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Condensate production booming, but fight over definition limiting exports, EIA official says
Fuel Fix ^ | September 22, 2014 | Robert Grattan

Posted on 09/23/2014 6:05:57 AM PDT by thackney

Condensate is coming, and a whole lot of it too, U.S. Energy Information Administration Director Michael Schaal told attendees at a Platts, McGraw Hill Financial pipeline conference today.

A comprehensive definition about what exactly condensate is, however, might have to wait.

By one broad classification, lease condensate is a very light type of oil separated at field facilities from natural gas. Under that definition, lease condensate production has been growing rapidly in the U.S. as more oil is drawn from shale. In 2012, the EIA estimated that the U.S. pumped 274 million barrels of lease condensate from the ground, compared to 173 million barrels in 2008.

But getting more specific isn’t quite that easy. The Organization of the Petroleum Exporting Countries, some production figures and export rules all use separate measures to identify the liquid, Schaal said.

“Condensate has many different definitions,” Schaal said. “A lot of the definitions revolve around some nonstandard terminology that is developed as practice historically by the industry and is now coming to the fore in terms of the potential for crude oil exports.”

Those differences aren’t just academic. Because the U.S. bans crude oil exports, determining what exactly condensate is and how much refining it needs before it can be exported has proven to be very important to producers who want to send the fuel abroad.

The U.S. Commerce Department has ruled that in some cases lightly refined condensate is not a crude oil and can be exported. But because those rulings aren’t public, they can’t be relied upon broadly.

Schaal said the EIA was working with stakeholders and other federal agencies looking to arrive at a definition. The EIA functions as an independent advisory arm of the Department of Energy.

“Depending on its long-term viability as a particular commodity,” Schaal said, “we would expect the industry and federal agencies would make changes to make a defined condensate term that is in line with what is allowed to be exported.”

Exports could offer a release valve to offset condensate production that is threatening to overtake the capacity of refineries to process it. In early August, companies began the first exports of lightly refined condensate, which the Commerce Department had deemed wasn’t crude oil.

However, the push toward exports hasn’t been popular with everyone.

Several refineries have already pushed to have the rulings allowing condensate exports overturned, and a larger group has turned out to oppose a push to overturn the wider ban on exporting any type of crude.

If the nearly four-decade-old ban on crude exports is abolished, all exports would be allowed and the condensate definition wouldn’t be nearly as important, Schaal said.


TOPICS: News/Current Events
KEYWORDS: condensate; energy
More examples of selective government interference and regulations. Treat all commodities the same instead of trying to manipulate selective markets.

Government is the problem, not the solution.

1 posted on 09/23/2014 6:05:57 AM PDT by thackney
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To: thackney

How close is this condensate to gasoline?


2 posted on 09/23/2014 7:02:24 AM PDT by painter ( Isaiah: “Woe to those who call evil good and good evil,")
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To: thackney

Is this condensate the same as “Drip gas”?


3 posted on 09/23/2014 7:07:24 AM PDT by Ruy Dias de Bivar
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To: painter

I’ve read stories about drivers stopping and topping off their model T’s on condensate while driving through the wilds of Texas.


4 posted on 09/23/2014 7:42:03 AM PDT by dangerdoc ((this space for rent))
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To: thackney

What’s the reasoning behind banning crude ? What is that supposed to do ? Certainly hasn’t brought down the price of gas.


5 posted on 09/23/2014 7:43:06 AM PDT by mosesdapoet (Serious contribution pause.Please continue onto meaningless venting no one reads.)
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To: Ruy Dias de Bivar; painter

As the article states, different folks use different definitions. And each field producing condensate, produces a different mix of components making it, just like crude oil can very greatly in components and properties.

In general, condensate is too light for an oil refinery producing most transportation fuels. Some condensate can go through a splitter with a portion of it sent to mix with crude or products at the refinery.

It can contain significant natural gasoline; but understand that is an old industry term, not a match for today’s gasoline. Natural gasoline is mostly pentanes, smaller amounts of hexane and other C6. Usually, it is not much Octane or above. A few fields produce condensate heavy enough to run in an older carburetor engine but had a tendency to vapor lock. Some ran just fine. Some couldn’t even start such an engine.


6 posted on 09/23/2014 7:51:17 AM PDT by thackney (life is fragile, handle with prayer.)
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To: dangerdoc
I’ve read stories about drivers stopping and topping off their model T’s on condensate while driving through the wilds of Texas.

I've heard such stories as late as the 80s. The gaugers, who monitor wells, and make sure the tanks are emptied before they over flow, had a reputation for topping off their trucks with condensate. Of course that was both theft, of the condensate, and evasion of highway motor vehicle fuel taxes.

7 posted on 09/23/2014 7:51:33 AM PDT by Pilsner
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To: mosesdapoet

Very old legislation from back in the Nixon Price Control days.

My opinion it was a failure. It really messed up some earlier investment on the West Coast and greatly slowed down Alaska investment in more production back before the mid 90s.

Government should quit putting up additional barriers to investment in our manufacturing, energy production and other business.


8 posted on 09/23/2014 7:53:34 AM PDT by thackney (life is fragile, handle with prayer.)
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