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RE: The Ripple Effect Of Refinery Fires

Home Forums Refining Community Refinery News The Ripple Effect Of Refinery Fires RE: The Ripple Effect Of Refinery Fires

#7357

Charles Randall
Participant

Several points stand out in the Valero’s Sunray Texas (non-coking) Refinery fire:
 
First it was a Propane BLEVE (pronounced ~Blevy = Boiling Liquid Expanding Vaporization Explosion). The escaping Liquid Petroleum Gas (this case Propane) probably auto-ignited and caused damage to surrounding fuel storage/transfer systems that also fed the fire as well as some chlorine tanks.  Lot of the existing propane storage / terminal systems in US refineries and terminals are grandfathered and probably would not meet today’s permit requirements. The potential for these systems is lethal – especially in today’s accident prone refinery systems.
 
The second point is that this is a 74 year old refinery and all the hype about increased productivity with 132 refineries able to meet Demand levels that it used to take 350 refineries is ridiculous at best. The youngest US refinery in the US is now 32 years old & the average is between 60-96 years old and while they may have been able to pull off the 93-97% capacity production levels for last few years the toll is beginning to show and the downtime for maintenance and accidents is keeping the average production closer to 81-87% capacity that was the historical average.
The fault lies here with letting Environmental groups block much needed new refining capacity and the Federal government needs to step in and over ride this process to protect US supply security, industrial safety and the needs of the people and stop letting few environmental drive the governmental approval process.  We need new refineries so plants over 50 years old can be shutdown and new modern world scale ones take their place (even if they have continually been updated with new units and technology).  The extreme demands placed on the existing US refineries for Low Sulfur Fuels, reducing emission levels and still increase production to meet demand while running at rates that were only meant to be sustained for part of the year during driving season – not for the entire year. The US Refining industry has had more accidents and deaths in the last 5 -10 years than in the previous 15.
 
The third point is that any of the production issues become immediate problems – along with the loss of 220 refineries, a loss of storage capability occurred (driven by inventory cost reductions & better supply – demand delivery logistics). The US Gasoline stocks in 1980’s & with 350 refineries could meet 40 days of demand, now they barely meet 21 days US gasoline demand. The top 7 refineries in 1993 controlled about 40% of the gasoline market – now the top 7 control nearly 75% of the US gasoline market. The reduced production capability after the LS Fuels requirements and the lack of new refineries has over 13% US gasoline supply coming from imports of nearly 43 countries, only part of them capable of making Ethanol ready gasoline blends or new sulfur levels and majority of the exports come from developing countries with little or no environmental oversight anywhere near the US Refining Industry.  The entire world is becoming limited in the same way – less than 3 million BPD separate balance and shortage on global basis (compared to past 13 million BPD).
 
The last point would be the damage the Bush/Congress bill to take Ethanol blend levels 20% in next 10 years will have (=cancel) on current badly needed refinery expansions because the additional displaced 10-20% gasoline takes away economic justification for the projects. You don’t need to announce an intention 8-15 years before it can happen – except to try to gain votes/approval rating. The current case just validating a refining industry fear about Congress intent is enough to create a shortage in place of a process that was underway to meet more of the domestic demand.  

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