OT: Oil Refineries - this is very off topic

Of course he's talking complete bollox. If they are after something else than what is this other magical product of crude oil that they are after?

Yes, petrol is a by product of the process, but there are many different by products of the cracking process, petrol and diesel are just two, there are many more, but to say that petrol is an inconsquential part which just happens to be produced would be wrong.

I told him he's talking bollox but that's just not good enough. We both reasonably well aware of what refineries do, the fractional distillation, further cracking, catalystic processing etc. I think he was saying that things like the cosmetic industry, chemical industry, paints and plastics industry plus many more are where the refineries originated. I said they're tiny in comparison to the light fuel oil industries but that isn't the answer. It's not an argument about what refinaries do it's about why, in the first instance, they are there.

The argument is meaningless today. Once upon a time, before cars existed in large numbers, it was true. But as soon as cars started to proliferate, petrol became an important part of the industry's product range. Removing it from the equation would totally change the economics of oil extraction/refining.

Another important factor is that the composition of petrol is a much more tightly controlled than it was in the early days, so production costs are higher.

JohnR ( snipped-for-privacy@hotmail.com) gurgled happily, sounding much like they were saying :

Sounds about right for Usenet, then.

AIUI, LPG is, but not petrol.

Why the first refineries were built is irrelevant. If they didn't make money on what they did they would close. What's important is the products and the economic viability of them *now*.

The message from "JohnR" contains these words:

They are there to produce a range of distillates, of which petrol is just one. To say that a refinery is there for any one fractin in particular is to misunderstand the economics of industry.

It's a bit like people who work for a firm saying "I'm the most important person here - if I stopped operating the lifts no one would be able to do their jobs". It may be partially true, but it doesn't convey any useful information other than that the person making the assertion isn't terribly bright.

I understand all that - I also understand it was/is a bizarre and stupid argument to be having but it boiled down to whether higher grade petrolium as used in engines today was historically nothing more than a waste byproduct of other (historically) more important processes that now just happens to have become an extremely lucrative comodity or whether it is and always has been a primary part of what refineries are all about. My argument is that modern refineries exist and always have done, primarily to produce the varying grades of light oil combustion engines need. I've looked at the pie charts - well over 3/4 of what a refinery produces is fuel oil of one grade or another. Surely that would have to make the other constituents incredibly valuable to justify the argument that fuel wasn't what they were initially about. My own opinion is that modern super refineries are purely a result of the fuel needs of the world's internal combustion engines and that in earlier times (perhaps) individual non-fuel industries did the crude oil refining to get what they needed themselves, this now cheaper to buy from a super refinery but that's just my opinion. The argument started because of the vast profits oil companies are now recording and how according to stevieboy they're being made because petrolium fuel, being a waste product of these other processes, doesn't cost the oil companies a penny.

His argument was that production costs are zero (not delivery or provision) because petrol essentially is simply a waste product of the other processes.

I wrote about half a page of waffle but reading it back every point I made was a circular argument so I deleted it and I'll just link this page instead:

Apparently, the whales are to blame. That ought to shut your friend up.

Plastics are made from oil. Where it comes in the refining process I've no idea, but considering how many pruducts are contained in plastic containers, or have a lot of plastic in their construction. It must be significant in the refining process. Average cost of plastic moulding granules, BTW is around £1000 a ton. Mike.

tell me about it - i was struggling to argue my corner i'll tell you.

I doubt it - good site btw I like reading history.

Oil Industry call it feedstock and it accounts for about 1.5% of production IIRC.

Is that straight profit after expenses and R&D and all?

Such as what? Lamp oil?

Paints, plastics and chemical industries, it was a bit of a chicken and egg argument but the website bweebar posted helps puts things in perspective quite nicely. I think the early refineries (as opposed to oil production facilities) were set up to produce lamp oil and mechanical oils on an industrial scale for steam engines. Seems I had it about right after all.

You're missing the point. Let me explain more.

Imagine I'm refining 10 barrels a day. Out of the total volume, 2 barrels is a highly flammable mixture that no one wants. That's a waste product.

Someone comes along, and finds a use for my highly flammable waste product. They'll even buy it off me. Great! I sell them my 2 barrels, and anything I get is pure profit.

Then loads more people come along, wanting to buy the stuff. Great - I need to refine a load more oil, because these people will buy the stuff that I thought no one wanted.

A few decades down the line, most of my business is selling the highly flammable mixture that I thought no one wanted.

Yeah, so he's right? I argued that oil refining originated from the need to get the fuel oil and not the other stuff.

Well, not really - not in the form that the question was put, at any rate. Refineries as they are today exist (and were built) primarily to supply petrol.

If by fuel oil you mean lamp oil (a lot like diesel), not petrol, you are totally correct. This was the first commercial oil-derived product (for the first 30-40 years). This is the main reason oil started to be pumped (for use in lighting).

Depends on what you define as a refinery as well, cracking came in to make fuel.

A point to note in support, the Ethyl Gasoline company was one of Americas most successful companies in the first half the the twentieth centurey and it was formed just to supply high quality flammable "waste".....