Definitions - Upstream, Midstream and Downstream
Definitions - Upstream, Midstream and Downstream
Definitions - Upstream, Midstream and Downstream
Library of Congress
Library of Congress / Research Guides / Business / Oil and Gas Industry: A Research Guide
/ Downstream: Refining and Marketing
Introduction
Downstream: Refining and
History of the Industry
Organizations and
Marketing
Cartels
The downstream sector covers
Oil and Gas refining and marketing.
Companies
While refining is a complex
Upstream: Production process, the goal is
and Exploration straightforward: to take crude oil,
which is virtually unusable in its
Midstream: natural state, and transform it
Transportation
into petroleum products used for
Downstream: a variety of purposes such as
Refining and heating homes, fueling vehicles
Marketing and making petrochemical Wolcott, Marion Post. Barnsdall oil refinery.
Wichita, Kansas. 1941. Farm Security
plastics.
Subscription Administration - Office of War Information
Databases A number of processes are Collection. Library of Congress Prints and
involved in refining depending on Photographs Division.
Statistical Data
the wanted end product.
Oil and Gas Pricing Hydrotreating is used to remove unwanted elements, such as sulphur and
nitrogen from hydrocarbons; cracking breaks molecules into smaller
News and Analysis fragments to produce gasoline and other lighter hydrocarbons. The gasses
produced by cracking are used to create other products like synthetic rubber
Laws and and plastics. When making gasoline, refiners need high octane numbers to
Regulations
prevent engine knocking. Despite knowing the dangers of lead, tetraethyl lead
Industry was added to gasoline in the United States in the 1920s in order to increase
Controversies the octane. Since the U.S. government banned lead in vehicle gasoline in 1996
as part of the U.S. Clean Air Act, refineries use alkylation and reforming to
develop high-octane gasoline.1
Refineries are usually located near population centers to facilitate marketing
and distribution of final products.2
Marketing is the wholesale and retail distribution of refined petroleum
products to business industry government and public consumers Generally
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products to business, industry, government, and public consumers. Generally
crude oil and petroleum products flow to the markets that provide the
highest value to the supplier, which usually means the nearest market first
because of lower transportation cost and higher net revenue for the supplier.
In practice, however, the trade flow may not follow this pattern due to other
factors, such as refining configurations, product demand mix, and product
quality specifications.
Gasoline service stations handle the bulk of public consumer sales and oil
companies sell their petroleum products directly to factories, power plants,
and transportation-related industries. Natural gas sales are almost evenly
divided between industrial consumers, electrical providers, and residential
and commercial heating.3
Because gasoline is a commodity that is more or less the same, competition
for customers required creative marketing tactics. Retail gasoline stations
offered free services like maps, car washing, and dinnerware. Oil company
brands offered credit cards starting in the 1950s to ensure customer loyalty.
Radio, billboard, and television ads promoted catchy slogans, additives, and
adjectives like "premium" and "high performance" to attract drivers.4
Advertorials, or sponsored op-eds, were used by Mobil in the New York Times
to publish pro-oil industry commentary. Today, social media gives companies
a platform to promote various energy initiatives and mitigate negative news.5
Chemical Week
Call Number: TP1 .C37
Published/Created: Weekly, 1951 to present
Articles cover new technologies in chemical
manufacturing and processes. Volume 164, 2002,
includes a supplemental issue NPRA: A Century of Achievement and
Excellence focusing on the history of the petrochemical and refinery
industries.
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Additional works on oil and gas transportation and storage in the Library of
Congress may be identified by searching the Library of Congress Online
Catalog under appropriate subject headings. Choose the topics you wish to
search from the following list of Library of Congress subject headings to link
directly to the Catalog and automatically execute a search for the subject
selected. For assistance in locating the many other subject headings which
relate to this subject, please consult a reference librarian.
Gas distribution.
Natural gas--Marketing.
Petroleum--Refining.
Petroleum products--Marketing.
Petroleum products distribution equipment industry.
Petroleum refineries.
NOTES
1. Jia Man Neoh and Shang Yang Chuah, Oil & Gas: Europe Industry
Surveys, (New York: CFRA, 2019).; Charles F. Conaway, The Petroleum
Industry: A Nontechnical Guide, (Tulsa, OK: PennWell, 1999), 236; Kat
Eschner, “Leaded Gas Was a Known Poison the Day it was Invented,”
Smithsonian Magazine, , (Dec. 9, 2014). Back to text
2. Conaway, The Petroleum Industry: A Nontechnical Guide, 245. Back to
text
3. Michael D. Tusiani and Gordon Shearer, LNG: A Nontechnical Guide
(Tulsa, OK: PennWell Corp, 2007), 74. Back to text
4. Daniel Yergin The Prize (New York: Free Press, 2008), 531. Back to text
5. Mark L. Robinson, Marketing Big Oil, (New York: Palgrave Macmillan,
2014), 89. Back to text
Subjects: Business and Management, Company and Industry Information, Economics, Energy
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12/19/21, 3:49 PM Midstream: Transportation - Oil and Gas Industry: A Research Guide - Research Guides at Library of Congress
Library of Congress / Research Guides / Business / Oil and Gas Industry: A Research Guide / Midstream: Transportation
Introduction
Midstream: Transportation
History of the Industry
The midstream sector covers
Organizations and transportation, storage, and
Cartels
trading of crude oil, natural gas,
Oil and Gas and refined products. In its
Companies unrefined state, crude oil is
transported by two primary
Upstream: Production modes: tankers, which travel
and Exploration
interregional water routes, and
Midstream: pipelines, which most of the oil
Transportation moves through for at least part of
the route. Once the oil has been Penn Oil & Truck. ca. 1920. Library of
Modes of extracted and separated from Congress Prints and Photographs Division.
