Skip to comments.Houston fills with crude oil that canít be shipped out
Posted on 04/10/2014 5:59:57 AM PDT by thackney
Bloomberg article so link only
My notes and highlights below
(Excerpt) Read more at fuelfix.com ...
The light sweet coming out of Eagle Ford and other shale formations is more valuable and less efficient to run in the heavy sour refineries.
Crude exports here are banned.
There are 13 ships that meet the requirement of the Jones Act to move oil from one US port to another. Those are booked solid.
Wouldn’t it be a prudent investment to convert those refineries to handle the light crude? I’m not sure I’d like to see us exporting light crude only to have to import the heavy crude from someplace like Venezuela or the Middle East. And building additional tankers will take years.
Are you trying to say central planning of economies doesn’t work?
Exporting expensive crude while importing cheap crude would mean we produce the same gasoline, produce the same amount of oil and improve the trade balance without spending more money to convert refineries while not getting a gain in production.
Converting the refineries will take years as well.
Yes, strange as is seems.
The immediate answer is to complete Keystone. That would end our imports from Venezuela and severely damage a Russian client which spreads the socialist gospel in south America. End the export law and use our surplus oil to end what’s left of OPEC’s control. The inventory quantities, which is used by traders to jack oil prices, once on the market will be reflected in the world price. That’s the fastest way to restrict cash flow to Russia and the Middle Eastern sponsors of terrorism.
In LNG and oil we have a potential economic big stick that can harm our enemies and kick up economic growth in this country at the same time.
And how would that help int this case? We would still have a surplus of sweet crude and a lack of refineries.
End the export law and use our surplus oil to end whats left of OPECs control.
We don't have an oil surplus. Every barrel of oil we export has to be replaced by a barrel of import.
It's all expensive crude, coming and going.
The US refineries produce more than we use in the US. We do not have a lack of refineries. We have surplus capacity.
I’m not claiming crude oil is cheap. But heavier oil (which has more BTU per barrel) is cheaper because it cost more for the refinery to produce products. And we have already spent the money to take advantage of the cheaper oil.
I don’t think we have enough refineries to handle all the different types of crude, do we? We haven’t built a new one in years; just upgraded the older ones, at great cost, IINM.
Problem with that is it would require our commie president to do something beneficial to the US and detrimental to the Ruskies....something that would set back his plan to unilaterally surrender!!!
We refine more than we use ourselves.
It is far cheaper to expand and upgrade an existing refinery than build a new one from scratch.
American refiners are set to add at least 400,000 barrels of oil-refining capacity a day to existing plants between now and 2018, according to information compiled by The Wall Street Journal and the consulting firm IHS. That is the fuel-making equivalent of constructing a new, large-scale refinery.
On top of that, plans are in the works for several plants capable of processing the ultralight oil extracted from the Eagle Ford shale formation in South Texas. Those facilities, which are relatively inexpensive to build, aren’t technically considered refineries because they can’t handle a complex array of crude types or produce a wide mix of fuels.
These plants, called “splitters” or “toppers,” take the very light oil one step closer to becoming gasoline and diesel. Then the half-processed fuel can be shipped to Latin America, Europe and Asia, where refiners there finish the job.
Some energy companies that traditionally weren’t involved in refining are jumping in. Kinder Morgan Energy Partners KMP +0.28% LP, a pipeline company, is building an ultra-light-oil plant near the Houston Ship Channel that will create up to 100,000 barrels a day of fuels for export. Magellan Midstream Partners said it is considering a project that is similar in size and scope and would be located in Corpus Christi, Texas, about 200 miles to the southwest.
Shale-Oil Boom Spurs Refining Binge
Higher U.S. Crude Production Has Valero, Marathon Increasing Capacity
March 2, 2014
Would you rather import heavy crude from Venezuela and support a Russian partner which is a socialist regime or would you rather import from a neighbor, Canada, which to my knowledge does not support terrorism nor invade other countries?
Hurting Venezuela hurts Russia since they’ll have to prop up another regime. Now that you know refineries are designed to process specific types of crude, where will Venezuela sell their heavy crude once we, their biggest customer in the past, stop buying it? The idea is to bleed Russia while restricting their cash flow by killing high world oil prices.
FWIW, the Crimea will suck the better part of a billion dollars from Russia to fund their government and programs. The overall idea is to force Russia to embrace the suck and thereby end the possibility of their modernizing the military and restrict funds for other adventures.
There’s a reason the Saudis panicked over fracking. If we dump that oil on the market they and every other oil producer that relies on oil sales, including Russia, for funding their government, is totally and royally screwed.
The days of $100/bbl oil will be over.
So, Is Obama right? We don’t need the Keystone Pipe line? (ducking)
There are multiple storage tank facilities (with many, many units each) being built in Houston. They’re popping up like mushrooms.
We don’t need the Keystone Pipeline if we want to keep refining more OPEC oil and less Canadian Ally Oil.
