When Refineries Go Down

When Refineries Go Down

So, exactly what gets turned around in a turnaround? 

Turnarounds are usually planned every 3-5 years and can last anywhere from a few weeks to several months, depending on the scope of the needed improvements.

The extent of a turnaround depends on a variety of factors. A turnaround can involve major overhaul activities and upgrades to some or all of the primary processing systems or to the entire refinery. It’s helpful to know the key processing units within a refinery that are scheduled for maintenance or upgrade during a turnaround.

In most refineries there are a number of key processing units that produce gasoline and diesel fuel. For example:

  • A “Hydrotreater” removes sulfur and nitrogen from the raw petroleum product and is a major piece of the diesel fuel production process.
  • A “Coker” converts “residual fuel”–the low-grade remains left from the refining process–into useable gasoline and diesel fuel.
  • The “Crude Distillation Unit” separates crude oil into different products according to their boiling points.

During a turnaround, these and other major refining units are often taken off-line and replaced or upgraded with new equipment and technology. To complete such large-scale projects, it’s not unusual for a refinery to hire thousands of skilled, temporary workers.

Turnarounds are typically scheduled to take place when demand for petroleum products is at its lowest and skilled contract workers are most available – often during the first quarter of the year after the holiday season.

In 2013, the United States will depend on only about 140 domestic refineries to process 5 billion barrels of crude oil into the 240 billion gallons of gas and diesel needed to power our 250 million cars and trucks over 3 trillion American miles. That’s about 40 round trips to the sun. Every month! So, when even one of those refineries goes down, and the available supply of fuel along with it, the negative impact on fuel sellers, buyers, and users can be huge.

Without a reliable source of competitively-priced fuel, your inventory and bank account will take a big hit during both unexpected and planned refinery shutdowns.

Expect the Unexpected

An unplanned shutdown of refineries does happen occasionally, triggered by anything from an extreme cold snap to devastating Katrina-like hurricanes in the Gulf where a large concentration of U.S. refineries are located. Most recently, it was California that felt the brunt of an unforeseen shutdown in late 2012 when refinery outages helped cause prices at the pump to leap to their highest level in 5 years.

Planned Shutdowns

While unexpected outages happen without warning, refineries do periodically undergo planned and targeted shutdowns called “turnarounds”—when major refining units are taken out of commission while they undergo substantial maintenance and reconditioning (for more on turnarounds, see sidebar >)

For instance, recently a New Mexico refinery announced the hiring of over 1,000 skilled workers to complete a substantial turnaround in 2013.

Supply Goes Down? Price Goes Up!

Both unplanned outages and planned turnarounds can have an expensive impact on the production and supply of finished fuel and therefore on the prices you pay for your fuel.

Obviously, unplanned outages, especially during peak months, will quickly hike the price of fuel. But even with the predictable nature of a scheduled shutdown and the advance time for other refineries and suppliers to inject more supply into an affected region, the pressure on overall supply and price is still strong. In fact, in anticipation of a competitor’s turnaround, some suppliers will actually increase their prices to discourage sales and protect their inventory.

Why It Matters To Fuel Buyers

When a refinery goes off-line, planned or not, buyers who are dependent on a single source of fuel can easily fall victim to the two-edged sword of lower supply and higher price.

Single-source suppliers are vulnerable to fuel shortages and high prices and will pass that pain on to you, so it’s smart to verify now that your own supplier has developed a fail-safe network of dependable fuel sources. Just ask them. A confident supplier should be forthcoming about how many options they have when it comes to meeting your needs.

You can plan for the unexpected, and guard against the impact of a shutdown or turnaround by relying on a versatile supplier with multiple fuel sources and the ability to deliver despite any pipeline squeeze in your area.

The Desert Fuels Difference

Yes, we are different. And, we think, better. Desert Fuels has steadily grown to be one of the largest and most dependable petroleum wholesalers and marketers throughout the Southwest and beyond.

And for good reasons:

  • Phenomenal Buying Power:
  We can purchase from ALL major suppliers.
  • Aggressively Competitive Fuel Prices:  
We consistently offer the lowest prices available.
  • Price Quote Guarantee:  
When we quote you a price, we stick to it. Guaranteed.
  • Same Day Delivery:
  Order by noon and we guarantee same-day delivery.
  • Loyalty Fuel Program:
  Your consistent purchasing earns you valuable fuel price discounts.
  • Daily Market Updates:
  Twice a day we’ll email or txt you fuel price movements to help you buy smarter.
  • Prices the Day Before:  
We’ll quote you the next day’s price so today you’ll know what you’ll pay tomorrow.
  • Technology:
  You can view & print prices, invoices, and statements online. We’re geeky.
  • Communication:
  Call anytime, 24/7. Yes, that is a real, live human being who answers.

At Desert Fuels, we’re always looking out for the best deal for us and our customers. We have negotiated favorable fuel contracts with multiple suppliers in every region that we serve – nine states and growing. So we can deliver where and when the need arises.

We want our customers to have the confidence and peace of mind that they are buying smart, at the best prices, and at the right time. And we want to pass on the tools that we use so that you too can make good buying decisions.

We’ll take the time to learn your company and its fuel needs – and we’ll do everything we can to take away the fear of the unknown and demystify the volatile fuel purchasing process.

Our innovative approach is nothing short of a fuel industry revolution:

  • To transform the archaic and backward “way we’ve always done things” to new and advanced technologies that deliver real-time data needed to make real-time decisions involving real, hard-earned money.
  • To simplify the complex, upgrade the obsolete, and throw open the closed doors of a long-secretive industry.

Give us a try and experience something refreshingly different!

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