacuation services (all of which use twin jet engine helicopters for their missions) may not have access to the fuel they need to fly. If so, this would greatly impact the rapid transport of critically ill and injured patients for definitive care (speaking as an Emergency Room RN, you could well understand my concern in this particular regard).

Of course, anyone who could eleborate on this issue would have my greatest appreciation.

Subkommander Dred

Regarding 1, just about any refinery can handle heavy crude. If they don't have a coker, they are going to end up with lower yields and a lot of residue that is essentially roofing tar. If they do have a coker - which is a very expensive piece of capital - they can turn that residue into more gasoline, diesel, and something very similar to coal (the coke) that can be burned in power plants.

Sour crude is a different matter. Specific equipment has to be installed to handle it. However, due to new low sulfur diesel and low sulfur gasoline specs, I think that all refineries have made the investments into the hydrotreating facilities required to process sour crude. I guess the one caveat would be to consider what their design assumptions were. If they assumed a sulfur content of 1%, then they may not be able to handle crude with 3% sulfur, or they can only handle it at reduced rates.

I think transport is a pretty minor cost. It is a little more expensive if ethanol is being blended, because it has to be trucked or railed, and that is more expensive than shipping by pipeline. At current crude prices, the cost of oil is adding somewhere between $1.50 to $2.00 toward the cost of gasoline, depending on the refinery configuration. Then you have associated state and federal taxes, and profit. Historically, profit margins have been somewhere 5% and 10%.

Diesel got pretty scarce at times last year, but right now diesel inventories are pretty good. That's because diesel is cheaper to produce, but selling at a higher price than gasoline. Refiners have some flexibility in producing diesel or gasoline,so they tend to favor diesel right now. The worry is that if gasoline inventories continue to plummet, refiners may have to shift some production from diesel, causing the inventory picture to flip flop.

Inventories will start to come back up in the next few weeks. Refineries are finishing up spring turnarounds, and prices will start to stem demand. I think we will have rationing of a sort, but it will be rationing by price.


Oh, I realize I didn't fully answer your first question. There are initial capital outlays, but there are ongoing costs as well. For example, most plants use hydrogen to turn the sulfur into H2S. That is a continuing cost, and either requires a hydrogen plant (consuming natural gas) or a hydrogen pipeline into the refinery. I can't give you an exact difference on what it costs to process sour versus sweet. If I had to guess (and I could probably come up with an actual number, but it would be proprietary) I would say somewhere in the range of an additional $0.05-$0.20/gallon of processing costs.



Subkommander Dred

Gasoline Inventory vs. Price - large scale

This is a chart of the United States' days of gasoline inventory on hand plotted against the average retail price of gasoline. I've taken the weekly total inventory number released by the EIA and divided it by the corresponding week's number for millions of barrels of gasoline consumed daily. Note that the left axis is not zero scaled. Price of gasoline is inflation adjusted. Numbers are 4 week averages.

Notice the gradual downward trend from a range of 25-30 days a decade ago to 20-25 days currently.

Oil CEO,

Nice graph.

Can you obtain very recent data in 2006 which migh show a larger divergence between inventory and price lines?

Based on recent posts and data it appears that the price is now above $3.00 and inventory is at or below 20 days.  Both of these would be outside their ranges for the past decade even including Katrina.


Christian Science Monitor says it's just the ethanol/MBTE thing.

OPEC members have offered oil companies extra deliveries but have been turned down - an indication that there is plenty of crude oil available, Mr. Routt says. In addition, he points out that the current quarter is usually the low point in demand for crude oil. Refineries are busy conducting maintenance or shifting over to the summer blends of gasoline.

The current run-up in price, Routt contends, is more related to stresses in the phasing out of MTBE (methyl tertiary butyl ether), a fuel additive. It is being replaced by ethanol, which is in short supply.

"The price run-up is product-led," he says. "Once the refineries come back on stream, it should take some of the pressure off."

