New California refinery to use Mideast oil rather than oil from North Dakota, Texas

Bloomberg/Fuel Fix:
Chevron Corp. plans to run higher- sulfur Alaskan and Middle Eastern crudes when it completes work at Northern California’s largest refinery in 2016, not the Bakken oil helping spur the U.S. path to energy independence.

Chevron’s 245,300-barrel-a-day Richmond refinery is seeking regulatory approval to replace a hydrogen plant and increase capacity at the fluid catalytic cracker’s hydrotreater and sulfur-recovery system.

The upgrade will take about two years and could be done as soon as mid-2016 if city officials green- light the project in June or July, Nicole Barber, a company spokeswoman, said in an interview at the plant earlier this week.

Richmond imports mostly light, sour crudes from Saudi Arabia, government data show. It will use the same sources after the work, Barber said.

The U.S. supplied 86 percent of its own energy needs last year as horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies from shale formations such as North Dakota’s Bakken and Texas’s Eagle Ford. Imports also climbed from Canada’s tar sands.

“Bakken is too light to fully utilize our equipment and tar sands are too heavy,” Barber said. “This refinery processes more intermediate crudes. The middle of the barrel is our sweet spot. That’s the best type of crude we can run.”

Groups including Communities for a Better Environment and Earthjustice have fought the project, saying that the proposal would allow Chevron to process heavier and more polluting feedstock such as crudes from Canada’s oil sands.
I suspect that transportation may have had something to do with the decision.  Big Green is determined to block transportation projects like the Keystone XL and the Saudi crude arrives at the dock near the facility.   It is much harder for the anti energy left to block those deliveries.


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