Just when I thought it couldn't get worse...comments?

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

http://www.garynorth.com/y2k/detail_.cfm/3198

From GN's site:

I have one very, very reliable source within that industry who tells me that the oil refining industry can't cope with the task. I am told that the problem of embedded systems can NOT be fixed EVER, no matter how much time were allowed. WHY? Because the refineries themselves would have to be dismantled to uncover these embedded systems. Essentially, the refineries would have to be destroyed and rebuilt!!! These embedded systems are buried within enclosed systems. Identifying, testing and replacing these systems is too impractical. It is financially unsound to do so. The better option is to build new ones. There is no time to do this with less than 400 days left and the time to build a new refinery is 3 to 5 years.

So, what does this mean? My sources, especially the most reliable source tell me that it means that on January 1, 2000... the oil and gas refineries will cease operations. These facilities also have converted their inventory management control systems to small inventory levels so that inventory levels are running about 1 to 2 days capacity. A few years ago, the industry averaged a 1 to 6 month supply in storage tanks. Not so today.

The results: By 1/5/2000 there will be no gasoline, no diesel fuel, no natural gas, no heating oil, no fuel oil products at all. This means trains will have no fuel. Trucks will have no fuel. Cars will have no fuel. Electric Power Plants will have no oil for fuel, nor coal... because there will be no fuel to power the vehicles to get it to them. So, there will be no electricity. And you know the remaining domino schematic from that point.

[end]

I don't know squat about the oil refining industry, but this scared the sh*t out of me. Anyone have any knowledge or comments?

-- Steve Hartsman (hartsman@ticon.net), November 30, 1998

Answers

Just how foxy/crazy is SadOn H? Bet he'll still be able to export fuel. How humiliating.

Newsweek's cover story on their new magazine: Christmas Goes OnLine -- all about the joys of the world going eCommerce and totally computerized. Glorius gush re: exciting soon future of all-computerized.
Hhhmmmm, there's a H U G E gap between these "realities."
What is the truth ???

Ashton & Leska in Cascadia
xxxxxx xxxx

-- Leska (allaha@earthlink.net), November 30, 1998.


I sure hope the United States still has that "strategic petroleum reserve" that it did back in the 1970's...

-- Kevin (mixesmusic@worldnet.att.net), November 30, 1998.

Steve......

Don't buy that one for a minute.........

Certainly there will be some disruptions because of embedded chips. However, the industry have always had to repair/replace defective components. This is nothing new.......just on a much larger scale.

My experience shows that this industry is actually expanding and investing billions of dollars in new projects. The only thing slowing them down a bit is the very low world oil prices.

All these companies have departments known as Risk Management or Strategic Development and their focus is on operating so they can get the highest possible profit margin. Contingencies are no doubt being planned.

You might want to talk to your source and get some very specific details because it sounds as if he/she is perhaps applying a situation that affects maybe one company, to a whole industry.

-- Craig (craig@ccinet.ab.ca), November 30, 1998.


No matter how you look at it, the embedded chips will be the "wildcard" of Y2K. And as far as any "reserve", I seem to recall that back in the 1970s when environmentalists were claiming that we would soon deplete our natural resources such as oil, the counter to this was that, thanks to better technology, we could dig out resources that previously would not be feasible to do so. Which, as has been pointed out before, could mean that once the technology breaks, everthing is effectively depleted.

-- Jack (jsprat@eld.net), November 30, 1998.

Steve, I posted this link before its from a y2k defense briefing go to http://www.dtic.mil/c3i/y2k/slides_1998/ and then go to the bottom on supply capabilities. It is the last slide and the question is asked on reports that only 30 % of commercial refineries will be remediated by new years evil. Seems to confirm what you heard, coupled with chevrons 10 Q, looks very bad papa bear

-- papa bear (it.guy@usa.net), November 30, 1998.


I was just going to start a thread on this as well. Many of us on this forum have agreed that while GN's spin on things are biased, his links are good. But the above mentioned article on oil refineries had no verifiable link. And a few days ago, he mentioned that Mormon canneries were shutting their doors to non-Mormons. That aslo was unverified. I then went to Walton's home page to see if they were making any statements related to that. They have not updated their home page since October of 1998. If an "insider" said that everything was going to be fine would we believe it? In the same way I refuse to get upset about unverified statements. Why can't GN provide the names of those canneries that are closing their doors? And why would he print unproveable claims about oil refineries NEVER being able to be fixed? He would undoubtedly want more than heresay in determining what to believe, why would he expect or want his listeners to demand less?

