Saturday, June 14, 2008

Heavy Problem: Dirtier Oil, Though Cheaper, Sparks Green Backlash

Cheap oil! Get your cheap oil here!
clipped from
The bad news: it’s nasty stuff.

Heavy, sour grades of crude oil trade at a discount because they cost more to refine and produce less of the premium products like gasoline and jet fuel. Iran has had such trouble selling its sulfur-rich oil that it’s got 14 tankers of the stuff floating in the Persian Gulf unsold. So yesterday, Iran and Kuwait slashed the price of their heavy oil; it’s now selling at the steepest discount in at least nine years.

Trouble is, there’s more heavy oil on the way. Canada might have a trillion barrels of oil in its tar sands, but they don’t call them “tar” for nothing. And it’s not just Canada; most new oil finds these days are “gooey, acidic, or laced with sulfur,” as the Journal’s Neil King Jr. put it in April.

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