Delta Airlines' Refinery

Henning

Henning

Taxi to Parking
Gone West
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iHenning
Well, we just docked up and started unloading the first 210,000 barrels of Sahara crude at Delta's refinery dock in Marcus Hook PA. It's being operated by Monroe Energy. It's a nice new dock Conoco Phillips built up 2 years ago right before they shut down operations here. Everybody here seems quite happy and determined to make it work for Delta as Fed Ex is keeping a close eye on it with the other eye on another closed refinery across the river. Our relief gets to finish the discharge as we are on our way home, hopefully I'll catch my flight.:hairraise:
 
Re: Delta Airline's Refinery

Henning said:
Well, we just docked up and started unloading the first 210,000 barrels of Sahara crude
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So Henning, tell us about your new gig? You alluded to walking into something good a while back but I didn't hear any more. I need some good news these days. Best of luck to you. And from Leslie too.
 
Re: Delta Airline's Refinery

JOhnH said:
So Henning, tell us about your new gig? You alluded to walking into something good a while back but I didn't hear any more. I need some good news these days. Best of luck to you. And from Leslie too.
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Just a tug boating gig Lightering tankers to get them light enough to make it up the Delaware river for now, decent enough paycheck till the economy picks up or the world ends, whichever comes first.:D Tell Leslie I said hi and I'll stop in and trade y'all a ride back out in the 310.
 
Re: Delta Airline's Refinery

I wonder how that refinery operation is working for Delta. The fuel isn't being used in its own planes, as I understand--they're just using it to keep their books more in the black when fuel prices go up. Makes brilliant sense in theory, but I do wonder if it's working in practice.
 
flyingron said:
Union Carbide theme song: Ten little, nine little, eight little indians...
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Wow. Hadn't heard that joke in a very long time.

Of course, college freshmen this year weren't born for another 10-11 years after Bhopal... now that'll make you feel old...

And for the youngsters who don't know the context of the joke...

http://en.wikipedia.org/wiki/Bhopal_disaster
 
Re: Delta Airline's Refinery

jpower said:
I wonder how that refinery operation is working for Delta. The fuel isn't being used in its own planes, as I understand--they're just using it to keep their books more in the black when fuel prices go up. Makes brilliant sense in theory, but I do wonder if it's working in practice.
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We just brought in the first load of crude, so we'll see how the refinery fires back up, it's been closed for the last 2 years. Your understanding is incorrect BTW. They will use the Jet A and trade the gasoline, Diesel and other distillates that they can't crack into kero for more Jet A, at least that's the way it's supposed to work according to Monroe who's operating the refinery for them.
 
Re: Delta Airline's Refinery

Art VanDelay said:
It didn't really work for DuPont back in the 80's when they thought they'd get into the refinery business to edge out the competition.

http://mobile.bloomberg.com/news/2012-04-19/delta-s-oil-refinery-plan-flies-against-economic-sense
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I have a feeling they will make it work, Monroe seems quite determined to make it work for them, and the facility from what I understand was bought at the right price. The main concern I had was who was going to run it, and they have a bunch of guys who know what they are doing. Considering the profit in the oil business, it can't be as big of a mistake as when they bought Pan Am.
 
Re: Delta Airline's Refinery

The profit in the oil business all comes from the upstream end. There's basically no profit in refining right now; we've been selling off a lot of our refineries because the margins just aren't there.
 
Re: Delta Airline's Refinery

Katamarino said:
The profit in the oil business all comes from the upstream end. There's basically no profit in refining right now; we've been selling off a lot of our refineries because the margins just aren't there.
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Is it because of lack of demand due to the slow economy? I would suspect the margins will come back when the economy heats up, correct? So this must mean our current refining capacity is not the bottleneck in the energy supply chain right now due to lower demand?
 
Henning said:
I have a feeling they will make it work, Monroe seems quite determined to make it work for them, and the facility from what I understand was bought at the right price. The main concern I had was who was going to run it, and they have a bunch of guys who know what they are doing. Considering the profit in the oil business, it can't be as big of a mistake as when they bought Pan Am.
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Well, they didnt "buy" PanAm. They bought some of the route network and some of the airplanes to operate those routes ( and me..).

