Impact of expansion of domestic (U.S.) heavy oil production on the US refining industry

Conference · Sun Dec 31 04:00:00 EST 1995

OSTI ID:229601

Olsen, D K ^[1]

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1. BDM-Oklahoma, Inc., Bartlesville, OK (United States)

Previous studies have suggested that as much as 900 MB/D of new heavy oil could be produced in the United States by the year 2010. A more conservative and realistic target production level is 300 MB/D. We assumed this additional heavy oil production and developed potential production areas, volumes (300 MB/D, low volume, and 900 MB/D, high volume scenario), oil quality, and delivery times through the year 2010. The impact on the United States refining complex was evaluated. Simulations using a linear programming model of the United States refining industry were conducted and balanced by displacing imports (principally Mideast light crude) with domestically produced heavy oil. The base case (no new heavy oil) projects the United States production and refining performance through 2010. If new domestic heavy oil is delivered, then new bottoms conversion capacity (delayed coking) will be required. The investment required before the year 2010 to accommodate the additional domestic heavy oil production is $7.050 billion for the low volume scenario and $7.253 billion for the high volume scenario. About half of the cost can be attributed to compliance with the United States Clean Air Act (CAA), which requires higher quality (cleaner) products and lower refineries emissions. The other half of the cost is for new capital equipment, delayed cokers, and other heavy oil conversion capacity. The cost for both scenarios is about the same because the proposed additional domestic heavy oil is lower in sulfur than the Mideast medium crude it displaces.

• OSTI ID: 229601
• Report Number(s): CONF-9502114--Vol.2
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
29 ENERGY PLANNING, POLICY, AND ECONOMY
CAPACITY
COST
ECONOMICS
FORECASTING
IMPORTS
INVESTMENT
PETROLEUM
PETROLEUM REFINERIES
SUPPLY AND DEMAND