The Economics of Oil Tankers

The Economics of Oil Tankers
Micro

It's good to know something about how the oil business works since all of Western Civilization currently depends on it.

Mid-East Oil

It Was Saudi Arabia That Broke Iran, Not the US
Maxinomics

It's always good to learn a little more about how we got where we are.

What kind of war is this?

Zelensky says Ukraine has completed repairs on Druzhba pipeline, which carries Russian oil to Europe

Doesn't make any sense to me. It's like two nutcases pretending to strangle each other while squishing a third party between them who is siphoning money out of both their wallets.

P. S. Ten minutes later I came across this one:

Ukraine Billionaire Spends $554 Million For World's Most Expensive Apartment In Monte Carlo

U. S. Energy Consumption

Estimated U. S. Energy Consumption in 2023: 93.6 Quads

Found this on Casey Handmer's Blog. Click to embiggenate. A quad is a unit of measurement equal to one quadrillion (10^15) British Thermal Units (BTUs). I suspect that Rejected Energy (the gray box in the upper right corner of the chart) is energy that is converted to heat and dissipated, and Energy Services (the block box in the lower right corner) is energy that was used for useful things. So roughly one third of the 93.6 quadrillion BTUs were used to do something useful, and the other two-thirds was was converted to waste heat. This is a bunch, but it is negligible compared to the zillion BTUs the sun delivers every day.

Colonial Pipeline

Colonial Pipeline

This is what keeps the East Coast humming. 

The pipeline – consisting of three tubes – is 5,500 miles long and can carry 3 million barrels of fuel per day between Texas and New York. - Wikipedia

Fuel started flowing in 1964. I'm posting this just because I like the map.

Previous posts about the Colonial Pipeline.

Oil Shipping Choke Points

Nearly 24 million barrels per day of oil pass through the Malacca Strait compared to almost 21 million barrels per day through the Hormuz Strait.

AIRCAT

AIRCAT 35 Crewliner
AIRCAT VESSELS

AIRCAT is a French outfit. This boat is pretty substantial: 115 feet long and 45 feet wide. Power comes from four 2000 HP engines.

I got onto this from this photo on Liberalguy:

Eureka’s AIRCAT Bengal

MarineLink has a story about the militarized version.

AIRCAT cutaway drawing

I would have thought you would need big air intakes, but apparently they are able to draw in enough air through an opening in the bow.

AIRCAT and FPSO (Floating production storage and offloading)

That FPSO is truly huge. The oil business is truly nuts.

Drill, Baby, Drill

Bullwinkle jacket, Corpus Christi, Texas, 1988

Jacket is the underwater structure that supports the drilling platform.

Russian Oil

The Russian tanker Renda

Coast Guard Cutter Healy webpage reports:

The Russian tanker Renda transits toward Nome Jan. 13, 2012. The Coast Guard Cutter Healy has been breaking ice for the tanker to ensure a safe delivery of fuel to Nome residents. U.S. Coast Guard photo by Petty Officer 2nd Class Charly Hengen.

Let's Talk About Ukraine

Meeting at Diriyah Palace, Riyadh, Saudi Arabia, Tuesday Feb. 18, 2025

Looks like Zelensky, the grifter / puppet, has been sidelined. Lots of people talking about this meeting, but identification was neglected, so I decided to investigate. Note that the three countries represented at this meeting are the world's largest energy producers.

Participants, left to right:

• U.S. Middle East envoy Steve Witkoff
• U.S. Secretary of State Marco Rubio
• U.S. National Security Advisor Mike Waltz
• Saudi Foreign Minister Prince Faisal bin Farhan Al Saud,
• Saudi National Security Advisor Mosaad bin Mohammad Al-Aiban
• Russian foreign policy advisor Yuri Ushakov
• Russian Foreign Minister Sergei Lavrov

• 

  Diriyah Palace, Riyadh, Saudi Arabia

Nothing like a European palace, but then Saudi Arabia is an alien land.

Pipeline Welding

Fire line, mainline pipeline welding rigs Pennsylvania
The Pipeline Life

A view into a world most of us never see. I've seen welding rigs, but it's always just one rig all by its lonesome, never seen anything like this.

Groups of People Working Together

North American Petroleum Pipelines
Foundation of our civilization

Groups of people working together, commonly called 'businesses' or 'companies', is what makes our modern life possible. Some people like to complain about businesses by using phrases like 'they aren't fair' or they are 'making obscene profits'. Businesses are not the problem. The problem is that we don't have enough people organizing groups of people into productive enterprises. I dunno, maybe it's not possible to have everyone working. Or maybe the people who aren't working don't want to work. Well, sure, there are people who don't want to work, but the problem right now it that there are a large number of people who want to work, but can't find meaningful employment, and by meaningful, I mean a job that pays a decent wage and is not soul-crushing. Just how much a decent wage is is open to debate, likewise how much soul-crushing a person can tolerate is also variable. More money can alleviate some of that soul-crushing, at least for a while.

