The oil and gas industry is broken down into three sectors: upstream, midstream and downstream. We’ve covered the upstream and midstream: The upstream sector does everything needed to locate natural gas and oil and to bring it to the surface. The midstream sector transports and stores it. Now, we want to shed light on the downstream sector.
Whether you know it or not, you most likely have dealings with the downstream sector on a daily basis. It is responsible for: oil refining, supply, trading, product marketing and retail. Not only does it produce and sell gasoline and diesel, but also all the other myriad items made possible by the oil and gas industry. If you have ever purchased or used any of the following, you have dealt with the downstream sector:
- Gasoline
- Kerosene
- Jet fuel
- Diesel oil
- Heating oil
- Fuel oils
- Lubricants
- Waxes
- Asphalt
- Natural gas
- Propane
- Butane
- Plastic
- Pharmaceuticals
- Fertilizer
- Pesticides
First Stop: Oil Refining
The first stop on the ride downstream is an oil refinery. Refineries refine the crude oil by heating it in a distillation tower. Once distilled, all the different components are separated. These components can be used as is, or they may be sent to different petrochemical facilities that transform them into the products that have become part of our everyday lives. The above is just a partial list of all the things the oil and gas industry provides. Do you know what cosmetics, medical equipment and kevlar gear all have in common? Most, and in some cases all, of their components are made with petrochemicals. Are you into sports? Golf balls, golf bags, basketballs, footballs, even surfboards are available thanks to petrochemicals. Are all those sports working up your appetite? Food preservatives and refrigerators are petroleum creations.
No matter what you drive, fossil fuels get you where you’re going
The gas station on the corner where you fill up your car is a retail part of the downstream sector. Even if you own an electric car, not only were most of its components made from petrochemicals, but more than likely the electricity powering that car is created by natural gas. Natural gas is run to a power plant and is burned in order to boil water. The resulting steam turns a turbine that powers a generator. The generator spins magnets creating affordable and reliable electricity. Plug in your car, charge it, and then off you go.
This would be a good time to send a note of thanks to the oil and gas industry for making your everyday life easier and more enjoyable. Don’t forget – that ballpoint pen you’re using also came from the downstream sector of the oil and gas industry.