MMEX Resources Corp (MMEX)

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News on website April 4,2017
http://www.mmexresources.com/news.php



Refiners put faith in US
shale oil’s longevity
By Chris Tomlinson Houston Chronicle
true
From the Dakota plains down to the South Texas scrub and over
to the Permian Basin, refiners are making multi­decade bets that
shale drillers can keep the oil flowing to feed new facilities that
will be cleaner and safer than ever.
U.S. oil companies are pumping more than 9.1 million barrels a
day. With the price for a barrel of West Texas Intermediate floating
between $45 and $55 a barrel, analysts predict they could add
another million barrels a day in 2018.
Directional drilling and hydraulic fracturing of shale rock help
the U.S. compete with Saudi Arabia and Russia for the title of
world’s largest energy producer. We even export light sweet crude
and liquefied natural gas to Latin America and Europe.
That fact often confounds readers who wonder why the U.S. still
imports heavy sour crude from Venezuela, Canada and the Middle
East. The answer is that refineries are designed for a blend of
crudes and can’t run only on light sweet.
Truth be told, refiners didn’t reconfigure their equipment
because they didn’t know how long the U.S. boom would last.
When OPEC allowed prices to drop from more than $105 a barrel
to less than $30, refiners felt vindicated because conventional
wisdom said you can’t drill a horizontal well and fracture it for less
than $85 a barrel. But conventional wisdom was wrong.
As soon as prices inched above $50, oil companies announced
they had learned how to make money at that price. They’ve
doubled from last year the number of rigs operating in the most
lucrative oil basins. Refiners are taking notice, recognizing that
shale oil and gas are here to stay and finally are investing in new
facilities.
“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 the
world.”
Meridian’s new refinery will process 60,000 barrels a day and
supply gasoline, diesel and low­sulfur 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. Austin­based MMEX Resources
Corp. plans to raise $450 million to build a 50,000­barrel­a­day
refinery in 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.
Two Houston companies, engineering firm Vepica USA and
fabrication firm Basic Equipment, engineered and built Meridian’s
Davis Refinery to be the industry’s most environmentally
sustainable facility, 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
said.
Under better circumstances, we wouldn’t need to build refineries
and petrochemical plants, and instead would concentrate on
developing cleaner forms of energy and reducing greenhouse gas
emissions. Unfortunately, we’re not there yet, either
technologically or financially.
Until then, we’ll need to burn fossil fuels, but we should burn
them as efficiently and cleanly as possible. Using cleaner light
sweet crude and natural gas in the United States is an essential step.
Projects like Meridian’s Davis Refinery prove that the fossil fuel
industry can do better. More importantly, though, it proves that
residents can rightfully demand that refineries adopt the best
technology.
That’s a small price to pay for taking full advantage of our
nation’s energy riches.