Oil, What, Where & When in North America Over the Next 3 Years
Many countries have very heavy crude oil and it can only be used to refine certain products. Saudi crude cannot be used for gasoline production because of this. Mexico and Venezuela also have almost all of their oil as heavy crude. It can be used to produce heavy bunker oil used in ships and asphalt production. In Canada’s Alberta oil patch, the oilsands is also very heavy crude and must be refined in an upgrader to allow it to become a very light crude then be refined into gasoline and other light oil products. It costs a great deal more time and money to refine the heavy crudes into light grade products..A certain percentage of very heavy crude is also lost in the double refining process which is one reason it brings a much lower price.
When normal West Texas Intermediate ( WTI ) crude was selling for $75 a barrel a few months ago, the heavy oilsands crude of northern Alberta was worth only $28 a barrel on the market. Therefore asking Saudia Arabia to increase very heavy oil production to try to help out with high gasoline prices makes no sense when you understand the basics. Saudi crude is no good for gasoline production.
Husky Oil, a Calgary, Alberta based company, which is more than 50 percent owned by the Chinese for the past 3 years, just bought a half share in a refinery in Ohio. They spent about 2 months rejigging the refinery in early 2008 with it’s American partner and will be sourcing the crude from Alberta. The agreement with their partner is that they will not get any refined products for the first 2 years which means all the finished gasoline, diesel, home heating oil, jet fuel and propane that this plant will produce, will go only to it’s American customers and none to Canada. This is partly Chinese money that has help made this possible. Whatever your opinion is of that, this will be a big help in the summer supply of all fuels.
