That's an interesting add-on to your article on refinery closures http://www.theoildrum.com/node/6016

Aug 26, 2009
Valero has been seeking a buyer for the refinery and was close to a deal with Brazil's state-owned oil company Petrobras (PETR4.SA) in early 2008 before a fire at the refinery halted the sale, sources familiar with the transaction have told Reuters.

Valero, the largest U.S. refiner, has refused to identify potential buyers.

Since the January 2008 fire, Valero has been talking to both Petrobras and PetroChina (PTR.N) about a possible sale, according to the sources.

The Aruba refinery cannot make finished motor fuels like gasoline and can make only intermediate feedstock, but is capable of running low-grade crude oils that used to sell at deep discounts to higher-grade crude oil.

As worldwide demand for motor fuel has dwindled in the global economic downturn, the discount for low-grade crudes has evaporated, crushing the refinery's profitability.

Sources familiar with the refinery have said any buyer would have to make extensive investments worth billions of dollars to improve the plant's capabilities.

"I don't know why anyone would want to buy it," said one of the sources.

http://www.reuters.com/article/idUSN2627434720090826

This gives us a glimpse into the future, many unexpected events, as we are not familiar with the internal cost and operating structure of oil companies.

And for those who don't like windfarms going up for visual reasons, in this case they are better than refinery stacks

http://c.photoshelter.com/img-get/I0000Ohr7pl4MZAg/s

Which of course means they can keep on building windmills well past 100% of their power demand, and use the excess for desalinating.

What is even more interesting and fun is to zoom down to the area that is this relatively small (by world standards) decrepit oil refinery, switch to sattelite view and look at the number of acres it occupies scattered along the coast of Aruba...I say we buy the ground, junk out the metal for scrap and build a concentrating mirror solar plant right there!

Think of the possibility...plenty of sunlight, out of the hurricane belt area, and a perfect place to test the economics against wind with the wind farm right across the island, and it would help diversify the islands electric production so that they would not have to worry as much about any variability issues...and when the island moves over to plug hybrid and electric cars (perfect here, the island is barely over 20 miles from tip to tip!)you have a renewable energy showcase and plenty of juice for the transportation as well...what a thought...

RC

You seem to imagine that building oil refineries and pipelines and supertankers requires no fossil fuels, or trivial amounts compared to building wind turbines, etc.

Whatever we do, we will consume fossil fuels in building things. The important question is whether those things will still be useful when fossil fuels are scarce or absent.

If we build a coal-fired power station using coal and oil, when the coal gets too expensive to burn, the station is useless. If we build a wind turbine using coal and oil, when the coal and oil get too expensive to burn... the wind turbine still produces power.

How much turbine-power was used to build that ship and those cranes and trucks, and feed all those operators?

Not very much. Manufacturing and water transportation use very little oil.

Manufacturing is an inside activity - who wants internal combustion engine fumes? If you want an example of a very large world wide fleet of electric vehicles, look no farther than the plant floor, where electric fork lifts are everywhere.

Jerome,

Your articles on TOD are always a welcome morale booster for those of us who aren't confirmed doomers.

I am very interested in learning what energy intensive industries fit in well with wind power and also manufacture high value products.Little such information is readily available to someone without a lot of time to look for it.

Desalinated water is a high value product in Aruba.Can desalination plants run mostly or exclusively on wind power?Or does the nature and design of the desalination equipment require that it run continiously for long periods?

A wind powered irrigation pump for example can be turned on and off frequently without damaging it, and wind would be fine as a power source so long as the pump will run enough hours total in a week.Of course the productivity of the irrigation system is zero unless it is running, and continious power might be necessary to justify the expense of installing irrigation.Irrigation is obviously out of the question in Aruba, but there are probably plenty of places where wind powered irrigation would work without long distance transmission lines.

So my question should perhaps be reframed thus:

Are there any energy intensive industries that could locate profitably in places with good wind potential and run exclusively on wind power?

