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The large increases in US oil production is in the Permian Basin and the Bakken Shale, which both produce light crude. Some of this is exported, as most refiner
by njarboe 7y ago
The large increases in US oil production is in the Permian Basin and the Bakken Shale, which both produce light crude. Some of this is exported, as most refineries in the US are designed to process heavy crude. California refineries generally are set up for lighter crude (historically a lot of Alaskan crude) and has been hit with higher oil prices due to the recent loss of Saudi production.
- beerandt 7y ago>designed to process heavy crude Yes, because historically, that's what the US produced. The refining and transport infrastructure takes time to modify and catch up to the new markets, (especially after Warren Buffet and Obama's back room deals to the benefit Union Pacific RR). California is set up for lighter crude because it has even higher costs and stricter environmental regs than the US standard, but the same premise applies. It's still cheaper for them to import the more expensive light/sweet than to refine heavy/sour from LA or Mexico or Colorado.