[QUOTE=Trip7;4028668]
Originally Posted by
MaxQ
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.
It may be a little misleading to say “upgrade”.
Sour crude is corrosive to equipment so US refinery’s spent billions to upgrade equipment to process it because it’s sourced from poor countries and acquired cheap.
Sweet crude is less corrosive to equipment and inferior metals can safely be used so the rest of the world built to the minimum. Whats makes sweat crude more expensive is it can be processed at most all refineries and sour cannot.
Your basically saying you have to upgrade your salt water engine to operate in fresh water.
Its definitely a loss of efficiency to spend billions in upgrades to run sour crude then arbitrarily stop and buy sweet crude.
You don’t have to upgrade a 777 to fly 100 people 500 miles, but it’s a non starter business model because of a gross loss of efficiency. After you spent so much money investing in the equipment that can do more.