Thursday, February 08, 2007

How Many Gallons of Gasoline in a Barrel of Oil?

If you save 1 billion gallons of gasoline, how many barrels of oil does that translate into?

There are 42 gallons of oil in an oil barrel, so I first thought that there would then be 42 gallons of gasoline in a barrel as well. But as I looked into it it quickly became more complicated that that.

Oil is complex mixture of hydrocarbons (mostly alkanes) of various lengths of which only some are of the length that make up gasoline. It is also turned into diesel fuel, jet fuel, solvents, fertilizers, pesticides, and plastics. Since gasoline doesn't make up the whole barrel, it then seemed like a good idea to figure out what percentage of the barrel was turned into gasoline.

About 10% of the product of the distillation of crude oil is a fraction known as straight-run gasoline. That would mean that a barrel of oil would produce 4.2 gallons of gasoline. It also depends on the type of oil, as Venezuelan crude yields little gasoline (about 5%), whereas Texas or Arabian crude yields about 30% gasoline.

Given the differences I took a look at what the average barrel of oil produces. American Petroleum Institute reports that 1 barrel of oil produced 19.4 gallons of gasoline per barrel based on average yields for U.S. refineries in 2000.

They also report that

The total volume of products made is 2.6 gallons greater than the original 42 gallons of crude oil. This represents “processing gain.”
Hmm, so maybe instead of thinking about 42 gallons per barrel I should start with 44.6. But, I digress.

The EIA tells us that in 2005, 20.8 billion barrels of oil and 9.16 billion barrels of gasoline (385 billion gallons) were consumed. That gives us a ratio of 18.5 gallons per barrel. The EIA also tells us that 69% of petroleum use is for transportation, and while I found that factoid interesting enough to let you know, it doesn't pertain to the current analysis so we will keep moving.

If straight-run gasoline only makes up 2-13 gallons per barrel, how did the average get to 19.4 or 18.5? That lead me to read these really interesting articles on oil refining and cracking. Using catalysts, heat, steam and or hydrogen complex organic molecules (e.g. kerogens or heavy hydrocarbons) are broken down into simpler molecules (e.g. light hydrocarbons) by the breaking of carbon-carbon bonds in the precursors.

From Chevron:
Today, some refineries can turn more than half of every 42-gallon barrel of crude oil into gasoline. That's a remarkable technological improvement from 70 years ago, when only 11 gallons of gasoline could be produced.
So it looks like using cracking you can turn 1/2 of a barrel of oil into gasoline or 21 gallons.

Or maybe even higher as Cars.com reports:
More than half of the gasoline used in the United States today is produced by cracking, most by a fluid catalytic cracking process that uses alumina-silica gel powders as catalysts.

By combining all of these processes, 100 liters (26 gallons) of crude oil can yield slightly more than 100 liters of gasoline.
100 liters of crude = 100 liters of gasoline, that would get us back to the 42 gallon mark.

In Winning the Oil Endgame, they take another approach, comparing the amount of energy in a gallon of gasoline with that of a barrel of oil. A Barrel of oil equivalent has 5.8 million Btu of energy vs. 115,000 Btu for a gallon of gasoline. This gets you up to 50.4 gallons.

While I like this valuation method, energy would be lost converting all the oil into gasoline. I think the cars.com value stating that it is possible to have a 1 to 1 conversion is a better estimate.

So there you are. After all this analysis, we are back where we started. A barrel of oil can produce 42 gallons of gasoline. If the US could cut reduce consumption by 1 billion gallons of gasoline, that would translate to 24 million barrels of oil.

Update: Commenter Tom asks whether drilling, transportation, refining and distribution are accounted for in the estimate. No they weren't. The best estimate I could find for energy loses for these is from a Wikipedia reference to a Department of Energy "Petroleum refining and distribution efficiency factor" of 0.83. I tried to figure out how that number was calculated but failed. But, assuming it is an accurate estimate for drilling, transportation, refining and distribution, then 17% of total energy is used for these purposes. Taking the 50.4 gallon number (based on total energy of a gallon of oil) * .83 = 41.8 gallons, which is pretty darn close to the 42 gallon number.

24 comments:

Taquila said...

That's a good research buddy. I was also having the same questions from long time. Thanks for putting this all together.

Fat Knowledge said...

Taquila,

Glad you found it useful. :)

swissmountaindude said...