That's a part of it, but not the major part of it. The major part is that refinery utilization still has not recovered to pre-hurricane levels. That plunging gasoline inventory is why prices are spiking. The worrisome part is that normally at this time of year, inventories had turned up about 2 weeks ago. If inventories don't turn upward next week, they will fall out of the bottom end of the range.


"OPEC members have offered oil companies extra deliveries but have been turned down - an indication that there is plenty of crude oil available..."
Once again the truth is twisted to a breaking point. Popular ignorance of what constitutes "crude oil" is consciously being exploited here. It is inconceivable that any refiner would refuse useable oil in this day and age - it would essentially be inexcusable negligence and quickly followed by shareholder litigation. OPEC has been offering its less than ideal grades of crude at signifcant discounts for a longtime now. They are simply not useable by the broad spectrum of refiners who are geared for light and medium crudes. While it is surely correct that the phase out of MTBE and the run up in ethanol prices is affecting gasoline prices how does one determine this effect compared to the tightening of sulphur content in gas and diesel, to say nothing of the spiking cost of crude and process feedstocks like natural gas? It is inevitable that such stories begin to appear, even amongst the better media content providers. Competing interests will seek to twist the story to their favour. Quotes like this:
"The price run-up is product-led," he says. "Once the refineries come back on stream, it should take some of the pressure off."
Are transparently trying to tell people what they want to hear ie: "Don't worry, this is an anomaly, things will be back to normal soon, do not alter your plans, purchases or investment patterns." What is most disconcerting is that many watchers, pundits, politicians and consumers will buy it - completely ignoring that this "price run-up" follows on a dramatic spike BENCHMARK crude prices... Sorry for the vent, I know I'm preaching to the choir... Thanks for the update!
Farmers say ethanol not to blame

Recent media reports have claimed that ethanol is the cause of skyrocketing fuel prices, a claim vigorously denied by a coalition of farm and energy organizations, "I've got corn growers from all over the country calling and they are mad," said Jon Doggett, vice president of the National Corn Growers Association. American Farm Bureau Federation (AFBF) President Bob Stallman reinforced Doggett's comment. He said many Farm Bureau members are upset about being blamed for high gasoline prices.
They aren't blameless, but it certainly isn't fair to place the bulk of the blame on them (yet). If they can't get ethanol to the places it is needed to make reformulated gasoline, then they will have to explain fuel shortages. But right now, escalating ethanol prices play a very minor part in the gasoline spikes. That graph at the top shows the primary reason.


BS!  Ethanol has next to nothing to do with the price spike.

How about the 400 000 - 650 000 bbl/d shut in Nigeria?  
How about the freefall of Iraq production?
How about GOM recovery?
How about overall decline or export capacity in general?
How about increased demand?
How about overall quality sour vs. sweet?

Funny, but last time I checked gasoline was MADE FROM OIL!


From July, 2005:  The Federal Trade Commission today issued a report entitled "Gasoline Price Changes: The Dynamic of Supply, Demand, and Competition." The Report analyzes the many factors that influence fluctuations in the prices that U.S. consumers pay for gasoline at their local gas station. It examines a wide range of gasoline price factors - including the cost of crude oil, increasing national and international demand, and federal, state, and local regulations - all of which influence the prices consumers pay at the pump. One of the Report's conclusions is that over the past 20 years, changes in the price of crude oil have led to 85 percent of the changes in the retail price of gasoline in the U.S.

Common sense.

And you wonder why the farmers get pissed.

Stryker, before I actually review this, - you have to change your tone. Many of us respect your input. In your favor - you are actually coherent. But please, if we are going to debate here, let's do it numbers-on-numbers, source-on-source. I know It's boring that way, but everybody accomplishes much more that way. Try to keep emotion out of it. I'm speaking from personal experience. Don't let the combat cloud your vision. And stay away from the goddamn caps for chrissakes!

Now I'm going to go and actually read what you wrote.

Looking at this closely, it is apparent what is happening.

We all agree.

Read it again, fellas. There's no problem here.

If you have a problem, relate it through me, I'll settle it.

