To say that Permian crude oil quality varies is an understatement at best. In fact, there’s as much variety in the crude coming out of West Texas as there is in the arsenal of a major league pitching ace. Handling those varied crude qualities is the challenge of midstream operators, who, like batters facing down a Randy Johnson or Pedro Martinez in their prime, need to do the best they can with what they’re given. With the start of spring training only a month away, we begin a series detailing the current mix of Permian crude oil qualities, how pipelines are handling them, and what it means for exports, the end destination for much of today’s incremental Permian oil production. Today, we discuss Permian crude quality variations and the steps new pipelines are taking to deal with it.
As usual, we start this blog with a quick recap of our recent work on the Permian. We were just in this space discussing Permian crude oil, as well as natural gas, markets in Thinking Out Loud, where we looked at how the new pipelines that came online in 2019 factored into our 2020 outlook. The Permian was also a big topic among RBN’s blog readers last year, as three of our five most popular blogs were Permian-focused and our #1 blog, Hard Hat and a Hammer, also had a Permian slant. One subject matter we only touched on occasionally last year was Permian crude oil quality. We’ll make up for that now, with this series.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Figuring out Permian crude oil quality is kind of like trying to decipher what the next pitch may be in a Major League Baseball game. While you know you’re getting oil, the characteristics of that oil can vary widely from one part of the basin to the next. The most important aspect of crude quality is its “API gravity,” or just API for short. API stands for American Petroleum Institute, and the gravity measurement indicates a crude oil’s density relative to water, with higher numbers representing “lighter” oil types with lower densities. Conversely, low API numbers indicate denser, or “heavier” crude varieties. Figure 1 maps out the Permian’s oil wells and colors them according to API. The crude oil most commonly associated with the Permian is West Texas Intermediate (WTI), which is typically defined as a crude with an API between 38 and 44 degrees (light blue dots in Figure 1) and concentrated in the Midland and southern Delaware basins.
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About the song
"Come Together" was written by John Lennon and Paul McCartney, and is the opening track on The Beatles’ 11th studio album, Abbey Road. It was released as a double A-side single, backed with the George Harrison-written tune "Something," in October 1969. It went to #1 on the U.S. Billboard Hot 100 chart. It was recorded at EMI/Abbey Road Studios in London in July 1969, with George Martin producing. Morris Levy, who owned the publishing rights to Chuck Berry's song, "You Can't Catch Me," sued John Lennon for copyright infringement, claiming "Come Together" sounded similar and shared lyrical content with "You Can't Catch Me." Lennon settled out of court and, as part of the settlement, agreed to record three other songs owned by Levy. Two of those songs ended up on Lennon's 1975 solo album, Rock 'n’ Roll. Personnel on the record were: John Lennon (lead and backing vocals, rhythm guitar, electric piano), Paul McCartney (bass, backing vocals), George Harrison (lead guitar) and Ringo Starr (drums, maracas). Many artists have covered "Come Together" over the years, including Aerosmith, Ike and Tina Turner, Michael Jackson, Joe Cocker, Arctic Monkeys and Godsmack.
Abbey Road was recorded at EMI/Abbey Road, Olympic and Trident Studios in London between February-September 1969. The 17-song George Martin-produced album was released in September 1969. It went to #1 on the U.S. Billboard Top 200 Albums chart, and has been certified 12x Platinum by the Recording Industry Association of America. All four Beatles played and sang on the album, with assistance from Billy Preston and George Martin at times on keyboards. As a side note, the album cover photo was the source of conjecture and speculation during the "Paul is Dead" rumors that started as early as 1967, and were further propagated by popular Detroit DJ and Grande Ballroom promoter, Russ Gibb. Two supposed "clues" on the Abbey Road cover is the fact that McCartney is shoe-less and out of step with the other Beatles, the other is the license plate of the Volkswagen in the photo reads: "LMW 28IF," supposedly representing "Linda McCartney Weeps," and Paul McCartney's age if he were still alive. The ‘60s were certainly an interesting time.
The Beatles were a British rock band formed in Liverpool in 1960. With the key line-up of John Lennon, Paul McCartney, George Harrison and Ringo Starr, they went on to become the best-selling music artist in history, with record sales of over 800 million worldwide. They have released 23 studio albums, five live albums, 53 compilation albums, 21 EPs, 63 singles and four motion pictures. They have won one Academy Award, one Billboard Award, four Brit Awards, 26 Grammy Awards, 15 Ivor Novello Awards, one MTV Video Music Award and three World Music Awards. They are members of the Rock and Roll Hall of Fame, the UK Music Hall of Fame, the Vocal Group Hall of Fame, and were awarded MBEs (Member of the Order of the British Empire) in 1965. The Beatles broke up in late 1969. John Lennon died in December 1980, and George Harrison in November 2001. Paul McCartney and Ringo Starr still record and perform as solo artists.
