I’m coining a term: Mutually Assured Refining Capacity (MARC)™. Mutually Assured Refining Capacity (MARC)™ Unlike Mutually Assured Destruction (MAD), which relies on nuclear deterrence, MARC™ binds nations through their dependence on scarce oil refineries. We can call it a working thesis, idea, or idea under development - the guard rails of energy flows, a primary way I evaluate geopolitics and its limits from time to time. The world has ~825 refineries processing ~100 million barrels per day (bpd) globally, disrupting this supply chain risks economic collapse for all. MARC™©is a term I’ve coined to highlight this overlooked force for global peace. Refineries Are Critical and Complex Typical crude refinery process diagram. TL;DR: Refinery supply chains are a complex web of global sourcing, requiring $5-10 billion, 50,000 tons of steel, 10,000 workers (with a 20% skilled labor shortage), 1,000 tons of catalysts, and 10,000 spare parts per facility, with over 10,000 failure points that can halt operations and spike fuel prices by 10-20%. TL;DR Refineries transform crude oil into essential fuels like gasoline, diesel, and jet fuel, powering modern economies. With just 825 facilities worldwide, their scarcity creates a global bottleneck. Any disruption—war, sanctions, or natural disasters—spikes fuel prices and destabilizes trade. MARC™: A New Geopolitical Force MARC™ enforces peace through economic interdependence, not fear. Nations rely on each other’s refineries to meet fuel demands. All-out war would cripple these supply chains, making skirmishes the safer option. Global Refinery Landscape The world’s 825 refineries are unevenly distributed, with Asia leading at 320 facilities (36.5 million bpd). North America has 150 refineries (22 million bpd), while Europe and the Middle East have 120 and 73, respectively. No region is self-sufficient, forcing trade reliance. Table 1: Global Refinery Landscape (2024) America’s Refining Role The U.S., with 129 refineries (18.4 million bpd), is a refining powerhouse. Yet, it imports 1.5 million bpd of heavy crude from Canada and Mexico for Gulf Coast plants. A conflict disrupting these flows could raise U.S. gas prices by ~20% ($0.75/gallon). The Complexity of Refinery Supply Chains From a chemical engineering perspective, refinery supply chains are a combinatorial marvel, integrating thousands of specialized components, precise chemical processes, and global logistics to build, operate, and maintain these critical facilities. The intricate dependencies across countries and industries amplify MARC™’s role in deterring conflict, as no nation can disrupt this web without self-inflicted economic harm. Construction and Capital Intensity Building a refinery is a massive undertaking, requiring years of planning, billions in investment, and a highly specialized labor force. The process involves sourcing materials from dozens of countries and skilled workers like welders and chemical engineers, who are increasingly scarce. Each facility is a bespoke engineering project tailored to specific crude types, with labor shortages adding significant delays and costs. Metrics: Cost: $5-10 billion per refinery. Steel requirement: ~50,000 tons of high-grade steel (e.g., from Japan, South Korea) for distillation towers, reactors. Labor force: ~10,000 workers during construction, including 2,000-3,000 specialized welders and 500 chemical engineers; global shortage of ~20% for such skilled labor (e.g., U.S. welder deficit: 50,000 by 2026). Construction timeline: 5-7 years, extended by 6-12 months due to labor scarcity. Metrics: Cost: $5-10 billion per refinery. Steel requirement: ~50,000 tons of high-grade steel (e.g., from Japan, South Korea) for distillation towers, reactors. Labor force: ~10,000 workers during construction, including 2,000-3,000 specialized welders and 500 chemical engineers; global shortage of ~20% for such skilled labor (e.g., U.S. welder deficit: 50,000 by 2026). Construction timeline: 5-7 years, extended by 6-12 months due to labor scarcity. Metrics Cost: $5-10 billion per refinery. Steel requirement: ~50,000 tons of high-grade steel (e.g., from Japan, South Korea) for distillation towers, reactors. Labor force: ~10,000 workers during construction, including 2,000-3,000 specialized welders and 500 chemical engineers; global shortage of ~20% for such skilled labor (e.g., U.S. welder deficit: 50,000 by 2026). Construction timeline: 5-7 years, extended by 6-12 months due to labor scarcity. Cost: $5-10 billion per