The Shale Oil Boom and its Effects on Refineries There’s a major oil boom in the United States. More specifically, a shale oil boom, which has also led to an increase in refining processes throughout the nation. Towns all across Middle America that were once considered ghost towns are coming back to life with the influx of oil money. This is all due to the discovery of crude oil beneath shale formations in the states of North Dakota and Texas.
Directional Drilling and Hydraulic Fracturing Why now? Where did this big boom come from? New technology in the industry has allowed for this massive oil rush; more specifically, directional drilling and hydraulic fracturing. Directional drilling has made it possible to drill horizontally through shale formations such as, Eagle Rock in Texas and Bakken in North Dakota, and get to the rich area of oil that lies beneath. Hydraulic fracturing pumps water, sand and other chemicals into the shale and the pressure breaks it up and lets the oil escape and flow to the surface. These processes have helped US oil production grow by a record 1.136 million barrels a day last year to 8.121 million now, according to Energy Information Administration.
Effect on Refineries Refineries are finding that they need to expand or add new equipment to process shale crude. For many years they were developed to process heavy crudes imported from international markets and are now faced with light crudes from the United States. Refineries need to refit their plants for this new crude oil. Larger energy firms like Tesoro, Valero and Marathon Petrochemical are expanding existing refineries to process the shale oil. They are currently seeking permits to build three new refineries in North Dakota, Texas and Utah, all near oil fields. This is something that hasn’t happened in over three decades. Smaller companies are looking to reopen small ‘teapot’ plants to take advantage of the booming oil market. The revival of these teapot refineries has revitalized small towns that were all but forgotten and are now getting a new surge with new housing, businessesand jobs.
America’s Export Ban One major concern on many executive’s minds is the effect this boom will have the American oil export ban in effect since the 1970’s. Some worry that a reversal of the ban would not be good for the domestic oil market. An end to the ban could lower the price difference between domestic and international grade crude oils. This would take away one of the big advantages that the domestic refinery has over international ones that can offer cheaper labor and lax environmental regulations.
U.S. Oil Boom With the huge amounts of oil locked within the compact shale in Texas and North Dakota, we are experiencing an oil boom like no other in U.S. history. The revitalization being provided is not only to refineries;but alsoto small, sleepy towns across the mid-country. This is much needed after years of hard luck. S&D Consulting’sexperience in refining processes can help your business should you need to expand or refit due to shale oil or any other needs. S&D Consulting has expertise in maximizing output, product specifications, efficient use of resources and monitoring safety in daily operations. Contact S&D Consulting for more information on refining processes.