Petroleum Fuels Power the Economy and Power the World.
Crude oil was discovered nearly 150 years ago, and today, we’re still deriving most of our energy needs from petroleum fuels. Their energy density, availability and transportability make petroleum fuels a good fit for the power-hungry economy.
No energy source is perfect, though, and there are also challenges with petroleum fuels. Largely environmental and supply-oriented, many of these issues are within the scope of the petroleum industry to positively affect, but some issues are external and difficult to account for.
Still, petroleum fuels are what power our transportation networks, our supply chains, our businesses, our homes, and most of the modern comforts we’ve come to rely on.
The Primary Petroleum Fuels: Gasoline and Diesel
We derive an impressive array of products from crude oil, which is also the primary feedstock for petroleum fuels. There are also several types of petroleum fuel, including fuel oil, kerosene and naphtha. The two we rely on the most, though, are gasoline and diesel. You’ve seen them at the pump, but maybe you’ve wondered why there’s different fuels for different types of vehicles. Here’s what’s different about them:
- Gasoline – About half of all crude oil is processed into gasoline, the fuel that most of us power our passenger vehicles on. Gasoline is produced from lighter crude compounds and is less dense than diesel. It is also combusted using a spark generated inside a combustion engine. As such, engines designed to take gasoline leverage heat to unlock the energy inside the fuel.
- Diesel – Diesel is more energy-dense than gasoline and refined from heavier crude compounds. In other words, you get more energy bang per buck, compared to gasoline. Diesel requires different engine technology to work in, as it is not combusted using heat. Instead, diesel engines utilize compression to activate the fuel.
How is Crude Oil Refined to Produce Petroleum Fuels?
The journey from crude to fuel is a long one, consisting of many steps. That gallon of fuel in your car’s tank has likely traveled hundreds, if not thousands of miles. Where has it been? From ground to gas, this is what it takes to get fuel to the pump:
During distillation, the crude is boiled and separated by density. Lighter compounds evaporate and rise while heavier compounds are drawn down by gravity. Propane, butane, gasoline, kerosene, jet fuel, diesel, fuel oil, lubricants, and bitumen (for asphalt production) are all separated into different processing channels using this approach.
Additional refining steps include cracking and hydrotreating – Cracking breaks larger hydrocarbon strings into smaller, lighter chunks, which is desirable for the refining process. During cracking, the long hydrocarbon strings are snapped apart using extreme heat and a powdered catalyst that is recaptured and cleaned following use.
Hydrotreating removes foul-smelling and burning sulfur from hydrocarbon molecules. It does this by introducing hydrogen to the hydrocarbon mix, which bonds with the sulfur and chemically pries it off of the larger hydrocarbon molecule.
Once Refined, Petroleum Fuels Are Piped to Terminals For End-Users
The fuel’s journey isn’t over once it’s been refined. We don’t fill our gas tanks up at the refinery, after all. There’s still one final leg of the journey to make, from refinery to the end-user.
To do that, the fuels first have to be transported to terminals for storage one last time. This can be done with pipelines or trucks. If it is handled by pipelines, it can take weeks for the fuel to reach the terminal. Even though it may be pumped across the country, the fuel inside the pipeline moves at a walking pace. That’s to ensure it doesn’t over mix.
Once at the terminal, the fuels are separated by formulation and stored in tanks. From here, trucks transport the products to the pump, one step away from their final destination – your car’s gas tank.
Capacity Is Up While the Number of Refineries is Down, Thanks to Efficiency
Refining capacity has continued to rise over the decades, but the number of refineries has not. In fact, the number of operating U.S. refineries has declined by 50 percent in the last 40 years.
How is it possible that the U.S. is refining as much oil as it ever has, with only half the refineries? Part of the answer is size – some of the remaining refineries have been expanded. Part of the answer, though, is also efficiency. Modern refineries are far more efficient than they were just a generation ago. While oil refining does come with environmental risks, modern refineries are mitigating the problem by doing more with less.
The Petroleum Market is Sensitive and Susceptible to Supply Chain Shocks
A potential issue with doing more with less, though, is that when the U.S. suddenly needs a lot more fuel, supply challenges may emerge quickly. That has been the case the last few years, as natural, geopolitical, and economical events have combined to send shocks through the petroleum industry.
The whole world runs on oil, so global events like the war in Ukraine can create supply issues in multiple markets. In the U.S., even though refineries are as efficient as ever, they are currently running at 98 percent capacity, with little room to suddenly add more production. Compare this to normal operating capacities, which run a bit over 80 percent.
With little ability to flex with circumstances change, the combination of increased natural disasters, geopolitical instability, the 2020 pandemic and domestic policy has left the petroleum supply chain brittle. And when there’s a supply shortfall in a particular market, that market has to buy from another market to compensate. If there are many markets doing this simultaneously, supply issues worsen further.
Given its importance to the world economy, the supply of petroleum will continue to be a pressure point that the industry must adapt to.
Even With These Challenges, Petroleum Will Fuel Modern Society for Some Time Yet
The long-term future of energy may eventually de-emphasize the use of petroleum fuels, but that future hasn’t arrived yet. Until then, our societies require the energy-rich fuel sources we derive from oil.
That doesn’t mean there aren’t challenges to take on. As human societies expand and complexify, the need for additional supply and environmental solutions will only increase. That’s why we’re working with industry and political leaders to make the transition from petroleum fuels as measured as possible.
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