The Basics

Small Producers, Back Bone of Oil and Natural Gas Industry

According to the IPAA, 83 percent of U.S. oil and 90 percent of U.S. natural gas are produced by independent producers that don’t have more than $5 million in annual retail sales or don’t refine more than an average of 75,000 barrels per day of crude oil.

Upstream to Downstream

  • Upstream: The upstream sector includes searching for potential crude oil and natural gas fields, drilling exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil or raw natural gas to the surface.
  • Midstream: The midstream sector involves the transportation, storage, and wholesale marketing of crude or refined petroleum products.  Pipelines and other transport systems can be used to move crude oil from production sites to refineries and deliver the various refined products to downstream distributors.
  • Downstream: The downstream sector is the refining of the petroleum crude oil and the processing of raw natural gas, as well as the marketing and distribution of the products derived from the crude oil and natural gas.

Petroleum Products from Crude

Unquestionably, gasoline production is the life blood of this country, and diesel fuel is the backbone of commerce as it powers the trucks, freight trains, and ocean vessels that transport 70 percent of the nation’s consumer products. The use of natural gas and efficient alternative to oil, is rapidly increasing in popularity to heat and cool homes. However, heating oil remains popular in the northeast regions of the country.

What can you make from one barrel of oil?

Researches broke down a typical barrel of domestic crude oil into what could be produced from it. The average domestic crude oil has a gravity of 32 degrees and weighs 7.21 per gallon. Here is what just one barrel of crude oil can produce:

The lighter materials in the barrel are mainly use for paint, thinners and dry cleaning solvents, and they can make nearly a quart of one of these products. The miscellaneous fraction of what is left still contains enough byproducts to be used in medicinal oils, still gas, road oil and plant condensates.