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Wednesday, March 23, 2016

How Oil Is Formed -- A Note From Jones Oil Ireland -- March 23, 2016

This is kind of cool. I just received a personal note from "Kate" at Jones Oil Ireland -- a 100%-Irish company delivering oil and refined products to the counties in Ireland. She sent me a link to their site, "How Oil Is Formed." She must have known I used to teach as a substitute school teacher at the middle and high school levels.

Update, 1:56 p.m.: see first comment -- Jones Oil Ireland suggests that "we" will run out of oil in about 50 years. They must not have heard of the Bakken. Another Geico Rock Award nominee?

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RBN Update On Bakken CBR To The West Coast
Pacific Northwest
Link here

West Coast market
  • somewhat different than the rest of the US
  • WTI vs Alaska North Slope (ANS) delivered to Long Beach, CA
  • ANS: the default crude processed by west coast refineries
  • if Bakken crude sells at a significant enough discount, CBR is economical
  • this post focuses on Pacific Northwest
  • later, RBN Energy will focus on California
  • much of CBR delivered to the PNW comes from the Bakken
  • California CBR mostly from Canada, New Mexico, the Rockies (Bakken?)
PNW
  • five (5) refineries -- all located in Washington State
  • total refinery capacity: 647,000 bopd
  • all process ANS
  • no pipeline network to deliver US inland crude to the PNW
  • Five refineries (now/future Mb/d):
    • Tesoro: 50 / 120
    • BP: 60 / 234
    • Phillips 66: 30/101
    • Trailstone (US Oil Refining): 40 / 42
    • BP: 0 / 65 -- held up by Environmental Impact Study
Recently:
  • Bakken: $37.24
  • ANS: $39.26 (apparently that includes the sea-going tanker rate)
  • Bakken CBR: add $10.39/bbl)
  • thus: an $8 penalty to use Bakken oil
Take-or-pay / other long-term commmitments
  • other "incentives" keep Bakken CBR moving to the PNW 

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