We all agree here. Let's focus our guns on the enemy.

In many reformulated gasoline markets (example: Atlanta metro area), MTBE is being replaced with ethanol as the primary octane boosting additive.  Ethanol does not transport by pipeline well (it tends to separate), requiring it to be trucked in and mixed locally.
The net result is thusly:
  1. Ethanol demand is up, as MTBE is phased out and replaced. Higher demand creates shortages.
  2. Use of ethanol instead of MTBE plays into a more "just in time" delivery and mix flow, exacerbating shortages.

Shortages of ready to pump reformulated gas result, causing prices to rise slightly.
The rest is, as you say, not ethanol related.
You're right.  I vent.  

I vent, because it tends to get a little frustrating watching 'shocked' citizens complain about rising gas prices while filling up 10/mpg Support Usama Vehicles.

I vent, when I see MSM pundits circle j*** their so-called expert guests (or worse: public representatives) with spoon fed renditions of what passes for hard hitting journalism.

I vent, at the American citizenry [a.k.a the brave] who kowtow before the criminal leadership they have the power to remove.

But most of all... I vent because PeakOil is a challenge - granted a very difficult one but a challenge nonetheless.  

And challenges my friend, (sry can't resist) ALWAYS have a solution.

BS!  Ethanol has next to nothing to do with the price spike.

Isn't that what I said? You should listen to Oil CEO's advice. I get it. You like ethanol. But when you are given facts and logic, your responses look like "Ethanol! Woo-hoo! Green fuel! Yee-haw!" You didn't even pay attention to what I wrote, and yet you felt the need to respond in a way that was completely irrelevant.

That is not the first time it has happened. You did the same thing over the E85 debate. I gave sound reasoning for why the market for E85 will dry up if the subsidies expire as they are scheduled to. None of your responses addressed my arguments. You argument basically consisted of "You're crazy. Car makers are producing flex-fuel vehicles". Not only does this ignore my arguments, it also ignores the news stories from a few months ago that said the market for E85 had started falling off when the price of ethanol started getting more expensive.

Ethanol has baggage. Most people on the forum realize that. You don't help your credibility by completely ignoring the arguments against it, nor by responding with a series of non-sequitors.


My BS statement was not intended for you RR.  It was intended for those who think that somehow ethanol is the prime motivation behind the price of gasoline - which it most certainly is not.

And as for our banter over ethanol, my posts may have been sarcastic, however, I can assure you that they were indeed logical.

For instance...

I presented you with evidence that Cali's waiver for ethanol was directly related to supply and demand - not pollution as you submit.

I informed you that one simply cannot make blanket statements about ethanol production.

You tried to claim that the technology behind ethanol production would not evolve - which is complete nonsense.

You claim that there will not be a market for E85 after next year.  I counter with GM and the Gov. of Michigan opening new E85 stations, Ford and VeraSun building an E85 flex-fuel corridor from Chicago to Kansas City, Toyota making the huge announcement that they will be building E85 flex-fuel vehicles for the US market.  To which, I could've added GM's yellow cap campaign, the Senatorial investigation into the illegal blocking of E85 filling stations by Big Oil, or even the recent CNN survey on alternative fuels of which 90% of respondents or 77,000 people, want alternative fuels.

You claim that no one is going to pay more for renewable fuel.  Really?  I warrant, that like Whole Foods and the organic movement in general, people will in fact be willing to pay more for a cleaner conscience.

I highlight that mandatory renewable fuel usage is a sound investment; prompting private investment in the industry to the tune of 100's of millions of dollars and you say that the industry is dead in the water without government subsidy.  

All this and in response I get:

"I know all about ethanol. I have done graduate school research on it. You, on the other hand, seem to be painfully uneducated about it."  or  "It's fine to disagree, but a logical argument would do wonders for you."

You misrepresent, and frankly falsely represent many of my arguments.

For instance, I showed the statement from Feinstein's office showing that their scientists had proven that ethanol addition did not help pollution at all. That was well before there were ethanol shortages.