Those routes give them an International presence they would not have today without them. Too bad they forgot to ask your opinion.
 
Re: Delta Airline's Refinery

Henning said:
Your understanding is incorrect BTW. They will use the Jet A and trade the gasoline, Diesel and other distillates that they can't crack into kero for more Jet A, at least that's the way it's supposed to work according to Monroe who's operating the refinery for them.
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Ahh, yes. I just looked it up, and it looks like you're right. Not sure where I heard what I heard.
 
Re: Delta Airline's Refinery

Anthony said:
Is it because of lack of demand due to the slow economy? I would suspect the margins will come back when the economy heats up, correct? So this must mean our current refining capacity is not the bottleneck in the energy supply chain right now due to lower demand?
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The margins were never that high. They were, and are, well below other manufacturing industries.

The reason companies like Exxon make a lot of money, is because they sell a lot of product. The profit margin is very low.

If the people running it do it well, Delta could save 5-6% from having to purchase it, however the risk is in it not running well. Henning says they have the right people in place. Let's hope that's true :)
 
Re: Delta Airline's Refinery

There is a hell of a lot of profit between the refinery and the rack available, all you have to do is cut the gargantuan wastes of money in operations. There always has been plenty of profit available as long as they operate in a careful and competent manner. Just because proit doesn't make it to taxable income doesn't mean it doesn't exist. Eliminating all the waste and corruption and there's a margin for sure. Heck, you get two free gallons of product out of a barrel of crude typically getting 44 gallons from a 42 gallon barrel. But yes the people who are pulling it out of the ground combined with those who own and are collecting o the mineral lease are the real top dogs on the money tree.
 
Re: Delta Airline's Refinery

Mafoo said:
The margins were never that high. They were, and are, well below other manufacturing industries.

The reason companies like Exxon make a lot of money, is because they sell a lot of product. The profit margin is very low.

If the people running it do it well, Delta could save 5-6% from having to purchase it, however the risk is in it not running well. Henning says they have the right people in place. Let's hope that's true :)
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I know that overal margins in the industry are sub 10%, and below many other industries, but I didn't realize refining was that low. Thanks for the info.
 
Re: Delta Airline's Refinery

Anthony said:
I know that overal margins in the industry are sub 10%, and below many other industries, but I didn't realize refining was that low. Thanks for the info.
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Do you all seriously believe there is only 10% profit in the biggest, richest companies and industry on the planet? Get real, there is a big difference between reported profits and real profits.
 
Re: Delta Airline's Refinery

Henning said:
Do you all seriously believe there is only 10% profit in the biggest, richest companies and industry on the planet? Get real, there is a big difference between reported profits and real profits.
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I am surprised the SEC doesn't know this and investigate.:rofl:

If you are talking about free cash flow vs "profit" I agree which after all is all that really matters.

Cheers
 
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Re: Delta Airline's Refinery

X3 Skier said:
I am surprised the SEC doesn't know this and investigate.:rofl:

If you are talking about free cash flow vs "profit" I agree which after all is all that really matters.

Cheers
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Profit is also what the CEO and other officers and BOD take home, FMD those salaries bonuses and $250MM yachts, budgets that are larger than some nation's. I have seen it, I have met the players. I've been employed there. It's really enough to pay everyone's income tax and then some by selling energy and water. It's just so unbelievable...
 
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Re: Delta Airline's Refinery

Care to elaborate on this "two sets of books" theory?

Henning said:
Do you all seriously believe there is only 10% profit in the biggest, richest companies and industry on the planet? Get real, there is a big difference between reported profits and real profits.
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Re: Delta Airline's Refinery

Henning said:
Profit is also what the CEO and other officers and BOD take home, FMD those salaries bonuses and $250MM yachts, budgets that are larger than some nation's. It's really enough to pay everyone's income tax and then some by selling energy and water.
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Getting technical, all those bloated salaries are Costs, not Profits and the bigger the salaries and other perks doled out to those wonderful people who, BTW, only get paid so much so they can keep score with the other guys, the lower the reported profits.

