I'd also suggest that rate of production is a serious element. How fast and at what volume are they able to process the sludge back into a usable state? On the above linked website, their faq identifies at least three different processes and handling methods determined by the state of the sludge. So this isn't a simple or even expedient process and will be limited by the specific technical and infrastructure demands of the method. If they can start producing a hundred thousand barrels a day from sludge, there remains a significant shortfall to in the refining supply chain which can't operate efficiently or even at all at reduced thresholds.

That's a fair assessment. I don't argue that we need more oil. It just seems like a waste for them to be containing so much unusable product.

Yes it will take time. But using your analogy, it's like a bakery that can shelve 200 loaves of bread with 3 good loaves remaining, and 50 moldy loaves of bread still on the shelf.

But in this case, if we don't just leave the loaves on the shelf, there's a process to recover 45 of those moldy loaves as good usable loaves.

Or we could just leave the moldy ones alone, because cleanup takes time and money. But we lose shelf space for good loaves and who knows what the the health risk is to the workers.

The sludge can eat away at the container, exposing the environment to toxins. It's also using a good deal of their storage. Their maximum is 75 million barrels, with 20 million barrels worth of sludge. That's product that can't be sold as is and is simply being stored.