-- madeline (runner@bcpl.net), November 30, 1998.

And let's not forget Infomagic's comments on the questionable ability of the post-2000 civilization to "bootstrap" itself on easily obtainable fossil fuel resources...most all of those have long since been depleted. Hmmm...anybody know the shelf life of Prozac?

-- a (a@a.a), November 30, 1998.

There's no shortage of oil.

We're sitting on a reserve here in Northern Alberta, that has more oil than all of the middle east. There are hundreds of years of supply just in our area.

-- Craig (craig@ccinet.ab.ca), November 30, 1998.


Madeline: GN got his cannery info, I believe, from the c.s.y2k forum. There is/was a thread there that contained individual reports from all over the country about LDS canneries limiting sales and closing their facilities to outsiders. The phenomenon wasn't universal, but apparently many canneries, which are volunteer-run, have been simply inundated with new customers and users. One cannery that reported needing one truckload of supplies each month was up to three truckloads a week and still couldn't meet demand, if I recall correctly. -----------

BTW, the national oil reserve was stored as crude oil, as I recall, and would still need refining to meet fuel/industrial needs. And a lot of it has been "released" to the market because, after all, oil is plentiful and cheap, right? And is that Alberta oil stored in oil shale deposits? Reason I ask, last I heard, current extraction technology uses more than a barrel of oil (in energy equivalent) to extract a barrel of oil from oil shale deposits, which is why they havn't been exploited either in Canada or the US without massive government subsidies.

-- JDClark (yankeejdc@aol.com), November 30, 1998.


Craig, can you provide some info. to back that up? I know we sold some of our reserves here in the US to balance the budget about a year ago. Reserves are great IF you have the power (electricity, etc.) to convert them to usable fuel.

-- Gayla Dunbar (privacy@please.com), November 30, 1998.


To JDClarke

It's not in oil shale. It's in "tarsand". The plants up here operate with no government subsidy and in fact provide hundreds of millions of dollars yearly to the Government of Alberta in the form of taxes and royalties. The cost to extract the oil from the sand has been falling for years, and is now only slightly more expensive to mine than it is from conventional sources. Even at today's very low oil prices, the companies involved are still making a profit, not to mention investing billions more in expansion projects.

Gayla..... There are probably lots of internet resources if you search for "oilsands". A good place to start would be www.suncor.com or www.syncrude.com

-- Craig (craig@ccinet.ab.ca), November 30, 1998.


Craig, obviously we're talking about a different kind of reserve. The reserves we were talking about in the US have already been extracted from the ground and are in storage tanks. Very little exploration and production going on in the US right now due to the extremely low price of a barrel of oil. Bottom line is the "transition" from oil to gasoline may not be that easy come 2000.

-- Gayla Dunbar (privacy@please.com), November 30, 1998.

FWIW: A friend that is also preparing called an LDS cannery in our area & was told that they now are booked up for a year & a half. Unless you have a Mormon friend that is on the schedule then you "might" have a chance to get in, since they are allowed to bring XX amount of folks with them during their scheduled time. At least this is what I was told. Donna

-- Donna in Texas (Dd0143@aol.com), November 30, 1998.

Steve, noticed in a few of the SEC 10-Q reports for the electric power utilities, PG&E and SCE, that they seem to be purchasing natural gas. Is this a trend and a contingency plan?

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), November 30, 1998.


Also a few years back went to a presentation by some guys from Australia who had taken a Tesla technology idea and created a conversion unit that will fit on any automobile and allow the car to run on water -- 'ole H2O. The presentation seemed amazingly real and was made by some pretty sincere guys. Now, how to find them again. Humm.

-- Diane J. Squire (sacredspaces@yahoo.com), November 30, 1998.