In fact, some of those bozos run up the salaries, perks and other assorted nonsense like artwork in the corner office, especially in smaller firms, so the company breaks even and owes no taxes. Part of the "costs" is having the company pay the taxes on their salaries and perks for them although the IRS and SEC clamped down on those type of arrangements a while ago IIRC.

A couple of my buddies and I did a research study back using the 10K forms when we were in the Biz School for a Stats class where we compared the salaries of the 5 highest paid officers to reported profits, ROE, ROI and other measures of "goodness". To no ones surprise, no correlation with anything was apparent except compensation with others in the same industry.:rolleyes2:

Cheers
 
Re: Delta Airline's Refinery

wabower said:
Care to elaborate on this "two sets of books" theory?
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There doesn't have to be two sets of books. All they have to do is use the legal deductions provided by our elected representatives.

Of course most of those elected officials have been bought off by lobbyists (which in itself is a deduction), but WE THE PEOPLE still have the power to vote those people out of office if we care enough about it. But those same crooked elected officials are the ones that buy off citizens votes through various pork projects and other entitlements.
 
Re: Delta Airline's Refinery

Henning said:
Profit is also what the CEO and other officers and BOD take home, FMD those salaries bonuses and $250MM yachts, budgets that are larger than some nation's. I have seen it, I have met the players. I've been employed there. It's really enough to pay everyone's income tax and then some by selling energy and water. It's just so unbelievable...
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I never understood why anyone cares about this. The only people hurt by some bozo making far more money then he is worth, are the shareholders of the company, that have a right to fire him if need be (or sell there stock and go own something else if they don't like it).

Unless he is stuffing the money under a mattress, it hurts no one else that he has it. He got to employ you, so you got a job out of it. Thousands of people got to work to make the 250 million dollar boat, and I am sure he paid a ton of taxes on it.

What he didn't use to employ people by spending it, he has sitting in a bank. And because it's there, banks can loan money to small businesses to do things like make payroll.

So a few people get to live like rocks starts. Who cares? I sure don't.
 
Re: Delta Airline's Refinery

Mafoo said:
What he didn't use to employ people by spending it, he has sitting in a bank. And because it's there, banks can loan money to small businesses to do things like make payroll.
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I know a few small business owners who would love for the banks (who we bailed out, BTW) to do just this.
But that's another discussion for another place, like SZ, which I don't go to.
 
Re: Delta Airline's Refinery

Mafoo said:
I never understood why anyone cares about this. The only people hurt by some bozo making far more money then he is worth, are the shareholders of the company, that have a right to fire him if need be (or sell there stock and go own something else if they don't like it).

Unless he is stuffing the money under a mattress, it hurts no one else that he has it. He got to employ you, so you got a job out of it. Thousands of people got to work to make the 250 million dollar boat, and I am sure he paid a ton of taxes on it.

What he didn't use to employ people by spending it, he has sitting in a bank. And because it's there, banks can loan money to small businesses to do things like make payroll.

So a few people get to live like rocks starts. Who cares? I sure don't.
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Good post. Thanks.
 
Re: Delta Airline's Refinery

X3 Skier said:
Getting technical, all those bloated salaries are Costs, not Profits and the bigger the salaries and other perks doled out to those wonderful people who, BTW, only get paid so much so they can keep score with the other guys, the lower the reported profits.

In fact, some of those bozos run up the salaries, perks and other assorted nonsense like artwork in the corner office, especially in smaller firms, so the company breaks even and owes no taxes. Part of the "costs" is having the company pay the taxes on their salaries and perks for them although the IRS and SEC clamped down on those type of arrangements a while ago IIRC.

