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Why do we import Russian (and other foreign) oil when we have a lot of it in the U.S.?

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  • Why do we import Russian (and other foreign) oil when we have a lot of it in the U.S.?

    Here's an idea: Why don't these greedy f***s use the hundreds of billions of dollars in subsidies we pay them every year to upgrade their refining infrastructure?



    There’s been a lot of discussion about the fact that the United States imports Russian oil — and a pretty good amount of it.

    Now, you could be excused for asking yourself: “Wait a second, I thought the U.S. had a bunch of oil in the Permian Basin in Texas and the Bakken Shale in North Dakota. Why the heck are we importing oil?” Turns out the answer is part chemistry and part economics.

    When oil refiners talk about crude, they generally ask two questions. First: How easy is it to break up the hydrocarbons to produce, say, gasoline or jet fuel? (In oil speak: How light is it?) Second: How much sulfur is in the oil? If there isn’t much, it’s called sweet crude.

    “Higher sulfur content, more sour crudes actually are cheaper to purchase,” said Hugh Daigle, associate professor of petroleum engineering at the University of Texas at Austin.

    That’s because they take longer to process and need specialized refining equipment. This cheap, lower-quality crude comes from Canada, Venezuela and Russia, among other spots. Back in the late 1990s and early 2000s, it was the product U.S. refiners were buying.

    “A lot of refineries, especially in the Gulf Coast, made a very expensive bet to invest in this equipment that would allow them to save money on input costs by processing, you know, lower-quality crude,” said Richard Sweeney, an assistant professor of economics at Boston College.

    Then came the fracking boom. Fracking produces light, sweet crude that can’t be refined with that equipment.

    “And it’s just like the economics of that bet turned out, ex-post, to be really bad,” Sweeney said.

    Even though a lot of that light sweet crude is coming from Texas, where the refineries are, the U.S. imports foreign oil in order to make use of the existing infrastructure.

    “They spent billions of dollars on this refining capacity in the ’90s and early 2000s,” said Ryan Kellogg, professor of public policy and deputy dean for academic programs at the University of Chicago. “They’re not going to want to let that sit idle. It’s there, and it makes sense to use it.”

    But there’s got to be a way for refineries to retrofit their operations to make use of more domestically produced oil, right?

    “That is, you know, something we could do. It would require some reconfiguring of the refineries,” said Daigle. “But does it make economic sense for the refining companies to do that?”

    Reconfiguring refineries costs a lot of money, so why do it if companies can still turn a profit using their existing platforms?

    To be fair, the U.S. refining system is processing more light sweet domestic crude than it used to, but nowhere near the point where the country can stop importing heavier, sour oil from abroad.

    The upshot: Since 2020, the U.S. has been a net exporter of oil, sending a lot of its light sweet crude to Europe and Asia where refineries are equipped to deal with the kind of oil coming out of West Texas and North Dakota.

    https://www.marketplace.org/2022/03/...9esR2DkIu5Dmx8

  • #2
    Much too complicated a story for the resident alt-right brain trust.

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    • #3
      Originally posted by W*GS View Post
      Much too complicated a story for the resident alt-right brain trust.
      Yep.

      Brief summary for those who are too lazy to read:

      The reason why America imports Russian (and other foreign) oil:

      Despite earning record profits, and despite receiving profligate government subsidies, oil companies refuse to invest any of those monies in upgrading their refining infrastructure.

      Comment


      • #4
        Refineries need both capacities. Canada is a friendly source of heavy crude. We also need the light capacity for domestic oil as well as Saudi oil.


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        • #5
          It's much cheaper to just buy members of Congress.

          After all, Manchin has a yacht payment to make.

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          • #6
            Originally posted by Drunk Monkey View Post
            Refineries need both capacities. Canada is a friendly source of heavy crude. We also need the light capacity for domestic oil as well as Saudi oil.

            The point is that we import oil from Russia and other foreign countries not because we need the oil, but because oil companies are too cheap to upgrade their refining infrastructure - despite the record profits and massive government subsidies.

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            • #7
              Originally posted by Roh View Post
              It's much cheaper to just buy members of Congress.

              After all, Manchin has a yacht payment to make.
              Yep.

              That way, you can dictate to government how much you want to pay in taxes - not vice versa.

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              • #8
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                • #9
                  Originally posted by L.A. BRONCOS FAN View Post

                  The point is that we import oil from Russia and other foreign countries not because we need the oil, but because oil companies are too cheap to upgrade their refining infrastructure - despite the record profits and massive government subsidies.
                  So upgrade all the refineries for sweet crude only? We don't like Canadian oil?

