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Oil and Gas Industry: A Research Guide

Downstream: Refining and Marketing

Wolcott, Marion Post. Barnsdall oil refinery. Wichita, Kansas. 1941. Farm Security Administration - Office of War Information Collection. Library of Congress Prints and Photographs Division.

The downstream sector covers refining and marketing.

While refining is a complex process, the goal is straightforward: to take crude oil, which is virtually unusable in its natural state, and transform it into petroleum products used for a variety of purposes such as heating homes, fueling vehicles and making petrochemical plastics.

A number of processes are involved in refining depending on the wanted end product. Hydrotreating is used to remove unwanted elements, such as sulphur and nitrogen from hydrocarbons; cracking breaks molecules into smaller fragments to produce gasoline and other lighter hydrocarbons. The gasses produced by cracking are used to create other products like synthetic rubber and plastics. When making gasoline, refiners need high octane numbers to prevent engine knocking. Despite knowing the dangers of lead, tetraethyl lead was added to gasoline in the United States in the 1920s in order to increase 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 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

The following materials link to fuller bibliographic information in the Library of Congress Online Catalog. Links to additional online content are provided when available.

Downstream Industry Codes

The North American Industry Classification System is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. Codes start with two-digits at the broadest industry level, and become more specific at the six-digit level. Mexico, Canada and United States data is comparable at the five-digit code level. Other region, country, and organization-specific industry codes exist for data tracking purposes. Knowing how a particular industry or a company within an industry is classified can help when researching, since information is often organized within these codes.

3241Petroleum and Coal Products Manufacturing
324110Petroleum Refineries
324121Asphalt Paving Mixture and Block Manufacturing
324122Asphalt Shingle and Coating Materials Manufacturing
324191Petroleum Lubricating Oil and Grease Manufacturing
324199All Other Petroleum and Coal Products Manufacturing
424710Petroleum Bulk Stations and Terminals
424720Petroleum and Petroleum Products Merchant Wholesalers (except Bulk Stations and Terminals)
425120Wholesale Trade Agents and Brokers (Petroleum brokers)
454310Fuel Dealers

Library of Congress Catalog Searches

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.

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, External, (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