Steve,

Jim Lord, in his September 8, 1998 "Y2K Tip of the Week" column on the Westergaard 2000 site http://www.y2k timebomb.com/Tip/Lord/lord9836.htm, quoted from the April 1998 issue of _World Oil_ magazine:

"It is estimated that the average oil and gas firm, starting today, can expect to remediate less than 30% of the overall potential failure points in the production environment. This reality shifts the focus of the solution away from trying to fix the problem, to planning strategies that would minimize potential damage and mitigate potential safety hazards."

-- No Spam Please (anon@ymous.com), November 30, 1998.


Steve,

>These facilities also have converted their inventory management control systems to small inventory levels so that inventory levels are running about 1 to 2 days capacity. A few years ago, the industry averaged a 1 to 6 month supply in storage tanks.

So they've got about a year to convert back to higher inventory levels, which is easier than building new refineries.

>Anyone have any knowledge or comments?

I was a programmer at a major oil company research center for five years a while ago, and have two relatives working in the oil industry now. I've been working on raising those relatives' Y2K awareness. They each have Yourdon's _Time Bomb 2000_ book. They each know that I have extensive and varied computer programming experience and sound foundation for my Y2K views. I know one of them has no refinery contact, but I'll see what I can find out from the other.

-- No Spam Please (anon@ymous.com), November 30, 1998.


Craig,

Some reactions:

>This is nothing new.......just on a much larger scale.

But that much larger scale (and fixed, relatively short time frame) is just what makes the whole Y2K mess so dangerous.

Never forget that the oil industry's Y2K-caused disruptions will occur within the context of concurrent Y2K-caused disruptions all over the rest of North Amerrican society. That _IS_ new.

>their focus is on operating so they can get the highest possible profit margin. Contingencies are no doubt being planned.

Plans in the corporate interest are not necessarily in the public interest. Planning to maximize the assurance of supply of oil products to society is almost certainly not going to be compatible with focus on the highest possible profit margin.

>get some very specific details because it sounds as if he/she is perhaps applying a situation that affects maybe one company, to a whole industry.

Competitive pressure keeps companies in the industry using roughly the same overall technology -- whatever has proven to be most cost-effective in that era. So it's not unreasonable to suspect that Y2K-susceptibility in one company is mirrored in others until it's shown otherwise.

>There's no shortage of oil.

But the practical concern is the availability of refined petroleum products to the general population during Y2K-caused disruptions.

>"tarsand". The plants up here operate with no government subsidy and in fact provide hundreds of millions of dollars yearly to the Government of Alberta in the form of taxes and royalties. The cost to extract the oil from the sand has been falling for years, and is now only slightly more expensive to mine than it is from conventional sources.

That's about production of crude oil, not its refining into gasoline, heating oil and so forth.

--

What is the production capacity of Alberta's tar sand plants?

-- No Spam Please (anon@ymous.com), November 30, 1998.


According to the initial post, the problem is that the embedded systems cannot be accessed. Because they cannot be accessed they can not be either tested or remediated. Therefore, according to this logic, if they fail, katie bar the door.

Do electronic systems fail? In everyday life, that is? Of course, they do. Everything electronic that I've either bought at the store or worked on in a long engineering career has eventually failed.

So, let's see now. I'm going to take a multibillion dollar refinery and built it on top of an embedded system. That embedded system has a calculated Mean Time Between Failures of x years. Let's say for a start that x = 10. That means that the mean time between failures of that one system is 10 years......some will fail early, some will last for years longer. This is your classical Gaussian distribution -- bell shaped curve. It might be that the system has a 10% probabillity of failing within 1 year. This is the system that I built my refinery on. Smart, wasn't I?

Gary North provides the report as unsubstantiated. He also asks for help in either substantiating or refuting it.

While I expect problems with oil refining and distribution, I don't give much credence to having refineries shut down because they were built on top of embedded systems. Urban legend, anyone?

-- rocky (rknolls@hotmail.com), November 30, 1998.


A few thoughts:-

1. Weren't five guys recently killed trying to restart a refinery in the US. Is a restart normally this dangerous? More to the point will it be possibly more dangerous post-y2k?

2. Oil has to get to the USA to be refined - shipping, in addition to the GPS system reaching capacity in 9/99, is going to be a mess worldwide.