I didn't say that ethanol technology won't evolve. But the technologies involved in grain ethanol production are very mature, and are unlikely to see much improvement. I did write an essay on what it would take to make a quantum leap.

You still haven't addressed my argument against E85. You seem to think that because there are E85 vehicles, there will be an E85 market.

I did not say people won't pay more for alternative energy. They won't pay a great deal more. That has already been shown. When ethanol spiked up, news stories abounded that E85 sales dropped off.

I am certainly not the only one who says ethanol is dead without subsidies. The much referenced Hirsch report on Peak Oil said exactly the same thing.

Regarding your last paragraph, Ha! You have gotten detailed arguments in every case. You just chose to ignore them.


You are correct. I constructed this yesterday before the EIA released its Wednesday numbers.

The last weekly entries should be 202.5 mil barrels, 9.100 barrels per day, giving us 22.3 days. Price is $2.78.

I'm using four week averages for graph so It would show 22.96 days and $2.68.

I'll update this in a couple of weeks. There is definitely a larger divergence, we'll see if it continues.

Nice graph! I was working on the same type of analysis:

src: GraphOilogy

The image in the background is the derived probablity map from the observed "number of day of consumption" since 1991. Dark patches indicate more frequent values. The Current level is near (slightly below) the most probable value for this day of the year).

This is great.  My final comment on Oil CEOs was a suggestion for a trendline.  Your probability distribution provides the equivalent so we can appreciate the implications of current stocks from a historical perspective.

So now I'm wondering:  What happened at the beginning of 2004?  Stocks were apparently way low then, consistently low.

Another consideration:  most businesses since the 90s have been optimizing the supply chain (Wall Mart as our favorite example). I don't have a lot of in-depth knowledge of this topic, but it seems like just in time delivery could also be playing a role in the downward trend that we see over time.

That's a good question, I don't know exactly what happen in 2004 but clearly lower numbers have been observed in the past without significant price spikes. The current value is not an outlier yet. The market is now more sensitive to stock fluctuations for other reasons.
A few months ago gasoline stocks were shooting through the roof; now they've fallen dramatically from those highs. But they're still in the average range. And the graph posted by Oil CEO shows that in terms of days of inventory, stocks are still robust.

So what's the big deal??

True, the price of gas was pretty steady at around $1.50/gal (U.S.) for years (from Oil CEO's graph) and has risen in the past couple years to $2.50/gal. Still pretty cheap.

Often you'll hear about how "high" gas prices are a hardship and the average person can't cut back on driving since they have to get to work. Here's a question. What is this "summer driving season" you always hear about? Sounds to me like "vacation travel." It sounds plausible to say, "I have to get to work," but somehow less compelling to say "I have to go on my vacation."

(Don't get me wrong -- I have to go on my vacation, I just have my doubts about the whole rest of the country.)

I've always interpeted "summer driving season" to mean a combination of summer vacations, as well as people driving more to other events, e.g. teenagers going out (or to work) during the summer when there's no school, families spending the day at the local beach, lake, park or whatever, etc.  My wife and I drive slightly more in the summer, but we almost never drive for the explicit purpose of Going On A Vacation.
That's the only way we can vacation.  With three (small) kids and two (largish) dogs, the only way we can afford to go somewhere is to drive.

From the traffic, it seems many others are in the same boat.

Just read something disturbing in the Dutch Shipping Weekly newspaper Weekblad Schuttevaer - nr. 16, 2006, page 13, top right, text under the head "vrachtenmarkt" (anyone can log in: fill in usernam {"gebruikersnaam"} and password {"wachtwoord"}  )

"Tankermarket is plain bad for vlcc's (very large crude carriers)......competition with seuzmaxes are strong. But also these Seuzmaxes have to accept low rates and fight over every load with the vlcc's.....For the vlcc's as well as for the Suezmaxes apply there are too many vessels available for the cargo offered, and it looks like it will stay that way for some time..."

