Dick Mills in one of his columns had an excellent point that, to paraphrase, stated it may prove extremely difficult to sort out Y2K failures from other causes. A search of Yahoo's news server with terms such as electric grid, natural gas, oil refinineries, etc. turns up some interesting but difficult to interpret headlines. The electric grid is frequently strained by the heat, recent natural gas line failures and earlier in the year, power plant explosions. Hadn't quite realized the difficulty oil refinieries have been having. Oil production is tied into electrical production and shortages of the former would lead to increased prices and if severe enough unreliability of the latter. Tosco Corp closed its Avon oil refinery after an explosion, Chevron's Richmond refinery has now blown up twice, one in late March and again in July.

http://biz.yahoo.com/rf/990723/9z.html http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/1999/07/16/MN6448.DTL

Would like to say this business as usual but it isn't. a) Alaska oil pipeline output was slowed secondary to an inability to refine their product b) Gasoline prices at the pump are affected c) Both Tosco and Chevron saw quarterly year over year declines in profits.

http://biz.yahoo.com/prnews/990722/ct_tosco_c_1.html http://dailynews.yahoo.com/headlines/bs/story.html?s=v/nm/19990724/bs/chevron_earns_3.html

Don't know if these problems are Y2K related but if we have enough of them we won't need Y2K for electrical problems. Either way its not good news.

-- Anonymous, July 27, 1999

Answers

I went and read OPIS and Platt's alerts as well as the SF Chronical coverage from these time periods. These incidents were NOT Y2K related according to published sources and the industry buzz that I gather on a very informal basis.

However, you are correct in assuming that the state of CA puts itself in a very precarious position through it's somewhat misquided attempts at environmental regulation. Witness the recent MTBE fiasco. The industry increased complexity to the tune of about 10 billion dollars to meet this spec in california for cleaner gas and what they got was a chemical which is quite resistant to removal from the water tables which it has leaked into. In any event, this special gas which is not really sold elsewhere in the US is typically only made in California refineries and one or two gulf coast refineries as well as Hess's St. Croix. In other words, if there's a supply disruption, refiners must rely on current supply inventories and any product which can be blended or imported to the state. Importing and blending take time and money which equates to higher prices at the pump. Yes Virginia, you can have cleaner gas, but it's gonna cost you.

As far as crude supplies, California is unique in that it has a huge source of domestic crude oil. Unfortunately much of this oil is very heavy SJV crude which requires a lot of effort to refine. However the proximity of these fields to SF and LA are a good thing indeed for the citizens of CA. My gut feeling is that during 2K, this proximity and supply will be called on to meet shrinking CA imports (which typically come from the Far East). You are correct to assume that any supply interruptions to ANS would be disastrous for the West Coast. As far as I know, the refineries in the Bay and some in LA depend heavily on this crude. The recent disclosure and whistle blowing by BP employees regarding imminent problems with TAPS is not a good thing at all.

-- Anonymous, July 27, 1999

SJV - ANS - TAPS - ?

-- Anonymous, July 28, 1999

Jim,

You have read extensively on this. Second Dave's post. What is going on at BP? Also, I certainly hope these industry mishaps are not Y2K related considering the time to repair. If you believe the subsequent thread, though, there are technicians performing undocumented, unannounced, unsupervised Y2K experiments.

-- Anonymous, July 28, 1999

SJV = San Joaquin Valley Crude Approx 13-16 API gravity, commonly refers to a group of crudes that are gathered in this area of North Central California most of them are "heavy crudes" meaning they are thicknchewy ;) and tougher to refine. Also usually higher in sulphur. There are also some lighter bbls. in this area which are used in LA and the Bay.

ANS = Alaskan North Slope crude oil, pumped from the ground in Alaska then transhipped down to Washington and California refineries and very occasionally to Korean and other far east markets. This is one of the Key marker crudes for the west coast as many refineries there run it. Its around 22 API and lower in sulphur than SJV.

TAPS - big old alaskan pipeline system which carries the crude accross the tundra and past the mooses to the place where it is loaded onto ships.

I hadn't heard anything about unexplained or unauthorized system tests re: Y2K on this pipe, but I will check around to see what the buzz is.

-- Anonymous, July 28, 1999

Thenks for the clarification, Jim.

-- Anonymous, July 28, 1999