Oil Case

The Oil Hub Where Traders Are Making Millions - Businessweek

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Bloomberg Businessweek

http://www.businessweek.com/articles/2012-09-27/the-oil-hub-where-traders-are-making-millions

By Matthew Philips September 27, 2012

Tugboat pilot Barry Meredith hauls barges of oil as big as football fields for a living. He calls his route “the loop,”

which starts with him guiding his boat and two empty 300-foot barges into the Port of Catoosa, outside Tulsa, Okla.

Meredith steers toward a cluster of seven storage tanks brimming with crude that’s been trucked in from wells in

Oklahoma and Kansas.

Moving 43,000 barrels of oil from the tanks into the barges is a 12-hour process, and one mistake can mean disaster.

“You get 4,000 barrels going through that hose every hour, and you let something ass up. … Man, it makes a big

mess,” Meredith says in his Florida drawl, his face deeply tanned from 19 years on a tugboat. At dawn the next day

he’ll leave for Mobile, Ala. The route of winding rivers is more than 1,300 miles long and takes about a week.

“It’s a haul, man,” says Meredith. “You leave here and go back out the Arkansas River. Then you hit the Mississippi

and take it down to New Orleans and into some industrial locks. Once you’re through those, you scoot across

Mississippi Sound and on over to Mobile Bay and into the Mobile harbor.” Next stop is a storage facility in Mobile

leased by Hunt Oil. Meredith says Hunt will take this domestic crude and mix it with lower-grade oil from

Venezuela. He’ll then barge the blend up to Hunt’s refinery in Tuscaloosa, where it’ll be turned into gasoline, diesel

fuel, jet fuel, and asphalt. Meredith then will head back to Catoosa and start all over again.

These are 24/7 days for oil production in the U.S. North Dakota now produces more oil than Alaska—and more than

Ecuador, too. Geologists estimate that Oklahoma still has 80 percent of its...