"too many vessels available for the cargo offered"

"too many vessels available for the cargo offered"

"too many vessels available for the cargo offered"

I can't explain it.

This is the comment from the tanker section of the OPEC report I cited earlier
Spot freight rates for shipping crude oil weakened significantly in March, especially by the end of the month, due to ample tonnage resulting from the combination of lower demand following heavier refining maintenance in Asia and USA compared to the previous year as well as growing tanker capacity. Usually, freight rates decline during the second quarter of the year when demand slows due to refinery maintenance but this year the downward trend started earlier and was more pronounced than in the previous year, especially for VLCCs moving from the Middle East where freight rates declined to WS50-60 at the end of March, levels which in 2005 were not reached until June. On a monthly basis, rates for VLCCs trading on the Middle East/eastand west-bound long-haul routes hit an eight-month low in March after rates for VLCCs moving to the East lost 47 points or 36% to average WS84 while those moving to the West fell 29 points or 28% to stand at WS74.
thanks HO. So rates are down, but more then usual for this time of the year.
More tankers have been built recently. Maybe a glut?

Tanker levels forecast to weaken in 06 - Fairplay

Fairplay reports that Double Hull Tankers, the vessel-owning offshoot of Overseas Shipholding Group, has forecast that this year's tanker markets will not match 2005 levels. DHT's supply and demand analysis suggests that 4Q06 will show "less of a seasonal upturn" than in 4Q05, which showed lower VLCC and Aframax rates than a year earlier. Tanker utilisation overall is expected to be lower this year than last year, DHT said, because of the number of newbuildings looking for cargoes and because higher oil prices would reduce demand growth.

"too many vessels available for the cargo offered"

I can't explain it.

If we've reached peak oil, we will need fewer and fewer tankers (and refineries).
That is what I find disturbing and the reason for my post. As HO pointed out, rates are lower then usual. It makes one wonder if Ghawar, for example, has started to collapse spectacularly.

But it can also be caused by less demand from refineries then usual as more are off line, or limited in production. It could also be (one for westexas to wonder about) that refineries have the same demand as usual, but cargo's offered are to much of the heavy, sour type.

It makes one wonder if Ghawar, for example, has started to collapse spectacularly.

From all that I've read, Ghawar is the long pole in the tent.   According to Deffeyes, "when the Ghawar field waters out, you can kiss your lifestyle goodbye."  To be sure, there are other opinions.  To my semi-educated mind, the collapse of the King of Kings cannot be anything less than a watershed event.

Question 1: How will we know (forum and messenger) when Ghawar is in terminal decline?

One of my personal triggers is the word "Ghawar".  When American MSM even mentions the word "Ghawar", when I hear even one casual conversation discuss problems with "Ghawar" by name, that will be like the waters suddenly receding away from the shore.

Question 2:  Is the decline of Ghawar as significant an event as I am portraying it to be?

Part of the shipping element is simply SHIPPING supply, rather than crude. It takes years to build one of the suckers and the yards have been cranking them out like mad lately.

It appears that capacity will peak around 2008 (according to the shipping pubs and some proprietary info I have) and you should see a continuing slide in the Baltic Dry Index as well as tanker spot rates.

So what? So short the tanker operators like FRO (Frontline). Ignorant investors see a high dividend rate on these things and think "Alright! 8% div" and buy it up. Then spot rates collapse as all this capacity comes online and the dividend...along with the share price...evaporate.

"too many vessels available for the cargo offered"

And I didn't see ANY mention of WATERWORLD last night!  These can become our floating MadMax cities, once they're retired from the Crude Trade and the Coastal Cities all become WaterParks after the sealevel rises..

How about this-

In the grain embargo put on by Jimmy
Carter, grain North of New Orleans
was cheap. No one wanted it, because grain
couldn't go to paying customers (Russia).

The EU loaned the US energy products in the wake
of Katrina.  From Kunstler, October 10, 2005-"the European Union has been sending two million barrels of crude a day to the US out of its own emergency reserves."

bbl's were lent.  People were wondering at TOD when the
payback would occur.