Yep, quite a bit of that going on. And has been for a while
Kinder Morgan Expanding Houston Ship Channel Operations
Kirby Corporation To Build Additional Inland Tank Barges For Delivery In 2014
BOSTCO Project, Houston, United States of America
I yearn for the days of competitive oil pricing with large supplies - we just need to drill.
ontap ~ Problem with that is it would require our commie president to do something beneficial to the US and detrimental to the Ruskies....something that would set back his plan to unilaterally surrender!!!
EVERYTHING obama does either:
a) Weakens America/AmericansI have yet to have anyone raise a single substantive counter example in several years of posting this.
b) Distances America's allies
c) Strengthens America's enemies
d) Serves Islam
e) Harms Israel
Or some combination of the above.
Apparently not for the light crude that they're talking about.
There is a lot of truth in what you say. I never can believe that today those who govern actually seek to impose burdens and harm upon us rather than free up the spread of productivity and resulting wealth. “Sick Puppies!”
That’s true. There’s an effort to change the export laws. After Crimea, it looks like Congress is moving in that direction. Obama would have to veto the legislation. My guess is the energy companies have enough clout to get R done.
"turning Around" a running refinery (giant machines that never stop) is expensive, time consuming and sometimes dangerous.
what we really need, as everyone knows, is “investment” in wind and solar....
That’s right so dump it on the market and kill the price of oil. It’s basic supply and demand. OPEC beat econ 101, by playing games with supply. That doesn’t work when we start dumping oil on the market. In fact it may result in a downward spiral since other nations, including Russia and the Middle Easter oil exporters rely on oil for financing their economies. They’ll have to pump and sell more in the face of declining prices to maintain their income.
The Saudis rightly recognized that fracking was the equivalent of a gun to their head. Now that we have the light oil, it’s time to pull the trigger.
If you’re reading this thread, you already know we have oil coming out our ears with more to come. Same with natural gas.
If the Jones Act didn't tie our hands needlessly, that oil would go to US refineries that today import light sweet from overseas.
It is a matter of location and transportation, not the total capacity.
For some bizarre reason,it is acceptable for a foreign ship with a foreign crew to delivery oil from an overseas nation to any port in the US, but it is not acceptable for the same crew and ship to deliver crude produced here in the US to the same US port.
We still import nearly as much crude oil as we produce ourselves; 7.6 versus 7.9 MMBPD. While the imports are falling and the domestic production is climbing, we have a long ways to go just to break even.
Crude Oil Production
U.S. Crude Oil Imports by Country of Origin
“Crude exports here are banned.
There are 13 ships that meet the requirement of the Jones Act to move oil from one US port to another. Those are booked solid.”
Ok, so why is regular unleaded $3.59 and Diesel is $3.55 in South Fort Worth TX this morning?
Glut of oil should mean cheap prices on gas and diesel.
WE WANT NEW REFINERIES AND WE WANT THEM NOW!
We had a big slick in Houston last night, but he left for Austin this morning.
And we have already spent the money to take advantage of the cheaper oil.
I have not seen the spread recently between brent & WTI. is imported heavy crude cheaper than local domestic light crude?
Not a glut?
Yes , I understand that. I’m just wishing for days of old and <.99 per gallon gas.
I was pumping gas back in the late ‘70’s and early ‘80’s and my how the old timers whined when gas went above $1. Then we all complained about $2 per gallon. But now everyone just goes along with the Obama inflation exorbitant price of fuel and everything else.
is imported heavy crude cheaper than local domestic light crude?
Yes. See Jan prices and history below.
Light Louisiana Sweet First Purchase Price $89.39
West Texas Intermediate First Purchase Price $90.39
U.S. Landed Costs of Crude Gravity 20.1 to 25.0 percent $78.36
I understand. When I was working in Alaska, doing oil industry work, I started riding the bus when gasoline hit $2.50.
Eventually I decided my time was more valuable.
Thanks for the update.
That will kill the fracking boom too.......
Of course, the government could repeal the law that requires American-flagged ships to travel between American ports. It's just another sop to the dying labor unions, anyway.
“We had a big slick in Houston last night, but he left for Austin this morning.”
Wrong. We had a big dick in Houston last night (grubbing for more money), but he left for Austin this morning (thankfully). Funny how many champions of the poor in River Oaks can afford to attend a $16,000-per-plate fundraising dinner.
Nope! While it will have an effect, you’re ignoring the natural gas that will be needed to run the power plants that will replace the EPAed coal fired plants. And if Obama and Congress gets off their asses and move to get the federal government out of the way of LNG exports, there’s a huge overseas market that will take all we can supply to enable the Euro weenies to tell Russia to take their gas and pound sand.
You get both oil and natural gas from the same well. That ignores the propane, butane, ethane and pentane that often accompanies methane. There’s more money to be made than you know. That’s happening locally where the low price for methane means the wet gases still make it profitable to drill.
The other possibility is lower oil prices may increase demand by other users. Since we have excess refinery capacity, maybe consumers would buy more gasoline and drive more if the price dropped. What would cheaper fuels do for manufacturing and transportation? Get the point?