Are you in favor of lifting the 40 year ban on oil exports?

I just read a head line on Fox News Channel website that the politicians are trying to lift the 40 year ban on oil exports... Sounds like that will send the prices back up and level the playing field for the U.S. against the OPEC countries... Any one else have any insight about this?

 

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Permalink Reply by Booger on December 16, 2015 at 8:19am

as long as Saudi (opec) keeps producing at a high rate, this will not affect global pricing........

Permalink Reply by lance on December 16, 2015 at 8:33am

At least we will be able to sell our crude to E.U. countries and others now and get rid of some over stock... Right? 

Permalink Reply by Undecided About Oil on December 16, 2015 at 2:18pm

Lance,

"...

At least we will be able to sell our crude to E.U. countries and others now and get rid of some over stock... Right?

..."

You think we have an over-stock of Crude Oil & Petroleum in the USA?

Then why are we still net importing almost 5 Million Barrels per Day?

Permalink Reply by Bluflame on December 17, 2015 at 8:39am

Lance & Undecided,

   The answer is a little more complicated. Much of the domestic "oil" we are producing is in fact "condensate", which has an A.P.I. of 50 or higher. Most of the gulf coast refineries are configured to process "heavier" oil with a lower API, such as West Texas Intermediate (WTI) or Louisiana Light Sweet (LLS). Converting refineries to process "condensate" is apparently an expensive proposition. Earlier this year, the government lifted the ban on exporting condensate.

    Bottom line….the "heavier" oil we are importing comes mainly from Canada, Mexico & Venezuela and will work in the gulf coast refineries. So the imports are sort of an "exchange" of condensate for heavier feedstock. 

    IMHO, completely lifting the oil export ban will be a non-event.

BluFlame

Permalink Reply by lance on December 17, 2015 at 9:00am

What kind of oil is in the Ohio Utica? I understand the Marcellus has mostly gas and condensates right? 

Permalink Reply by Bluflame on December 17, 2015 at 9:07am

Condensate in both Utica & Marcellus….MarkWest has built a condensate splitter near Cadiz.

BluFlame

Permalink Reply by Joseph-Ohio on December 17, 2015 at 9:41am

I've read on these pages, both 'Black Oil' and 'Rich Condensate' are contained within the Ohio Utica.  'Black Oil' in the Western Utica and 'Rich and Lean Condensate' in the Eastern Utica.

If our refineries are set up to process the heavier oils who will we trade our light oils / condensate with ?

Canada comes to mind as does the Keystone XL.

Read a little earlier this morning that Venezuela's largest E & P is busting out as their fields are not proving after all - so it doesn't appear they'll be sending as much heavier oils our way than we perhaps previously thought. 

I guess there's still Mexico sending us heavier oils however.

What do our trading partners do with the light oils / condensate ?

Are their refineries already set up to process them ?

Who else besides Canada, Mexico and Venezuela would trade with us and use our condensate ?  Asian markets perhaps ? Thinking we ought to be very careful trading with that bunch as they may not prove allied after all is said and done.

I'd suggest new refineries (set up to process condensate / light oils) here at home but I would much rather see a much larger role for domestic use of natural gas instead.

Pretty good that they open the door for exporting condensate and then cripple the process by not approving the Keystone XL if you ask me.

Doesn't seem to be very 'forward thinking'.

All IMHO.

 

 

Permalink Reply by Bluflame on December 17, 2015 at 11:05am

Some US refineries are set up to process condensate or at least "lighter" oil. Ironically, one of them is the Marathon refinery in Canton! Why? Who knows. One of the benefits of the recent integration of MarkWest & Marathon.

Some Gulf refineries can process condensate, and on the international market, it is a mixed bag. The whole condensate issue is a shale phenomena and has complicated life for the refineries. They can also blend it with "heavier" oil to run on existing equipment. As you can imagine, this complicates both transportation and storage. To make matters worse, condensate is much more volatile than "black oil".

You are correct about the black oil in the western Utica. Unfortunately, so far it has proven uneconomical to produce. Condensate is the lightest component of NGL's produced in the wet gas zone. That stream must be subjected both to gas processing & fractionation.

BluFlame

Permalink Reply by Joseph-Ohio on December 17, 2015 at 11:13am

Wondering if they've ever tried diluting the heavy oil of the Western Ohio Utica with Condensate and perhaps even using it to 'Fracture' with (instead of water) ?  At 1st pass it sounds like pretty risky business - but.......that's normal S.O.P. for the E & P's anyway isn't it ? 

Also, based on what I've read, they've always intended to use Condensate to dilute the Canadian Oil Sands Bitumen so as to enable pumping it in the Keystone XL - correct ?

Thanks for your very informative replies BluFlame.

Always good info. from your address.

J-O

Permalink Reply by Bluflame on December 17, 2015 at 11:31am

J-O,

  This is a "Catch-22". For the last few years, lots of Utica/Marcellus condensate has been shipped to Alberta, both by rail & pipeline (partially) to act as diluent for very heavy tar sands oil thus permitting the oil to be shipped by rail or pipeline. Tar sands oil, due to the extraction process, is the most expensive North American oil. Most, if not all of the tar sands projects are unprofitable at these current low prices and have been shut down. Obviously, this stems the tide of condensate shipments to be used as diluent.

BluFlame

Permalink Reply by Joseph-Ohio on December 17, 2015 at 12:17pm

How about the part about thinning our Western Utica Black Oil with our Condensate ?

Any merit to that ?

Has it ever been tried as of yet ?

Just wondering / thinking out loud here.

Thanks.

J-O

Permalink Reply by Bluflame on December 17, 2015 at 12:30pm

Possible, but not enough production to make it worthwhile. Those Utica E&P's still drilling are concentrating on the dry gas zone. With NG now under $2/MCF, it's questionable in my mind how much longer dry gas drilling will continue.

BluFlame

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