Maybe empty tankers would be a sign of payback.

Are the EU gasoline reserves being built up?

Just guessing,


I don't know the answer to your question, but the US is very good at borrowing but no so good at paying back I would say
I used the gasoline stocks graph in my latest blog entry to show that this is the reason prices are spiking and not gouging. This addresses a recent report by The Foundation for Taxpayer and Consumer Rights in California who suggest it is really profiteering that is driving prices higher.

See: Another Uninformed Consumer Watchdog

Incidentally, the shameless self-promotion of my blog has finally paid off! I got a plug in in an ethanol article:

If you don't want to wade through the ad, here is the plug:

"For an entertainingly obsessive fixation on the issue, check out my new favorite blog, chemical engineer Robert Rapier's R-Squared".

Woo-hoo! I am entertainingly obsessive! Believe me, I have been called much, much worse.


Unfortunately it looks like the election run-up hype is probably going to blame the Chinese for the high price of gasoline.
The Republicans will blame the Chinese. The Democrats will blame the oil companies. Nobody will blame the consumer.


Exactomundo, and the same sentiment is leading to expectations that somebody will "fix it" for us.  It's not up to us to conserve, we like our Buicks and F-250s.  The government will save us.

Like children, we blame others and expect somebody else to make it all right.

Isn't this showing the big push to boost refined stocks while seasonal demand is 'low' so that refinery maintenance that was deferred after Katrina can be done ?  While refineries are offline for maintenance and seasonal demand is starting to increase, stocks plummet, prices rise etc.  Am I missing something?
Well, the decline is very sharp, and stocks are on the verge of falling out of the bottom end of the range. If you notice, normally during this week stocks are increasing. That is the worrisome part. Stocks will turn back upward in the next few weeks, but the fact that they are still plunging may indicate some shortages down the line.


Shell just announced that Mars will be back up and partially producing by the 2nd half of May (just in time for hurricane season). Some excerpts:

Mars Platform Production to Resume Ahead of Schedule

NEW ORLEANS, April 20 PRNewswire -- Shell Exploration & Production Company (Shell) is ahead of schedule to restart production from its Mars Tension Leg Platform (TLP). To signal resumption, Shell began to notify the appropriate Gulf of Mexico mid-stream transportation, marketing businesses and downstream customers to secure sales for initial, post-Katrina, oil and gas production. Mars is the largest producing platform in the Gulf of Mexico that was affected by Hurricane Katrina, representing about 5 percent of current Gulf of Mexico daily production.

Based on progress to date, Shell expects that construction activity necessary for initial production at Mars will be complete by the end of April. A brief re-commissioning and start-up process will follow, and partial production is expected to resume in the second half of May. Mars production is expected to be restored to pre-Katrina rates by the end of June.

By the end of 2005, Shell had repaired all of its hurricane-damaged facilities except Cognac and Mars, restoring over 75 percent of its total pre-Katrina production rate.



still a build in crude. volatility


Step back and see the Big Picture:

Mining companies are complaining about a shortfall in the supply of the giant tires that go on large dump trucks and other heavy equipment. These outsize tires stand as tall as 12 feet tall and can spread 4 feet wide.

NYT link

Great article. Peak Tires.
I find it odd that Goodyear, etc. underestimated demand for the hugest tires years ago. Either their economic forecasters were ignorant or dumb--or they did not have any, which would be extremely hard to explain.

A highly probable and greatly increased demand for those tires could should have been visible on the horizon by the mid nineteen nineties and possibly sooner.

Anybody know the story on this one?

Wouldn't that have required an up front investment on their part?  And if so, how would it have helped their share price in the next quarter?
I saw a similar story about the giant tires 1 year ago in an obscure newspaper. These are low volume specialty products, not mass volume like conventional car tires. The shortage indicates that mining activities are picking up at a rate much faster than predicted. Mostly strip mining for coal.
So far so good. But how could their economists have been so short-sighted as not to be able to see the demand increasing greatly for coal as far back as the early nineties?

