Genoil Chairman and CEO David Lifshultz believes improving hydrogen use at conventional oil refineries can increase yields of oil products from heavy oil by as much as 25 percent.

"The truest and highest and best use of a hydrogen economy is really the hydrogenation of oil," said Lifshultz.

Oil refiners face a glut of low-quality, high sulfur oil, or heavy sour crude, as sweet oil production in the United States and the North Sea slips. Refiners around the world are investing billions of dollars to add cokers and desulfurization units to refineries that process the heavy crude at high temperatures and high pressure.

"We continue to be limited in refining capacity and with these types of technologies we get better use out of the oil that we do have," said Emil Pena, former Department of Energy deputy assistant secretary under Bill Clinton. Pena sits on Genoil's advisory board, but does not invest in the company, he said.

Genoil says it has improved a standard refinery practice known as hydrocracking, which mixes hydrogen separated from natural gas with the carbon that's in crude to make oil lighter and more usable.

The units, known as hydroconversion upgraders, refine oil more cheaply because they don't need the high pressure and high temperatures used in conventional units, said Lifshultz.

He said the units would cost $15 million to $150 million at a refinery, depending upon how heavy a crude it aimed to run, and whether the refinery already had hydrocracking capacity.

The units can also be used instead of cokers, which are fairly cheap but are also among the more dangerous units at refineries.

Genoil is testing its units on heavy crude from Russian oil company LUKOIL -- oil produced near Siberia that is so heavy it can't be transported through pipelines. If the Siberia tests are satisfactory, the two companies may enter agreements to install an upgrade at Lukoil's Yarega field near Siberia.

The process will be tested this year at the small Silver Eagle refinery in Utah, owned by Silver Eagle Refining. An explosion rocked the refinery last week, but Lifshultz said it was not related to the upgrader, which has not yet been installed.