by GHung » Wed 12 Dec 2018, 10:34:08
$this->bbcode_second_pass_quote('KaiserJeep', 'I')f I understand the situation correctly, the US supply of conventional oil has peaked some months ago, and the present demand is being filled with a combination of heavy oils (tar sands, etc) and lighter oils (condensates, etc.) from fracking.
Can the deficit of conventional oil be replaced by blending the heavy and light components? Can this mix be used to make diesel and home heating fuels, even if it costs more to do that than by conventional petroleum?
Just trying to understand the US perspective on a diesel shortage that is primarily outside the US today. That diesel costs more than gasoline in the US today will soon increase the cost of everything transported by truck or rail. Home heating oil that is more expensive will bite me personally. My Nantucket home uses oil and natural gas is not available on the island - but LPG is available and some use it for heat.
So far, it seems more like an incovenience for refineries than a genuine hydrocarbon production shortfall. But maybe I am missing something.
From Revi's link:
$this->bbcode_second_pass_quote('', '.')..... the refineries are indeed having difficulty in producing quality fuels from combining of tar sands and light-tight shale oil. The industry thought by combining the heavy tar sands oil and U.S. light shale oil, it would make an average oil blend, similar to good ole fashion medium grade API conventional oil.
However, it has turned out to be a real nightmare as this Tar Sands-Shale Oil blend creates a lot of difficulties for the refineries. So, it will be interesting to see how the situation unfolds in the global refinery market when U.S. shale oil finally peaks.
The article suggests that raising taxes on diesel using environmental concerns as a reason (France?) may in fact be an attempt to get ahead of a permanent decline in conventional oil and heavier fuel oils including diesel. Demand destruction? Anyway, some months ago, our local diesel prices were near par with regular gasoline and have now jumped to be about $0.80 higher. Supply and demand it seems.