Here’s some news that should make all the energy independence buffs throw their hats to the floor and shout “Tarnashion!” India’s Reliance Industries is building the world’s largest oil refinery. This refinery, scheduled for completion this December, is planned for refined fuel export to Europe and the US exclusively. So by the end of the year we can be dependent on India for gasoline shipments. Gas prices could drop by 60 cents a gallon from this.

How can this lower prices when we’re being told we live in a world of tight oil supplies? It’s actually quite simple. This enormous refinery will process sour crude oil. Sour refers to the sulfur content of the petroleum. Sour crude has lots of sulfur. Sweet crude has little. Removing sulfur from oil is an expensive process, so in the past oil refiners have chosen to favor sweet crude. I was surprised to learn there is actually a glut of sour oil. The extra 200,000 daily barrels Saudi Arabia pledged this weekend to pump is all sour crude. That’s why the announcement did nothing to lower prices. The Saudis will pump more unwanted oil. Iraq has 30 million barrels in tankers floating at sea. They have no destination because no one wants to buy sour crude.

The oil price you see ticking ever higher on TV is the price for West Texas Intermediate crude. That is a light sweet crude oil, and that type of oil is actually in short supply. We’re not finding any new major fields in Texas anymore. The UK’s sweet crude from the North Sea is in decline. Nigeria is another sweet crude producer and thanks to militants in the oil rich Niger River Delta, it’s well below its pumping capacity. Nigeria could pump 3 million barrels a day, but the rebel attacks have cut that by 944,000 barrels. If the rebels were put down, oil prices would plummet.

But remember, No Blood For Oil, so we’ll have to make due with the sour crude no one wants. Well, Reliance Industries will want it by the end of the year. They’re going buy this cheaper oil, turn it into high quality fuel, and sell it to us. They will get even more money because refined fuel commands a higher price than crude, and new jobs from the deal. Construction of the new refinery is employing 100,000 people (not a typo). It will still employ thousands of people when it’s running.

Let this be a reminder that all this energy independence talk is hot air. How can we seriously say we’re going to get away from importing oil, when we’re about to import even more refined fuel!? The US is about to become even more dependent on another country for fuel but nobody cares because doing something (building our own refineries) is impossible. No one is willing to compromise and agree to allow any to be built. Over and over local politicians bemoan the loss of heavy industry. How dare they do that when no one will stand up and offer land for a new refinery. A giant factory that builds cars or TV sets or any widget you choose isn’t going to be any different. Industry is industry and a refinery will be as clean, or dirty depending on your perspective, as any other. Michigan only has one refinery. Indiana has two, and Ohio has four. If they’re hurting for blue collar jobs so bad, let an oil company build some sour crude refineries in those states.