This was posted on another forum.It is a very good article concerning oil industry dependencies,dated April 1999.Does anyone have newer info on the oil industry? I didn't know this ...

"But the Scada system is the heart of Texaco's embedded-system network. If it can't collect data from the field devices, the company has no idea what's going on in its operations, can't analyze its production, can't bill customers - can't function as a company. By law, if Texaco loses contact with its field devices, it shuts down in four hours." http://www.wired.com/wired/archive/7.04/texaco.html?pg=1&top...

Texaco's been working on this for a looooong time. Started sooner than most oil companies. So, I imagine theyre pretty far along on remediation. Cheryl

-- Desertj98 (jturner@ptway.com), August 24, 1999

Answers

Texaco has been working on it a loooong time. But the gist of the old Wired article you cite and other oil industry conversations give me the impression that they (and most other majors/pipeline companies) will prevail. A more pressing risk is the half of our oil supply that's imported. Most sources of our imported crude and products is from third wolrd backwaters such as Nigeria, Gabon, Venz, Mexico, and the Mideast. In the context of that Wired article I've also wondered about our +1 million bl/day trans Alaskan Pipeline. Here's a key question: In many of these third world backwaters the oil companies (many of which are at least partially owned by our majors) seem to be diligently working on their y2k probs. But in a place like Nigeria or Venz, the rest of the country's infrastructure has done very little. Can oil operations continue to function if power, supplies and society unravels around it? In the third world they have ample independent power generators and security because they're used to lots of societial probs. In conjunction with pre-millenium hoarding, and if the answer to my question is no---- get set for something worse than the '79/80 shortage, even if the Texacos prevail... Carpe Diem

-- Downstreamer (downstream@bigfoot.com), August 24, 1999.

It's a classic supply chain problem. Getting the crude to the U.S. is a very complicated problem. We have the oil fields themselves, through a pipeline or by ship to storage, then by pipeline or ship to U.S. port. At each stage you need energy to get the job done. You are dealing with countries that may be unstable economically (I just read about coming trouble in Ecuador and Argentina) or socially. They have infrastructure problems of their own. Aside, we may have shot ourselves in the foot regarding the Panama Canal. It looks like the Chinese will have control and can decide which ships are allowed through. How much of our oil comes by way of the canal? Anyone know? When you add up all the elements the result as I see it is a high probability of failures. As those of us who are old enough remember it only took a 10% oil shortfall to cause us severe problems in the 70's. Our imported oil is around 50% of what we use so you can see the potential for recession is high and that is only from oil. How much of our domestic output requires oil? Will your company be able to stay in business if the price of oil triples? Even if you don't believe in TEOTWAWKI you would be wise to prepare for economic trouble next year.

-- J.R. (MGRMOS@AOL.COM), August 24, 1999.

The Panama Canal doesn't have much oil market significance. Most oil trade tankers are too big to get through it hence 2 pipelines were built to transfer oil from east to west. One's in Panama and one's in Costa Rica. Most Calif refineries are supplied by CA or Alaskan production but maybe 15-20% of their crude runs comes through these pipelines. Ocassionally, when CA gasoline prices spike to 20 cents over the US Gulf there is a gasoline arb that opens and small product tankers are chartered to go west through the canal. Furthermore the contention that China is gonna control the Panama Canal is bunk but thats for a different forum.

-- Downstreamer (downstream@bigfoot.com), August 24, 1999.