Admittedly, the giant tires are a relatively low-volume product, but my impression is that there is a large profit on each unit sold. Perhaps, however, major tire firms were constrained by limited funds for new capital investment--except that I do not recall that being the case (in general) in the nineties.

With few suppliers, a firm can act like a monopolist or maybe a duopolist and keep prices and profits high on products such as the giant tires. For me, the mystery remains.

I do not believe that rubber firms conspired to create a shortage of these tires to jack up prices and profits, because a mining company can always use somewhat smaller (and somewhat less efficient) trucks with smaller tires, and I imagine that is now happening.

I was at a library earlier this month and saw a railroad industry magazine.  What was the cover story?  The coal crisis.  Seems the rail economists did not get everyone to build coal hauling capacity either.
I read the mining magazines. Tires is the least of their problems.
  1. These are specialty tires. Most tire companies don't have the expertise, or the molds, to build these tires.
  2. The mining companies and their suppliers were expecting a downturn after the stockmarket crash. They certainly weren't expecting the Chinese to give us all that free stuff after the crash.
For example, the Cantung mine actually shut down after the customers broke their contracts because the price was too high. Shortly afterwards the price spiked ten times because there wasn't enough tungsten. Nobody expected that.
3. We have been investing in Wall Street instead of mines, roads, smelters, railroads, pipelines, and nongas generators, for about the last twenty years before 2000. It's called a stock market boom, which is inversely related to a commodities boom. This is not the first, or even the fifth, time this has happened. It's just a natural market cycle.
Oh, and one other thing. A mine is a finely tuned process. Using the wrong size trucks for your equipment screws up your process in unexpected ways and leads to lower throughput. No kidding. I've read articles discussing this. Remember, a five percent decrease in efficiency from using the wrong size trucks used to mean a one hundred percent decrease in profits back when times were lean. Now, of course, it might mean a ten percent decrease in profits because of the high product prices.
My god, have you seen what's happening to copper? That has to be speculation. At least when tungsten doubled in a month it was obvious market manipulation by the Chinese. Copper has way to many suppliers to be anything but people fleeding currencies into commodities.
It;s actually a bit more complicated - there have been a couple of stories on this in some of the Mining Magazines, and it has been known for about 6 months or more.  I'll see if I can dig up a couple of articles and post on it next week (having the weekend off for family reasons).
Here is a few I dug up:

"Entergy Arkansas, the state's largest provider of electricity - and consumer of coal - claims Union Pacific Railroad schemed to hold back deliveries of Wyoming coal to Arkansas power plants in an effort to make more money.

In a lawsuit filed Tuesday in Pulaski County Circuit Court, Entergy claimed that the railroad "in a conscious and deliberate practice" limited supplies of coal from the Powder River Basin in Wyoming in an effort to manipulate demand and ultimately maximize its profits."

"November 07, Associated Press -- Tire shortage causes problems for coal mines. Coal mining companies in the Powder River Basin in northeast Wyoming are maneuvering to get
around a worldwide shortage of tires for heavy equipment. The shortage is widely attributed to increasing demand from U.S. and international mining operations for tires, industry officials said. Military operations in Iraq and Afghanistan have added to the strain on the tire market, said Jim Davis, a Goodyear Tire & Rubber Co. spokesperson. Drivers and mechanics at Wyoming mines are getting instructions intended to extend the life of off−the−road tires used on the giant dump trucks used to haul overburden and coal. Companies are also scrambling to make up the shortage through deals with suppliers, which are so tightly strapped that at least
one mine has had to idle some of its trucks in recent weeks. To meet the demand, manufacturers like Goodyear and Bridgestone Corp. are looking at expanding the capacity of their big tire plants. Davis said the heavy−equipment tire shortage could continue through 2007. .htm

Taking Lumps
As Utilities Seek More Coal,
Railroads Struggle to Deliver

"Snags in Wyoming Ripple
Through Taxed Network;
Power Plants Run Short

A 5,833-Hopper-Car Deficit


During the past 10 months, Arkansas Electric Cooperative Corp. has been forced to do things that power generators hate to do: It cut electricity production at plants that are the cheapest to operate and ran its costliest units harder than ever. At times, it even bought electricity on the open market at top prices.

