10-year-old gasoline…???

[mdsalemi]

1,000,000 gallons of gasoline held at storage facilities in New Jersey and Maine, which were put in storage after superstorm Sandy ten years ago, are being released this summer. This is not crude to be refined. This is refined gasoline…

For the chemists among us, Is this going to be any good? Six month old gasoline in a two stroke engine won’t work. We always talk about old gas in our cars because of the fuel injection. Now there’s ten year old gasoline being released into the market?

Thoughts anybody? Is this going to be any good?

[Bonnyboy]

I don't know the actual answer but I had a related conversation last year with a guy who worked at a refinery and he said that the fuel in the big tanks is turned over regularly so it is always "fresh enough" to be used  -  60,000 gallons come out -  60,000 gallons of new go in.    He said that if it sits too long it has to be "lightly refined" again or just diluted with good stuff in amounts that won't affect performance. 

He said one of his jobs when he was much younger was to check the freshness of the fuel and they would sell the fuel that got older for some reason or another to the discount fuel shops so he told me not to put "discount" fuel into my toys because you never know. 

It all comes down to money and the refineries don't want to loose any money so they keep their inventory as fresh as possible, but for fuel that was in reserves somewhere else - you would hope that they would be constantly turning over the inventory to keep it fresh. 

[mdsalemi]

Hi Ian,

Well that makes perfect sense!

Without some kind of government intervention (like it or not, and politics aside), nobody likes to store large amounts of petroleum products because of the price volatility. My friends who own a small fuel distribution company in Michigan have the capability of storing tens of thousands of gallons, which would be many, many weeks worth of fuel oil and gasoline. They now only keep a few days supply since they don't want to top the tanks only to see their wholesale price go down the next day.

So if anyone was smart about this, what they were doing is drawing this down and replacing it as it went over the past decade. The gas then, isn't really ten years old.

[GM]

Fun fact: Contango and backwardation are terms used to define the structure of the forward (futures) curve. When a market is in contango, the forward price of a futures contract is higher than the spot price. Conversely, when a market is in backwardation, the forward price of the futures contract is lower than the spot price.
If oil/gas prices are expected to rise (contango), you'd want to store it, and if prices were expected to fall (backwardation), you'd want to sell.

[mdsalemi]

If oil/gas prices are expected to rise (contango), you'd want to store it, and if prices were expected to fall (backwardation), you'd want to sell.

That's all for "the suits" and Wall Street to worry about.

For the oil and gas retailers, they simply don't want to get caught with costly inventory. So they store very, very little these days as I mentioned. Most of their business is kind of steady, so if they buy high (they won't know that) and suddenly the price drops, any inventory may be at the high price.

There's no telling when the next refinery fire, pipeline burst, or insurgents in Nigeria, or shortage of additives will drive up the price, or a glut may lower it. Nobody has a crystal ball that works.

This "million gallons" apparently in my first report on this was wrong, it's 1M barrels, or 42 million gallons. It will be released in chunks of 100K gallons each to try and moderate any price rise in the Northeast this summer. I don't think it's enough to make much of a difference...but heck I'm not in the business.

The US Energy Information Administration said that in 2021, New York State consumed 14 million gallons a day of gasoline. Add the other NE states to that and you'll realize that 42M gallons, particularly in 100K increments is just a blip.

[MikeSimon]

Gasoline that is being kept in large storage facilities for longer periods is not the final product we are getting at the pump. If it was, they would have to have different storage for different grades of fuel. (octane ratings). Fuel that comes out of storage is purer than pump gas and is being modified before put in tankers to reach the pumps (ethanol added, knock inhibitors added etc.) What makes fuel bad and not last is not the basic CmHn molecule composition but the additives.

[mdsalemi]

Gasoline that is being kept in large storage facilities for longer periods is not the final product we are getting at the pump...What makes fuel bad and not last is not the basic CmHn molecule composition but the additives.

Great information, thanks--

[wwheeler]

Lubricating oil is a similar deal in that it is the additive packages that go south. The base oil can be recycled and then new additives put back in. In gas like Mike said, it is the additives that go south first.

[mbpaul]

Since the USA uses about 8 million barrels a day, how much of the million barrels is going to go in a typical gallon that we buy at the pump?  And how much do you think it will it decrease the price for each gallon we buy? 

[mdsalemi]

Since the USA uses about 8 million barrels a day, how much of the million barrels is going to go in a typical gallon that we buy at the pump?  And how much do you think it will it decrease the price for each gallon we buy?

This load of gas, apparently, is in two storage locations. Maine and New Jersey.  Also the designation was the north east, and to maybe moderate price in this area over the summer months…won’t effect me or you. Maybe the only effect is to stop paying storage fees…???