1503-44
Petroleum
- Jul 15, 2019
- 6,660
The thing I keep seeing on you tube is that US refineries must export light shale oil to refine it in other countries. I have discussed this at length with several AI LLMs delving quite deeply into process constraints of various refinery configurations and in general this does not appear to be true. I am ready to call out their BS, but I am not a refining process engineer, so I am interested in some human confirmation.
What I have learned, or cleverly convinced every LLM I have conversed with to agree upon is,
That after one gets past a basic topping plant, refineries seem to have a basic configuration that enables them to process blends of crude oils preferably within an average range of API 30-35-40.
Researching many flavors of crude oil, I see that most readily available blends range from a low of API 20, WCS West Canadian Select, Hebron at 21.2t to a Bakken Crude at 43.8, DOMS Domestic Sweet 42.9 and finally WTI-LT West Texas Intermediate Light at API 47.5. At the extreme to provide contrast, I see one from Malaysia at API 73, actually a condensate stream.
Noting that all those blends have at least some amount of boil off between the entire range of 15C and 550C, any refinery running any of those, or blends of those blends, must be able to process all those components to some degree, whether that means additional treatment and further separation, or just making wide cuts. You get a little or a lot of each product, depending on the distillation curve. It's all gotta go somewhere. So it appears to me that a typical refinery can at the least process all oil it is feed over the entire API and temperature range 15 to 550C. I understand that quality of some products might be affected by poor number of trays and spacing and lack of good temperature control at extreme limits, but in general can we expect to get some amount of Lt Naphtha, Hvy Naphtha, Kerosene, Gasoil, and if there is a vacuum tower, vacuum distillate and residue from any blend feedstock? The amount you get of each may not be ideal, or most profitable, but that's what you get. Whether you can improve on those by further treating depends on the additional process that the refinery has at its disposal. I see a lot of similarity there as well.
That kind of leaves me to believe that those additional units can adjust the final output breaking down some heavies and adding lites to others to get more or less of one product or another another, rather than selling all as a lower value product, but essentially that is just improving what has already been essentially "processed" already.
So to wrap this up, my conclusion is that American refineries can process any common blend between API 30 and perhaps up to 45, some blends, or refineries doing so, more effeciently than others. Several large refineries have been upgraded to very profitably do so. So, I know it's possible. Outside those ranges, blending to get the average API back to acceptable range is profitable, but not totally necessary until you get into a condensate API. Over 50? And, IF The US exports light oil to be refined elsewhere, that is because of economics. WTI has been selling below Brent price for years. I would suppose the discount is to enable foreign refineries to have the option to buy it and refine that rather than Brent. In other words pretty much why Gulf coast refineries get a "good price" for Mexico Maya blend, so they have the option to buy that rather than the "good price" they get for Canadian WCS. Every oil must be sold at Par value at any potential purchaser's location, or they buy the other option and any "discount" is for transport cost and the sellers desire to ensure his sale at auction over that of other suppliers. That also pretty much refutes the generally prevailing Canadian idea that the US buys their oil unfairly cheap. Today WCS is $10 lower than WTI instead of the usual $13 to $15, which tells me that there is a bit more demand for it, or the sellers are justifying their pride in WCS somehow, but siince it costs $6 to $8 to get it to the Gulf, it will not get any better than WTI - 10, or the refineries will just buy WTI. The only fair price is market price and the market price is the fair price. You want a higher price, then you remove the heavy metals then bring it to me.
Ultimate conclusion. It's only a matter of making profit. American refineries can refine American oil, they just chose to blend with heavier foreign oils because they get more fuel and bunker oil, without sacrificing diesel, gasoline and kerosene output needed for demand; which making too much of it would only lower those prices. You get a full bouquet for every barrel processed. Why settle for making too much gasoline diesel and jet fuel and kill your market? Phew. Done.
Comments?
I think these LLMs have gotten very much better over the last 6 months, but perhaps we both will judge that by the accuracy of my conclusion.
My LLM comments.
Gemini reports are extensive, if not overly so. I found it a bit difficult to agree on its research planning, but it does an extensive internet search. I told it to delete the what is API and oil flavors it wanted to do, but it did it anyway. It did reach out to 134 websites for one report I asked for.
