By Nick Cunningham
A growing number of refineries around the world are either curtailing operations or shutting down entirely as the oil market collapses.
Oil prices have fallen precipitously to their lowest levels in nearly two decades. Typically, falling oil prices are a good thing for refiners because they buy crude oil on the cheap and process it into gasoline, jet fuel, and diesel, selling those products at higher prices. The end consumer also tends to consume more when fuel is less expensive. As a result, the profit margin for refiners tends to widen when crude oil becomes oversupplied.
But the world is in the midst of dual supply and demand shock — too much drilling has produced a substantial surplus, and the global coronavirus pandemic has led to a historic drop in consumption. Oil demand could fall by as much as 20 percent, according to the International Energy Agency, by far the largest decline in consumption ever recorded.
Consumption of jet fuel around the world has plunged by 75 percent. Average retail gasoline prices in the U.S. are dropping below $2 per gallon nationwide and have already fallen below $1 per gallon in some places. They will fall further still.
"If oil continues to sell at such a low price, some of those companies are going to have severe financial issues tr… https://t.co/hHNTRFJ7uc— KENS 5 (@KENS 5)1585594804.0
In fact, margins even fell into negative territory, meaning that the average refiner was losing money on every gallon of gasoline produced. Refiners now find themselves facing a painful financial squeeze.
"We're seeing gasoline cracks at negative margins. We're seeing jet cracks even worse," Brian Mandell, an executive with Phillips 66, said on a March 24 phone call with investors. "Cracks" refer to the difference between the cost of buying crude oil and selling the refined product, and it stands in as a reference point for a refiner's profit margin.
One of the main strategies that refiners use when a particular product is oversupplied is to alter their processing mix. Facing a glut of gasoline, refiners could switch their operations away from gasoline to a focus on diesel, where margins have not declined by nearly as much. "With strong price signals pushing refiners towards diesel production, they would have made immediate adjustments to tweak their refined product yields," RBN Energy, a consultancy, wrote in a report.
However, some refiners already switched over to diesel following tighter international sulfur regulations on maritime fuels that took effect at the start of this year, which placed a premium on low-sulfur diesel. Having already tapped that strategy, the ability to adjust away from gasoline production is "likely limited," RBN concluded.
Collapsing Demand Leads to Refinery Closures
There are around 3 billion people on some form of a lockdown around the world. In those circumstances, refiners have seen buyers vanish overnight.
"We're seeing even our Latin American customers asking us if they can back out of cargoes now, so we see that the demand destruction is starting to move toward Latin America," Brian Mandell, the Phillips 66 executive, told investors.
With no buyers, gasoline is set to pile up in storage. Refiners are looking at no other choice but to curtail or shut down operations.
Valero Energy, for instance, recently announced that it would limit output at six of its 12 U.S. refineries. ExxonMobil announced significant cuts to its refineries in Texas and Louisiana, citing the lack of sufficient storage capacity. Notably, Exxon said it would shut down its gasoline unit at its Baytown, Texas, complex, the company's largest such unit in the United States.
"The refiners are struggling mightily, due to the steep drop in demand," John Kilduff, a partner at Again Capital LLC, told Bloomberg. "The poor refining margins will push companies to reduce operating rates further."
The danger for some refineries is that they cannot simply throttle back and operate at really low levels. "In our experience, crude throughput in the 60 percent to 70 percent range is approaching the minimum rates that a refinery can operate without completely shutting down units," RBN said.
According to Phillips 66, even that threshold might be optimistic. "I don't think a good rule of thumb would be down in the 60 percent range for refiners. Most refineries can't turn down that far," Robert Herman, an executive with Phillips 66, said on an investor call. With refiners already lowering processing, "we're nearing kind of minimum crude rates in many of our refineries today," he added.
In other words, facing a mounting glut and no ability to lower output further, some refineries may simply need to shut down entirely.
