From One Barrel of Oil: What Do We Actually Get?

A fuel sign in Front Royal on Monday, Sept. 21, showed regular gasoline at $4.09 a gallon and diesel at $6.39.

Those numbers raise an interesting question. Gasoline and diesel can both come from the same barrel of crude oil, so why do they cost different amounts? And what else comes from crude oil besides the fuel we put in our vehicles?

The answer may be surprising.

A barrel of crude oil doesn’t simply become gasoline. It becomes a collection of fuels and other products that touch nearly every part of modern life — from highways and airplanes to clothing, plastics and household products.

But the journey starts long before crude oil reaches a refinery.

Getting Oil Out of the Ground

Crude oil is found in underground rock formations. Producers use geological information, seismic surveys and exploratory drilling to identify deposits that may contain commercially recoverable oil.

Once producers find a suitable location, they drill wells to reach the oil-bearing formation.

Some oil can rise because of underground pressure, while other wells require pumps or other methods to bring it to the surface. Horizontal drilling and hydraulic fracturing have also allowed producers to reach oil trapped in formations that were once difficult or too expensive to develop.

What comes out of a well isn’t ready for your gas tank.

At or near the production site, operators separate crude oil from water, natural gas, and other materials. The crude is then transported toward refineries, often through pipelines, although trucks, trains, and ships can also be part of the journey.

Another important detail: Not all crude oil is the same.

Crude can be light or heavy and can contain different amounts of sulfur. Lower-sulfur crude is commonly called “sweet,” while higher-sulfur crude is called “sour.”

Those differences matter because refineries aren’t identical, either. Some are designed to process certain types of crude efficiently, while heavier or higher-sulfur crude may require more processing.

Only after that journey does the familiar barrel of oil reach the refinery.

A Barrel Means 42 Gallons

When the petroleum industry talks about a barrel of crude oil, it means 42 U.S. gallons.

But a refinery doesn’t take those 42 gallons and simply divide them between gasoline and diesel.

Crude oil contains a mixture of hydrocarbons. Refineries use heat and a series of processes to separate and convert those hydrocarbons into useful products.

The exact amount of each product varies by crude type, refinery, time of year, and market demand.

In general, gasoline accounts for the largest share of U.S. refinery output from crude oil. Roughly 45% to 50% of refinery output can be motor gasoline.

About 25% to 30% can be distillate fuel oil, a category that includes diesel and heating oil.

Jet fuel can account for roughly another 8% to 10%.

The remainder includes products such as hydrocarbon gas liquids, petroleum coke, asphalt and road oil, lubricants, refinery feedstocks, and other petroleum products.

View those percentages as an illustration rather than a recipe for every barrel. Refineries vary, crude oils vary, and refiners can adjust what they produce.

Refinery math also gets a bit unusual.

A refinery can end up with more than 42 gallons of finished petroleum products from a 42-gallon barrel of crude. That’s because refinery processing changes the hydrocarbons’ density and volume. The U.S. Energy Information Administration calls this “processing gain.”

Nothing is being created from nothing. The molecules are being rearranged and converted into products with different physical properties.

Gasoline and Diesel Go Separate Ways

Gasoline and diesel may begin with the same crude oil, but after refining they become different products serving different markets.

Gasoline primarily fuels passenger vehicles and light trucks.

Diesel has a much broader commercial role. It powers tractor-trailers hauling goods across the country, as well as farm equipment, construction machinery, and many other commercial vehicles and machines. Distillate fuels also include heating oil.

Jet fuel serves another market entirely.

That’s an important point when looking at a station sign showing gasoline at $4.09 and diesel at $6.39.

Sharing the same raw material doesn’t mean two finished products must sell for the same price.

Refineries also can’t simply turn an entire barrel into diesel just because diesel is more expensive. Refineries also have to consider the type of crude, refinery equipment, and demand for all the other petroleum products.

Exactly why diesel can climb far above gasoline — and what determines both prices — is something we’ll examine in Part 2.

Your Clothes May Have Started With Petroleum

Fuel is only part of the story.

Crude oil and natural gas also supply feedstocks to the petrochemical industry, which turns hydrocarbons into chemicals and materials used to manufacture thousands of products.

Plastic is probably the best-known example.

Petrochemical feedstocks are used in plastics found in food packaging, bottles, containers, toys, electronics, automobiles, building materials, and medical equipment.

Then there is your closet.

Polyester is a synthetic fiber made from petrochemicals. Nylon also relies on chemical feedstocks associated with petroleum production.

That means shirts, jackets, athletic clothing, carpeting, upholstery, and other fabrics can be connected to oil and natural gas.

Synthetic rubber used in tires and other products also has petroleum connections.

Walk through a typical house, garage, or workplace, and the list grows.

Petroleum-derived materials and chemicals can be used in paints, solvents, adhesives, lubricants, detergents, insulation, flooring, roofing products and numerous personal-care and household products.

A car itself contains petroleum products even when its fuel tank is empty. Plastics, synthetic rubber, lubricants, coatings, insulation and upholstery may all contain petroleum-derived materials.

And beneath the car is another familiar petroleum product: asphalt.

Petroleum Shows Up in Unexpected Places

Hospitals provide another example.

Plastics and other petroleum-derived materials are used in many disposable medical supplies, protective equipment, tubing, containers, and other products. Petrochemicals also play a role in pharmaceutical manufacturing.

Agriculture depends on petroleum in several ways. Diesel powers tractors and other equipment, while lubricants, plastics, transportation, and manufactured farm supplies add other links to petroleum.

Even many products marketed as alternatives to petroleum-powered transportation still contain plastics, synthetic materials, lubricants, and other components that can trace part of their origins to petrochemical feedstocks.

That doesn’t mean every plastic or synthetic product begins with crude oil. Natural gas is also a major source of petrochemical feedstocks.

And despite the enormous number of consumer products connected to petroleum, fuels still account for the large majority of what refineries produce.

That’s why crude oil remains so closely associated with transportation.

Much More Than Gasoline

It is easy to think about oil only when pulling into a gas station.

We see the price displayed in large numbers along the highway. We watch the dollars climb on the pump. When gasoline or diesel becomes expensive, we notice immediately.

What we don’t see as easily is the petroleum in the road beneath us, the tires on our vehicles, the polyester in our clothes, or the plastics throughout our homes.

That makes the 42-gallon barrel much more than a container of future gasoline.

Oil must be discovered, drilled, brought to the surface, separated, transported, and refined before it becomes useful products. At the refinery, one raw material begins several different journeys — into gasoline, diesel, jet fuel and other products, as well as feedstocks that can eventually become materials we use every day.

And that brings us back to the Front Royal fuel sign.

If America produces large quantities of its own oil, why can gasoline still reach $4.09 and diesel $6.39?

Why should turmoil in the Middle East matter to a driver in Warren County if the United States doesn’t depend entirely on Middle Eastern oil?

And if the United States is described as “energy independent,” why aren’t American motorists independent of world oil prices?

Those questions aren’t really about what comes out of a barrel.

They’re about what determines the price of that barrel — and everything that happens between the oil field and the gas pump.

Coming tomorrow in Part 2: From Oil Field to Gas Pump — What Really Determines What We Pay?