Refineries beginning to build facilities for shale oil
...I think this is an important move to cut imports of oil and begin refining US oil from shale producers. It should help with the US balance of trade too. It is a move I have been pushing for some time, and I am glad to see US companies working toward achieving energy independence.
"The industry has focused on large coastal facilities with large, complex refineries that can handle just about everything that shows up in a tanker," said Bill Prentice, CEO of Meridian Energy, which plans to begin construction on a $850 million greenfield refinery in North Dakota this summer. "Now there's no need for all of that complexity and heavy crude ... now we have an opportunity to build a new kind of refinery that operates on the best crude in world."
Meridian's new refinery will process 60,000 barrels a day and supply gasoline, diesel and low-sulfur oil to the Midwest market. But the company is far from alone.
Raven Petroleum, headquartered in Houston, says it will start work on a $500 million refinery in South Texas' Eagle Ford Shale region later this year. Austin-based MMEX Resources Corp. plans to raise $450 million to build a 50,000-barrel-a-day refinery in West Texas' Pecos County.
Overcoming local opposition, though, can be tough.
"When people heard we were putting a refinery in, people started to freak out because everyone knows what a refinery looks like," Prentice said about his project in the Bakken Shale play. "But this isn't going to be your granddad's refinery. It's going to be something completely different."
Meridian wants to prove that a refinery doesn't need to operate in some industrial ghetto or wasteland. Light sweet crude doesn't have the sulfur, particulates or viscosity that require a lot of distilling, which means fewer pollutants are released in the refining process. That can mean a lighter footprint.
Meridian's Davis Refinery was engineered and built to be the industry's most environmentally sustainable facility by two Houston companies, engineering firm Vepica USA and fabrication firm Basic Equipment, Prentice said. The company has applied for nothing more than a Minor Synthetic Source permit, which puts it on the same environmental level as a dry cleaner. If successful, it would be a first in the business.
"And we've made changes to the design in the last few weeks that would further reduce emissions by another 15 percent," he added.