Ejiofor
Alike with agency reports
The
decision of the United States to stop the importation of Nigeria’s light blend
of crude oil due to the shale oil boom has exposed the US refineries to the
dangers associated with the processing of lighter shale oil.
As a result of the increased domestic production of shale oil,
the US has slashed crude oil imports from a peak of almost 14 million
barrels per day in 2006, to slightly above 7 million barrels per day.
Crude oil import from Nigeria, one of the principal sources of light crude, was also slashed from more than 1 million barrels per day in 2010 to zero in July 2014.
But the US refineries, Reuters has reported, are designed to
handle medium blend crude as against the much lighter shale oil being produced
in the country to replace imports from Nigeria and others.
US refiners are said to have shown a strong preference for a medium blend, but almost all the oil being produced as a result of the shale boom is much lighter than the refineries can handle.
Reuters reported that while imports of medium-heavy and heavy
grades of crude oil (with specific gravity of less than 30 degrees) have
remained roughly constant at 4.5 to 5 million barrels per day since 2007,
imports of medium-light and light oils have dropped from 6 million barrels per
day to just over 2 million.
Imports of the lightest grades of oil, the closest substitutes for domestic shale production, have been reduced from 2.5 million barrels in 2007 per day to just 500,000 in the first seven months of 2014, according to US Energy Information Administration (EIA).
The
sudden change in the grades of crude oil processed by the refineries were said
to have threatened the capacity of the plants to blend the different grades to
derive the required quality of refined products.
The
refineries are said to be conscious of the quality and density of crude oil as
“crude varies considerably in terms of density, acidity, type of hydrocarbon
molecules they contain, and presence of impurities such as sulphur and heavy
metals such as nickel and vanadium.”
For
instance, if the crude oil contains too much acid or salt, the refinery’s
equipment will be damaged by corrosion, while with too many heavy metals, the
catalysts that aid refining will be poisoned.
On the
other hand, too much sulphur will make the crude too hard to meet
specifications for petroleum products.
Also, if
the crude oil is of the wrong density, it will be impossible to maximise the
efficiency of the refinery’s distillation tower and other units.
The
average density of crude oil processed in the US refineries since 1985 has been
fairly steady and in statistical terms, the weighted average specific gravity
has been 31.1 degrees with a standard deviation of just 0.7 degrees.
But
according to EIA’s US crude oil production forecast, analysis of crude oil
types released in May 2014, “roughly 96 percent of the 1.8 million barrels per
day growth in (domestic) production between 2011 and 2013 consisted of grades
with American Petroleum Institute (API) gravity of 40 or above.”
To
handle the lighter shale oil, the US refiners need to reconfigure their plants
to handle a lighter average blend, but that would take time and involves costly
investment.
The
simpler option, it was learnt, would be to lift the ban on crude oil exports
and allow US refiners to continue to import and refine more of the heavier oil
they prefer.
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