From the Ground to the Pump

October 17, 2016

Written By Adam Buckallew

The Refining Process Explained

You probably realize you are using energy when you fill up your vehicle’s fuel tank or burn propane to heat your homes. But have you ever stopped to consider the source of the energy or how it is delivered?

It all goes back to the ancient, decomposed remains of plants and animals that died hundreds of millions of years ago in oceans that once covered the Earth. These organisms sank to the bottom of the sea and, over millions of years, were covered with layers of sediment. As these layers accumulated, they were buried deeper and deeper, to the point where heat and pressure from the Earth’s crust caused oil and natural gas to form.

The U.S. petroleum industry began in the 19th century. The first oil well was drilled in 1859 and could extract 800 gallons of crude oil a day. Flash forward to 2016 and the U.S. Energy Information Administration (EIA) estimates 97 million barrels of crude oil are produced globally every day.

We use petroleum products in a wide variety of ways, including: transportation fuels and oils; fuel for heating and electricity; asphalt and road oil; and feedstocks to make chemicals, plastics and synthetic materials.

In 2015, the United States consumed a total of 7.08 billion barrels of petroleum products, an average of 19.4 million barrels per day. More than half of the oil consumed in the United States was fed by domestic production in 2015. Imports, mostly from Canada and Latin America, made up the remainder of the U.S. oil supply.

Roughly half of the crude oil and two-thirds of the natural gas produced in the United States come from hydraulically fractured wells. Although this technology has been in use for more than 60 years, it has only recently been used to produce a significant portion of domestic crude oil and natural gas supplies. Up until 2000, hydraulic fracturing, or fracking, accounted for only 2 percent of American oil production and 7 percent of natural gas production.

Fracking is the process of drilling down into the earth and releasing a high-pressure water mixture into the rock to release oil and gas deposits. The process is often combined with horizontal drilling to tap into shale and other tight-rock formations a mile or more below the ground. This has opened up large reserves of oil and natural gas that were previously locked away in areas like North Dakota, Texas, Oklahoma and New Mexico.

However, fracking is not the only source of U.S. oil and natural gas production. Drilling rigs, both offshore in the Gulf of Mexico and on land, can be found in many areas of the country.

Once the oil and natural gas is collected, it must be processed. Crude oil is sent to one of the 139 operating oil refineries in the United States. EIA pegged U.S. refinery capacity at 18 million barrels per day as of June 2015.

Refineries heat crude oil until it turns into a gas and the gas is piped into a fractional distillation column. As the gases cool below their boiling point, they condense into liquids. Gasoline and kerosene settle near the top of the column, diesel fuels are found in the middle and lubricating oil and heavy gas oil are near the bottom. There’s a little more work to be done to get the final products, but that sums up the bulk of the process.

Refining an average barrel of oil, which holds about 42 gallons, usually yields 19 gallons of gasoline, 12 gallons of diesel fuel, 4 gallons of jet fuel and 2.5 gallons of propane. The remainder of the barrel is used to make products like petroleum coke, liquefied refinery gases, asphalt, lubricants and other oils for feedstocks like plastics, detergents and solvents.

Once the products are ready to leave the refinery, the majority will be transported by pipelines to distribution terminals. The United States has the largest network of energy pipelines in the world with more than 2.5 million miles of pipe. This extensive network of pipeline serves as the energy lifeline for much of the country.

Most fuel is sent to bulk storage terminals that often service many companies. From there, large tanker trucks, some of which are capable of hauling as much as 10,000 gallons, deliver the fuel to companies, like MFA Oil, who then sell it to consumers.