Facts About Oil: A Reference Post
By Thomas Neuburger
This is a piece you may want to bookmark. Consider it a reference post.
The world in general and the U.S. in particular are facing an energy crisis, fueled by our leaders’ determination to further enrich the fossil fuel industry. So conversation about oil and gas will be all the rage the minute the crisis comes home.
Much of what’s said will be lies. Some of it already is:
President Donald Trump announced Friday that the U.S. and Venezuela have reached a "historic" oil deal that he said would give the U.S. a majority control of billions of barrels of oil reserves in the Caribbean country and lower gas prices for Americans.
If you want to sort through what you’ll hear easily, this information should help. Not all “oil” is oil, nor is all oil found where “oil” is found. Geography counts.
What Kind of Oil Is Where?
The top third shows different weights of petroleum, from extra heavy (sludge) through medium and light (the good stuff, the stuff that drives markets), to condensate (petroleum that’s vaporous underground but a liquid when brought up) and LNG / CNG — both forms of natural gas — also good stuff and a key source of fertilizer.
This is where it gets interesting.
• The heavy oils are thick and gummy, useful only for asphalt and the kind of sludge that big marine ships use. It comes from Venezuela and the tar sands in Canada (the name is a clue). No one tries to make jet fuel, kerosene or gasoline from sludge. Thus no Venezuelan oil will bring down U.S. energy prices. It’s too hard to refine and U.S. companies are not set up to use it.
• The medium and light weight oils are what people most want. Both the WTI (West Texas Intermediate) and Brent oil benchmarks are in this category. They’re often called “light sweet crude” for their higher viscosity (“light”) and low sulphur content (“sweet”). These products, and only these, are used to make heating oil, kerosene, diesel fuel and gasoline.
Now look where they’re found: the Gulf States, Iran, and Russia. The percentage from other locations is negligible compared to these sources.
Oops.
The World In a Nutshell
Thus our crisis prediction, all in one graph. If Gulf oil is not being shipped (thanks to the war on Iran), and if Russia shuts its taps to the West (which it’s already doing), the world, as they say, is hosed, and not in the good way.
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