There has been much ado in the print media and on the radio talk shows concerning a proposal to install a crude oil refinery on Grand Cayman. Without approaching the political pro and cons of the situation, I would like to attempt to make readers aware of misplaced ideas and statements that have been made.
I am a native Texan and have spent my life in and around the oil patch. I grew up in the East Texas Oil Field, which was the largest oil field in the world, from the time of its discovery in the late 1920s until production dropped off in the late 1950s. I worked, until my retirement in 2002, in the offshore oil and gas production industry in the Gulf of Mexico.
Most of us get a mental picture of the masses of vessels, smokestacks, tanks and piping that we have driven past or seen on television when we hear the word refinery.
This picture could not be farther from the truth.
The system proposed is a modular crude oil topping unit. The technology involved is one of the oldest and simplest in the refining business. It has been modernised and miniaturized so that it can now be built on a skid, at almost any fabrication yard in the world and shipped intact to the installation location. The only necessities for setup are electricity, feedstock storage and finished product storage or pipelines. These modules can be fitted with power generators, which use produced gas, to supply electricity after the unit is producing. A number of these modular units are in operation in countries around the world. The tank farm, for storing crude oil and any downstream products not piped to the end user, will probably require more land usage than the two refining units that are under discussion.
This type of refining unit is designed to process a very narrow range of crude oil types that fall into the light, sweet crude category. Sweet crude is designated as having less than 0.5 per cent sulphur. This means that one will never see any of the heavy black oil that is so often associated with the term crude oil.
The 6,000 barrel per day figure, which has been mentioned in the newspaper, references the input volume that the system is designed to process. (By the way, that barrel of oil is not the 55 US gallon steel drum so often used by the media to depict oil volume. It is actually 42 US gallons and dates back to the days when sailing ships hauled liquids in wooden casks.) The output volume of each product depends entirely on the physical make-up of the crude oil feedstock.
An email that was read on a radio talk show the other day suggested that the current fuel retailers on the Island may not be interested in purchasing gasoline and diesel fuel from a local refinery. The purchase of refined products from a local independent supplier is not an uncommon practice in the USA. The standards of the retail jobber must be sustained and the wholesale prices competitive.
If long-term commitment for the desired feedstock (the correct grade of crude oil) can be acquired and contracts arranged with local fuel jobbers/retailers and CUC for the sale of refined products, a local refinery begins to make sense. The job impact will be very negligible because the units are computer controlled and need very little day-to-day maintenance.
Two units are planned, so one could be producing if the other is down for repair. If locally refined products significantly reduce fuel costs for the Caymanian population, then the venture is worthwhile. Whether we like it or not, fossil fuel is the most efficient, cost effective means of lighting our homes and transporting people on the planet today. Any new technology that becomes available will take at least 20 to 30 years to phase into the economy. We will have a need for gasoline, diesel fuel, jet fuel, and LP gas for years to come. We should, at least, look into all feasible methods of supplying those needs in the most efficient, cost effective course of action possible.
Randy Kinsey
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