Introduction

It succors and drowns human life. And for the last eight years, oil — and the people and places that make it — was my obsession. - Peter Maass

Today a new book by Peter Maass was released. The book is called Crude World: The Violent Twilight of Oil. Peter Maass is a name you may know from a 2005 article that he wrote for the New York Times called The Breaking Point. The story was a comprehensive look at where he thought oil production/prices were headed - and what the implications might be. Maass focused on Saudi Arabia in the article, and spent a lot of time covering Matt Simmons' viewpoints. It was after reading this story that New York Times columnist John Tierney offered to bet Simmons on the future direction of oil prices. Thus arose the Simmons-Tierney bet.

I thought Maass' 2005 article was well-researched, and it was a captivating read. So when Mr. Maass e-mailed and asked if I would like a copy of his new book, I thought it would probably be a book I would enjoy. I still have a stack of books that have been sent to me to review, but I jumped this one to the front of the queue. I hadn't really intended to, as I am working on two other books right now*, and would normally finish those before starting another. But once I picked this book up and started thumbing through it, I couldn't put it down.

Motorists can thank a mild hurricane season in the Atlantic for the lower gas prices, according to the American Automobile Association.

Other factors include the end of the summer driving season and a cheaper winter fuel mix.

Gas stations sell a special, more expensive fuel blend during the summer to cut down on smog during hot months. Stations nationwide will start selling a less-expensive winter fuel blend Friday, which could lead to even lower prices, analysts said.

So what does this mean, and why does it make winter gasoline less expensive?

NB: This is a reposting of an article written by Robert two years ago on how winter gasoline differs from summer gasoline, and why this tends to make winter gasoline less expensive than summer gasoline. We also now have a lot of reports of gasoline outages due to short supply following Hurricanes Gustav and Ike. Feel free to discuss those in this thread or scroll down to the refinery/pipeline/gas shortages thread.

There have been several refining questions lately that were topical to this essay, originally posted in January 2007. Here I have updated it to reflect more recent prices.

When a refinery purchases crude oil, the key piece of information they need to know about that crude, besides price, is what the crude oil assay looks like. There has been a lot of discussion here at various times about “light sweet”, or “heavy sour”, and how these qualifiers affect the ability of a refiner to turn these crudes into products. So, I thought it would be good to devote an essay to this subject, and discuss how different types of crude can affect a refiner’s bottom line.

Let's compare light sweet oil to heavy sour oil by looking at a pair of assays:

Table 1. Comparison Between Assays of Light and Heavy Crudes

Most of you folks know that I recently wrote an Oil Quiz. The American Petroleum Institute (API) now has a quiz also, called the Energy IQ.

API's concern is that Americans have a low level of knowledge about energy issues, and this low level of knowledge may affect energy policy. To document the current level of knowledge, API hired Harris Interactive to perform an internet survey of 1,333 adults, then had a conference call with bloggers (Brian Faughnan - Weekly Standard; Ed Morrissey - Captain's Quarters, Heading Right; Geoffrey Styles - Energy Outlook; Stephen Spruiell - National Review; John Kingston - Platts, and Gail Tverberg - TOD) to discuss the results.

In this article, we will look at the quiz itself and then talk a little about the interpretation. As you read the quiz, you will note that the questions seem to be selected to emphasize points that API would like to make. API's discussion of the quiz can be found here, the quiz with answers and references can be found here, and the blogger conference call recording and transcript can be found here.

ENERGY IQ QUIZ

1. What percentage of the world’s 10 biggest oil and natural gas companies are owned and operated by foreign governments?

Answer under the fold