The oil industry is perhaps one of the greatest and most diverse industries in the entire world. It’s complex process contains a large number of critical phases and logistics, which must be undertaken for oil sites to be discovered, pumped, processed, shipped, and sold around the world. Since so many small organizations and industries rely on different components of this long process, the oil industry is commonly classified into three separate sectors of manufacturing and distribution. These three sectors include: Upstream, Midstream, and Downstream. The initial discovery and pumping of oil is the Upstream sector. Then, the transportation and shipping is the Midstream sector. Finally, the Downstream oil and gas involves the actual processing, distribution, and selling of oil and natural gas based products.
In this three part series, we’ve spoken about both Upstream and Midstream oil and gas pipelines. Today, we will focus on understanding downstream oil and gas pipelines.
Downstream Oil and Gas Pipelines
Most people are familiar with the oil industry’s downstream oil and gas sector. This is because it offers a close connection to everyday customers and consumers. During this process, crude oil arrives at the plants for processing, where it is then refined for use in a number of products, which will be distributed and sold to businesses and the general public. Because of the nature of the products that are being transported, high-quality equipment and components are essential during all phases of this transportation process.
The downstream pipeline itself is a unique network of large diameter, high-pressure steel pipes that are typically buried. These pipes physically transport petroleum products from refineries to various demand centers across countries, states, and cities through a number of pump stations and valves. This complex and large network of pipelines is also known at the downstream pipeline grid.
Products
The downstream oil and gas sector includes the actual processing and distribution to consumers. The two largest products of this sector include natural gas and natural gas liquids (NGL).
Natural gas
Natural gas a fundamental component of the Downstream facet. It is a term well known to most people, however, it is not always fully understood just what it is. Natural gas is comprised of methane and hydrocarbon gases. Because of this, it is flammable and found naturally in underground sites in close proximity to petroleum.
Due to its flammability, natural gas plays a vital role in the production of electricity and heat, as well as a role in the making of fertilizer and the transportation industry. Before it is ready for use, natural gas must undergo processing, or refining, to remove impurities and water. This is where the downstream phase sees most of its work.
Natural gas liquids (NGL)
Natural gas liquids are natural gases that have been liquefied and condensed. This is usually done to make storage and transportation easier. NGLs take up a volume 1/600th of regular non-liquefied natural gas. To achieve this state, the gas must be exposed to freezing temperatures of -260°F and stored in cryogenic tanks. When the NGL reaches its destination is will usually be reverted back to gas.
Transportation
The downstream oil and gas sector also deals with varying amounts of challenges in terms of transportation, distribution, and other logistics. After being processed, oil and natural gas products must be transported to various places where they will be used, sold, or redistributed. This involves the use of conventional methods such as boat shipment, rail shipment, or trucking. However, due to the special nature of natural gas it is commonly transported using an extensive pipeline network.
Importance of Downstream Pipeline Grid
The downstream oil and gas pipeline grid and infrastructure as a whole, is extremely important to our country’s function. In fact, there are currently 2.4 million miles of pipe in this complex transportation system. This past year alone, Americans consumed 40% of oil and 29% of natural gas as part of our energy consumption as a whole. As our nation’s energy demand continues to rise, more gathering and distribution lines will need to be updated and constructed.
Why are downstream pipelines so important? In our nation alone they run across state lines to bring feed stocks and fuels to a variety of consumers. This includes power plants, businesses, and homeowners. In short, Americans use energy by petroleum every day in varying capacities. In fact, the United States has the largest network of pipelines in the entire world.
It’s Essential for Everyday Living
Most people don’t realize just how many household products contain natural gas and oil. Cooling and heating purposes contain these products, such as heat supply for clothes dryers, ovens, and stoves. They also help power machinery that makes the products we use everyday. Even those products contain gas or oil by-products.
While we strive to create new fuel components for automobiles and technology, there are more than 263 million passenger vehicles registered to be on the road. Most of these rely on diesel or gasoline consumption. Downstream oil and gas pipelines supply the fuel necessary for these daily activities. It keeps our country moving both economically and physically.
Downstream Safety and Equipment
While you might hear the occasional story on the news, pipeline spills are not as common as you would think. In fact, with over 2.4 million pipelines, the measured number of accidents that occur is less than a fraction of a percent. 99.99% of all pipelines deliver product on a daily basis without incident. Current methods used to monitor and inspect pipelines use sophisticated IT systems and state-of-the-art technology to ensure and protect pipe integrity, people, and the environment. Operators use extensive preventative methods and high-tech inspection to discover any potential issues regarding pipeline components and take measures against future failures. Like other services and products, robust state and safety equipment standards are in place with tough penalties and rigorous requirements in order to hold operations at a high standard.
The products created in this Downstream sector are ones that we come in contact with daily. Natural gas and oil is woven into the fabric of our society. If these products were not readily available, our quality of life would be drastically different. The safe delivery of these products can be attributed to the quality components and safety measures guaranteed within our nation’s downstream pipelines. In order to maintain and improve this diverse industry, these components must be maintained to the highest of standards.