US Gasoline is made from ...
There are a lot of misunderstandings about oil, especially given how much talk there is about it.
#1 The USA consumes and exports 20.7 million barrels per day of refinery outputs.
#2 For every 42 gallon barrel of crude oil into a refinery you get an average of 44.5 gallons of refined products out of the refinery (when your refine crude oil, you produce products that expand in volume - the technical term is that refinery products have a lower specific gravity than crude oil. This gain due to refining is called "refinery gain." It is significant and is one of many reasons why you want refinery tech and capacity inside your country, especially if you are producing less crude oil. These Refinery Gains add 1.0 million barrels a day.
#3 But we also send into our refineries other hydrocarbons and some oxygenates that either supplement or substitute for crude oil. These are significant and are almost always ignored. The largest of these imputs is Natural Gas Plant Liquids. So producing more natural gas, produces more of a direct substitute to crude oil. The USA produces 2.0 million barrels per day of NGPL.
#4 Then we send another 0.6 million barrels per day of ethanol and other oxygenates into the refineries.
So 20.7 million barrels per day of refinery outputs consumed and exported. We export 1.3 million barrels per day of finished products. So we actual consume, 19.4 million. Keep in mind, that many countries that produce crude oil, can't refine it into anything useful. They are just as dependent on foreign (meaning us) gasoline as we are on foreign (meaning their) oil.
19.4 - 5.1 (domestic crude oil and lease condensates) - 2.0 Natural Gas Plant Liquids - 1.0 Refinery Gains - 0.6 Ethanol/Oxygenates = leaving 10.7 million barrels per day needed from foreign countries for our consumption.
The largest source of this "foreign" oil is CANADA!!!! Canada sends us 2.4 million barrels per day. Of this amount about 1.4 million is conventional crude oil and heavy oil (which sometimes is not counted as crude oil, but as a non-conventional oil, called heavy or ultra heavy, and the other 1.0 million is from Canadian tar sands.
The second largest source of "foreign" oil is MEXICO!!!! Mexico sends us 1.5 million barrels per day of crude and heavy oil. Much Mexican oil is heavy oil. Mexico has more heavy oil and utlra heavy that its not producing. Mexican sweet crude production has peaked.
So, 19.4 - 5.1 (domestic crude oil and lease condensates) - 2.0 Natural Gas Plant Liquids - 1.0 Refinery Gains - 0.6 Ethanol/Oxygenates = leaving 10.7 million barrels per day need from foreign countries for our consumption. 10.7 - 1.4 Canadian crude and heavy oil, -1.0 Canadian tar sand bitumen, -1.5 Mexican crude and heavy oil. So that leaves 6.8 coming from outside the USA, Canada and Mexico.
Of this 6.8 million only 19% or 1.3 million per day comes from all of the Middle East producers (Saudi Arabia, gulf states, Iraq, Kuwait ...)
The rest of America's crude imports come from several African countries (Nigeria and Angola being the biggest), several South American countries (Venezuela and Columbia are the largest) and Russia (some of which is produced in SIberia in ecosystems much like ANWR under Russian eco laws).
The USA could easily be producing far more than the 1.3 million we get from the Persian Gulf domestically from areas which it is illegal to produce in the USA:
Alaska National Wildlife Reserve (ANWR) 0.4 million
New California Offshore 0.4 million
Eastern Gulf Florida Straights 0.5 million
Atlantic Coast 0.5 million
Deep Water Off Shelf (Gulf) 0.2 million
Natural Gas Plant Liquids from natural gas produced in these areas 0.5 million
The USA could also could be producing synthfuels from coal and natural gas. If EPA permitting was expedited, we could reasonably be adding an additional production capacity of 0.3 million from coal and 0.2 million from natural gas every five years.
Pickens suggested use of CNG (compressed natural gas, which is different from natural gas synthfuel) could add an additional capacity of say 0.4 million every five years, very reasonably.
On the conservation side, the biggest impacts will be from reduced miles driven, and then by a roughly 5% per year improvement in average fuel efficiency of the nation's cars and trucks. Hybrids and Plug-Ins, along with smaller conventional gasoline engines and CNG will all combine in achieving this 5% efficiency gain - very likely we may get a result above that.
Get online this USA crude production, add some modest synthfuel capacity, use CNG in a reasonably plausible amount and get the hybrids and plug-in going and in a few more years we'll break $150 oil. (Go google what happened to oil after the 1979 oil shock ... the 1986 oil glut).
Bottom line most of the gasoline in your tank is produced in North or South America, much of it isn;t from crude oil, but from substitute inputs for crude oil.
#1 The USA consumes and exports 20.7 million barrels per day of refinery outputs.
