Petroleum Refining Industry Profile

Petroleum refineries are marvels of modern engineering. A maze of pipes, distillation columns, and chemical reactors turn crude oil into valuable products. The United States has nearly 150 refineries that can process anywhere between 5,000 and 500,000 barrels of oil per day. These refineries turn crude oil into the gasoline and chemical feedstocks that keep the country running. Refineries cost billions of dollars and operate 365 days a year, 24 hours a day.

Petroleum refining has grown increasingly complex in the last 20 years. Lower-quality crude oil, crude oil price volatility, and environmental regulations that require cleaner manufacturing processes and higher-performance products present new challenges to the refining industry. Improving processes and increasing the efficiency of energy use with technology research and development are key to meeting the challenges and maintaining the viability of the U.S. petroleum refining industry.

Geography

U.S. refineries operate in 33 states and directly employ more than 65,000 people. Refinery products are consumed throughout the country. Over 900,000 Americans are employed by more than 125,000 service stations nationwide, most of which are independently owned and operated.

Illustration showing the Number of Operating Refineries by State (As of January 1, 2004): WA has 5, OR has 1, CA has 21, NV has 1, UT has 5, NM has 3, TX has 25, MT has 4, WY has 5, CO has 2, ND has 1, KS has 3, OK has 5, AR has 2, LA has 17, WI has 1, IL has 4, MS has 4, AL has 3, GA has 1, TN has 1, KY has 2, MI has 1, IN has 2, OH has 4, VA has 1, WV has 1, PA has 5, DE has 1 and NJ has 5

Markets

Refining produces not only fuels but raw materials used as feedstock for the petrochemical industry (plastics, pharmaceuticals, agrochemicals, etc.). Crude oil is broken into various fractions that are then upgraded and refined into a variety of products. Modern refineries are able to alter processing configurations and change the product slate to meet demand and maximize profit. Demand for various products varies seasonally and geographically. During the summer driving months, the public consumption of gasoline rises; during the winter, more heating fuel oil is required, particularly in the frigid northern states.

Product	Gallons per Barrel
gasoline	19.4
diesel & home heating oil	9.7
kerosene-type jet fuel	4.3
residual fuel oil	1.9
liquefied refinery gases	1.9
still gas	1.8
coke	2.0
asphalt and road oil	1.4
petrochemical feedstock	1.1
lubricants	0.5
kerosene	0.2
other	0.4

Average yields for U.S. refineries in 2000
A 42-gallon barrel of crude oil yields 44.6 gallons of product "processing gain"

Production

The United States is the largest, most sophisticated producer of refined petroleum products in the world, with 17.7 million barrels per stream day of crude distillation capacity.

Energy

Petroleum refining is unique among manufacturing industries from an energy standpoint. It is the country's single largest source of energy products, supplying 39% of total U.S. energy demand and 97% of transportation fuels. At the same time, it is also the largest industrial consumer, representing about 7.5 percent of total U.S. energy consumption.

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