refinery. Steel requirement: ~50,000 tons of high-grade steel (e.g., from Japan, South Korea) for distillation towers, reactors. Labor force: ~10,000 workers during construction, including 2,000-3,000 specialized welders and 500 chemical engineers; global shortage of ~20% for such skilled labor (e.g., U.S. welder deficit: 50,000 by 2026). Construction timeline: 5-7 years, extended by 6-12 months due to labor scarcity. Specialized Components and Catalysts Refinery operations hinge on advanced equipment and catalysts, each with its own global supply chain. Fluid Catalytic Crackers (FCC) and hydrocrackers require precise materials to handle high temperatures and pressures. These components are produced by a handful of suppliers, creating choke points. Metrics: Catalysts: ~1,000 tons of zeolite-based catalysts for FCC units, sourced from Germany, China; replaced every 2-3 years at $10-20 million per cycle. Hydrocracker vessels: High-pressure (up to 3,000 psi), made with nickel-chromium alloys from Russia, South Africa; lead time of 12-18 months. Coking units: Proprietary delayed coking technology (e.g., Foster Wheeler, U.S.), installation takes 2-3 years. Metrics: Catalysts: ~1,000 tons of zeolite-based catalysts for FCC units, sourced from Germany, China; replaced every 2-3 years at $10-20 million per cycle. Hydrocracker vessels: High-pressure (up to 3,000 psi), made with nickel-chromium alloys from Russia, South Africa; lead time of 12-18 months. Coking units: Proprietary delayed coking technology (e.g., Foster Wheeler, U.S.), installation takes 2-3 years. Metrics Catalysts: ~1,000 tons of zeolite-based catalysts for FCC units, sourced from Germany, China; replaced every 2-3 years at $10-20 million per cycle. Hydrocracker vessels: High-pressure (up to 3,000 psi), made with nickel-chromium alloys from Russia, South Africa; lead time of 12-18 months. Coking units: Proprietary delayed coking technology (e.g., Foster Wheeler, U.S.), installation takes 2-3 years. Catalysts: ~1,000 tons of zeolite-based catalysts for FCC units, sourced from Germany, China; replaced every 2-3 years at $10-20 million per cycle. Hydrocracker vessels: High-pressure (up to 3,000 psi), made with nickel-chromium alloys from Russia, South Africa; lead time of 12-18 months. Coking units: Proprietary delayed coking technology (e.g., Foster Wheeler, U.S.), installation takes 2-3 years. Crude Supply and Blending Refineries blend crudes to optimize yields, requiring precise chemical specifications. A mismatch in crude quality can slash output, disrupting global fuel markets. Most refineries rely on imported crude, tying them to volatile geopolitics. Metrics: Global crude trade: 80 million bpd, sourced from 20+ countries. Blending example: 70% light Brent (API 38°), 30% heavy Venezuelan (API 16°) for optimal yields. Specification requirements: API gravity 30-40°, sulfur content <2%; mismatch reduces output by 10-15%. Metrics: Global crude trade: 80 million bpd, sourced from 20+ countries. Blending example: 70% light Brent (API 38°), 30% heavy Venezuelan (API 16°) for optimal yields. Specification requirements: API gravity 30-40°, sulfur content <2%; mismatch reduces output by 10-15%. Metrics Global crude trade: 80 million bpd, sourced from 20+ countries. Blending example: 70% light Brent (API 38°), 30% heavy Venezuelan (API 16°) for optimal yields. Specification requirements: API gravity 30-40°, sulfur content <2%; mismatch reduces output by 10-15%. Global crude trade: 80 million bpd, sourced from 20+ countries. Blending example: 70% light Brent (API 38°), 30% heavy Venezuelan (API 16°) for optimal yields. Specification requirements: API gravity 30-40°, sulfur content <2%; mismatch reduces output by 10-15%. Maintenance and Logistical Vulnerabilities Maintenance involves thousands of spare parts, each with its own supply chain. A single delay can idle a refinery, costing millions daily. This fragility ensures nations avoid disrupting the system. Metrics: Spare parts: ~10,000 per refinery, including European control valves, Chinese pump seals, sourced from 30+ countries. Downtime cost: $5-10 million daily for a $1 billion facility. Failure points: Over 10,000 per refinery, from catalyst shortages to equipment failures. Metrics: Spare parts: ~10,000 per refinery, including European control valves, Chinese pump seals, sourced from 30+ countries. Downtime cost: $5-10 million daily for a $1 billion facility. Failure points: Over 10,000 per refinery, from catalyst shortages to equipment