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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Elroy Jetson who wrote (48808)	9/10/2005 6:55:30 AM
From: John Carragher	Read Replies (1) of 206326

I hope you do not get ill, but it is a fact it cost more to transport and store small amounts of diesel vs large amounts of gasoline/heating oil,jet. check full truck load rates vs less than truck load rates you will see quite a mark up for points per gallon delivered. It was such a negative to store diesel i converted all our terminal storage tanks to heating oil in northeast . why because the colonial pipeline was at max capacity in fall , winter, and you had to ship product via tanker from gulf to northeast at (1970's) much higher prices. Just storing heating oil in summer fill vs shipping in winter versus storing diesel and taking away storage from heating oil paid to clean the tank, change pipes, etc to put the tank back into service as a heat tank or gasoline tank. I am telling you diesel lacks enough demand to be clog in the distribution system.. you lump diesel with jet fuel and heating oil.. each product needs to stand on its own for profitability. oh, each conversion had to have at least a 12% dcf return to take on the project. Prices were rising then too , i also eliminated heavy six oil, and asphalt storage (e.prov ref.continued to mfg asphalt not part of marketing operation.) It required heating oil to keep the tanks in pour status plus heat lines to loading rack and from receiving dock. I was not very popular with asphalt and heavy six oil sales department. However, unless they could increase throughput significantly i showed them it cost us more in terminal expenses to store and heat the products than the realization they produced in sales. I believe in about 18 months in the job i coverted some twenty five tanks, closed down operations in five terminals. Plus went to rack blending for diesel medium.

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