We are now witnessing oil refiners not just cutting runs, but in some markets they are completely shutting down.… https://t.co/0ndZjNMUHE— Javier Blas (@Javier Blas)1585569542.0
In one particularly unusual move, India's Reliance Industries said it would simply sell the crude oil that it had in transit at sea, rather than allowing the cargo to arrive at its refineries. Reliance, which operates the world's largest refining complex, said it would instead cut processing rates. "As of now, the plan is to cut refining throughput in April because demand is not there," a source told Reuters.
In the U.S., refineries unable to switch away from gasoline are most at risk, as are those in the Midwest and the Rockies, where access to pipelines and storage capacity is a fraction of that on the Gulf Coast, according to RBN.
"It is not difficult to see run cuts of 10 mmb/d (million barrels per day) soon, perhaps peaking at 15-20 mmb/d at the height of the pandemic. This is likely to force some refineries to close down, while others will reduce rates severely," research firm FGE said in a report on March 30.
Running out of Storage, Oil Prices to Crash Further
The situation could unravel rather quickly. Consumers aren't consuming and refiners are lowering their operations. Ultimately, that means that oil drillers will have no place to sell their oil.
A number of pipeline companies have already asked oil drillers to cut back on their production because the pipeline system was becoming overwhelmed.
The estimated 20-million-barrel-per-day surplus will lead to storage filling up in the next two to three months. To avoid such an outcome, analysts widely see crude prices crashing even further.
"Demand for gasoline (no driving) and jet fuel (no flying) has now crashed and inventories for these products are already brimming. Refineries in many places are now losing money for every barrel they process, or they have no place to store their output of oil products," Bjarne Schieldrop, chief commodities analyst at SEB, a Swedish corporate bank, said in a statement. "For land-based or land-locked oil producers, this means only one thing: the local oil price or well-head price they receive very quickly goes to zero or even negative."
Reposted with permission from DeSmog.
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By Brian Bienkowski
Fish exposed to endocrine-disrupting compounds pass on health problems to future generations, including deformities, reduced survival, and reproductive problems, according to a new study.
Low Levels Lead to Generational Impacts<p>Researchers exposed inland silverside fish to bifenthrin, levonorgestrel, ethinylestradiol, and trenbolone to levels currently found in waterways.</p><p>"Our concentrations were actually on the low end" of what is found in the wild, DeCourten said, adding that it was low amounts of chemicals in parts per trillion.</p><p>Bifenthrin is a pesticide; levonorgestrel and ethinylestradiol are synthetic hormones used in birth controls; and trenbolone is a synthetic steroid often given to cattle to bulk them up.</p><p>Such endocrine-disruptors have already been linked to a variety of health problems in directly exposed fish including altered growth, reduced survival, lowered egg production, skewed sex ratios, and negative impacts to immune systems. But what remains less clear is how the exposure may impact future generations.</p><p>For their study, DeCourten and colleagues started the exposure when the fish were embryos and continued it for 21 days.</p><p>They then tracked effects on the exposed fish, and the next two generations.</p>
Inherited Problems<p>DeCourten said the altered DNA methylation is one of the plausible ways that future generations would experience health impacts from previous generations' exposure. Hormone-disrupting compounds have been shown to impact DNA methylation, which is an important marker of how an organism will develop.</p><p>"Methyl groups are added to specific sites on the genome, [the exposure] is not changing the genome itself, but rather how the genome is expressed," she said. "And that can be inherited throughout generations."</p><p>In addition, Brander said there are essentially different "tags" that exist on DNA molecules, which tell genes how to turn on and off. She said the exposure to different compounds may be "influencing which methyl tags get taken on or off as you proceed through generations."</p><p>The researchers said the study should prompt future toxics testing to consider impacts on future generations.</p><p>"The results … throw a wrench in the current approach to regulating chemicals, where it's often short-term testing looking at simple things like growth, survival, and maybe gene expression," Brander said.</p><p>"These findings are telling us we really at least need to consider" the next two generations, she added.</p>
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Poor eating habits, lack of exercise, genetics, and a bunch of other things are known to be behind excessive weight gain. But, did you know that how much sleep you get each night can also determine how much weight you gain or lose?