#2 For every 42 gallon barrel of crude oil into a refinery you get an average of 44.5 gallons of refined products out of the refinery (when your refine crude oil, you produce products that expand in volume - the technical term is that refinery products have a lower specific gravity than crude oil. This gain due to refining is called "refinery gain." It is significant and is one of many reasons why you want refinery tech and capacity inside your country, especially if you are producing less crude oil. These Refinery Gains add 1.0 million barrels a day.
#3 But we also send into our refineries other hydrocarbons and some oxygenates that either supplement or substitute for crude oil. These are significant and are almost always ignored. The largest of these imputs is Natural Gas Plant Liquids. So producing more natural gas, produces more of a direct substitute to crude oil. The USA produces 2.0 million barrels per day of NGPL.
#4 Then we send another 0.6 million barrels per day of ethanol and other oxygenates into the refineries.
So 20.7 million barrels per day of refinery outputs consumed and exported. We export 1.3 million barrels per day of finished products. So we actual consume, 19.4 million. Keep in mind, that many countries that produce crude oil, can't refine it into anything useful. They are just as dependent on foreign (meaning us) gasoline as we are on foreign (meaning their) oil.
19.4 - 5.1 (domestic crude oil and lease condensates) - 2.0 Natural Gas Plant Liquids - 1.0 Refinery Gains - 0.6 Ethanol/Oxygenates = leaving 10.7 million barrels per day needed from foreign countries for our consumption.
The largest source of this "foreign" oil is CANADA!!!! Canada sends us 2.4 million barrels per day. Of this amount about 1.4 million is conventional crude oil and heavy oil (which sometimes is not counted as crude oil, but as a non-conventional oil, called heavy or ultra heavy, and the other 1.0 million is from Canadian tar sands.
The second largest source of "foreign" oil is MEXICO!!!! Mexico sends us 1.5 million barrels per day of crude and heavy oil. Much Mexican oil is heavy oil. Mexico has more heavy oil and utlra heavy that its not producing. Mexican sweet crude production has peaked.
So, 19.4 - 5.1 (domestic crude oil and lease condensates) - 2.0 Natural Gas Plant Liquids - 1.0 Refinery Gains - 0.6 Ethanol/Oxygenates = leaving 10.7 million barrels per day need from foreign countries for our consumption. 10.7 - 1.4 Canadian crude and heavy oil, -1.0 Canadian tar sand bitumen, -1.5 Mexican crude and heavy oil. So that leaves 6.8 coming from outside the USA, Canada and Mexico.
Of this 6.8 million only 19% or 1.3 million per day comes from all of the Middle East producers (Saudi Arabia, gulf states, Iraq, Kuwait ...)
The rest of America's crude imports come from several African countries (Nigeria and Angola being the biggest), several South American countries (Venezuela and Columbia are the largest) and Russia (some of which is produced in SIberia in ecosystems much like ANWR under Russian eco laws).
The USA could easily be producing far more than the 1.3 million we get from the Persian Gulf domestically from areas which it is illegal to produce in the USA:
Alaska National Wildlife Reserve (ANWR) 0.4 million
New California Offshore 0.4 million
Eastern Gulf Florida Straights 0.5 million
Atlantic Coast 0.5 million
Deep Water Off Shelf (Gulf) 0.2 million
Natural Gas Plant Liquids from natural gas produced in these areas 0.5 million
The USA could also could be producing synthfuels from coal and natural gas. If EPA permitting was expedited, we could reasonably be adding an additional production capacity of 0.3 million from coal and 0.2 million from natural gas every five years.
Pickens suggested use of CNG (compressed natural gas, which is different from natural gas synthfuel) could add an additional capacity of say 0.4 million every five years, very reasonably.
On the conservation side, the biggest impacts will be from reduced miles driven, and then by a roughly 5% per year improvement in average fuel efficiency of the nation's cars and trucks. Hybrids and Plug-Ins, along with smaller conventional gasoline engines and CNG will all combine in achieving this 5% efficiency gain - very likely we may get a result above that.
Get online this USA crude production, add some modest synthfuel capacity, use CNG in a reasonably plausible amount and get the hybrids and plug-in going and in a few more years we'll break $150 oil. (Go google what happened to oil after the 1979 oil shock ... the 1986 oil glut).
Bottom line most of the gasoline in your tank is produced in North or South America, much of it isn;t from crude oil, but from substitute inputs for crude oil.
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Replies to This Discussion
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Permalink Reply by Brendan Eric Johnson on -
That is interesting to know, good information to have, but does not change the fact that petroleum products are a non renewable resource. No matter where they come from, the world's present rate of consumption insures that these resources will eventually be depleted. Any plan that only involves more drilling or other changes in where we get our petroleum products is at best a temporary solution. As a nation we need more long term thinking and more long term solutions.