Leo is built into Brave Browser. It's a more natural conversation process. Not bad. And very convenient sitting right there on the browser. Gives you an "Answer with AI" prompt for anything you search for, or any question you care to ask it at the moment. I really like that.
I wasn't happy with ChatGPT. It doesn't like to do too much work.
What I have learned, or cleverly convinced every LLM I have conversed with to agree upon is,
That after one gets past a basic topping plant, refineries seem to have a basic configuration that enables them to process blends of crude oils preferably within an average range of API 30-35-40.
Researching many flavors of crude oil, I see that most readily available blends range from a low of API 20, WCS West Canadian Select, Hebron at 21.2t to a Bakken Crude at 43.8, DOMS Domestic Sweet 42.9 and finally WTI-LT West Texas Intermediate Light at API 47.5. At the extreme to provide contrast, I see one from Malaysia at API 73, actually a condensate stream.
Noting that all those blends have at least some amount of boil off between the entire range of 15C and 550C, any refinery running any of those, or blends of those blends, must be able to process all those components to some degree, whether that means additional treatment and further separation, or just making wide cuts. You get a little or a lot of each product, depending on the distillation curve. It's all gotta go somewhere. So it appears to me that a typical refinery can at the least process all oil it is feed over the entire API and temperature range 15 to 550C. I understand that quality of some products might be affected by poor number of trays and spacing and lack of good temperature control at extreme limits, but in general can we expect to get some amount of Lt Naphtha, Hvy Naphtha, Kerosene, Gasoil, and if there is a vacuum tower, vacuum distillate and residue from any blend feedstock? The amount you get of each may not be ideal, or most profitable, but that's what you get. Whether you can improve on those by further treating depends on the additional process that the refinery has at its disposal. I see a lot of similarity there as well.
That kind of leaves me to believe that those additional units can adjust the final output breaking down some heavies and adding lites to others to get more or less of one product or another another, rather than selling all as a lower value product, but essentially that is just improving what has already been essentially "processed" already.
So to wrap this up, my conclusion is that American refineries can process any common blend between API 30 and perhaps up to 45, some blends, or refineries doing so, more effeciently than others. Several large refineries have been upgraded to very profitably do so. So, I know it's possible. Outside those ranges, blending to get the average API back to acceptable range is profitable, but not totally necessary until you get into a condensate API. Over 50? And, IF The US exports light oil to be refined elsewhere, that is because of economics. WTI has been selling below Brent price for years. I would suppose the discount is to enable foreign refineries to have the option to buy it and refine that rather than Brent. In other words pretty much why Gulf coast refineries get a "good price" for Mexico Maya blend, so they have the option to buy that rather than the "good price" they get for Canadian WCS. Every oil must be sold at Par value at any potential purchaser's location, or they buy the other option and any "discount" is for transport cost and the sellers desire to ensure his sale at auction over that of other suppliers. That also pretty much refutes the generally prevailing Canadian idea that the US buys their oil unfairly cheap. Today WCS is $10 lower than WTI instead of the usual $13 to $15, which tells me that there is a bit more demand for it, or the sellers are justifying their pride in WCS somehow, but siince it costs $6 to $8 to get it to the Gulf, it will not get any better than WTI - 10, or the refineries will just buy WTI. The only fair price is market price and the market price is the fair price. You want a higher price, then you remove the heavy metals then bring it to me.
Ultimate conclusion. It's only a matter of making profit. American refineries can refine American oil, they just chose to blend with heavier foreign oils because they get more fuel and bunker oil, without sacrificing diesel, gasoline and kerosene output needed for demand; which making too much of it would only lower those prices. You get a full bouquet for every barrel processed. Why settle for making too much gasoline diesel and jet fuel and kill your market? Phew. Done.
Comments?
I think these LLMs have gotten very much better over the last 6 months, but perhaps we both will judge that by the accuracy of my conclusion.
My LLM comments.
Gemini reports are extensive, if not overly so. I found it a bit difficult to agree on its research planning, but it does an extensive internet search. I told it to delete the what is API and oil flavors it wanted to do, but it did it anyway. It did reach out to 134 websites for one report I asked for.
Leo is built into Brave Browser. It's a more natural conversation process. Not bad. And very convenient sitting right there on the browser. Gives you an "Answer with AI" prompt for anything you search for, or any question you care to ask it at the moment. I really like that.
I wasn't happy with ChatGPT. It doesn't like to do too much work.
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