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Exxon Complains Of Toxic U.S. Govt Crude Oil

ExxonMobil has raised concerns that part of the crude oil it bought from the U.S. Strategic Petroleum Reserve (SPR) last year contained very high levels of the toxic hydrogen sulfide—the latest company to have complained about tainted crude from the U.S. emergency stockpile, Bloomberg reported on Friday, citing emails it had obtained under the Freedom of Information Act.

The U.S. Department of Energy disputes the claims that it has been repeatedly selling crude tainted with dangerous levels of hydrogen sulfide, although it admitted that it had paid some US$1 million to clean up a contaminated cargo for PetroChina, Bloomberg reports. Some of the readings of the companies may have been “spurious” or contamination may have occurred during the shipping of the crude from the SPR to the companies, the Department of Energy told Bloomberg.

Exxon is not the first company to have complained of high levels of the toxic hydrogen sulfide in crude bought from the SPR. Last year, Reuters reported that Shell, Macquarie Group, and the U.S. trading arm of PetroChina had raised concerns about the toxic substance in U.S. government crude.

Apart from corroding refinery equipment, high levels of hydrogen sulfide are dangerous to humans, and many effects are seen even at low concentrations, according to the U.S. Occupational Safety and Health Administration. Effects range from mild effects, such as headaches or eye irritation, to very serious consequences, including unconsciousness and death.

Related: Chevron To Buy Anadarko In $33B Deal

Chemical engineers told Bloomberg that the possible contamination in the SPR crude could have occurred when high-sulfur crude—put in the stockpile years ago—was blended with oil that has been added more recently, or that bacteria may have grown in the caverns and transformed the sulfur in the sour crude into hydrogen sulfide. 

The Strategic Petroleum Reserve, set up in the 1970s when the Arab oil embargo created a fuel crisis in the United States, held a total of 649.1 million barrels of crude oil as of April 5, 2019, including 254.6 million barrels of sweet crude and 394.5 million barrels of sour crude oil.

Renewed concerns over the quality of the U.S. strategic oil reserve could undermine the role of the emergency stockpile as a safeguard against shortages of sour crude or affect future sales out of the SPR, according to Bloomberg.  

By Tsvetana Paraskova for Oilprice.com

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