By Laura Beil
Consumers have long turned to vitamins and herbs to try to protect themselves from disease. This pandemic is no different — especially with headlines that scream "This supplement could save you from coronavirus."
Vitamin D<p><strong>What it is: </strong>Called "the sunshine vitamin" because the body makes it naturally in the presence of ultraviolet light, <a href="https://www.sciencenews.org/article/vitamin-d-supplements-lose-luster" target="_blank">Vitamin D is one of the most heavily studied</a> supplements (<em>SN: 1/27/19</em>). <a href="https://health.gov/our-work/food-nutrition/2015-2020-dietary-guidelines/guidelines/appendix-12/" target="_blank">Certain foods</a>, including fish and fortified milk products, are also high in the vitamin.</p><p><strong>Why it might help: </strong>Vitamin D is a hormone building block that helps strengthen the immune system.</p><p><strong>How it works for other infections:</strong> In 2017, the <em>British Medical Journal</em> published a meta-analysis that suggested a daily vitamin D supplement <a href="https://www.bmj.com/content/356/bmj.i6583" target="_blank">might help prevent respiratory infections</a>, particularly in people who are deficient in the vitamin.</p><p>But one key word here is <em>deficient. </em>That risk is highest during dark winters at high latitudes and among people with more color in their skin (melanin, a pigment that's higher in darker skin, inhibits the production of vitamin D).</p><p>"If you have enough vitamin D in your body, the evidence doesn't stack up to say that giving you more will make a real difference," says Susan Lanham-New, head of the Nutritional Sciences Department at the University of Surrey in England.</p><p>And taking too much can create new health problems, stressing certain internal organs and leading to a dangerously high calcium buildup in the blood. The recommended daily allowance for adults is 600 to 800 International Units per day, and the upper limit is considered to be 4,000 IUs per day.</p><p><strong>What we know about Vitamin D and COVID-19:</strong> Few studies have looked directly at whether vitamin D makes a difference in COVID.</p>
Zinc<p><strong>What it is: </strong>Zinc, a mineral found in cells all over the body, is found naturally in certain meats, beans and oysters.</p><p><strong>Why it might help: </strong>It plays several supportive roles in the immune system, which is why zinc lozenges are always hot sellers in cold and flu season. Zinc also helps with cell division and growth.</p><p><strong>How it works for other infections: </strong><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6457799/" target="_blank" rel="noopener noreferrer">Studies of using zinc for colds</a> — which are frequently caused by coronaviruses — suggest that using a supplement right after symptoms start might make them go away quicker. That said, a clinical trial from researchers in Finland and the United Kingdom, published in January in <em>BMJ Open</em> <a href="https://bmjopen.bmj.com/content/10/1/e031662" target="_blank" rel="noopener noreferrer">did not find any value for zinc lozenges</a> for the treatment of colds. Some researchers have theorized that inconsistencies in data for colds may be explained by varying amounts of zinc released in different lozenges.</p><p><strong>What we know about zinc and COVID-19:</strong> The mineral is promising enough that it was added to some early studies of hydroxychloroquine, a drug tested early in the pandemic. (Studies have since shown that <a href="https://www.sciencenews.org/article/covid-19-coronavirus-hydroxychloroquine-no-evidence-treatment" target="_blank">hydroxychloroquine can't prevent or treat COVID-19</a> (<em>SN: 8/2/20</em>).)</p>
Vitamin C<p><strong>What it is: </strong>Also called L-ascorbic acid, vitamin C has a long list of roles in the body. It's found naturally in fruits and vegetables, especially citrus, peppers and tomatoes.</p><p><strong>Why it might help:</strong> It's a potent antioxidant that's important for a healthy immune system and preventing inflammation.</p><p><strong>How it works for other infections: </strong>Thomas cautions that the data on vitamin C are often contradictory. One review from Chinese researchers, published in February in the <em>Journal of Medical Virolog</em>y, looked at <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/jmv.25707" target="_blank">what is already known about vitamin C</a> and other supplements that might have a role in COVID-19 treatment. Among other encouraging signs, human studies find a lower incidence of pneumonia among people taking vitamin C, "suggesting that vitamin C might prevent the susceptibility to lower respiratory tract infections under certain conditions."