Transportation
natural gas, pipelines transport
Storage the products to another carrier or directly to a refinery. Petroleum products
then travel from the refinery to market by tanker, truck, railroad car, or more
Downstream: Refining pipelines. Tankers deliver petroleum by transporting oil and refined products
and Marketing from other countries to the U.S. to make up the difference between domestic
products and demand. Tankers also transport oil along the Gulf coast. The
Subscription
Databases Merchant Marine Act of 1920, also known as the Jones Act, heavily impacts
the transportation industry, as it requires vessels that transport cargo from
Statistical Data one U.S. port to another U.S. port must be built in the United States, and
majority owned and operated by United States citizens or permanent
Oil and Gas Pricing residents.
News and Analysis See more information and resources on Modes of Transportation and
Storage in this guide.
Laws and
Regulations
Industry
Controversies
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Additional works on oil and gas transportation and storage in the Library of
Congress may be identified by searching the Library of Congress Online
Catalog under appropriate subject headings. Choose the topics you wish to
search from the following list of Library of Congress subject headings to link
directly to the Catalog and automatically execute a search for the subject
selected. For assistance in locating the many other subject headings which
relate to this subject, please consult a reference librarian.
Petroleum--Storage.
Petroleum--Transportation.
Natural gas--Storage.
Natural gas--Transportation.
Natural gas pipelines.
Petroleum pipeline industry.
Petroleum pipelines.
Tank cars.
Tankers.
Petroleum reserves.
Subjects: Business and Management, Company and Industry Information, Economics, Energy
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12/19/21, 3:47 PM Upstream: Production and Exploration - Oil and Gas Industry: A Research Guide - Research Guides at Library of Congress
Library of Congress / Research Guides / Business / Oil and Gas Industry: A Research Guide
/ Upstream: Production and Exploration
Introduction
Upstream: Production and
History of the Industry
Organizations and
Exploration
Cartels
The upstream segment of the oil and gas industry contains exploration
Oil and Gas activities, which include creating geological surveys and obtaining land rights,
Companies and production activities, which include onshore and offshore drilling.
Upstream: Crude oil is categorized using two qualities: Density and sulfur content.
Production and
Exploration Density is measured by API gravity, and ranges from light (high API
gravity/low density) to heavy (low API gravity/high density).
Midstream: Sulfur content ranges from sweet (low sulfur content) to sour (high
Transportation sulfur content).
Downstream: Refining Light and sweet crude oil is usually priced higher, and therefore more sought-
and Marketing after, because it is easier to refine to make gasoline than heavy and sour
crude oil.1 Oil volume is measured in barrels (bbl), which equals 42 gallons.2
Subscription
Databases Natural gas is found in both associated formations, meaning it is formed and
produced with oil, and non-associated reservoirs. Gas can either be dry (pure
Statistical Data
methane), or wet (exists with other hydrocarbons like butane). Although wet
Oil and Gas Pricing gas must be treated to remove the other hydrocarbons and other
condensates before it can be transported, it can increase producers'
News and Analysis revenues because they can sell those removed products.3
Laws and The advent of shale gas in the United States is one of the biggest
Regulations breakthroughs in the history of the energy industry. Prior to its development,
the United States was viewed as a growing natural gas importer. But,
Industry production from shale gas has catapulted the United States into being the
Controversies
world's largest producer of natural gas and a fast-growing exporter. The two
primary technological advances that made production from shale and other
tight formations economically possible were horizontal drilling and hydraulic
fracturing.
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EXPLORATION
Oil and gas exploration encompasses the processes and methods involved in
locating potential sites for oil and gas drilling and extraction. Early oil and gas
explorers relied upon surface signs like natural oil seeps, but developments in
science and technology have made oil and gas exploration more efficient.
Geological surveys are conducted using various means from testing subsoil
for onshore exploration to using seismic imaging for offshore exploration.
Energy companies compete for access to mineral rights granted by
governments by either entering a concession agreement, meaning any
discovered oil and gas are the property of the producers, or a production-
sharing agreement, where the government retains ownership and
participation rights.4 Exploration is high risk and expensive, involving
primarily corporate funds.5 The cost of an unsuccessful exploration, such as
one that consisted of seismic studies and drilling a dry well, can cost $5
million to $20 million per exploration site, and in some cases, much more.
However, when an exploration site is successful and oil and gas extraction is
productive, exploration costs are recovered and are significantly less in
comparison to other production costs.6
Proven reserves measure the extent to which a company thinks it can
produce economically recoverable oil and gas in place, as of a certain point in
time, using existing technology.7 The estimates for proven reserves are
updated over the life of a lease, based on regular reassessments.8 Technology
can impact the estimates: For example, the advances in hydraulic fracturing
and horizontal drilling caused the U.S. Geological Survey to increase its
proven reserves estimate for the Marcellus Shale by 40 times the original
value.9 In addition to technology, prices and existing infrastructure influence
reserves estimates.
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PRODUCTION
RESOURCES
Additional works on production and exploration in the oil and gas industries
in the Library of Congress may be identified by searching the Library of
Congress Online Catalog under appropriate subject headings. Choose the
topics you wish to search from the following list of Library of Congress subject
headings to link directly to the Catalog and automatically execute a search for
the subject selected. For assistance in locating the many other subject
headings which relate to this subject, please consult a reference librarian.
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NOTES
Subjects: Business and Management, Company and Industry Information, Economics, Energy
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