The Oil Drum: Europe

Every year in late summer, you will start hearing references in the media about the conversion to winter gasoline, such as the following (originally in the Bradenton Herald, but the link is long dead):

Motorists can thank a mild hurricane season in the Atlantic for the lower gas prices, according to the American Automobile Association.

Other factors include the end of the summer driving season and a cheaper winter fuel mix.

Gas stations sell a special, more expensive fuel blend during the summer to cut down on smog during hot months. Stations nationwide will start selling a less-expensive winter fuel blend Friday, which could lead to even lower prices, analysts said.

So what does this mean, and why does it make winter gasoline less expensive?

NB: This is a reposting of an article written by Robert two years ago on how winter gasoline differs from summer gasoline, and why this tends to make winter gasoline less expensive than summer gasoline. We also now have a lot of reports of gasoline outages due to short supply following Hurricanes Gustav and Ike. Feel free to discuss those in this thread or scroll down to the refinery/pipeline/gas shortages thread.

How can you double something and still have ten times less than you started with?

The answer to this question will help us reassess claims that advances in oil field technology will postpone the peak in global oil production. The question itself arises from a case study of Enhanced Oil Recovery in the Handil Oil Field in Indonesia.

There have been several refining questions lately that were topical to this essay, originally posted in January 2007. Here I have updated it to reflect more recent prices.

When a refinery purchases crude oil, the key piece of information they need to know about that crude, besides price, is what the crude oil assay looks like. There has been a lot of discussion here at various times about “light sweet”, or “heavy sour”, and how these qualifiers affect the ability of a refiner to turn these crudes into products. So, I thought it would be good to devote an essay to this subject, and discuss how different types of crude can affect a refiner’s bottom line.

Let's compare light sweet oil to heavy sour oil by looking at a pair of assays:

Liquid Volume %	Generic Light Sweet	Generic Heavy Sour
Gas (Boiling Point to 99°F)	4.40	3.40
Straight Run (99 to 210°F)	6.50	4.10
Naphtha (210 to 380°F)	18.60	9.10
Kerosene (380 to 510°F)	13.80	9.20
Distillate (510 to 725°F)	32.40	19.30
Gas Oil (725 to 1050°F)	19.60	26.50
1050+ Residuals	4.70	28.40
Sulfur %	0.30	4.90
API	34.80	22.00

Table 1. Comparison Between Assays of Light and Heavy Crudes

One of the things I really like about The Oil Drum is that I learn something new here almost every day. So, I thought I would return the favor by explaining in a bit more detail something you may not know.

Every year in late summer, you will start hearing references in the media about the conversion to winter gasoline, such as the following (originally in the Bradenton Herald, but the link is long dead):

Motorists can thank a mild hurricane season in the Atlantic for the lower gas prices, according to the American Automobile Association.

Other factors include the end of the summer driving season and a cheaper winter fuel mix.

Gas stations sell a special, more expensive fuel blend during the summer to cut down on smog during hot months. Stations nationwide will start selling a less-expensive winter fuel blend Friday, which could lead to even lower prices, analysts said.

So what does this mean, and why does it make winter gasoline less expensive?

Most of you folks know that I recently wrote an Oil Quiz. The American Petroleum Institute (API) now has a quiz also, called the Energy IQ.

API's concern is that Americans have a low level of knowledge about energy issues, and this low level of knowledge may affect energy policy. To document the current level of knowledge, API hired Harris Interactive to perform an internet survey of 1,333 adults, then had a conference call with bloggers (Brian Faughnan - Weekly Standard; Ed Morrissey - Captain's Quarters, Heading Right; Geoffrey Styles - Energy Outlook; Stephen Spruiell - National Review; John Kingston - Platts, and Gail Tverberg - TOD) to discuss the results.

In this article, we will look at the quiz itself and then talk a little about the interpretation. As you read the quiz, you will note that the questions seem to be selected to emphasize points that API would like to make. API's discussion of the quiz can be found here, the quiz with answers and references can be found here, and the blogger conference call recording and transcript can be found here.

ENERGY IQ QUIZ

1. What percentage of the world’s 10 biggest oil and natural gas companies are owned and operated by foreign governments?