failures. Metrics Spare parts: ~10,000 per refinery, including European control valves, Chinese pump seals, sourced from 30+ countries. Downtime cost: $5-10 million daily for a $1 billion facility. Failure points: Over 10,000 per refinery, from catalyst shortages to equipment failures. Spare parts: ~10,000 per refinery, including European control valves, Chinese pump seals, sourced from 30+ countries. Downtime cost: $5-10 million daily for a $1 billion facility. Failure points: Over 10,000 per refinery, from catalyst shortages to equipment failures. Why Strategic Reserves and Zombie Movies Mislead TL;DR: SPRs (e.g., U.S.’s 600M barrels, 5-month supply) can’t replace refineries, as crude needs processing, and fuels degrade fast (gasoline loses 20% octane in 6-12 months), debunking zombie movie myths of long-lasting fuel caches. Apology: Apologies for the detailed breakdown of SPRs and fuel myths; it’s crucial to show why MARC™’s refining network is the real backbone of energy security! TL;DR Strategic Petroleum Reserves (SPRs) are often misunderstood as a robust shield against refinery disruptions, but their limitations and the rapid degradation of stored fuels reveal why they can’t replace MARC™’s interdependent refining network. Zombie movies further mislead by depicting fuels lasting decades, ignoring chemical realities. This fragility reinforces the need for global cooperation to maintain refining capacity. Purpose and Scale of SPRs SPRs are designed to cushion short-term oil supply shocks, but their capacity is finite. The U.S. SPR, the world’s largest, holds mostly crude oil, not refined fuels. This limits its effectiveness in prolonged disruptions. Metrics: U.S. SPR capacity: ~600 million barrels of crude, equivalent to 60 days of U.S. crude imports (10 million bpd). Maximum drawdown rate: 3.5 million bpd, constrained by pipeline and port infrastructure. Metrics: U.S. SPR capacity: ~600 million barrels of crude, equivalent to 60 days of U.S. crude imports (10 million bpd). Maximum drawdown rate: 3.5 million bpd, constrained by pipeline and port infrastructure. Metrics U.S. SPR capacity: ~600 million barrels of crude, equivalent to 60 days of U.S. crude imports (10 million bpd). Maximum drawdown rate: 3.5 million bpd, constrained by pipeline and port infrastructure. U.S. SPR capacity: ~600 million barrels of crude, equivalent to 60 days of U.S. crude imports (10 million bpd). Maximum drawdown rate: 3.5 million bpd, constrained by pipeline and port infrastructure. Refining Bottleneck SPRs store unrefined crude, which is useless without operational refineries. Refining capacity, not crude availability, is the critical constraint in a crisis. SPRs can’t address refinery-specific disruptions. Metrics: U.S. refining capacity: 18.4 million bpd; a 10% disruption (1.8 million bpd) would exhaust SPR crude in ~5 months at max drawdown. Refinery restart: 3-6 months and $100-200 million in recommissioning costs for an idled facility. Metrics: U.S. refining capacity: 18.4 million bpd; a 10% disruption (1.8 million bpd) would exhaust SPR crude in ~5 months at max drawdown. Refinery restart: 3-6 months and $100-200 million in recommissioning costs for an idled facility. Metrics U.S. refining capacity: 18.4 million bpd; a 10% disruption (1.8 million bpd) would exhaust SPR crude in ~5 months at max drawdown. Refinery restart: 3-6 months and $100-200 million in recommissioning costs for an idled facility. U.S. refining capacity: 18.4 million bpd; a 10% disruption (1.8 million bpd) would exhaust SPR crude in ~5 months at max drawdown. Refinery restart: 3-6 months and $100-200 million in recommissioning costs for an idled facility. Fuel Degradation and Storage Myths Refined fuels degrade quickly, debunking zombie movie tropes of long-lasting gas caches. Gasoline and diesel require constant maintenance to remain usable. This makes large-scale fuel stockpiling impractical. Metrics: Gasoline degradation: Loses 20% octane rating within 6-12 months due to oxidation. Diesel/jet fuel shelf life: 1-2 years with stabilizers; storage maintenance costs $50-100 million annually. Metrics: Gasoline degradation: Loses 20% octane rating within 6-12 months due to oxidation. Diesel/jet fuel shelf life: 1-2 years with stabilizers; storage maintenance costs $50-100 million annually. Metrics Gasoline degradation: Loses 20% octane rating within 6-12 months due to oxidation. Diesel/jet fuel shelf life: 1-2 years with stabilizers; storage maintenance costs $50-100 million annually. Gasoline