Oil Business: Heavy Crude Being Used More

One of the signs that there is an energy crisis is simply that light sweet crude is getting harder to come by and refineries are turning more and more to heavy sour crude. In the Atlanta Journal-Constitution is an article by Michael E. Kanell who provides one of the better explanations I've seen:

Roughly 85 million barrels of oil power the world's economies each day. Pumped from deserts, sea floors and backyards, much of it is free-flowing, low-sulfur oil that is easy and cheap to refine for use in cars, trucks and heating.

It's the Good Stuff: light, sweet crude.

Light because it is less viscous --- that is, less thick. Sweet because it has little of the sulfur that must be removed --- in a costly process --- to make gasoline, diesel and heating oil.

Light, sweet crude.

It produces more fuel than the heavier, "sour" versions. It's what most refineries are designed to handle. And it is just not coming out the ground fast enough.

"You're getting less and less of the good stuff," said Michele Markey, special projects manager for Apache Corp., a Houston-based energy company.

Although the overall supply of oil has been sufficient to cover rising demand, that additional oil has increasingly been what is known as heavy, sour oil....

Less and less of the good stuff. Although heavy crude is cheaper, it still requires a higher cost to process heavy oil and it means more energy input before we get the energy payoff and it's dirtier than light sweet crude. And although supplies of both light sweet crude and heavy sour crude were adequate three years ago, it's not entirely accurate to say the supply has been sufficient in the last year; if production were five per cent higher than it is now, and the price lower, the additional production would easily be absorbed and utilized in a number of different ways throughout the world.

There was a time in the oil business when one unit of energy produced a hundred units of energy. I recently said that we now get just fifty units back for every unit of energy spent producing oil, but that apparently was true some years ago; it's not clear what the number is presently except that the payoff is now less than fifty. The days of 100 to 1 energy payoffs are long gone and the payoff in the coming decade is expected to drop as we move further out into the oceans, further up into the harsh conditions of the tundra, and as we process more and more heavy oil.

For thirty years, the writing has been on the wall and the United States, the most innovative country in the world, has been hampered by politicians and corporations who refuse to believe we have a problem. The midterm elections are coming. It's long past time for Washington to get a wake-up call.