A couple of my buddies and I did a research study back using the 10K forms when we were in the Biz School for a Stats class where we compared the salaries of the 5 highest paid officers to reported profits, ROE, ROI and other measures of "goodness". To no ones surprise, no correlation with anything was apparent except compensation with others in the same industry.:rolleyes2:

Cheers
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There's no doubt that a "Good Old Boys" club exists with top execs and BODs in many industries. However, whether a compensation package is "bloated" or not isn't your call to make unless you're a shareholder. Sure, some execs live a flashy lifestyle that everyone sees, but in most cases, it isn't an easy job, and it's a job with an incredible amount of risk and responsibility. Some execs, like politicians, are incompetent but well connected, and never seem to suffer for their incompetence. However, most of them do a pretty decent job. How much would cutting executive pay at, say, XOM move the profit needle? Probably not much. Sure, you could cut EVERYONE'S compensation and have more "profit," but for how long? And what qualifies you to decide whose salary should get cut?

In my opinion, the larger problem with some big businesses (which also includes labor unions) is their influence over public policy to accomplish what they can't do through market competition. That usually means shutting out competitors or making it harder for competitors to enter a specific market. It only works because the politicians love the perks and the public largely looks at politicians as arbiters of the job market. It's really a failure of the politicians, which is something over which all voters have direct control.


JKG
 
So, can I taxi up to the Delta refinery and buy some 93 octane, no lead, no alcohol, at a fair price?
If so, I'm game...
And I don't care how well the CEO lives as long as some of it trickles down..
 
Dr. O said:
So, can I taxi up to the Delta refinery and buy some 93 octane, no lead, no alcohol, at a fair price?
If so, I'm game...
And I don't care how well the CEO lives as long as some of it trickles down..
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I recall some years back how the Delta execs set up their compensation so that even if Delta went belly up they got their full packages. This right before they started "renegotiating" the payouts of their pilot retirees.
One pilot I know claims he could have taken a lump sum payout (this before the shenanigans) or get monthly checks. He chose monthly. Wrong choice. Later, he saw those checks reduced by about 90% in a cost reduction move. If you work for a company for 20 3- years with the expectation that you will earn a retirement, then I believe you are by God supposed to get it. Else if you know you are not going to get a retirement, then save for it yourself.

http://www.dp3.org/data/Piding out.pdf
 
Re: Delta Airline's Refinery

X3 Skier said:
Getting technical, all those bloated salaries are Costs, not Profits and the bigger the salaries and other perks doled out to those wonderful people who, BTW, only get paid so much so they can keep score with the other guys, the lower the reported profits.

In fact, some of those bozos run up the salaries, perks and other assorted nonsense like artwork in the corner office, especially in smaller firms, so the company breaks even and owes no taxes. Part of the "costs" is having the company pay the taxes on their salaries and perks for them although the IRS and SEC clamped down on those type of arrangements a while ago IIRC.

A couple of my buddies and I did a research study back using the 10K forms when we were in the Biz School for a Stats class where we compared the salaries of the 5 highest paid officers to reported profits, ROE, ROI and other measures of "goodness". To no ones surprise, no correlation with anything was apparent except compensation with others in the same industry.:rolleyes2:

Cheers
Click to expand...


It's all a matter of perspective. Anything I pay above cost is profit, how the company disburses those profits to meet the bottom line net that they have to pay out in dividends is no concern of mine. They are basically screwing the stockholders who are not in large stake holdings, since I don't play the game, I don't care. You can play all the semantic games with it you please, but itis what it is, a game the little guy will always lose; like the Midway at the carnival. Pretty soon we should start charging the Indian Casinos a small tax, 2-5%, a token to being truly assimilated to greed, the New American Way.
 
Re: Delta Airline's Refinery

Henning said:
a token to being truly assimilated to greed, the New American Way.
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First off, greed is as old as mankind. Plus the form of "greed" that we think of today is not a bad thing.

Greed as a sin, or a negative thing in general, related to taking more then you could use, thus the value of what you took dissolves. For example, you grow 10x times the corn you can eat, but being greedy you don't let anyone else have any. 90% of your food rots, and in the end it becomes worthless.

That's an example of greed, and why it's a bad thing.

