Potential Solution to the Short Term Oil Crisis!

[Brandon A. Lopez, MSEE + 2]

Edited April 27, 2020 by Brandon A. Lopez, MSEE

[BillKidd + 139]

Has anyone written a detailed article on what you propose?

Edited April 27, 2020 by BillKidd

[Brandon A. Lopez, MSEE + 2]

No, but I can write a full thesis on it, although we need action more urgently by more people than just our company. We need to take this on an emergency nation-wide schedule. This is my original idea that has been cross-referenced with Caterpillar dealers. This is what I have done for a living for 7+ years and have worked on many government buildings & VA Hospitals. My company employs generator paralleling switchgear to ensure America has a backup energy grid. My documentation is attached. This is now a fully developed concept and ready to be discussed with our lawmakers.

URGENT_ OIL CRISIS POTENTIAL SOLUTION!!!.msg RE_ _External Email__External Email_A Question I Am Pondering.msg

Edited April 27, 2020 by Brandon A. Lopez, MSEE

[Brandon A. Lopez, MSEE + 2]

Update: This has reached Rep. Dan Crenshaw's office and the Texas Railroad Commission in addition to professors at Purdue University in Lafayette, IN. We might get somewhere if we keep trying!

[Jan van Eck + 7,558]

OK, I give you full marks for trying!  Now, what do you propose to do with all the natural gas that you will be displacing with these oil-fired generators?   Or is that going to get flared off?  

Not so easy to go shifting around huge quantities of raw fuels. 

the other problem is that the refining of crude yields more stuff than just diesel.  You will get light fractionals, and a lot of heavy residual, basically bunker C and asphalt.  In the old days the bunker C would go to ship's engines and some power plants; under your proposal, that would have to get set aside.  And for the asphalt?  Unless you intend to go pave the dirt roads in backwoods America, I don't really see a market for it. 

It might make more sense for "society," however that gets defined, to go full-bore in converting oil and gas surpluses into plastics monomers and polymers.  Polymerized plastics can be stored in "gaylords," big cardboard boxes of 1,000 lbs each, and then stored in dry warehouses.  Lots of warehouse space out there.  To organize who pays for it, at least in the short term, you would likely need the equivalent of a "Fannie Mae" financial institution, to pump money into the polymerization plants.  Yet, could be done.  Cheers.

[Jay McKinsey + 1,489]

It would likely be cheaper to just pay the workers' salaries.

[Bob_W + 37]

Hi Brandon, Good thinking.

But by the time the diesel generators are ordered, manufactured, installed, and brought online, won't the over-supply crisis be over?

To save jobs in the debt-ridden oil shale basins, you'd have to bring the generators completely online by last month or the month before.  And the lead time for bringing a power generation plant online is likely three years or more, maybe more like ten years the way some projects get bogged down.  Regulator approvals, budgeting, engineering, contracts...  So to save the jobs that are being lost today, you'd have to go back in time to at least 2016.

And after prices return to normal, are the diesel power generators going to be financially feasible to operate?  Have to get a lot of use out them to justify the expense.  I can't imaging burning $60 or $80 oil for power generation...

[Brandon A. Lopez, MSEE + 2]

Gentlemen, 

My responses in red below.

OK, I give you full marks for trying! 

Now, what do you propose to do with all the natural gas that you will be displacing with these oil-fired generators?   Or is that going to get flared off?  38.4% of America is powered by Natural Gas. 23.5% of America is powered by Coal. We can decrease the amount of coal used immediately. By my projections, all we would need is to turn off our coal systems, (just for around 4 hours per day). 

Not so easy to go shifting around huge quantities of raw fuels. 

the other problem is that the refining of crude yields more stuff than just diesel.  You will get light fractionals, and a lot of heavy residual, basically bunker C and asphalt.  In the old days the bunker C would go to ship's engines and some power plants; under your proposal, that would have to get set aside.  And for the asphalt?  Unless you intend to go pave the dirt roads in backwoods America, I don't really see a market for it. We can pave America beautiful new streets as part of Pres. Trump's $2.5T infrastructure plan!

It might make more sense for "society," however that gets defined, to go full-bore in converting oil and gas surpluses into plastics monomers and polymers.  Polymerized plastics can be stored in "gaylords," big cardboard boxes of 1,000 lbs each, and then stored in dry warehouses.  Lots of warehouse space out there. I agree. This is the basis and premise of the whole method.

 To organize who pays for it, at least in the short term, you would likely need the equivalent of a "Fannie Mae" financial institution, to pump money into the polymerization plants.  The government needs to do something before overproduction leads to no more storage space. We are already at the system's breaking point. We are almost out of places to store oil. Once that happens, what are you going to do with the oil. Additionally, if we cut all production, a lot of people will go bankrupt and lose their rigs. That will ultimately cause future fuel shortages by losing the equipment that makes us energy independent. 

Yet, could be done.  Cheers. Thank you for your interest and insights! Keep this going!!!

 

It would likely be cheaper to just pay the workers' salaries. Again... What do you do when there is no more place to put the oil. This is a fast acting emergency plan that is meant to work only for a specified time. That specified time is to be determined by our present situation but should not exceed a 6 months. We should expect demand to be down and our Russian and Saudi friends have not done the world any favors. We need to save ourselves here in the short term to keep our long term stable and intact.