The big problem is that people can be disagreeable. Getting a group of people to work together requires a cerain force of personality. A thick skin may also be necessary. We complain about politicians being corrupt, or stupid or in league with the devil, but they are the ones who are willing to wade into swamp and deal with all the other swamp creatures. I sometimes think I should give it a try, but that takes energy, and at this point in my life, this blog takes all my creative energy.

But you should give it a try. You can't be any worse than any of the morons who currently inhabit the swamp of politics.

If the economy gets too bad, you start getting rabble rousers calling on the downtrodden to rise up and then you get revolutions and wars. Are people in warmer climates more sensitive to slights? More likely to take offense? Is that why countries in the tropics suffer from wars and revolutions more frequently? Or is it that clear thinking in warmer climes is in short supply?

Caterpillar Wine Mixer

Bump Starting Old Iron with @ziptiesnbiasplies
DEBOSS GARAGE

Much of this equipment is left over from the Canadian Trans Mountain Pipeline. The pipeline was built in 1952. Note that is entirely within the year, not started in one year and finished umpteen years later. It was completed in less than a year. It is 700 miles long and runs from Edmonton, Alberta, across the Rocky Mountains to Vancouver, British Columbia.

Trans Mountain Pipeline

The last section of pipeline is assembled on the Trans Mountain pipeline expansion project, near Laidlaw, British Columbia, Canada, February 18, 2024. REUTERS/Chris Helgren

A second pipeline was recently laid alongside the original. The new line has almost double the capacity of the first one.

Pipe

Ukraine

I don't understand the war in Ukraine. I've been trying to figure it out, but I'm not having much luck. But this week I came up with a couple of new ideas.

My favorite is that somebody with serious clout, he might even be running the country, though with all the infighting going on I don't think anyone is really in charge, and certainly not effing Joe Brandon. Anyway, this mythical big shot has got a personal hard on for Ukraine and he just wants to destroy the country. Somebody pissed him off so bad, made him so angry that he is going to lay waste to the entire country. So far he's doing a pretty good job.

This might even be why he decided to start poking the bear back in 2014. Irritate the Russians enough and they are likely to retaliate, and that would suit Mr. Big just fine. Also, don't allow Ukraine to actually retaliate against Russia because that would mean war and we don't really want to hurt Russia, we want to confine all the death and destruction to Ukraine.

Ukrainian Oil and Gas Reserves and War Zones

The other idea is that the war is being fought over the Ukraine's natural gas and oil fields. This would normally be my favorite, oil being money and all, but the occupied areas do not seem to coincide with the oil fields. But maybe Russia just hasn't gotten around to them yet.

Commies

Oil derricks in the Baku oil field in Azerbaijan in 1912. ETH-Bibliothek Zürich

Reading The Madonna of the Sleeping Cars by Maurice DeKobra. It's 1927 and our man, Prince Séliman, has gone to meet with the Soviet leader in Berlin, one Leonid Vladimirovitch Varichkine, in an attempt to rescue Lady Diana's fortune in the form of 15,000 acres of oil fields from the Bosheviks. These two are in conversation and Varichkine lets loose with this:

"Really and truly, my friend, you are naive. Living is high since the War - but human life is cheap. When 20 million men have been the victims of inimical capitalists, what difference does it make if a few thousand Russians are incarcerated for the sake of severe principles? When hatred, violence, envy, an abject egotism have circulated at their own free will among civilized people, who has any right to reproach us for not having conducted our Revolution with a shepherd's staff in our hand and Pan's pipes to our lips? Believe me the world is always kind to successful tyrants and moral mud is only thrown at the heads of political failures. Take, for example, your dear Kerensky, the White Hope of the Western Liberals - he missed his mark, and you all reproached him bitterly for having been hypersensitive. All he would have had to do would have been to hang every one of us - Lenin and his following. With about 50 pretty little executions without trial, he might have been able to smash the egg of Communism under his heel; the constituency would then not have been overthrown by the sailor Jelesniakof, and you would have looked up to Kerensky as the greatest Statesman in the world. Revolutions are not made with mittens. A social Revolution conducted along legal lines is a toy constructed for the use of dyspeptic socialists nourished on noodles and black bread."

Add in the political infighting, treachery and murder going on in House of the Dragon and it is no wonder I am of a cynical frame of mind. 

Notes:

• Kerensky has a page in Wikipedia.
• Jelesniakof is mentioned in the book Lenin by Mark Aleksandrovich Aldanov.
• Nikolay Krestinsky was the Soviet Ambassador to Germany from 1923 to 1930.
• Prince Séliman and Leonid Vladimirovitch Varichkine both seem to be entirely fictitious.

The oil fields in question are near Tbilisi, Georgia:

Georgia, Armenia & Azerbaijan between the Black Sea and the Caspian Sea

P. S. Totally unrelated to this post, but I just came across a story about a priest murdered in Derbent which is on the above map, in Russia, on the Caspian Sea just above the border with Azerbaijan.