</p><p>But for preventing colds, a 2013 Cochrane review of 29 studies <a href="https://www.cochranelibrary.com/cdsr/doi/10.1002/14651858.CD000980.pub4/full" target="_blank" rel="noopener noreferrer">didn't support the idea</a> that vitamin C supplements could help in the general population. However, the authors wrote, given that vitamin C is cheap and safe, "it may be worthwhile for common cold patients to test on an individual basis whether therapeutic vitamin C is beneficial."</p><p><strong>What we know about Vitamin C and COVID-19: </strong>About a dozen studies are under way or planned to examine whether vitamin C added to coronavirus treatment helps with symptoms or survival, including Thomas' study at the Cleveland Clinic.</p><p>In a review published online in July in <em>Nutrition</em>, researchers from KU Leuven in Belgium concluded that the <a href="https://www.cochranelibrary.com/cdsr/doi/10.1002/14651858.CD000980.pub4/full" target="_blank" rel="noopener noreferrer">vitamin may help prevent infection</a> and tamp down the dangerous inflammatory reaction that can cause severe symptoms, based on what is known about how the nutrient works in the body.</p><p>Melissa Badowski, a pharmacist who specializes in viral infections at the University of Illinois at Chicago College of Pharmacy and colleague Sarah Michienzi published an extensive look at all supplements that might be useful in the coronavirus epidemic. There's <a href="https://www.drugsincontext.com/can-vitamins-and-or-supplements-provide-hope-against-coronavirus/" target="_blank" rel="noopener noreferrer">still not enough evidence to know whether they are helpful</a>, the pair concluded in July in <em>Drugs in Context</em>. "It's not really clear if it's going to benefit patients," Badowski says.</p><p>And while supplements are generally safe, she adds that nothing is risk free. The best way to avoid infection, she says, is still to follow the advice of epidemiologists and public health experts: "Wash your hands, wear a mask, stay six feet apart."</p>
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By Elliot Douglas
In early October, Britain's Prince William teamed up with conservationist David Attenborough to launch the Earthshot Prize, a new award for environmentalist innovation. The Earthshot brands itself the "most prestigious global environment prize in history."
The world-famous wildlife broadcaster and his royal sidekick appear to have played an active role in the prize's inception, and media coverage has focused largely on them as the faces of the campaign.
“Rather than a Moonshot 🌕, we need Earthshots 🌍 for this decade.” Watch Prince William’s @Tedtalks talk in full:… https://t.co/m5NCj6TQzH— The Duke and Duchess of Cambridge (@The Duke and Duchess of Cambridge)1602408749.0
But the pair are only the frontmen of a much larger movement which has been in development for several years. In addition to a panel of experts who will decide on the winners, the prize's formation took advice from the World Wildlife Fund, Greenpeace and the Jack Ma Foundation.
With more and more global attention on the climate crisis, celebrity endorsement of environmental causes has become more common. But why do environmental causes recruit famous faces for their campaigns? And what difference can it make?
'Count Me In'
"We need celebrities to reach those people who we cannot reach ourselves," says Sarah Marchildon from the United Nations Climate Change secretariat (UNFCCC) in Bonn, Germany.
Marchildon is a proponent of the use of celebrities to raise awareness of environmental causes. In addition to promoting a selection of climate ambassadors who represent the UN on sustainability issues, Marchildon's team has produced videos with well-known narrators from the entertainment world: among them, Morgan Freeman and Mark Ruffalo.
"We choose celebrities who have a lifestyle where they are already talking about these issues," Marchildon explains.
"Sometimes they reach out to us themselves, as David Attenborough did recently. And then they can promote the videos on their own social channels which reach more people than we do — for example, if they have 20 million followers and we have 750,000."
Environmental groups focused on their own domestic markets are also taking this approach. One Germany-based organization that uses celebrities in campaigns is the German Zero NGO. Set up in 2019, it advocates for a climate-neutral Germany by 2035.