Answer under the fold

Should We Ever Subsidize an Oil Company?

“Of course not!” might be the immediate reaction of most people. But doesn’t it depend on the objectives you are trying to achieve or the behaviors you wish to influence? Are there no cases in which it would be warranted? What if the end result was a reduction in our fossil fuel consumption?

I think most people would like to see us move away from fossil fuels. But fossil fuels are money-makers for the oil companies, and the cheapest option (strictly in terms of dollars at the pump) for consumers. So how do we wean off of fossil fuels?

On April 18th, I participated in a conference call with the American Petroleum Institute. The topic of the call was Energy and the Environment. You can download a transcript here or the audio of the call here.

Here was a list of participants, pulled from the call transcript:

Jeff McIntire-Strasburg is from Treehugger and we just went through, briefly, a blog roll. We have on the call Robert Rapier from The Oil Drum and R-Squared; Hank Green of EcoGeek; Tom Fowler of NewsWatch: Energy which is Houston Chronicle; Marc Gunther, Fortune; Mark Gongloff of The Wall Street Journal Energy Roundup; and Carter Wood of ShopFloor.org.

I think they missed mentioning John Gartner from Wired.

Update: I am going to stop tabulating the votes at this point. Here were the top choices, in reverse-order of the number of points each received: 33, 13, 4, 3, 11, 12, 16, 31, 1, 7, 9, 23. I will start with Question 33, and work my way through the list as time allows.

I have pointed the API again to this thread, so they can get a handle on what people want to know. Here are some excerpts of the responses I got back:

Interesting questions all. Because we billed this as an “energy and the environment” conference call, we would, of course, prefer that the questions be relevant to the topic, primarily out of respect to those bloggers who signed on because of their interest in the environment and sustainability. There will be future calls during which other topics can be discussed.

I also asked whether or not questions about natural gas (#4) are appropriate for this particular call. The response I received back was:

API has a strong interest in natural gas. While we will leave it up to you to decide whether you should pose that question, I do want to reiterate what I said in my earlier email about sticking to the announced topic.

Given that, I will more or less play it by ear on some of these questions. If everyone else is asking purely environmental questions, I may hold off on certain questions until the next call. I do have a lot of questions that are purely environmental questions, and I will work my way through some of those at the top of the list. I will also do some rewording of some of the questions, as I agree that some are too vague and leave themselves open to a canned reply. I will follow-up on this as soon as they have the transcript online, which should be within a couple of days.

Thanks again to all who participated.

I will participate in another API conference call on energy issues on April 18th, and I would like to solicit questions from readers. The topic will be “Energy and the Environment”, but I would expect they will take any energy-related questions. The speaker will be API CEO Red Cavaney.

I wrote up my impressions of the previous conference call here. You can read the transcript from the first call here along with an audio recording at the API's Energy Tomorrow site.

If you get a chance, read the transcript or listen to the audio recording. This may prompt some questions. I will try to get as many answered as possible, and then I will write up the results. Don't miss this opportunity to have your questions/concerns documented and addressed. If you have a question, please list it. First come, first served.

When a refinery purchases crude oil, the key piece of information they need to know about that crude, besides price, is what the crude oil assay looks like. There has been a lot of discussion here at various times about “light sweet”, or “heavy sour”, and how these qualifiers affect the ability of a refiner to turn these crudes into products. So, I thought it would be good to devote an essay to this subject, and discuss how different types of crude can affect a refiner’s bottom line.

Let's compare light sweet oil to heavy sour oil by looking at a pair of assays:

Liquid Volume %	Generic Light Sweet	Generic Heavy Sour
Gas (Boiling Point to 99°F)	4.40	3.40
Straight Run (99 to 210°F)	6.50	4.10
Naphtha (210 to 380°F)	18.60	9.10
Kerosene (380 to 510°F)	13.80	9.20
Distillate (510 to 725°F)	32.40	19.30
Gas Oil (725 to 1050°F)	19.60	26.50
1050+ Residuals	4.70	28.40
Sulfur %	0.30	4.90
API	34.80	22.00

Table 1. Comparison Between Assays of Light and Heavy Crudes