Interesting article with useful comments by TOD staff and old timers. Given the fact that banks can still run risky bets for a big payday and be bailed out if they fail, why would they settle for chump change returns even if produced wonderful results and benefited society. Until we force banks to act like banks and perform traditional banking functions, it just ain't gonna happen. Right now a big investment bank like Goldman Sachs who could care less about a project like this can borrow money from the Fed at close to 0% and put it in to long treasuries and make a guaranteed return of perhaps 5% going forward based on the way rates have been trending. Or they could leverage it 10 to 1 and get 50% if the bansters and Fed thugsters print them enough wampum. And these are safe bets. Unless the structure of taxpayer support of banks is changed, it's all just spit into the wind

Do any of your colleagues want to author TOD articles?

Keep up the great work; Aruba is an excellent choice for wind power, and I wouldn't be surprised if they add to the current capacity.

Things are happening on the other islands too, but as I haven't been able to find a public source about it, I can't say more at this point...

On Curaçao: last that I read here was the plan to have 20% electricity from wind in the last years of the next decade.

I share your suspicion ;-)

And I agree - transport based on wind could come back into use. Modern sails and lines are made from high tech oil based fabrics and fibres and the question of cost and energy cost vs using the inputs as fuel means making a choice does come into play. Returning to the old cotton and hemp products for sails and lines is not the only issue either. How long will the GPS satellite system remain in place? What about modern spars and rigging? Etc etc.

These are the kinds of things we should now be saving fossil fuels for. It should become a crime to waste them for superfluous purposes such as powering soccer mom's SUVs! However some return to hemp and cotton may be warranted. In Mystic Connecticut I had opportunity to visit The Plymouth Cordage Company Ropewalk: http://www.mysticseaport.org/

Sailors generally call ropes, lines ;-)

This is a 250-foot segment of the Plymouth Cordage Company's ropewalk, built by its founder, Bourne Spooner, in 1824. This ropewalk was operated by the firm until 1947, when modernization eliminated its usefulness. The original building, located in Plymouth, Massachusetts, was over 1,000 feet long and contained three rope-making grounds. It would be impossible, of course, for a sailing vessel to operate without rope, so one can understand the importance of this exhibit to the story of America and the sea.

The three main steps in the production of rope are illustrated here with the equipment that did the work. Natural fibers are first spun into yarn; many yarns are twisted together to form a strand; and then three strands are twisted together in the opposite direction to form rope. The extreme length of the building was important as the spinning and twisting had to be done in a straight line, and one needed a 1,000-foot-long path to make a 100-fathom (600-foot) rope. The tension of twisting the parts in the opposite direction at each step is what holds rope together.

Early rope was made of either American or Russian hemp, but by the 1830s abaca (manila) was being imported from the Philippines and rapidly became the preferred fiber. Manila is cleaner than hemp, as well as more durable and flexible, and does not have to be tarred, as did hemp, to resist deterioration by heat, rain and salt water.

Best hopes for preservation of some of the skills and knowledge from our maritime past, it might come in handy again.

Not near as great but certainly humbling is the experience of being on a small fishing boat whose diesel dies with the batteries near fully dischaged as the tide and wind bear it out to sea. The tenuousness of existence, dependent on a single alternator nut lost in the bilge comes home very quickly. It is not hard to generalize from that little specific experience to the whole of the complex world mechanical system we rely on for 'simple' day to day existence. Of course the same fishery that boat was working had been manned by sail power only vessels (by fed reg) until 1952. A lot can change in 30 years.

Jerome -

Thanks.

So then, a business based on manufacturing towers might indeed become a going concern should several wind farms start being built in the Mid-Atlantic states. I guess it all depends on how fast these projects come to fruition.

I think the initial idea here in Delaware was to form a joint venture with an existing supplier of heavy manufactured items used in the nuclear power industry, with the rolled steel coming from a small steel mill in northern Delaware. The former party has since backed out, so this venture is looking for other alternatives, such as possibly setting up the fabrication facility right on the grounds of the steel mill. As the mill is right on the Delaware River, the tower segments could be transported to the wind farm site by barge.