 

But by the time the diesel generators are ordered, manufactured, installed, and brought online, won't the over-supply crisis be over? We are utilizing America's existing emergency generation system. You are correct by a lot. It would be much too costly and time prohibitive to do new installations. 

To save jobs in the debt-ridden oil shale basins, you'd have to bring the generators completely online by last month or the month before.  And the lead time for bringing a power generation plant online is likely three years or more, maybe more like ten years the way some projects get bogged down.  Regulator approvals, budgeting, engineering, contracts...  So to save the jobs that are being lost today, you'd have to go back in time to at least 2016.

And after prices return to normal, are the diesel power generators going to be financially feasible to operate?  Have to get a lot of use out them to justify the expense.  I can't imaging burning $60 or $80 oil for power generation... No sir. This is not the premise of the method. The premise is only to utilize existing equipment. I know this equipment exists because I help build it every single day. Between us and CAT, we believe we can make this a successful solution. It is now moving up the chains of command in several lawmaker's offices and the Texas Railroad Commission. 

 

Edited April 27, 2020 by Brandon A. Lopez, MSEE
Answering New Questions

[Jay McKinsey + 1,489]

16 minutes ago, Brandon A. Lopez, MSEE said:

 

Now, what do you propose to do with all the natural gas that you will be displacing with these oil-fired generators?   Or is that going to get flared off?  38.4% of America is powered by Natural Gas. 23.5% of America is powered by Coal. We can decrease the amount of coal used immediately. By my projections, all we would need is to turn off our coal systems, (just for around 4 hours per day). 

It might make more sense for "society," however that gets defined, to go full-bore in converting oil and gas surpluses into plastics monomers and polymers.  Polymerized plastics can be stored in "gaylords," big cardboard boxes of 1,000 lbs each, and then stored in dry warehouses.  Lots of warehouse space out there. I agree. This is the basis and premise of the whole method.

 To organize who pays for it, at least in the short term, you would likely need the equivalent of a "Fannie Mae" financial institution, to pump money into the polymerization plants.  The government needs to do something before overproduction leads to no more storage space. We are already at the system's breaking point. We are almost out of places to store oil. Once that happens, what are you going to do with the oil. Additionally, if we cut all production, a lot of people will go bankrupt and lose their rigs. That will ultimately cause future fuel shortages by losing the equipment that makes us energy independent. 

It would likely be cheaper to just pay the workers' salaries. Again... What do you do when there is no more place to put the oil. This is a fast acting emergency plan that is meant to work only for a specified time. That specified time is to be determined by our present situation but should not exceed a 6 months. We should expect demand to be down and our Russian and Saudi friends have not done the world any favors. We need to save ourselves here in the short term to keep our long term stable and intact.

 

Coal power plants don't spin up and down on a daily basis. 

What does making plastics have to do with running generators?

If you are a free market guy then you say let the oil wells shutdown. Your main concern seems to be keeping the oil industry infrastructure available for the future through central planning.  Just pay for it directly by paying the salaries and rig expenses it is cheaper, faster and easier.

 

[pisstol + 48]

Hi, Brandon: I am not in the oil business. I just real oilprice.com to educate myself. But I think the flaw in your thinking is that you assume that American oil is suitable for diesel. An article today mentioned the fact that we don't have enough sour crude, and I have seen the fact stated elsewhere:

https://oilprice.com/Energy/Energy-General/Trump-Could-Use-Nuclear-Option-To-Make-Saudi-Arabia-Pay-For-Oil-War.html

The article says: "Second, there is also the fact that Saudi currently provides one of the few large-scale sources of sour crude (including the benchmark Arab Heavy) that is available to the U.S., which is essential to its production of diesel, and to which purpose WTI is less suited."

The article goes on to says that for various reasons the USA can't get Mexican, Venezuelan, and Canadian our crude at this time.

So if we make a lot of diesel, we have to buy a lot of Saudi oil from those oil tankers that are circling like buzzards in the Gulf Coast and off the coast of California. 

Before I started reading this web site, I pretty much thought that oil was oil. A very experienced person mentioned to you already some of the problems from a refinery's point of view. But, unless I missed it, nobody has mentioned this particular point.

If I am wrong about the above, I am sure somebody will correct me.

 

[Wombat + 1,028]

6 hours ago, Jay McKinsey said:

It would likely be cheaper to just pay the workers' salaries.

That's right. And just flare the oil.

[Brandon A. Lopez, MSEE + 2]

8 hours ago, Wombat said:

That's right. And just flare the oil.

The drawbacks to flare 6-30 Million Barrels of oil per day are as follows:

• Equipment/rig damage and loss will lead to a future oil shortage or dependency on foreign oil 
• Good paying job loss/people out of work
• 100% loss and no productive use of one of earth's most valuable resources yielding no conservation of other energy prime movers
• Cripples US economy by destabilizing a critical sector of the economy

[Cletus + 7]

15 hours ago, Jay McKinsey said:

It would likely be cheaper to just pay the workers' salaries.

And set fire to the oil. Coal prices were off 15% today as electricity demand plummets, yet we expect government to set up this eleborate scheme and locate the generators to make it work. As wombat says just set fire to it after the government has paid for it. After the Fed stepped in to buy junk bonds capitalism is dead anyway. All these arguments from vested interests remind me of the too big to fail argument during the GFC, we all know government is going to step in anyway, while they're at it they'll probably throw in some tax cuts for the rich just to sweeten the deal.

Edited April 28, 2020 by Cletus