They were actually designed to refine Venezuelan heavy crude, but the whole Ortega thing made that trade disappear, so now they go for Alberta crude instead.
That doesn't mean that they need to be, long term.
When the turnaround comes to replace some of those oversized heavy-processing vessels, the preference (in an deregulated market) would be not to replace them.
If epa and other regs that dictate output quotas loosen, it'd been easy for preference to change.
Nobody is building refineries today. Gasoline demand is shrinking every year. All of them are rusty and they will just be driven to the ground with minimal maintenance.
Every refinery shuts down at least twice a year for a multi-week turnaround.
The minimum cost to stay operating isn't paying to keep the high cost vessels running, but to remove and sell them to a place that has that heavy crude locally.
The heavy oil processing is the larger maintenence cost that you think isn't happening.
I keep wondering if a financial death spiral will hit petroleum.
Who wants to do long term loans and investment in something where PV/Wind/Storage/EVs are evolving rapidly?
Petroleum is based on huge amounts of hidden subsidies as well, which might unwind rapidly (in the five year sense). Example: The US Navy is basically an unfunded subsidy for worldwide shipping.
Oil in theory relies on a threshold of political power to keep carbon taxes at bay, or worse, a huge "they knew" lawsuit/penalty which is increasingly tenuous every year.
But I haven't heard or seen it, but I'm no insider.
There is a lower bound of production needed and that is to cover chemicals, bunker fuel for ships and jet fuel for airplanes. I don’t see these demand factors going away anytime soon (unless ships start converting to nuclear and some density breakthrough happens to batteries that will allow electric airplanes to exist)
But that is how many scales of production lower than current production?
Keep in mind that all the cheap, easy, light, sweet crude that is just a couple feet below the ground is LONG gone.
So every oil development is a ... BIG ... industrial project. Tar sands, fracking, shale oil, deep sea drilling, mega mega mega tankers.
First of all, that implies a larger amount of upfront investment. No deep sea oil until you build the huge drilling platform.
But if the return on investment drops sufficiently (or risk profile, etc), then the projects don't start. So the supply starts to tail off. So refineries don't need to be as big. But... they are ALREADY that big, so the maintenance is a semi-fixed cost. So the costs go up. The financing get riskier.
Can you see the spiral I refer to? The oil industry has developed with a certain degree of demand and demand growth to continue its expansion, as extraction has become more difficult.
Now, I think based on my VERY limited research that the shale oil in the dakotas has a certain floor, and production will continue for decades. But other parts of the world may not have such guarantees, especially if the old US Navy decides to stop securing everyone's oil (insert the cheeto talking about everyone freeloading off the USA).
This spiral is already happening, most of the players who do not have valuable upstream assets (oilfields) started diversifying their portfolio with biofuels, renewables, electric charging infrastructure etc (see Shell, BP). Other luckier folks have a ton of cash and a ton of valuable assets in their upstream portfolio. These guys only need limited financing, and they have decided to position themselves as the companies who will extract and sell the last barrell of oil (see ExxonMobil, Chevron etc).
Your intuition is right, but there will be no disruption. The consolidation will ensure that the remainder players have the capacity to keep the music on (of course at a higher product price).
The heavy crude processing is a maintenance cost sink.
Reverting to processing local oil is both cheaper equipment wise (removing the heavy crude vessels and selling them) and cheaper bc you don't pay to pipe oil with the viscosity of sludge across the continent.
Fed quotas are the reason for the current config, configuration, economics.
> The clusters are poor and poor health, but have no statistical significance to pollution levels
Yeah, because the rich don’t want a refinery in their nice neighborhood. The second order effect being that the cancer is exported to wherever the refinery lands.
I don't normally comment on geopolitical stuff, but I think it would be interesting to see what would happen if Canada just decided to close the border, lock out all the American companies operating up here, and stopped exporting anything. With no access to oil, wood, electricity, car parts, or steel, I think people will be quickly chomping to get rid of the orange man and his billionaire cronies.
> Our politicians have said they would rather burn the country to the ground, than give it over to America
Politicians say a lot of things. And as Clausewitz said, war is politics by other means. There is no world in which Canada resists even a limited American assault in the near term.
sounds like a solid reason for Canada to acquire nuclear weapons
US in the south, and Russia in the arctic.
Saskatoon / greater SK is the 2nd largest supplier of uranium in the world, and most US nuclear weapons + plants are running on Canadian hot rocks.
creating medium range missile would be trivial for Canada in terms of resources and technological / engineering skill-sets in country. not a far flight from upper QC to NYC, or from upper Nunavut to Petrograd
Interestingly enough some of the US nuclear bombs contained Canadian made plutonium
“ Despite the declaration of peaceful use, from 1955 to 1985, Chalk River facilities supplied about 254.2 kilograms (560 lb) of plutonium, in the form of spent reactor fuel, to the U.S. Department of Energy to be used in the production of nuclear weapons.[3] (The bomb dropped on Nagasaki, Japan, used about 6.4 kilograms (14 lb) of plutonium.)”
I never said anything about resisting, but I don't think there's much value in a scuttled landmass... maybe you could turn the country into a frozen parking lot, but nobody's going to want to come up here just for shits and giggles.
> don't think there's much value in a scuttled landmass
Of course there is [1]. (It's exorbitantly more valuable as a civilisation. I would have thought this parenthetical too obvious to be worth mentioning a few years ago.)