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                  • #10
                    Originally posted by Drunk Monkey View Post

                    So upgrade all the refineries for sweet crude only?
                    Yes.

                    Unless you want to have to depend on Russian oil?

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                    • #11
                      Originally posted by L.A. BRONCOS FAN View Post

                      Yes.

                      Unless you want to have to depend on Russian oil?
                      Canada? We no like their oil? They are probably the best trading partner we can have. I don't get it?

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                      • #12
                        Originally posted by Drunk Monkey View Post

                        So upgrade all the refineries for sweet crude only? We don't like Canadian oil?
                        I thought tar sands oil was the worst possible grade of oil. Not to mention the massive damage it does to the environment.

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                        • #13
                          The left always has someone to blame for everything going wrong on their watch. Its either Putin, Trump, greedy companies, or Covid ..... How about trying to fix something and stop blaming people for the f ed up policies you guys are pushing.


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                          • #14
                            Originally posted by Roh View Post

                            I thought tar sands oil was the worst possible grade of oil. Not to mention the massive damage it does to the environment.
                            Getting oil from tar sands is like smoking the butts from public ashtrays.

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                            • #15
                              Originally posted by uplink View Post
                              The left always has someone to blame for everything going wrong on their watch. Its either Putin, Trump, greedy companies, or Covid ..... How about trying to fix something and stop blaming people for the f ed up policies you guys are pushing.

                              Click image for larger version

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                              • #16
                                Because Biden

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                                • #17
                                  Originally posted by Mile High Salute View Post

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                                  Uplink loves him some Russian oil.

                                  And anybody who challenges socialism for oil companies? Just sad!

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                                  • #18
                                    Originally posted by uplink View Post
                                    The left always has someone to blame for everything going wrong on their watch. Its either Putin, Trump, greedy companies, or Covid ..... How about trying to fix something and stop blaming people for the f ed up policies you guys are pushing.

                                    Putin, Trump, and the greedy (oil) companies are all in the same basket of deplorables, and yes -- they should be blamed for a lot of the issues that the world is struggling with lately.

                                    Covid? That's the whackadoo QAnuts scapegoat, along with Asians, Hillary Clinton, and pizza parlors with basements.

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                                    • #19
                                      Originally posted by uplink View Post
                                      The left always has someone to blame for everything going wrong on their watch. Its either Putin, Trump, greedy companies, or Covid ..... How about trying to fix something and stop blaming people for the f ed up policies you guys are pushing.

                                      Are you serious? OMG.

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                                      • #20
                                        Originally posted by BowlenBall View Post

                                        Putin, Trump, and the greedy (oil) companies are all in the same basket of deplorables, and yes -- they should be blamed for a lot of the issues that the world is struggling with lately.

                                        Covid? That's the whackadoo QAnuts scapegoat, along with Asians, Hillary Clinton, and pizza parlors with basements.
                                        Not to mention, there ain't much "left" left in the Democrats, at least according to basic political definitions. A handful. Just as there aren't any more "conservatives" left in the Republican (or Trump) Party. They are now the radical Right, and have been for some time.

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                                        • #21
                                          Originally posted by Roh View Post
                                          Bil

                                          Not to mention, there ain't much "left" left in the Democrats, at least according to basic political definitions. A handful. Just as there aren't any more "conservatives" left in the Republican (or Trump) Party. They are now the radical Right, and have been for some time.
                                          Bill and Hillary Clinton are politically --"right" from Dwight Eisenhower.

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                                          • #22
                                            Originally posted by Blueflame View Post

                                            Bill and Hillary Clinton are politically --"right" from Dwight Eisenhower.
                                            Hell, they're "right" of Richard Nixon. Nixon proposed a universal health care plan.

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                                            • #23
                                              Originally posted by Roh View Post

                                              Hell, they're "right" of Richard Nixon. Nixon proposed a universal health care plan.
                                              Yes. American politics have been inexorably dragged rightward to the point that I'm not sure Reagan isn't politically left of Obama.

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                                              • #24
                                                Originally posted by Roh View Post

                                                Hell, they're "right" of Richard Nixon. Nixon proposed a universal health care plan.
                                                Yep. Furthermore, if Trumpublicans were to learn about Nixon's tax code, they'd denounce him as a "Marxist."

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                                                • #25
                                                  Originally posted by Blueflame View Post

                                                  Yes. American politics have been inexorably dragged rightward to the point that I'm not sure Reagan isn't politically left of Obama.
                                                  I remember Obama taking single payer off the table and making a face as if moving a bag of dog shit. Obama despised progressives.

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