US NAVY GPS SYSTEM

http://tycho.usno.navy.mil/gps_week.html

There are 80,000 non-compliant ships. No port in the worls is yet compliant.

http://marketspace.altavista.digital.com/WebPort.asp?ArticleId=541

3. Oil from the likes of Saudi Arabia - having worked there for three years I have no faith in their ability to organise a piss-up in....uh,.......... organise a camel race.

4. Same goes for most other oil-producing countries.

Maybe oil's well that ends well..... :-)

-- Andy (andy_rowland@msn.com), November 30, 1998.


Jack, Gayla,

Re: "reserves"

Because of the geological, technological, and economic realities of the petroleum exploration and production business, there are various types of "reserves", depending on context.

The cost of bringing oil and gas out of the ground varies a great deal, depending on circumstances. For instance, in Saudi Arabia the oil is just a short distance below the surface and does not cost much to pump up, nor does it cost much to drill the short wells needed to reach it. In the Alberta tar sands, the cost of extracting each barrel of oil is several times as much as the cost of pumping a barrel of Saudi oil.

If the market price of oil is $10 per barrel but it costs $15 per barrel to bring out of the ground from a given reservoir, one might sensibly decide that it is uneconomic to continue oil production from that reservoir and just turn off the pumps.

Another factor is that although an oil company may deduce from magnetometer or seismometer measurements taken above ground that oil or gas is likely to be in a certain area below ground, no one can be _sure_ until drilling a well down into that area to find out what and how much is actually there. So there's a difference between the petroleum reservoirs for which exploratory wells have directly shown the content and extent and the reservoirs for which the content and extent are just estimated from above-ground measurements.

Some areas have been more intensively explored for petroleum than others. If no one has looked in area XYZ, who knows if any oil is there?

From these and other factors, the petroleum industry has derived multiple definitions, which are all-too-often abbreviated to just "reserves" in the general press, leading to conflicting figures and understandings.

One measure of reserves is "proven reserves" (official terminology): the amount that would be produced if there were no change in prices or other economic conditions, no technological advances occurred, and no further discoveries were made. [Reliance on only this measure makes it look like oil's going to run out in just a few years.]

The key condition in understanding "proven reserves" is _if nothing changes_. Also, note that this definition assumes that no one will produce oil where the cost of production exceeds the price for which the oil can be sold. In fact, economics, technology, and exploration have been continuously changing. When oil prices do down, "proven reserves" decline because some oil becomes unprofitable to produce. When oil prices rise, "proven reserves" go up because some formerly unprofitable oil production becomes profitable at the higher prices.

Here are some figures from Earth Day '96: Are We Running Out of Oil?:

In 1945 proven oil reserves in the U.S. were 20 billion barrels. In 1993 proven oil reserves in the U.S. were 23 billion barrels.

Between 1945 and 1993, 135 billion barrels of oil were produced in the U.S., but 138 billion barrels were added to U.S. proven reserves because of the changes in economics, technology, exploration, and so on.

Another type of reserves is "ultimately recoverable". For this, it is assumed that economics are no obstacle, and all areas are explored. Only technological change is left as a variable.

According to that same article, the estimate (1996) for ultimately recoverable U.S. reserves was 99-204 billion barrels, and for ultimately recoverable global reserves it was 1.4-2.1 trillion barrels. The global estimate for what would be left in the ground as technologically unrecoverable (with current technology) was 4.1-5.4 trillion barrels.

-- No Spam Please (anon@ymous.com), November 30, 1998.


Well...my husband is operations manager of an independent power plant (gas turbine) and has worked in the industry for over 20 years. He says that this is one of the big worries. He agrees with the original poster's scenario and take on the oil refineries status.

He says that his power plant will be Y2k-compliant - no problem - BUT without fuel and with no place to send the electricity it won't do anyone any good. Period.

The whole system must work, or none of it works. If they can't get parts, they are screwed..simple little parts. He says that in the normal day to day operation of the plant, stuff breaks *every day*.

We got problems kids...big ones.

-- Bobbi (volfnat@northweb.com), November 30, 1998.


But for the near future (13 months) - if it isn't already drilled and "pipelined" - it isn't accessible. So your are left with just those that are already under production. requires lots of power and control and communication to move the oil safely. Cleanly.

Requires very few screw-ups in very few places to move it dirtily and dangerously.

