Refiner

How can a business survive and thrive while spending $5.30 to make a product that sells for $1.90? That’s what’s happening in the booming renewable diesel (RD) market, where government subsidies allow RD to compete directly with petroleum diesel even though RD is inherently more costly to produce. But as new plants keep coming on stream, RD profit margins are coming under closer scrutiny. In today’s RBN blog, we analyze RD profit margins and show how they are changing as the market continues to expand. 

When you transport crude to market by pipeline its going to get mixed up with other folk’s production being shipped on that pipeline unless you have an exclusive pipeline – which is not the norm. Some pipeline systems use a batch mechanism to separate individual parcels but the usual approach is to mix together like crudes in a common stream. When that happens the pipeline operator uses a quality bank to credit or debit shippers for differences in the quality between the crude they put in and what they take out of the pipeline. Today we explore how quality banks work.