June 1, 2012:

Improved technology and higher oil prices for the first time are making it economically feasible for oil refineries to tap more of Utah’s large reserves of crude oil as thick as boot polish, potentially bringing jobs and millions in revenue to the state. Upgrades proposed or under way at three of the state’s five refineries will enable them to process three times the amount of the paraffinic-based crude, commonly called black or yellow wax petroleum, as they could six years ago. But development will come at a cost.

Boosting production capacity could also increase certain environmental risks, based on refinery safety records over the past decades. Hundreds more oil tankers are expected to travel the 170 miles from the rich oil fields in eastern Utah to the refinery row that straddles the Salt Lake and Davis county lines, negatively impacting air quality, neighborhoods and traffic. HollyFrontier points out not all the implications for air quality are bad. Company officials say they expect to reduce the refinery’s normal emissions by 10 percent to 12 percent because Utah’s waxy crudes are especially low in sulfur. Only time will reveal how the pluses and minuses balance out.

Increasing capacity » Within the next two years, HollyFrontier plans to process 20,000 barrels a day of Utah wax crude at its Woods Cross refinery and a total of 40,000 barrels daily after 2016, up from its current capacity of 10,000 barrels a day. Tesoro, the state’s largest refinery, and the first to submit a proposal to the state Division of Air Quality, DAQ, plans to process nearly 20,000 barrels of Utah crude a day within the next two years, doubling its current capacity.

Chevron is upgrading its Salt Lake City facility to take more Utah crude, but it won’t say by how much. And although Silver Eagle and Big West aren’t expanding, the latter refinery in North Salt Lake has the capacity to process upward of 11,500 barrels of black wax per day. Silver Eagle’s Woods Cross plant now refines yellow wax exclusively. Black and yellow wax petroleum are refined into products such as gasoline, diesel, jet fuel, lubricating oil, paraffin and asphalt. Together, they made up 77 percent of the state’s oil production last year, with nonwaxy crudes from San Juan and Sevier counties contributing most of the remaining amount.

Utah’s waxy petroleum is cheaperper barrel than the so-called sweeter crudes, which can be shipped via pipelines. Unlike sweeter oils, Utah crude is so thick it solidifies unless kept warm. Most of the crude is trucked to Utah’s refinery row in insulated tankers, which must reach their destination within a few hours, making Salt Lake the only place in the region it can be processed. Despite its transportation challenges, Utah crude offers refineries several advantages, said Alan Walker of the University of Utah’s Energy and Geoscience Institute. Its low sulfur content aids in refining for lower emissions. And in the Uinta Basin, it lies just 3,000 to 4,000 feet underground, making drilling comparatively cheap.

"It’s an extremely valuable resource," Walker said. "The public has this perception that it’s bad crude oil, and nothing could be further from the truth." With the refineries proposing to pump out millions more barrels of waxy crude, one might expect they’d be belching that much more pollution. But it turns out the opposite is true, based on what the plants are projecting. ‘An exciting time’ » Holly, which submitted its waxy crudes plans to the DAQ last month, projected a decrease in overall pollution by 239 tons per year thanks to the low-sulfur input and additional pollution controls. The company projects sulfur dioxide will be reduced by nearly 400 tons per year. In addition, nitrogen oxides and volatile organic compounds, key factors in Utah’s pollution-forming emissions, are expected to decline by 45 tons per year and 21 tons per year, respectively. Holly said it expects just two pollutants to increase, carbon monoxide and Hazardous air pollutants.

By The Slat Lake Tribune