The electricity co-op made these moves because it is afraid of running out of coal. That's surprising in a country with such vast domestic reserves that some dub it the "Saudi Arabia of coal." But Arkansas Electric has a problem that is a growing concern for many U.S. utilities: It can't get enough coal to run its power plants because the trains that serve as its supply line aren't running on time. Delays in coal shipments to the Arkansas generator began last May with rail disruptions in Wyoming and forced the utility to burn more natural gas, lifting its 2005 power-generation costs by 21%, or $100 million."

I asked the following on an earlier thread, but I was late posting, so not everyone may have seen it:

The IEA March Oil Market Report said this about refinery capacity:

Going through March, we would expect throughputs to remain subdued as additional refineries enter maintenance. Gulf Coast planned refinery maintenance is expected to peak in March at around 450kb/d. This should, however, be offset by the re-start of several large cokers, following earlier maintenance, and the re-start towards the end of March or in early April of the three refineries out of commission following last year's hurricanes:
  • ConocoPhillips expects its refinery at Belle Chasse to reach full operating rates before the end of March.
  • BP now expects to have throughputs running at 50% of capacity by the end of March, i.e. above 200 kb/d, with a move up to full throughputs over the second quarter.
  • Murphy is currently expecting to restart its Meraux refinery early in the second quarter.

Combined, these three refineries will return approximately 800 kb/d of capacity to the Gulf Coast area, bolstering US product supply ahead of the US driving season.

Anyone know the current status of these three damaged refineries?
COP at Belle Chasse is up and running at full rates as of this week. Tried to come up earlier, but had some problems. The reason it took so long is that the refinery was basically under 4 feet of water after the hurricane. That ruined a tremendous amount of equipment.


Robert - thanks for the info.
Anybody wiser than me know how the supply numbers are supposed to look once the Turkish end of the Caspian pipeline is up and running?  NPR was talking about the project this morning but I didn't remember hearing any timeline or production numbers.
Last time we posted on this the schedule was for May, but there are still some concerns.
a mention of peak oil on the BBC news site:

A more controversial concern is the so-called "peak oil" theory: the idea that the world has reached the natural limits of oil exploitation, and that there is little more to be found in the ground whatever the price.

Although many in the business dismiss the concept, energy planners in several countries are nonetheless beginning to take it into account.

i'm new to peak oil (only found out a few months ago) but any mention of it on a major news site is perhaps a step in the right direction...

Reports: Some Stations Out Of Gasoline

NBC 10 has learned that several local gas stations have run out of fuel today as gas prices also soar in the Delaware Valley.

Shortages were reported in Delaware, New Jersey and Pennsylvania on Thursday afternoon.

An NBC 10 news team is currently at a Wilmington, Del., gas station where the station is expected to be out of fuel by 4 p.m.

Stations on the Admiral Wilson Boulevard in New Jersey and in several Pennsylvania areas are also out of fuel, or only selling premium fuel.

I've been away for about a week, so here goes, rolling black outs in Dallas and Houston? (its only April for crying out loud!)
And Denver Post headlines  
this morning stating that Colorado is leading the nation in home foreclosures. Meanwhile immigration rallies are trying to propel the legal status of all Illegals nationwide. And gasoline is about $2.90 in most places.
Yet Hummer sales were reported as being tripled last qtr? While gasoline prices are going past post Katrina levels? oil is trading at $73 and inching up.

 Seems we are headed straight to a wall, full steam ahead! I can't see how there will be a soft landing! This is gonna get ugly.

On a bright note, i heard someone speaking that China seems to have a shortage of labor, due to the peasants being able to find higher wages in various industries. Chasing the almighty  Yuan! Imagine that!