Posted on 10/09/2014 5:16:27 AM PDT by thackney
The United States imported more than 7 million barrels per day of crude oil during the first seven months of the year, despite the shale boom, according to the U.S. Energy Information Administration (EIA).
Crude imports have fallen from a peak of almost 14 million barrels per day in 2006, but they still account for almost half the barrels processed by U.S. refineries.
Some observers have expressed unease about lifting the ban on crude exports while the United States continues to rely on imports to meet such a high proportion of its needs.
"With regard to the oil export question, we are looking at that," Energy Secretary Ernest Moniz said in an interview with Platts earlier this month. "But a very important point that is just not emphasized is we remain a very large importer of oil."
The problem with looking at broad aggregates like this, however, is that not all crude oils are created equal. It is not possible to treat them all as substitutes for each other.
Crudes vary considerably in terms of density, acidity, type of hydrocarbon molecules they contain, and presence of impurities such as sulphur and heavy metals such as nickel and vanadium.
And refiners are very fussy about the quality of crude oil that they process. It is most definitely not the case that any old crude can be processed in any old refinery.
Too much acid or salt and the refinery's equipment will be damaged by corrosion. Too many heavy metals and the catalysts will be poisoned. Too much sulphur and it becomes hard to meet specifications for finished fuels. And oil of the wrong density makes it impossible to maximise the efficiency of the refinery's distillation tower and other units.
...a range of crudes by blending them to ensure the average quality...
(Excerpt) Read more at uk.reuters.com ...
Thanks, I didn’t know that, and it explains a lot about import/export.
The article contains even better detail than what I could include in the excerpt.
Cheers!
Is there demand elsewhere in the world for the US produced light oil? Are other nation’s refineries see up to process light oil?
World demand continues to grow. As new international refineries are built, it is cheaper to design for light sweet oil than heavy sour.
The world refinery growth will target that supply, if it is available. The US refinery growth and upgrades will also target it as well.
As for current demand, the light sweet sells for a higher price than the heavy sour, so it is far to say the current “demand” for it is greater.
If other countries are willing to buy our light oil why not? One of the problems with politicians is that they really don’t know what they are doing when it comes to making policy. The government tends to be the main producer of unintended consequences.
But with imports of light oil down to just half a million barrels per day, according to the EIA, refiners are running out of room to maneuver.
Imports from Nigeria, one of the principal sources of light crude, have already fallen from more than 1 million barrels per day in 2010 to zero in July 2014.
There is not much more room to accommodate rising domestic light oil production by backing out more imported light crude.
Petroleum is a very complex product and life at a refinery is all about design balance. Once the capital equipment is installed to process heavier crudes they become very profitable to distill, due to the discount between the price of heavy crudes and light sweet crudes. Light sweet crude can be refined into gas, kerosene and diesel. Turns out that the Gulf refineries switched to processing heavy crudes over the last 20 years, and are profitable because of it. Of course, please check with professionals like thackney, ckilmer and bestintxas for a reality check.
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