O&G Sector Guys/Baws/Dolls: Domestic Production. Do We HAVE To Import Right Now?

Short answer - We will always have to import due to the grade of oil we produce domestically, it simply isn't the right type of crude to fill a lot of our refineries.

Export light oil
Import heavier oil

So just as a guage, is WTx or Bakken light crude or other?

There is an article in this month's Time magazine saying that due to fracking in Texas, the US is now the world's largest oil exporter.

Like a previous poster said, refining that oil is a different matter entirely.

ETA: Link to the Time article

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Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?

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They are, somewhat. But it still has to make financial sense.

Just seems like in any long term or extrapolated equation, investment today would be the smartest investment. Is this some sort of foreshadowing for gasoline combustible engines? Is that what Big Oil is thinking?

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.

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Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?

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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.

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Why wouldn't we be retrofitting existing refineries to handle our own oil rather than someone else's?

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I don't think you can just retrofit a major refinery to change its whole configuration to run a vastly different type of crude. Think you can probably just make adjustments around the edges. These types of investments would take several years and hundreds of millions of dollars.

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So the industry backed it's own self into this technology problem and can't undo it.

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more like environmentalists and env. regulations deter "the industry" from building new refineries. This isn't anything new. Whenever the "industry" tries to do anything about it, they get tree huggers going ape shite. cost isn't worth the effort to "the industry".

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