As far as I can tell from the various bits of information I've obtained, the manufacture of these towers appears to be fairly straightforward moderately large steel fabrication, with nothing or not much in the way of specialized items such as large steel forgings. However, I imagine that special attention must be paid to the connections between the segments that make up the tower.

OMG -- Technology used for constructing and installing such offshore projects is old hat for the petroleum industry. Be it a wind turbine or a well head it's the same engineering for the most part. The problem is costs: when oil/NG prices jump oil industry actvity jumps and so do the costs. Right now building/installing offshore WT's would be much cheaper than a year ago. But there's the rub: when energy prices fell so did much of the incentive for the alts.

Offshore Gulf of Mexico (excluding the Deep Water) has been sliding down hill for many years. Lots of capability/personnel here to handle the new work. Last year the state of Texas awarded offshore wind leases in the GOM. But haven't heard anything about actual development plans yet.

OMGlikeWTF -

If you scroll up a bit you will see the question I asked Jerome re whether the fabrication of the towers are typically carried out by the turbine supplier or handled as a separate part of the project by an independent steel fabricator.

Jerome indicated that the towers are usually procured locally if possible. However, you are saying that the turbine supplier typically also supplies the towers. I'm curious as to the different answers.

If towers have to be manufactured under license from the turbine manufacturer, then that would appear to make a business scheme aimed at fabricating towers far less attractive than if the towers were a separate part of the project.

I am also not surprised that there are a limited number of vessels capable of installing offshore turbines, as it looks to be a highly specialized operation involving the delicate handling of some pretty large items.

By the way, are you involved in wind power in the US or in Europe? Are the procurement and construction practices markedly different between the two markets?

Engineer-Poet,

What have I done wrong? Was there an error in my reasoning?

Jerome certainly is a talented banker and financier, I read some of his blog and if you don't question the basis of endless exponential growth, he is quite convincing. However, bankers in general will not provide solutions to a problem that is caused by limits. Jerome frequently talks about his clean new energy here, that is coming from windpower. He does this because he makes a living from it. On one of his previous posts I could already show, that in Germany, installed onshore windpower is largly saturated after only 10-20 years and does not follow any exponential function, as do the interests, from which he makes his living. In fact, it follows the very Hubbert curve with a R2 of some 0,87 or so.

Windpower does not provide a solution to the paramount scarcity of metalls and energy. It is just a new dream sold to the ignorant masses to steer the flux of investments in a direction and Jerome uses this site as a means of advertisement to do so. Much more interesting would be an analysis of how useless all these efforts are (in Germany, where onshore windpower is almost saturated, it participates in the order of 1-2% to the primary energy consumption of that country). It would be interesting to work out the sharp contrast between all this hype and bluster on the one hand and reality on the other.

Please forgive me if my opinion is not yours and if I put my opinion in some ironic manner. But please don't become personal.

-Snomm

2. no, but in this case the wind input will be particularly easy to manage, for 2 reasons: 1) the wind output itself is unusually regular due to the wind patterns

Jerome, there are some months though, especially september and october, with days with (almost) no wind. So the oil plants backup that you mentioned will have to remain in place (or must find other solutions or cope with days without electricity (and water)).

Kotzebue island operates off of a wind & resistance heating grid. Spinning reserve is the variable resistance load.

Basically, an excess of wind almost all of the time which is dumped into a resistance heating load. This is what I propose for overnight on Aruba (and perhaps more than overnight).

Best Hopes for Renewable Energy on islands,

Alan

Thanks :-)

Edit: I've read some of your earlier articles as well and see that this info was available in one of those as well. Sorry for not UTFS.

Jerome, Thanks for your response. Since bigger turbines are cheaper there's the obvious question: Are turbines still getting bigger? Any idea how much bigger they are expected to get?

I do not see that the price dropped from 1,000 to 2,000 size. So then are bigger turbines really still getting cheaper?

Strange, hydro power on Kodiak Island has dropped in 2009 while wind and diesel are up. Nothing in the news section to show why that is.