The oil and gas industry is vital to many industries and is of importance to the maintenance of industrialized civilization itself and that is critical concern for many. Oil accounts for a larger percentage of the world’s energy consumption and the world consumes roughly 30 billion barrels of oil each year. While society, on a normal day to day basis consumes a large quantity, the demand spikes when areas are struck with catastrophic situations, such as the two hurricanes that hit this year. Focusing on the oil and gas industries as a supply chain manager, during the hurricanes, we evaluated Valero and how they overcame the obstacles they went through during and after the storm. Valero has headquarters in Corpus Christi and Houston along …show more content…
The gas supply chain has many phases but can be grouped together as five phases and some being more invasive then others. All companies in the Oil and Gas industries use the, some slightly different, process of phases the gasoline takes to be distributed. The first phase that is taken is the domestic and import of oil that is sent to the refinery, the next 4 steps are the steps that are taken to turn the oil and gas into a product that can be used for the public and how it is distributed. All phase of the gasoline supply chain are very crucial and no phases can be skipped over.
Our team went with Valero Energy to research and how they run their day-to-day operations and what procedures they take when faced with difficult situations such as hurricanes. Valero Energy operates two business segments, refining and ethanol and current operate 15 refineries throughout the US, Canada, the UK and Aruba. Valero Energy delivers its products through tankers, pipelines, trucks, or rail cars. This company is well known and on the up and up to try and become the largest independent refiners in the US and currently churns out roughly 3 million barrels per day. The phases taken by Valero the same as other well-known companies but they take pride in holding a lower cost at their products.
Phase Two of the gasoline supply chain involves refineries manufacturing crude oil into gasoline and other petroleum products. When severe
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Mother Nature gave us natural resources to patronize and natural gas is one of them. Small quantities of ethane, propane, butane and pentane are found in the natural gas composition but it is mostly made up of methane. The high volume of pipeline gas makes it difficult for it to be transported in its gaseous form. This is the reason why the oil industry is dominating because of how easy it can be transported. Pipelines are suitable for transporting pipeline natural gas but constructing the suitable infrastructure is very expensive and not technically feasible for global transportation.1 In addition, for you to be able to make it in the gas industry you need trading partners to buy your natural gas. Having said that, one can deduce that the only way to make a
America is not the only country that is recovering from an economic recession. The global marketplace is experiencing the same struggles that the recession has brought to countries across the world. Many companies have been impacted in a negative way from the recession, causing them to make some difficult decisions to survive during these turbulent times. When it comes to supply chain management, “it is remarkable how rapidly many businesses have successfully scaled back their supply chain operations in order to sustain profitability during difficult times” (Article p1)
Gasoline are complex mixtures of hydrocarbons (Gary et al, J., 2007) additives, and blending agents. The composition of gasoline depends on the refinery processes, the crude oil used, the overall balance of product demand, and the especially the product specifications. The typical composition of gasoline hydrocarbons (% volume) is: 4-8% alkanes; 2-5% alkenes; 25-40% isoalkanes; 3-7% cycloalkanes; l-4% cycloalkenes; and 20-50% total aromatics (0.5-2.5% benzene). Table 1 shows
A proposed oil pipeline project will have the capacity to transport thounsands of barrels of crude oil to refineries in Oklahoma, Illinois, and the Gulf Coast of Texas. The Keystone XL is a 1,711-mile pipeline delivering Canadian crude oil to United States oil markets. This project is a response to the market demand for heavy crude oil in the Unites States. The pipeline will also be used to transport crude oil to the Cushing tank farm in the Midwest region. Many refineries in the Gulf Coast region provide millions of barrels per day, This region accounts for almost half of U.S. refining capacity. The refineries produce large amounts of refined petroleum product, like gasoline and jet fuel. The negative impacts of
The supply of gasoline to various regions of the United States also plays a significant role. The country is divided into five different regions: Gulf Coast, East Coast, Midwest, Rocky Mountain, and West Coast. Some of these areas do not have enough refineries in their own region to support the consumption and therefore need it brought in. For example, the West Coast has very limited pipeline connections from the other regions. It must rely on water shipments and its small amount of refiners for its supply. If something should happen to the water shipments, i.e. a hurricane, tsunami, etc. it would greatly effect the supply of gasoline.