Middle of Nowhere

The BEST Place To Stop For Gas For Private Planes
Bill Allen

Dumas, Texas? Where's that? Middle of the Texas panhandle, 50 miles north of Amarillo:

Nashville to Las Vegas via Dumas, Texas

The Valero McKee Oil Refinery is seven miles northeast of Dumas. The land is so flat you can see the refinery from Dumas. The site looks about like you might expect:

Valero McKee Oil Refinery

The Center for Land Use Interpretation gives us a short summary:

This oil refinery, located on 5,000 acres near the Panhandle town of Sunray, is one of a few refineries in western Texas. It has a capacity of 200,000 barrels per day, making it medium-large relative to the others in the State. It employs around 450 people, and produces a wide range of petroleum products including gasoline, jet fuel, diesel, asphalt, sulfur, sulfuric acid, and liquefied petroleum gas (LPG). It is connected to a network of pipelines that bring crude oil from Kansas, Colorado, and Oklahoma, as well as from the Gulf, and the Permian Basin. Most of its products leave the plant via pipeline as well. It is likely the most widely connected of the dozen refineries owned by Valero in the USA. Valero, based in San Antonio, is one of the largest refiners in the country.

Looking for pictures of this place I found some cool images, so I uploaded them to Jigsaw Planet.

McKee Refinery 1

Guyana Update

Guyana and disputed the Essequibo region (red hash marks)

I posted about Guyana once four years ago. Today we have a report from RT (aka Russia Today). Looks like we might have another minor war coming.

The border between Venezuela and Guyana is under dispute. Nobody much cared about this patch of jungle until a giant oil company discovered oil there. Now Madura, the commie dictator of Venezuela, wants it, and we, the USA, are naturally opposed to this because we hate commies. And we want the oil for ourselves.

Looking at this I am wondering whether it might be cheaper and easier to get oil from miles below the surface of the ocean rather than trying to get drilling equipment and pipelines into the middle of a jungle. I just don't know. Drill ships are expensive. But so is any kind of construction in a jungle.

Even if Madura could somehow take over the disputed region, I doubt whether he would be able to get any oil out of there. I mean he has pretty much destroyed Venezuela's oil industry.

Venezuela production of crude oil in oil barrels, 1965-2019

SBM Installer

SBM Installer

I did this puzzle because I wanted to find out what kind of ship this is. You can't tell much from the thumbnails. SBM is some kind of big outfit that supports offshore drilling in places like the North Sea. Just what does it install? Well, anchors in the sea floor down by the U.S. Virgin Islands, for one thing.

Barge Master and Large Diameter Drilling (LDD) floating deep water drill operation - extended
Barge Master

Here's a better picture of this ship:

SBM Installer

Kerosene Heater

Free heating fuel but it's illegal - £120 8kw Diesel parking heater review from VEVOR
Joshua De Lisle

Kerosene, diesel and jet fuel are all basically the same thing which is why airliners always smell vaguely like a truck stop. Burning anything indoors can easily lead to being dead, which is why we've got safety standards on fireplaces and furnaces and heaters. Most recently, carbon monoxide detectors are all the rage. I am confident that all the trouble comes from shoddy installation by people who are not even thinking of the dangers. This guy does a careful installation, I don't think he will have any trouble.

But the most interesting part is when he starts talking about energy prices in Britain and the impact it is going to have on people this winter, all thanks to that bloody war in Ukraine. Europe really is America's lapdog. Very sad.

Could this be the reason for the war in Ukraine?

© Getty Images / Jake Wyman

Could this be the reason for the war in Ukraine? 

I found this on RT, but they are quoting the Financial Times. I haven't verified that the quotes come from FT, but I have heard this story elsewhere. 

Aggregate net income for publicly listed oil and gas companies operating in the United States exceeded $200 billion for the second and third quarters of the year, according to analysis of earnings reports and estimates carried out by S&P Global Commodity Insights for the Financial Times.

The media outlet reported over the weekend, citing the analysis, that US oil producers have cashed in on a period of geopolitical turmoil due to the conflict in Ukraine that has shaken up the global energy market and sent prices skyrocketing. The $200 billion figure, which included supermajors, mid-sized integrated groups and smaller independent shale operators, marks the sector’s “most profitable six months on record and puts it on course for an unprecedented year,” it wrote.

“Operating cash flow will likely be record-breaking – or at least very close to it – by year’s end,” executive director for upstream equity research at S&P, Hassan Eltorie, told the FT.

Okay, there's been a lot teeth gnashing over the price of gasoline and how it's all Biden's fault and Biden is going to fix it, both of which are balderdash. I say that because I don't think Biden is operating independently, I think he's just a puppet and someone is pulling his strings. 

Or it could be that he's just a member of 'the club' that actually runs thing and they needed a front man to go out and tell stories to the press and they picked Joe. Doesn't matter whether the stories are true or not, just as long as they are really stupid or insane because that's what you need to get people's attention these days.

So what the club decided was that the oil companies weren't making enough money. Then they wondered how they could fix that, and then they had a good long think and said "why don't we start a proxy war with Russia?"

I'm pretty sure that's exactly what happened. If you want to stretch your imagination, imagine that the Russian arms makers were in on it. They needed more money to build up their armaments and what better way to do that than to increase the price of oil that Russia was exporting.

New World Order, bah! It's never gonna change, the world has always been run by the rich and that's the way it's going to be.