German Zero produced a video in March 2020 introducing the campaign with "66 celebrities" that supported the campaign, among them Deutschland 83 actor Jonas Nay and former professional footballer Andre Schürrle. They solicit support as well as financial contributions from viewers.
"Count me in," they say, pointing toward the camera. "You too?"
"We are incredibly grateful for the VIPs in our videos," says German Zero spokeswoman Eva-Maria McCormack.
Assessing Success Is Complex
But quantifying the effectiveness of celebrity endorsement of campaigns is not a straightforward process.
"In order to measure effectiveness, first of all you need to define what is meant by success," says Alegria Olmedo, a researcher at the Zoology Department at the University of Oxford.
Olmedo is the author of a study looking at a range of campaigns concerning pangolin consumption, fronted by local and Western celebrities, in Vietnam and China. But she says her biggest stumbling block was knowing how to measure a campaign's success.
"You need a clear theory of change," explains Olmedo. "Have the celebrities actually helped in achieving the campaign's goals? And how do you quantify these goals? Maybe it is increased donations or higher engagement with a cause."
A popular campaign in China in recent years saw famous chefs Zhao Danian and Shu Yi pledge to abstain from cooking endangered wildlife. While the pledge achieved widespread recognition, both Olmedo and Marchildon say it's difficult to know whether it made any difference to people's actions.
"In life we see a thousand messages every day, and it is very hard to pinpoint whether one campaign has actually made a difference in people's behavior," she explains.
Awareness Is Not Enough
Many campaigns that feature celebrities focus on raising awareness rather than on concrete action — which, for researcher Olmedo, raises a further problem in identifying effectiveness.
"Reach should never be a success outcome," she says. "Many campaigns say they reached a certain number of people on social media. But there has been a lot of research that shows that simply giving people information does not mean they are actually going to remember it or act upon it."
But anecdotal evidence from campaigns may suggest reach can make an active difference.
"Our VIP video is by far the most watched on our social media channels," McCormack from German Zero says. "People respond to it very directly. A lot of volunteers of all ages heard about us through that video."
However, some marketing studies have shown that celebrity endorsement of a cause or product can distract from the issue itself, as people only remember the person, not the content of what they were saying.
Choosing the Right Celebrity
Celebrity choice is also very important. Campaigns that use famous faces are often aiming to appeal to members of the public who do not necessarily follow green issues.
For certain campaigns with clear target audiences, choosing a climate scientist or well-known environmentalist rather than a celebrity could be more appealing — Attenborough is a classic example. For others, images and videos involving cute animals may be more likely to get a message heard than attaching a famous face.
"We choose celebrities who have a lifestyle where they are already talking about these issues," says Marchildon from the UN. "You need figures with credibility."
McCormack cites the example of Katharine Hayhoe, an environmental scientist who is also an evangelical Christian. In the southern United States, Hayhoe has become a celebrity in her own right, appealing to an audience that might not normally be interested in the messages of climate scientists.
But as soon as you get a celebrity involved, campaigns also put themselves at risk of the whims of that celebrity. Prince William and younger members of the royal family have come under fire in recent years for alleged hypocrisy for their backing of environmental campaigns while simultaneously using private jets to fly around the world.
But Does It Really Work?
While environmental campaigns hope that endorsement from well-known figures can boost a campaign, there is little research to back this up.
"The biggest finding [from my study] was that we were unable to produce any evidence that shows that celebrity endorsement of environmental causes makes any difference," says Olmedo.
This will come as a blow to many campaigns that have invested time and effort into relationships with celebrity ambassadors. But for many, the personal message that many celebrities offer in videos like that produced by German Zero and campaigns like the Earthshot Prize are what counts.
The research may not prove this conclusively — but if the public believes a person they respect deeply personally cares about an important issue, they are perhaps more likely to care too.
"I personally believe in the power this can have," says Marchildon. "And if having a celebrity involved can get a single 16-year-old future leader thinking about environmentalist issues — that is enough."
Reposted with permission from DW.
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