Money does not spoil, or become something that because you have it, it's worthless. You can save it, and use it later for a charity, or to make sure your kids have a better life.

There needs to be a new word for what wanting more money is, because it sure is not greed, or a bad thing.
 
Mafoo said:
Money does not spoil, or become something that because you have it, it's worthless. You can save it, and use it later for a charity, or to make sure your kids have a better life.
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Inflation can make a big pile of money, become worthless overnight.

It's also multiplicative, so the larger pile of money grows faster, and prices tend to start off as inelelastic, so it looks good on paper for the people with the biggest money piles, for a while.

Then prices catch up.

So in a way, you're right. There are words for it, though. Wanting more money to counter increased costs isn't greed, it's maintaining equilibrium. Wanting more money than that, is profit.

Durable goods help temper this, but unless someone has the money to buy them, hoarding durable goods doesn't work when the monetary system goes off the rails. Example being the latest gold craze... It's a bubble, because there will not be as many buyers as there are sellers when those who are buying now want to cash out and do something with it.

Most durable goods are significantly up Maslow's hierarchy of needs. Perishable goods are what people will want first in really bad times, but... are perishable... Food being a prime example.

Money in America is a sideways measure of power and influence. With enough money, you can make someone with less do (almost) anything. And maybe that shouldn't even be couched with the "almost".

The ultimate example of that, is bail outs. The people with money/power/influence screwed up and were about to lose it all... so before they did, they changed the rule book.
 
Dang it, "profit" should have been "profiteering". Can't edit from Tapatalk. ;)
 
Re: Delta Airline's Refinery

Mafoo said:
First off, greed is as old as mankind. Plus the form of "greed" that we think of today is not a bad thing.
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I disagree, the greed we have now is a selfish hurtful hateful greed, we have gone mean, we have gone bad; like Pet Sematery...
 
denverpilot said:
Money in America is a sideways measure of power and influence. With enough money, you can make someone with less do (almost) anything. And maybe that shouldn't even be couched with the "almost".
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That all depends on how principled that person is, and whether they may be willing to compromise for cash. The impulse that might cause someone with less to compromise his principles for money is what that same person probably calls "greed" when a CEO does it, except the CEO has most often done SOMETHING productive to get it.

denverpilot said:
The ultimate example of that, is bail outs. The people with money/power/influence screwed up and were about to lose it all... so before they did, they changed the rule book.
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Whom would that be? The politicians were largely responsible for the banks failing, but the banks really didn't care because they knew that the politicians would be there to save their rear ends.

With all of the politician's engineering of the "new" General Motors, it will be interesting to see how long that train wreck lasts before it goes off another cliff. It isn't looking good at the moment.


JKG
 
Re: Delta Airline's Refinery

Henning said:
I disagree, the greed we have now is a selfish hurtful hateful greed, we have gone mean, we have gone bad.
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lol, people used to do far more vicious things to people centuries ago in the name of greed, then most of us can imagine.
 
Re: Delta Airline's Refinery

Henning said:
It's all a matter of perspective. Anything I pay above cost is profit, how the company disburses those profits to meet the bottom line net that they have to pay out in dividends is no concern of mine. They are basically screwing the stockholders who are not in large stake holdings, since I don't play the game, I don't care. You can play all the semantic games with it you please, but itis what it is, a game the little guy will always lose; like the Midway at the carnival. Pretty soon we should start charging the Indian Casinos a small tax, 2-5%, a token to being truly assimilated to greed, the New American Way.
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Seems to me that you either don't know what you're talking about (most likely), or are missing a huge opportunity to use your knowledge to become one of those big cheese fat cats that you like to lampoon.


JKG
 
Re: Delta Airline's Refinery

Mafoo said:
lol, people used to do far more vicious things to people centuries ago in the name of greed, then most of us can imagine.
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Yes, and look where we stand, in the same filth unable to learn enought to raise ourselves up. We live in a permanent and geometrically expanding world of hate and violence where everybody has to pack a gun 'just in case'. You can roll with it or you can refuse, but just remember, you get the world you make.
 
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