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Q: But the situation conjures up this image of two tankers ships passing each other. One is heading toward the U.S., and one is heading away. It’s like we’re bringing in the same product as we’re sending out.
A: Well, not necessarily. We’re not bringing in the same product. The light crude oil or the condensate we are exporting is actually much different stuff than your classical medium gravity, API gravity dense crude oil that we are using in our refineries.
In popular opinion, they’re all rolled into “crude oil.” But they have different compositions and they can not be processed by the same refineries. So, we are trying to export some of the light stuff, so to speak, while we are importing much heavier stuff to process in our refineries.
Many of our refinieries have been specialized to process much heavier crudes from Venezuela, from Mexico, so you can’t change them overnight. That’s why we’re importing oil and we’re exporting gasoline, lubricants, and other products and at the same time, we’re exporting condensate and light crude.
Second, not all crude oil is the same. It ranges from light to heavy, high to low sulfur and sour to sweet. The bulk of the oil currently produced in the United States is light oil. And not all refineries are the same. Many Gulf Coast and Midwest refineries were designed to process heavy oil from Canada, Venezuela and Mexico. To use more light crude domestically, refineries would need to pay less for their oil feedstock and would run in a suboptimal fashion, or require a significant investment in new infrastructure. “There’s a mismatch between the new production we’re developing as an industry and our country’s existing refining capacity,” said Ryan Lance, ConocoPhillips Chairman and CEO. “To process this new, lighter oil, refineries would have to operate inefficiently or at a reduced rate. They need to buy oil at a discount in order to make it economic to refine it, which hurts domestic producers and ultimately, consumers.”
originally posted by: yuppa
a reply to: DustbowlDebutante
Thats the Oil execs telling you they cant do it and lying about their ability to do so to keep the cost high.
Also, what do you think of abiogenesis of hydrocarbons?
Saudi Arabia is the largest Middle Eastern oil supplier to the U.S. with an 11% market share and has also invested heavily in U.S. downstream assets (refineries) to help lock in that supply.