Houston Chronicle by James Osborne April 16, 2020
Oil refineries around the country are scaling back fuel production, amid a coronavirus pandemic that has caused a record drop-off in gasoline and diesel demand.
With engineering limits on how much they can throttle back their plants, some refineries might soon have to shut down all together, as motorists stay home in the weeks or months ahead and the limited storage capacity for transportation fuels nears capacity.
“There will be more (closures) coming at some point,†said Ryan Todd, an analyst with the Houston-based investment firm Simmons Energy. “But all the refineries we talked to in the last week or so, everyone is cutting down to operational lower limits, and that’s about as low as you can go before you have to shut the thing in.â€-----
Design limitsTypically, the crackers, distillations units and other equipment used in modern refineries are not designed to operate at less than 60 to 70 percent capacity, Todd said. Though some larger refineries, such as those along the Gulf Coast, can operate at less than 50 percent.
As a whole, U.S. refineries have already reduced fuel production by about 30 percent, leaving little margin before facilities would begin stopping operations, said Marc Amons, an analyst at the research firm Wood Mackenzie.
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