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Permalink Reply by Glenn Scott on -
Think long term I agree, but alt now at the cost to replace all oil destoys the us economy with energy input costs 10x what the chinese will run their economy on through 2030
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Permalink Reply by SJC on -
I look at it as buying time and being practical. If we can use natural gas, hybrids, PHEVs and whatever looks good we can buy us some time to develop the next stage of what we need to do.
In the 70s the oil shocks woke us up, but we did not take advantage of the last 30 years to position ourselves for the next 30 years. That is OUR fault. Do not blame politicians, nor CEOs, nor Arabs, that is just a form denial and trying to escape blame. We have met the enemy and it is us.
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Permalink Reply by patrick on -
You missed the Bakken field of light sweet crude in Montana / North Dakota that has 41 years of supply for the USA but congress is keeping it off the market. As for the leases, the find in the gulf of mexico took 10 years to explore and find. Then the lease was bought back by the US Government and the company was not allowed to bring product to market.
Brendan: fact (NOT) that petroleum products are a non renewable resource. Current debate is that oil is being created constantly by Mother Earth and did not come from fossils. Fossils are never found below 15,000 feet but most oil is at 30,000. There is another blog within here that explains.
I'm for trying this plan to spur natural gas vehicles as alternate and spur electric cars. I don't know if wind towers are answer but we sure should try to develop technology now to know if it is better than ethanol. I've used solar but it was NOT cost effective in Minnesota. We need to explore all alternatives to learn and be ready to use. For instance, geothermal heat pumps save 50% and might be used to conserve. CAFE standards need to go up to 45 MPG to conserve gasoline. Wind might work to a degree and allow City's to use municipal pumps for their vehichles, buses, etc. I'm not sure if everyday drivers will be able to find pumps everywhere.
I agree that there is still plenty of Oil that we can get at and NEED TOO DRILL!
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Permalink Reply by dana on -
"Get online this USA crude production, add some modest synthfuel capacity, use CNG in a reasonably plausible amount and get the hybrids and plug-in going and in a few more years we'll break $150 oil. (Go google what happened to oil after the 1979 oil shock ... the 1986 oil glut).
Bottom line most of the gasoline in your tank is produced in North or South America, much of it isn;t from crude oil, but from substitute inputs for crude oil."
Doesn't matter where it is imported from- it's a fungible commodity. The price is the same no matter which h*** it got pumped out of- the actual amount imported to the US from the middle east is an irrelevant number. If we import it from elsewhere, the amount of money going into those hands is still the same, as long as our consumption level remains the same, supporting the world-price.
The lesson of 1979-1985 is that worldwide oil consumption fell by about 15% (cutting back far faster & deeper than previously thought possible) in response to the price shock, which caused the oil glut. Oil production didn't increase- it FELL, as did the price as storage capacity started to fill up. Nobody drilled their way out of that price-crisis, just as they won't this time. Oil production didn't hit the 1979 level again until 1988, well after the price crash. Efficiency simply increased faster than it was convenient for oil producers to cut back on production- that can (and will) happen again, whether US oil fields get developed or not.
The severity of the current price shock is much higher than 1979, and the longer the price is sustained, the more rapidly efficiency measures an swaps to alternatives will happen. At the $140/bbl price point nearly all known alternatives are cost-effective. (Hell, that's true even at $80/bbl!) Oil will have to drop to well under $50/bbl (try $25/bbl) to stop the shift toward increasing efficiency and alternate energy sources precipitated by this spike. Will it get there before the US or the world moves on to something else? (I dunno- got a crystal ball?)
US oil production is roughly 6-7% of the world total- even if we doubled it tomorrow (not hap'nin') it would only yield a ~18-20% drop in the price. Ongoing conservation, fuel swapping, and efficiency measures will have a far bigger impact much sooner than any drilling program could anywhere in the world. But that doesn't mean it isn't a good idea for a nation to be able to produce energy (from any source) at roughly the rate we use it, which is the rationale for something like the Pickens Plan.
Getting off oil kills the world price, un-funds a whole lot of nations with large pumping capacity whose interests, security, and political habits aren't necessarily aligned with those of the US. Being the single largest oil consuming nation, the US has the power to do this more than any other nation. We have far more control over the level of world oil consumption than we will ever have over production. If as a nation we stay substantially in import-mode, our economy will continue to be exposed to price shocks, to our detriment.
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Permalink Reply by Pronto Power on -
Reduce our consumption!!!!!!!
http://www.ted.com/index.php/talks/amory_lovins_on_winning_the_oil_...
