More Evidence the SPR contains corrupt spoiled oil

[wrs + 893]

I am sure that anyone who has ever dealt with cleaning out storage tanks can easily understand what a massive problem the SPR is likely to have with their storage.  Oil doesn't store well, it's a hydrocarbon and so it interacts with oxygen and other materials that have been in these salt caverns before the oil was put in them (irrespective of claims they were created from pure salt, the water itself was impure).  Exxon is complaining about excess H2S as did a Chinese buyer earlier in the year and others last year.  Oil in the ground is stored under pressure and not at all in the same conditions as the big salt caverns the geniuses in the govt decided to build in order to store the oil.  

I think the bigger problem with the caverns is that the oil is never cycled through them, instead it just sits there interacting with all the other contaminants in the non-native environment.  It's no surprise at all to me that the oil is bad quality.  I assume this will get worse with time not better.  That oil isn't worth half the market price and CAVEAT EMPTOR applies here in a massive way.  

I think the salt caverns work OK for NG storage because they are pressured and also because the gas is constantly being recycled which should allow for less interaction between the storage walls and the product.  The claim on the salt caverns for the oil is that they cycle the oil due to a temperature gradient in the caverns from top to bottom but does that really matter as the oil continues to be in contact with contaminants in the caverns which are not hermetically sealed.  Another claim made by the DOE is that the salt domes are self-healing in terms of fractures but we know this is bunk based on the Bayou Corne Sinkhole in the past decade.  How much else is the efficient govt wrong about regarding these now 30 year old albatrosses?

https://oilprice.com/Latest-Energy-News/World-News/Exxon-Complains-Of-Toxic-US-Govt-Crude-Oil.html

https://www.reuters.com/article/us-usa-oil-contamination-exclusive/exclusive-firms-complain-of-contaminated-crude-from-u-s-reserve-idUSKBN1H50GI

 

Edited April 12, 2019 by wrs

[Oil_Engineer + 86]

3 hours ago, wrs said:

I am sure that anyone who has ever dealt with cleaning out storage tanks can easily understand what a massive problem the SPR is likely to have with their storage.  Oil doesn't store well, it's a hydrocarbon and so it interacts with oxygen and other materials that have been in these salt caverns before the oil was put in them (irrespective of claims they were created from pure salt, the water itself was impure).  Exxon is complaining about excess H2S as did a Chinese buyer earlier in the year and others last year.  Oil in the ground is stored under pressure and not at all in the same conditions as the big salt caverns the geniuses in the govt decided to build in order to store the oil.  

I think the bigger problem with the caverns is that the oil is never cycled through them, instead it just sits there interacting with all the other contaminants in the non-native environment.  It's no surprise at all to me that the oil is bad quality.  I assume this will get worse with time not better.  That oil isn't worth half the market price and CAVEAT EMPTOR applies here in a massive way.  

I think the salt caverns work OK for NG storage because they are pressured and also because the gas is constantly being recycled which should allow for less interaction between the storage walls and the product.  The claim on the salt caverns for the oil is that they cycle the oil due to a temperature gradient in the caverns from top to bottom but does that really matter as the oil continues to be in contact with contaminants in the caverns which are not hermetically sealed.  Another claim made by the DOE is that the salt domes are self-healing in terms of fractures but we know this is bunk based on the Bayou Corne Sinkhole in the past decade.  How much else is the efficient govt wrong about regarding these now 30 year old albatrosses?

https://oilprice.com/Latest-Energy-News/World-News/Exxon-Complains-Of-Toxic-US-Govt-Crude-Oil.html

https://www.reuters.com/article/us-usa-oil-contamination-exclusive/exclusive-firms-complain-of-contaminated-crude-from-u-s-reserve-idUSKBN1H50GI

 

The SPR should have been dismantled years ago.  We don't need it.  Just another way the government wastes our tax dollars.

[Auson + 123]

14 hours ago, Oil_Engineer said:

The SPR should have been dismantled years ago.  We don't need it.  Just another way the government wastes our tax dollars.

At what price WTI can we expect a large sale from the SPR ?

[Old-Ruffneck + 1,177]

3 hours ago, Auson said:

At what price WTI can we expect a large sale from the SPR ?

It's true value probly not much more than 26 as an average. Keep in mind they started filling when crude was 10 and at tail end 80 tho they did buy some when was 140, very little tho. Wouldn't take much to find exact average for all the blends. My suggestion would be to release 1mbd onto the market as the Saudi's still want to play games. That would give small buffer for 550 days plus. Add a little if needed. As @wrs said, it's most likely going to take some extra refining so what is it's true worth?

[wrs + 893]

7 minutes ago, Old-Ruffneck said:

It's true value probly not much more than 26 as an average. Keep in mind they started filling when crude was 10 and at tail end 80 tho they did buy some when was 140, very little tho. Wouldn't take much to find exact average for all the blends. My suggestion would be to release 1mbd onto the market as the Saudi's still want to play games. That would give small buffer for 550 days plus. Add a little if needed. As @wrs said, it's most likely going to take some extra refining so what is it's true worth?

 

I think I read the average purchase price for the oil was $29/bbl.

[Auson + 123]

9 hours ago, Old-Ruffneck said:

It's true value probly not much more than 26 as an average. Keep in mind they started filling when crude was 10 and at tail end 80 tho they did buy some when was 140, very little tho. Wouldn't take much to find exact average for all the blends. My suggestion would be to release 1mbd onto the market as the Saudi's still want to play games. That would give small buffer for 550 days plus. Add a little if needed. As @wrs said, it's most likely going to take some extra refining so what is it's true worth?

Old-Ruffneck. Yup I meant what price WTI is Trump happy with before he will sell off a big chunk of the SPR