California oil plants get cracking for big switch to heavy crude

From the highway, the Shell Oil refinery here looks like any other tangle of pipes that process crude oil into gasoline. What makes this refinery different is that the oil running through it before being refined is thick enough to pave streets.

This oil, known as ''heavy crude,'' is making a significant change in the California oil business. The companies are spending billions to modify their refineries, and engineers are designing new drilling and recovery techniques to get the heavy stuff out of the ground.

Today, when oil companies bury their drills in California terra firma, the fourth-largest oil producing state in the United States, the odds are good that if they find oil, it will be a ''heavy crude.''

The American Petroleum Institute (API) classifies crude oil on a scale of zero to 100 according to a variety of factors, including the relationship of the mass of the oil to water. An oil that is rated at 10 to 20 degrees' API gravity is considered a heavy oil. By way of comparison, oil from Alaska's North Slope is 28 to 29 degrees, and oil from Saudi Arabia is typically 33.4 degrees. Generally the lighter the crude - that is, the higher the API rating - the easier it is to refine, particularly into gasoline. Heavy crudes are typically refined into residual oil, which is used to power freighters as ''bunker oil,'' or to burn in power plants.

The giant new discovery off Point Arguello is a heavy crude oil. Standard Oil of California, which is involved in this offshore discovery, expects to begin pumping this oil by 1986, and a spokesman says that ''several hundred thousand'' barrels a day could be pumped from the field in the next two decades. This heavy oil is replacing lighter imported crude oil, from the Middle East. And oil companies expect that the new heavy crudes will also ''back out,'' or gradually replace, oil from Alaska's North Slope.

According to Walter Mead, a professor at the University of California, Santa Barbara, California's heavy crudes will account for about 11 percent of all US production by 1990. Already, he estimates that California heavy crude represents 7.5 percent. According to the US Geological Survey, the US has 4.9 billion barrels of heavy crude oil and the world has 55 billion barrels of it.

In fact, Mr. Mead believes these new discoveries ''raise more problems for the West Coast oil glut.'' With the oil companies already tankering Alaskan oil to Gulf Coast refineries at an additional cost to the consumer of $4 a barrel, he says, ''it forces Congress to reconsider the ban on the export of Alaskan oil.'' With more California heavy crudes coming on stream by 1986, even more Alaskan oil will end up in Gulf Coast refineries.

These large reserves of heavy crudes have major financial implications for the energy business. Additional pollution control equipment has to be added to refineries to eliminate the sulfur dioxide emissions, and large invesments in new methods of ''cracking the oil'' must be made.

This is apparent at the Shell refinery here, where Thomas E. Innocenzi, manager of the complex, is fine-tuning the pipes. Shell has spent $800 million to permit this refinery and one in Martinez, in northern California, to operate with heavy crudes, produced by Shell at its Kernridge and Beta oil fields. Kernridge, which is onshore in Kern County, produces 84,000 barrels a day, and Beta, which is off Long Beach, produces 25,000 barrels a day.

The investment by Shell primarily entailed revamping its catalytic cracker. When oil is refined, it is ''cooked.'' The lighter parts of the oil float to the top of the cooker, while the heavier ones stay at the bottom. To crack the heavy oil molecules, a catalyst, such as a fine-grained sand, is forced through the oil at high speed. This breaks up the molecules into smaller, more manageable units. The Shell investment permits the catalytic cracker to operate at a higher temperature.

This higher temperature lowers the sulfur dioxide emissions and permits the company to turn out a more desirable product, such as jet fuel and gasoline. In fact, 60 percent of the heavy oil becomes salable gasoline. The rest powers the refinery, is made into components for other gasoline products, or becomes fuel oil. In Martinez, Shell added a ''flexicoker,'' which converts the blackest, stickiest part of the barrel into a useful product.

Producing the oil has likewise required huge investments. At its Kernridge facility, Shell has developed methods of ''steaming'' the oil out of the ground. For every three barrels of oil produced, however, it takes one barrel to generate the steam to get the molasses-like material to flow. Still, Shell has steadily increased production, from 40,000 barrels a day to 84,000 barrels a day in four years.

Shell is not alone in modifying its refineries. Chevron, a unit of Standard Oil of California, has upgraded its giant Richmond and El Segundo refineries so they can also take the heavier crudes. Unfortunately, a spokesman notes, the oil that will come from Point Arguello is not only heavy, it is of low quality, loaded with impurities that will require additional refining. Because of these impurities, he says, ''we will need the flexibility of marine transport,'' to move the oil to different refineries geared toward processing specific batches of oil.

The move to upgrade refineries has not been universal. Mr. Innocenzi notes that ''there are ample supplies of light crude on the market.''

Trilby Lundberg, editor of The Lundberg Letter, says, however, that refiners that make the shift ''will have an economic edge on those who don't,'' especially when the oil markets tighten and ''we progress to the day when the total market is heavier.''