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Permalink Reply by Glenn Scott on
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Thanks Dana for your thoughtful pro-conservation arguments. I don't think we substantially disagree. I don't want to leave anyone with the impression that the consumption side wasn't the primary cause. The global supply drop in crude after 1979 was OPEC cutting trying to hold prices - they could cut enough to catch dropping consumption.
#1 impact was the USA taking our oil fired electric power plants to coal and nat gas, the Euros took theirs nuclear.
#2 impact was the NE USA converting homes from distillate home heating oil to electric (hydro, nuke, coal), nat gas and propane.
#3 impact was raising the average fuel efficiency in the USA from 17 mpg to 22 mpg.
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Permalink Reply by Phil McQuillan on -
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http://push.pickensplan.com/forum/topic/show?id=2187034%3ATopic%3A4...
Here you will find many sample letters for anyone to use in whole or in part. Just Cut & Paste what's useful to you and send to your state representatives with appropriate changes. If you would like to see your Letter added to this list just post it using the Reply box below and I will add it. Many thanks for CONTRIBUTING!
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Permalink Reply by Glenn Scott on
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Fungibility Refute:
The assertion that oil price or oil physically is fungible (meaning that the price is set globally and/or that physical oil can substitute from one point of consumption to the next) is true, mostly.
This assertion then is followed by either of two non-sequiturs:
1) Oil is fungible (true) .... therefore, producing more oil in the US won't affect world oil prices (false). Oil's price is set on the margin by supply and demand. Lets say the USA were to add 0.25 million barrels per day each year for the next ten years. We would go from 5.1 million today up to 7.6 million in 2018, or an additional 2.5 million barrels per day. This would roughly equal the lost Iraqi production from the Iraq War. To hold that 2.5 million barrels per day is irrelevant means you also have to argue that the lost oil production due to the Iraq War didn't contribute to the rise in oil prices. You would also have to concede then that the Democrat's call to use 0.3 million barrels per day from the Strategic Oil Reserve would have no impact on prices (and would therefore be an election year gimmick). The world produces roughly 85 million barrels per day. Oil's price is set on the margin. But an honest discussion of increased US oil production and price must also consider the demand side. And this, I must concede is the stronger argument. Increased US oil production will lower price. But this lower price will lead to greater total consumption of oil, globally. The anti-drilling assertion that because the price of oil is fungible increased US oil production won't cause the price of oil to fall is FALSE. However, I will concede that because the price of oil is fungible increased US oil production won't cause the total consumption of oil to fall, it may actually rise. I will concede from the RIGHT that the war in Iraq contributed to higher oil prices. I will also concede that releasing oil from the US Strategic Petroleum Reserve would also cause the price of oil to decline. BUT the LEFT must then concede that increased oil U.S. oil production will lower global oil prices regardless of oil's price fungibility.
2) Oil is fungible (true) .... therefore producing more oil in the US will only mean that oil from Alaska will go to China and Oil from the Atlantic offshore would just flow to Europe (Mostly False). Oil is consumed physically in proximity to where it is produced because to move it further than the nearest market is inefficient. However, you really have to move oil from its point of production to the nearest refinery with the capacity to handle it. This caveat means that USA's lack of refining capacity or pipelines and terminals could create a greater probability that increased US oil could physically move elsewhere. For example, the limited ability to move Canada's rapidly expanding production of crude oil substitute, tar sand bitumen, to US refineries (which are largely on the Gulf Coast, New Jersey and Southern California has them thinking of sending the tar sand oil by pipeline to Vancouver for loading on tankers, which might well head for Chinese refineries (since the Chinese are rapidly expanding their terminal and refining capacity). Ironically, the Canadians already import light crude oil from Montana, Wyoming and the Dakotas to Alberta to blend with their heavy bitumen so that it can flow through pipelines and be refined easier. Right now this blended American light crude and Canadian tar sand bitumen then gets re-imported back to the US. Likewise, due to depletion of the North Sea oil fields, the British may end up sitting on excess refining capacity. It may make sense to export new Atlantic crude to Britain and re-import it back as gasoline to the US east coast. So the solution to keeping oil you produce in your country to match you domestic consumption is to build the refinery, pipeline and terminal capacity to use it. And in America today building any of these things is a NIMBY/environmental litigation and bureaucratic nightmare. But, if the US ended up sending Alaskan crude to China it would mean the Chinese would be sending dollars back to the USA which we would then use to buy say Brazilian oil to input into Texas refineries. Either way, the US is still, from an economic standpoint, better off in terms of trade deficits and domestic jobs. And in any national security crisis or disruption of US supplies, the government could ban the export of oil.
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