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Posted on 1/9/19 at 12:44 pm to bamarep
Economics
Posted on 1/9/19 at 12:51 pm to bamarep
quote:
Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?
They are, somewhat. But it still has to make financial sense.
Posted on 1/9/19 at 12:52 pm to bamarep
Right....what do the people who buy our oil do with it? Make candles?
Posted on 1/9/19 at 12:59 pm to bamarep
Crude oil is comprised of varying percentages of alkanes, naphtenes, aromatics and asphaltics. Heavy crudes are blended with lighter crudes to reduce their viscosity (reason #1) to enable transportation the refinery. The blend is more expensive (reason #2) than the sum of the parts. A blended crude will yield more individual products than either a light crude or heavy crude alone.
This post was edited on 1/9/19 at 1:08 pm
Posted on 1/9/19 at 1:22 pm to bamarep
quote:
Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?
Because it isn’t just a type of refining process for types of oil. The types of oil is determined by the factions within it. A given unit of light oil can be refined into more gasoline/kerosene than a given unit of heavy oil.
So in order to tailor operations to meet demand, you need to refine both. Otherwise you’ll generate a surplus of an item you can’t find enough customers for by processing enough oil to meet demand of a different item.
On a related note, all this talk about domestic vs foreign product is nothing more than ignorant political grandstanding.
Oil is a fungible commodity. It really doesn’t matter as far as day to day operations goes. It’s a nice boon to economic activity but it’s the act of drilling producting a product of global value, not the source/destination.
Rigs sell the product at global market prices into pipelines, and refineries buy it.
It’s not like the oil drilled in the Gulf is direct piped into the refineries in LA/TX.
Posted on 1/9/19 at 1:47 pm to bamarep
(no message)
This post was edited on 10/22/20 at 7:33 pm
Posted on 1/9/19 at 3:37 pm to bamarep
quote:
Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?
Existing contract, markets, deals etc.
With that said, the U.S. are net exporters. We export more O&G than we import.
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