degradation: Loses 20% octane rating within 6-12 months due to oxidation. Diesel/jet fuel shelf life: 1-2 years with stabilizers; storage maintenance costs $50-100 million annually. Systemic Dependencies SPRs can’t replace the complex supply chains for catalysts, spare parts, or skilled labor needed to keep refineries running. Fuel distribution also relies on electricity, which fails without refineries powering plants. This underscores MARC™’s critical role. Metrics: Supply chain recovery: 1-2 years to rebuild catalyst or spare part supply chains post-disruption. Electricity dependency: Fuel pumps require ~1-2 MW per large station, reliant on refinery-powered grids. Metrics: Supply chain recovery: 1-2 years to rebuild catalyst or spare part supply chains post-disruption. Electricity dependency: Fuel pumps require ~1-2 MW per large station, reliant on refinery-powered grids. Metrics Supply chain recovery: 1-2 years to rebuild catalyst or spare part supply chains post-disruption. Electricity dependency: Fuel pumps require ~1-2 MW per large station, reliant on refinery-powered grids. Supply chain recovery: 1-2 years to rebuild catalyst or spare part supply chains post-disruption. Electricity dependency: Fuel pumps require ~1-2 MW per large station, reliant on refinery-powered grids. Why Many "Wars" Stay Skirmishes MARC™ makes all-out war economically disastrous. Refinery disruptions ripple globally, harming allies and enemies alike. Below are five examples showing how I believe MARC™ caps conflicts at skirmishes. Example 1: Israel-Iran-China Triangle Israel’s third-largest trading partner is China, with $15 billion in annual imports (12% of its total). China processes 17 million bpd and relies on Iran for 1.5 million bpd of sanction-resistant crude (10% of imports). If Israel targeted Iran’s 1.8 million bpd refineries, China’s Shandong hub (4.2 million bpd) would stall, spiking global diesel prices and hurting Israel’s trade. China's refiners rely on sanction resistant Iranian crude. Figure 1: China’s Crude Imports (2023) Example 2: Saudi Arabia-Yemen-Houthi Conflict In 2019, Houthi attacks on Saudi Arabia’s Abqaiq refinery (5.5 million bpd) cut output by 50%, causing a 15% global oil price spike. Saudi Arabia, exporting 30% of its refined products to Asia, restrained escalation to protect $100 billion in trade. Asia’s diesel demand ensures conflicts stay limited. Example 3: Russia-Ukraine-Europe Russia’s 6.7 million bpd refining capacity supplies 40% of Europe’s diesel imports. Ukraine avoids targeting Russian refineries (e.g., Tuapse, 240K bpd) to prevent fuel shortages in EU allies. Such disruptions could raise European diesel prices by 10-20%. Example 4: India-Pakistan Tensions India’s 5 million bpd refineries supply 20% of South Asia’s fuel. Pakistan’s 450K bpd capacity can’t meet domestic demand. A war would cut India’s exports, risking a 25% regional fuel price hike, so tensions remain at border clashes. Example 5: Venezuela-U.S. Dynamics U.S. Gulf refineries process 500K bpd of Venezuelan crude. Sanctions haven’t escalated to military conflict—disrupting this flow would raise U.S. diesel prices by 10-15%. MARC™ discourages direct confrontation. Understanding Refinery Complexity Refining varies by crude type—light/sweet (e.g., WTI) needs simple topping refineries, while heavy/sour (e.g., bitumen) requires complex coking units. A shutdown in Iran or Venezuela affects diesel in Europe or gas in Ohio. MARC™’s web is invisible but unbreakable. Table 2: Refinery Types & Vulnerability America’s Refining Vulnerabilities U.S. refineries, averaging 40+ years old, face risks from hurricanes, tariffs, and EV growth. A 2 million bpd capacity loss by 2030 (10% of total) could force 25% more fuel imports. A Gulf outage (e.g., Saudi’s Ras Tanura, 435K bpd) would spike jet fuel prices by 15-20%. Future Risks Amplify MARC™ By 2030, 20% of global refining capacity (20 million bpd) could be at risk from closures. Europe and China face the highest exposure, tightening supply chains. MARC™’s peace-forcing effect will grow stronger. Figure 2: Refinery Capacity at Risk (2030) Global Interdependence Europe imports 30% of its diesel from Asia. Saudi Arabia fuels jets in 50+ countries. A single refinery attack could halt global aviation, making all-out war economic suicide. MARC™ as the New Reality MARC™ ensures nations prioritize trade over destruction. Refineries are the world's great vulnerability and have the capacity to constrain potential wars to skirmishes or peace.
