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cnn_com - high sulfur levels force gas stations to stop selling fuel - may 28, 2004.txt (7.5 KB, 167 views)

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Mike

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Terminator

I'm in the oil business and do business with both Shell and Texaco ,,they are called Motiva now. The refinery had a problem, the stations were shut down. If those stations are back up then the gas is good. It was over 100 stations but there are trucks that will suck it out. In my experience, the pipeline that ships the gas pre inspects so I doubt this product was off spec by much. I just sold a pipeline shipment of fresh gas to Shell last night.

blairbuc

is that literally fuel delivered by PIPELINE?

how long are the longest pipelines?

Ethan

Most gas is delivered by pipeline. If a refinery has a "rack system" it would be a small percentage. The Exxon Mobil refinery, to pick one, will make about 445,000 bbls a day. Now a "rack system" means a place were trucks can load. 445,000bbls is 445,000 times 42 which will give you the gallon figure. Very large amount. In our industry a barrel is 42 gallons, not 55 gallons. Not all of this is gas, its a mix of heating oil, low surf diesel, kero, gas, naptha ect. Gas will be about 56% of the total.

Coming out of Pasadena Texas I will ship a minimum of 1,050,000 gallons of gas every 5 days. I put it on the Colonial Pipeline System which will travel from Texas to N.J. in about 18 days at a cost of about .03 cents a gallon. A truck would cost far-far more in transit costs. We would run out of trucks in no time or run the entire fleet into rags in 3 days. On the way to N.J. I will drop gas off on spur lines that go to GA. VA. MD. Phili. and finally N.J.

If this gas was off spec. I doubt if was off spec. by much. The pipeline does its own inspection. I have never seen a pipline batch of gas to be off by anyting significant. It could be a difference of .01% over a maximum spec. My quess is your car never knew or felt the additional sulfur and this gets diluted as it gets dumped into tanks with on spec. gas. At most you may have burnt one tank full of this gas. Those tanks were probably turned with fresh gas before you came back to re-fill. I just don't see an issue here that can be measured, but that's my 2 cents. Regulatory agencys are quick to cut our throats over very small infractions that go above a posted max. spec. I can't blame them, without laws you have nothing.

To answer you question, I think the Colonial makes the longest run , but I also ship on the Explorer Pipeline which goes from Pasadena TX. to Hammond Indiana. I ship on the Laurel Pipeline that goes form Phili. to the West boarder of PA. I also am a shipper on the Buckeye Pipeline that goes to Up State NY. and PA form N.J. I ship on the Badger, Westshore and Wolverine pipelines that get me around Chicago and Detroit areas. I use to deliver gas to Meyers Stores in Detriot. You have probably burnt my gas in the last 24 years. Sometimes the title of the gas can change hands 12 times as it goes from TX. to N.J.

I do very little on Barges and Tankers expept to get from New York Harbor to Albany N. Y. before the Hudson river turns to solid ice. I have had barges blow up and I have hit my share of bridges. Not long ago you may have seen a barge burn to nothing on the news outside of New York City. The major networks kept flaching the burning barge and everyone in New York City say the smoke. The barge tied up behind the burning barge was one I charterd to go to Albany that day. I could not find a tug boat to get it out of there. Or I should say the company I leased the barge from could not. No one took notice, everyone was focused on the burning barge with 4 million gallons of fuel on it, but I was watching my barge on TV and screaming at the home office to get a tug over there and get my barge out of there before anything could spread. Well, every available tug was taken and many were being used to fight the ice in the Hudson River that day. In icy rivers you have to go from one tug to two tugs, one on each end. They sprayed the bow of my barge to keep it cool and finally we got out of there, but longer than I could take that day. I was drink my coffee in total peace and next thing i see is a news flash and I'm sitting there watching this huge barge twisting itself to death with the heat from the flame thinking I wonder which idiot leased that barge. It was not until 5 minutes later I catch a shot of the other barge tied to the dock not far from the blaze. I then saw the name and said, oh no, I'm the next idiot in line. In reality the cargo is insured by the company hauling your product, but I rather not deal with insurance companys and you don't want to be on TV with burning oil in this business. I have no exciting stories with pipeline movements.

To give you another idea, the Colonial Pipeline is a twin 36" line coming out of Pasadena and remains a twin line until Greensboro N.C. From there it turn into a single 36" line as it heads to N.J. were it stops, but you can access other pipelines at junctions. So I can come off the Colonial , hop on the Laurel or the Buckeye. So I have , using the Colonial and Buckeye, taken gas from Texas to Syracuse N.Y. That's far enough for me because while it's in transit I'm financing something I can't sell for many days and subject to protecting myself agains many price changes which occur every minute, or second, during the transit time. Take a look at the New York Mercantile Exchange and the gasoline contract trading there. All those hunderes of guys screaming at each other are changing the price up and down every second. Many die trying this. So far I am still alive an proceed with caution everyday I wake up and do this. Many feel oil people just make money every day. I wish they were correct. I have to agonize with a small team of people every day on how to make these moves without losing our you know what.

mind boggling - infrastructure wise and economic wise

great article you wrote

Yeah, great rundown and war stories! The American public is absolutely clueless about oil industry ecomonmics and logistics, and the mainstream media seems to want to keep them dumb, or they are just too stupid to understand it themselves and explain. Probably both!

Barbara Boxer is calling for an investigation of oil industry "collusion" in the current runup of gasoline prices.

How many times has this been done in the past? I lost count! How many times has the oil industry ever been found to be even suspect of impropriety, much less breaking any laws?

ZERO!

Boxer is an embarrassment to California - heck, she's an embarrasment to the country!

Duke

My favorite one is when the Chicago area runs into high gas prices once a year. Next thing you know the media is making out like we are making a fortune. The oil industry comes out a tells them same story. "There is not enough pipeline capacity to ship the oil from Texas to the Chicago area and what refineries are up there are old, and too few." If a large refinery breaks during peek demand periods, the prices go up until that broken refinery comes back on line. While it's broken, they are not making or selling product, so the broken refinery is not happy either. Chance are he has to go out and buy from another guy at a high price to cover his obligations. It's not a 'win-win.' The media says we are scum and screwing everone. Well, in reality that pipeline, called the Explorer Pipeline can only pump so much fluid give its diameter, its pumps and associated friction in moving product. In reality we would put the gas on our backs and walk it up there just to have the ability to sell the higher price. If people in Chicago are willing to pay me .20 cents a gallon more than any other location, I will do everyting I can to get what gas I have to the highest bidder. I would be fired if I shiped to New York if I could go to Chicagoand make more money. That is easy to understand. The media makes it look like we sit in a meeting and say, lets spend money shipping to the location that gets us the lowest price and ignore the huge prices we can get in the Chicago area. In reality we are all killing each other to get the gas to the highest buyer first. Efficiency is built into the system. Our greed and effieciency eventually get the price down and the broken refinery is trying his best to get back on line because he is out millions a day when he is down. In reality, the spikes in price that have happened in the past don't last long, maybe a month of two. This one is different since speculators see guys trying to blow up Saudi Oil Systems. Every Tom, Dick and Harry from Tokyo to Tin-Buck-To is bidding up oil futures out of fear that one day an attack will be more effective. Well, fine, its a free country to speculate on what you want, but the oil industry still gets blamed, ivestigations have to be set up because Barbara Boxer has never heard of the Futures Market and speculation which is going on between Democrat, Republican, Commie Pinko's and rich third world types who like to roll the dice. I can answer Barbar's questions but she will have to make my 90 300-E lifters stop clicking on early morning start ups before I answer her questions.