Deepity doo-dah, deepity day. My oh my what a messy day....

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), November 30, 1998.


A mountain bike just moved up higher on my wish list, with spare parts and a tube patching kit.

"Alternative" products may get popular real soon. *Sigh*

-- Diane J. Squire (sacredspaces@yahoo.com), November 30, 1998.


Diane, don't forget spare tires.

As for inaccessible embedded systems, I've read that the offshore oil rigs have many of these installed deep under water. Anyone have the facts on this?

This is a site put up by Lloyd's Register, the major maritime insurance conglomerate: The Year2000 Problem: What systems are at risk? Y2K in maritime environments.

Even if a tanker reaches port, it may not be possible to unload its cargo....

-- Tom Carey (tomcarey@mindspring.com), December 01, 1998.


FYI from the World Oil trade magazine.

(http://www.worldoil.com/archive/archive_98-04/bug-shemwell.html)

Here is an excerpt:

>>It is estimated that the average oil and gas firm, starting today, can expect to remediate less than 30% of the overall potential failure points in the production environment. This reality shifts the focus of the solution away from trying to fix the problem, to planning strategies that would minimize potential damage and mitigate potential safety hazards. <<

The article explains that an offshore oil platform may have more than 10,000 embedded chips governing both automated and manual tasks. Many of these are difficult to get to, such as under water.

-- Andy (andy_rowland@msn.com), December 01, 1998.


GN today posted an item about Sen. Strom (you mean I'm not dead yet?) Thurmond, chair of the Senate Armed Forces Committee, asking the DoD about the effects of a 70 percent loss of refinery capacity. GN/ Thurmond claim that's the percentage being bandied about *inside the industry.* Can anyone here confirm, deny, comment on that? My daughter's mountain bike is looking better all the time, although it won'tbe much use in Maine in January without snow chains.

-- JDClark (yankeejdc@aol.com), December 01, 1998.

Oh damn! I was going to plant golden queen corn in that field, but now I have to build a stinking oil refinery! I tell you this y2k preparation just NEVER seems to end.

-- doktorbob (downsouth@dixie.com), December 01, 1998.

Embedded systems sometimes do get placed in rather inaccessible locations: in satellites, deep under off-shore oil rigs, etc. No doubt these particular systems are engineered to have a very long life expectancy--but did the people in charge really think about Y2K? Who knows? Until a few years ago, NASA was still buying and installing noncompliant software; DoD made the same mistake last year. What the situation is in oil refineries, I've no idea, but a basic lesson may apply: never, never underestimate human stupidity.

The online version of the April issue of "World Oil" (which various posters have already cited and linked to) makes it clear that, for whatever reason, most embedded systems in U.S. oil production facilities will not be checked in time. This article was written by three gentlemen in the oil industry with outstanding credentials; I've seen it cited in various forums over the past six months. It also no doubt formed the basis of Sen. Thurmond's questions to Deputy Defense Undersecretary John Hamre in Sept. about whether or not the Defense Dept. could handle a 70% reduction in U.S. refining capacity. It's worth noting that Hamre did not really challenge Thurmond's premise; Hamre didn't provide any good answers, either.

The "World Oil" article's statistics were for oil refineries just starting to remediate their embedded systems in April 1998. While some refineries may indeed have gotten a much earlier start, the article's authors give the impression that such early birds are rare. To jump to another energy sector, one sees that most power companies have started actual remediation of embedded systems just this year. (Many fixed their billing software first; one suspects the same pattern in the oil and natural gas industries.) Some haven't started work on embedded systems yet. For instance, Conectiv Corp., a power company based in Wilmington, DE, has done 0% remediation of its embedded systems in generation, transmission, and distribution facilities. (N.B. I have close friends with little children living in Wilmington, so this fact really got my attention.) That's not some unsubstantiated accusation by a wild-eyed Y2Ker. It's Conectiv's own admission, in its latest 10Q filing with the SEC. Conectiv does proudly note that its billing systems are ready.

Again, never underestimate human stupidity.

-- Don Florence (dflorence@zianet.com), December 02, 1998.


One year later ... fuel shortages will tank the system.

-- got strong legs? (pump@iron.work), November 06, 1999.

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