Flood of the century or not, tech companies are taking steps to limit their exposure to the next traumatic event. Some are revising their inventory models; others are implementing supply chain software and setting up Web supplier hubs. Everyone wants tighter collaboration with suppliers and timelier information from customers. Tech companies are trying, in short, to make their supply chains shorter, transparent, and as flexible as possible. Rethinking of supply chain management at large networking, telecom equipment, PC and chipmakers is the remedy in this unstable
MEJRI, Mohamed, and Daniel DE WOLF. 2013. "Crisis Management: Lessons Learnt From The BP Deepwater Horizon Spill Oil". Business Management And Strategy 4 (2): 67. doi:10.5296/bms.v4i2.4950.
Valero possesses a vast amount of different raw materials, allowing for it to produce many different types of fuel such as gasoline, diesel, kerosene, and several others. Every day it produces at least thirty-five thousand barrels of gasoline, a seemingly insane amount to me because the refinery covers just seven hundred twenty-two acres, and uses only certain
Russell, R. S., & Taylor III, B. W. (2014). Operations and Supply Chain Management, 8th edition. Hoboken, New Jersey: John Wiley & Sons, Inc.
By asking Mrs. Montes how difficult operations were for her storefront based off the guideline Valero headquarters set she answered with the following statement, “Honestly it is easy, and they have an organized and clean operation. Nothing in the process seems to be an issue other than when consumers put a wrench in it. Like the recent time when gas stations did not have fuel due to mass panic.” This prompted us to raise the following question regarding the hurricane “Do you think it was more the consumer or the supply from the fuel companies that caused shortages?” We received the following response “It was the people, everyone went into mass panic and did not give the fuel companies a chance to explain there was no shortage or react quickly to the lines of cars those few days. This definitely caused a huge disruption in our fuel process and caused low reports in a mass amounts of stores that Valero could not stock as quickly as they would in a normal schedule.”
The EPA has clean fuel requirements that require the use of blended fuels that burn cleaner than regular gas. They also require the fuel to be oxygenated to decrease CO2 emissions. But with the added benefit to the environment, this cleaner fuel is more costly to produce and takes longer to produce. Regulations have made it more difficult to run refineries in the U.S. These regulations have prevented any oil and gas company form building a new refinery since 1976 (Hargreaves, 2007). American’s used up 17 million more gallons in 1995 than what was produced. And in 2005 that number reached 36 million gallons coming from outside the United States (Hargreaves, 2007). Even with this huge increase in consumption no new refineries have been opened in the U.S. because regulations in other countries are more cost effective. Most of the laws meant to help with the environment will almost always cause the price of gas to go up.
“When a station receives a load of gasoline, an invoice is generated that list the price of gasoline by grade. The price will be determined by the prevailing wholesale cost at the time of delivery, the freight, and federal, state and local taxes applicable to the station 's location” (DeCostanza, P1). Labor expense is also factored into the estimation of the cost of gasoline at gasoline stations as a baseline.
The US consumed 142 billion gallons of gasoline in 2007 and the tax applied on it is 18. 4 cents on one gallon. All around the US, there are around 162,000 retail gasoline outlets. With the price of crude oil hovering around $100 a barrel, it is no wonder that concern is growing about the gas prices being so high. After all, modern economies are kept moving by this lifeblood. For instance, in the United States alone personal vehicles consume more than 140 billion gallons of diesel fuel and gasoline per year.However, there are several factors that contribute to the gas prices being so high. Given below are a few of them. Increasing Demand for Oil One of the main catalysts for the incessant rise in gas prices has been one of the most
A wide range of petroleum products which include gasoline, diesel, liquefied petroleum gas (LPG) and aviation fuel is produced by Petron Port Dickson Refinery (PDR), which has a rated capacity of 88,000 barrels per day and operated by Petron Malaysia Refining & Marketing Bhd. Petron subsidiaries in Malaysia has eleven strategically-located depots and terminals to distribute their world-class fuels. Therefore, they are able to ensure a continuous and dependable supply of quality fuels to their various customers through this potent distribution network.
Significant oil companies such as Sonatrac was founded and became immersed in LNG production and transportation. Along with Exxon, Shell, and Burma Oil who became profoundly involved (Kennedy). As refineries were built in the nineteen sixties, the growth of LPG expanded. The regional business had its own structure for distribution and sale. During the oil crisis of nineteen seventy-three, many countries built liquid recovery plants when they realized LPG is a significant product. The expansion within the middle east of LPG production expanded tremendously between nineteen seventy-five and nineteen eighty-five topping out at thirty million tons by nineteen eighty-five. By nineteen eighty, exportation of LPG went worldwide (History of LPG).