Originally Posted by
MaxQ
Trip7.
I just made a post with questions on the oil industry i meant for you.
Somehow I managed to post it as a reply to madmax.
Please see my earlier post.
Apologies to both you and madmax for my carelessness
[QUOTE=MaxQ;4028332]
Originally Posted by
Trip7
It is apparent you have more knowledge regarding the oil/refinery industry than most of us here.
Can you provide a basic explanation of a few numbers that don't fit the rhetoric?
The US extracts about 13.5 million bbls/day of oil.
US refineries use about 16.5 mbl/day.
Yet we not only export crude oil, we seem to be actively encouraging this as national policy.
Is there a basic 101 type reasoning for this?
Total distillate produced in the US is about 21.5 to 22 mbl/day.
Total consumed in US is about 20.5mbl/day.
Is the additional 8 mbl/day produced only natural gas and ethanol equivelencys?
Or do we do "gaming" by including the 10%volume increase from refing and other such things, which change the numbers from a field production perspective to an end product perspective.
Do you have insight as to how long the oil production from basins that are asseessable primarily only by fracking will continue to be productive?
(obviously price gets involved.. $100/bbl can encourage a lot more drilling than $60 oil)
Rickair answered much of these questions very well, particularly about why the US exports so much of its light sweet oil. Quick summary:
- US Refineries are optimized for heavy sour crude. US production is mostly light sweet crude.
- It would take years and Billions of dollars to upgrade US Refineries for light sweet crude
- Light sweet crude produces lower yields of jet fuel/diesel and higher yields of gasoline/Petrol
The majority of the 10% volume increase is Natural Gas Liquids. These count as "petroleum liquids" but are not a crude oil substitute. Many politicians use the NGL inclusion in the data to make the highly misleading "net exporter" claim.
As far as the Shale basins the Permian remains the only basin with meaningful inventory in quality, Tier 1 locations. All other Basins have rolled over past their peak and are in terminal decline. $60 Oil certainly has far less economic drilling locations vs $100. US Shale Production will continue for quite a long time , although production numbers will likely be flat at best, and likely negative.