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From the Oil Field to the Gas Tank

The gasoline you pump into your car likely started its journey from halfway around the world. It traveled via oil tanker, railway tank car and truck, as well as through several pipelines. Each mode of transport and accompanying transfer operation added to its cost.

Gas and Its Crude Beginnings
The gas you pump into your car likely started its journey from halfway around the world, where it originated as crude oil. Also called petroleum, crude oil formed hundred of millions of years ago from decaying plant and animal material and deposited beneath the Earth’s surface. Here’s what happens before gas finally ends up in your vehicle’s tank:
Oil Pump1. Crude oil is drilled from porous rock deep underground in oil-rich regions such as the Middle East, North Sea, Africa and Latin America. In the United States, most petroleum is drilled in Texas and Alaska.
2. It then is transported through land and sea by pipelines or tankers to refineries around the world.

3. At the refinery, crude oil is separated by a heating distillation process and is treated and reformulated into gasoline, kerosene, home-heating oil, jet fuel, diesel, and so on.

4. Among the chemical treatment processes include “cracking,” in which non-gasoline components of crude oil are converted into gasoline.

5. Pipelines transport gasoline from refineries over long distances to local storage distribution centers.

Gas Pump 6. Individual additive packages are added at the distribution centers to produce different gasoline brands.

7. Gasoline is transported by tanker truck to gas stations.
Typically, crude oil from the Middle East, North Sea, Africa and Latin America is pumped through pipelines to seaports, where it’s transferred to tankers that carry it to refineries around the world. Because most of the world’s ports are not large enough to handle the huge crude-oil carriers, many ports have offshore facilities where these tankers can unload into — and load from — smaller shuttle tankers or underwater pipelines. At both ends of the process, crude spends time in storage tanks.

Crude oil is next transferred to the refinery, usually by pipeline. Crude oil can vary from very thin crude, which looks like apple cider, to very thick crude, which looks like melted tar. Thin crudes, called high-gravity crudes, contain more natural gasoline and less sulfur and nitrogen, so they’re easier to refine. The refining of thick crudes, or low-gravity crudes, into products such as gasoline requires more complex and expensive processing equipment, additional processing steps and more energy, all adding to the cost.

At the refinery, petroleum is first separated by distillation into gasoline, kerosene, fuel oil, jet fuel, diesel and so on. Gasoline produced by this direct distillation is called straight-run gasoline, and only a small portion of gasoline produced in the United States today is straight-run. While jet, diesel and some other fuels usually are acceptable as is, straight-run gasoline typically requires more processing, such as isomerizing, to increase octane characteristics for use in automobiles.

A Barrel of Goods
One 42-gallon barrel of crude oil yields more than just fuel for your car — it is a vital source of other everyday uses in transportation and industry.
Product Gallons per Barrel*
Gasoline 19.5
Distillate fuel oil1 9.2
Kerosene-type jet fuel 4.1
Residual fuel oil2 2.3
Liquefied refinery gases 1.9
Still gas 1.9
Coke 1.8
Asphalt and road oil 1.3
Petrochemical feedstocks 1.2
Lubricants 0.5
Kerosene 0.2
Other 0.3
*The total volume of products made is 2.2 gallons greater than the original 42 gallons of crude oil, representing a processing gain.

1Includes both diesel fuel and home-heating oil

2Heavy oils used as fuels in industry and marine transportation and for electric power generation

Source: American Petroleum Institute
Of the many complex processes used to convert non-gasoline components of crude into gasoline and then to further rearrange gasoline molecules to improve its characteristics for use in automobiles, “cracking” is the key one. Cracking is a chemical process by which complex compounds are broken down, or cracked, into simpler compounds. This can be accomplished either by thermal cracking, which applies heat and high pressure to the compounds, or by catalytic cracking, which combines heat and a catalytic agent. More than half of the gasoline used in the United States today is produced by cracking, most by a fluid catalytic cracking process that uses alumina-silica gel powders as catalysts.

Products of cracking contain about 50 percent gasoline. Often, these products are further treated by processes such as hydrogenation and hydroforming. The remaining 50 percent consists largely of lighter components, which may be further refined to increase yield and improve the gasoline quality. By combining all of these processes, 100 liters (26 gallons) of crude oil can yield slightly more than 100 liters of gasoline.

Pipelines are used in the United States to transport gasoline from refineries over long distances to local distribution centers, where gasoline is stored and then transported by truck to individual gasoline stations. These same pipelines also carry other refined products, including different grades of gasoline, diesel, home heating fuel, kerosene and jet fuel, all of which are shipped in batches. Adjoining batches mix wherever they come into contact with each other. These mixed portions of the stream, such as a mixture of premium gasoline with regular gasoline, may be sent to a refinery for re-refining and sold as a lower-valued product or as a mixture.

A gasoline marketer is not overly concerned with receiving gasoline from another marketer’s batch, because gasoline is made to standard specifications and therefore is — theoretically — of the same quality. Individual additive packages are added at distribution terminals to produce differences in gasoline brands.

Worldwide Oil Demand
Oil is a limited resource, so it may eventually run out, but not for many years. According to OPEC, its oil reserves are sufficient to last another 80 years at the current rate of production, while non-OPEC oil producers’ reserves may last less than 20 years. Following is a projection of oil demand in various parts of the world (in million barrels per day).
Countries 1995 2000 2010 2020
OECD1 42.2 44.6 47.5 49.1
OPEC2 5.3 6.2 7.4 8.6
Other developing countries 13.2 16.6 21.8 26.4
Former Soviet Union3 4.5 4.4 5.2 5.8
China 3.2 4.4 6.5 8.7
Other European countries 1.4 1.6 1.8 2.0
Total world 69.9 77.8 90.2 100.7
1Countries of the Organization for Economic Cooperation and Development include Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, The Netherlands, New Zealand, Norway, Poland, Portugal, Spain, South Korea, Sweden, Switzerland, Turkey, United Kingdom and United States.

2Countries of the Organization of the Petroleum Exporting Countries include Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

3Countries of the former Soviet Union include Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

Source: OPEC

Reported by Ron Cogan and Bill Siuru  for 


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