With the growth in U.S. production of light tight oil (LTO) in recent years, petroleum refiners in the United States have been processing greater volumes of LTO. To date, increased volumes of domestic LTO have mainly been accommodated with no- and low-cost options such as reducing light crude oil imports, increasing refinery utilization rates, making incremental efficiency improvements (crude unit debottlenecking), and displacing medium crude oil imports. A new EIA report reviews a range of additional options that U.S. refiners may consider to expand LTO processing capacity. The costs of these generic options vary according to each facility size, complexity, location, and a number of other factors:

•Size. Larger projects to provide additional LTO distillation capacity can have a greater overall cost but, given economies of scale, a lower per-barrel cost than smaller projects. However, these larger projects also require a greater commitment to processing larger amounts of crude oil imports into finished petroleum products. With this commitment comes a greater degree of exposure to risks that could affect crude oil supply or petroleum product demand. •Complexity. Although the cost of building units that contain both distillation and secondary processing capacity is generally greater in both overall and per-barrel terms than similarly-sized projects that provide only distillation capacity, the more complex facilities can process LTO into more refined petroleum products that generate more revenue and, possibly, better margins.

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