Category: eakze

Oil refineries across America have been plagued by a record number of fires, power failures, leaks, spills and breakdowns this year, causing dozens of them to shut down temporarily or trim production. The disruptions are helping to drive gasoline prices to highs not seen since last summer’s records. These mechanical breakdowns, which one analyst likened to an “invisible hurricane,” have created a bottleneck in domestic energy supplies, helping to push up gasoline prices 50 cents this year to well above $3 a gallon. A third of the country’s 150 refineries have reported disruptions to their operations since the beginning of the year, a record, according to analysts. There have been blazes at refineries in Louisiana, Texas, Indiana and California, some of them caused by lightning strikes. Plants have suffered power losses that disrupted operations; a midsize refinery in Kansas was flooded by torrential rains last month. American refiners are running roughly 5 percent below their normal levels at this time of the year. “You have a system that is taxed to the limit,” said Adam Robinson, an energy research analyst at Lehman Brothers. “This is what happens when spare capacity is eroded.” Refining crunch After Hurricanes Katrina and Rita disrupted the nation’s energy lifeline almost two years ago, oil companies delayed maintenance on many of their plants to make up for lost supplies and take advantage of the high prices. But, analysts say, they are now paying a price for deferring repairs. As a whole, refining disruptions have been considerably higher than in previous years: They averaged 1.5 million barrels a day in the first quarter, compared with 700,000 to 900,000 barrels a day from 2001 to 2005. In the days after the hurricanes, refiners were forced to briefly halt as many as 5 million barrels of production. In 2006, when refiners were still reeling from the impact of the hurricanes, disruptions in the first quarter averaged 1.35 million barrels a day. Many factors have led to the rise in gas prices, including disruptions in oil supplies from places like Nigeria and Norway. But analysts say the refining bottleneck in North America has been one of the main drivers of higher energy prices this year. Raft of regulations The refining crunch has pushed wholesale gasoline prices up 35 percent this year. It has also contributed to a 23 percent gain for crude oil prices in the same period. Oil futures in New York closed at $75.57 a barrel on Friday. Some critics of the industry have theorized on Internet blogs that the squeeze on gasoline and other refined products points to a deliberate effort among oil companies to bolster profits by keeping supplies tight. But experts point out that the companies have little incentive right now to hold back on fuel supplies. “Every refinery would like to run as much crude as possible, but they simply can’t,” said David Greely, senior energy economist at Goldman Sachs, who in a recent report compared the drop in domestic refining to an “invisible hurricane.” “These are more complex systems. There are more chances for things to go wrong. And when things go wrong, they tend to back up the system.” Meanwhile, refiners have been scrambling to meet a raft of environmental regulations, phase out toxic additives, add ethanol to the fuel mix and introduce new ultra-low sulfur standards for gasoline and diesel. Industry insiders attribute much of the fragility of refining operations to the difficulty of making these cleaner fuels, which they were not originally designed to do. Refiners spent $9 billion from 2002 to 2006 to make low-sulfur diesel. But producing these cleaner fuels means processing crude oil more intensely through the refining process, at higher pressures and temperatures. This, in turn, leads to more chances for glitches or breakdowns. “It’s a marvel we can continue to run refineries the way we do these days, given the many requirements and specification changes we have,” said Charles T. Drevna, executive vice president of the refining industry’s main trade group, the National Petrochemical and Refiners Association. “There comes a time when the piper has got to be paid.” Meanwhile, demand has been rising relentlessly, providing little respite to the nation’s aging energy infrastructure. Even as consumers complain loudly about high prices, they show no signs of scaling back. Gasoline consumption reached 9.66 million barrels a day in the first week of July, the second-highest level on record. “The cushion that used to be available five to seven years ago for these unplanned perturbations is no longer there,” said Jeet Bindra, Chevron’s president of global refining. “When a refinery has a hiccup, there are consequences on supplies.” “Since refining has become such as wonderful business, refiners have delayed maintenance,” Robinson said. “But when they do go down, they stay down for longer.”160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! read more