By Andy Uhler
There’s been a lot of discussion about the fact that the United States imports Russian oil — and a pretty good amount of it.
Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.
When oil refiners talk about crude, they generally ask two questions. First: How easy is it to break up the hydrocarbons to produce, say, gasoline or jet fuel? (In oil speak: How light is it?) Second: How much sulfur is in the oil? If there isn’t much, it’s called sweet crude.
“Higher sulfur content, more sour crudes actually are cheaper to purchase,” said Hugh Daigle, associate professor of petroleum engineering at the University of Texas at Austin.
That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.
Even though a lot of that light sweet crude is coming from Texas, where the refineries are, the U.S. imports foreign oil in order to make use of the existing infrastructure.
“They spent billions of dollars on this refining capacity in the ’90s and early 2000s,” said Ryan Kellogg, professor of public policy and deputy dean for academic programs at the University of Chicago. “They’re not going to want to let that sit idle. It’s there, and it makes sense to use it.”
But there’s got to be a way for refineries to retrofit their operations to make use of more domestically produced oil, right?