Interesting indeed. That cars.com link doesn't work (anymore) - I'd have said that making 42 gal of gas from 42 gal of crude would be a bit too good to be true. May have to go by weight & energy content as you did.... cheers!
andy

Fat Knowledge said...

Swiss Mountain Dude,

That sucks that the cars.com link is dead. If I can find a new link that has similar information I will try and put it back.

Cheers.

Anonymous said...

Very helpful. I've heard one of the major limitations to percentage conversion into gasoline is actually competing product demand - like diesel.

Anonymous said...

Part of the reason that the cost of goods has gone up is that the EPA has required that new Tractors, as of January 2007 burn a special, low emission diesel fuel. The fuel went from 500 parts per million to 15 parts per million. The Problem is that the requirements require more refining of diesel fuel, which will work in older diesel engines, but the the new requirements, required special filters on new tractors, which means they cannot operate on the old formula, the new formula has to stay in effect, because people did their job and followed the E.P.A. guidlines. I have a brand new tractor, and I get worst mileage with the new E.P.A. approved fuel than I do with the ultra-refined expensive fuel. I went from 7-8 mpg to 4-5 mpg, The fuel cost more, and they can't roll back to the old fuel, because it would clog the newly mandated exhaust systems

kalalaug said...

Umm....ok but where are we going to get our heating and lubricating oils and other petroleum products if 100% of each barrel is going to gasoline?

This is simply not possible. We pay even more per gallon for heating oil, which is even less refined. But this is simply more valuable, in more demand. Also the costs of actually refining the oil, as well as adding fuel additives and ethanol(which costs refiners more than the gass costs comsumers), adds additional costs.

The biggest difference is in the storage and transportation costs. Oil has to be delivered to your house. If 5 barrels of gas is delivered to your house, it could easily cost a company 50-60 dollars a gallon if you figure in gasoline(ironic, huh?), wear and tear, vehicle costs, customer service, and mostly salary for drivers who typically work massive overtime in the winter seasons.

While your research and theory are sound, I would argue that you are basing everything on a premise that is faulty, which is 1 gal oil=1 gal gasoline. You would need to get some profit estimates worked in there to get a valid argument.

Fat Knowledge said...

Hi kalalaug,

The question being answered in the post is: if you decrease (or increase) gasoline consumption by 1 million gallons, how many barrels of oil does that translate to?

Since the world uses 80 million barrels of oil a day, decreasing by 1 million gallons is but a small fraction of oil use. There is still plenty of oil available for heating and lubricating oils.

And while it is irrelevant to the conclusion of this post, you are incorrect when you state it is not possible to use substitutes other than oil for heating, lubricating oil and other petroleum products. Natural gas is used to heat much of the country rather than heating oil. The Fischer-Tropsch process allows the conversion of natural gas and coal into synthetic lubrication oil or fuel oil. Plastics that have been made from oil are also being made from corn.

Tom said...

Fat Knowledge,
Thanks for your assessment and expalnaton of how your estimate was derived. My question is: Doesn't the shipping of oil from Saudi Arabia to the US, the refining (cracking, etc.) process, and final distribution of useable gasoline around the country account for a significant amount of energy "taken from" the volume of crude oil converted to gasoline?
I am not sure that the energy cost of transportation, refining and distribution are accounted for in your estimate.

Fat Knowledge said...

Tom,

Good question. I updated the post, but it turns out that 42 gallons is a good estimate taking those into account.

Don said...

Good article FK. As for the person that wrote the post about fuel oil, heating oil, and lubricants....... Uh..... I don't see anywhere in FK's original post that says ALL oil is used to produce gasoline. It just gives a comparison of how much oil in a barrel COULD be converted to gasoline. SO........ out of 100 barrels say they use 50 for gasoline and the remaining 50 for lubricants, kerosene, jet fuel (refined kerosene), heating oil, etc. Well then.... we would have 50 (barrels) X 42 (gallons per barrel) or 2100 gallons of gasoline. Assuming you are using the method that the cars.com report used. And I don't believe "profit estimates", although worthy, are any part of the equation. All that was asked, by reading the title at the beginning,was "How many gallons of gasoline in a barrel of oil?" It doesn't matter how much profit they make (although we KNOW it hit record highs with the price spike a few years ago- go figure!), or how many different kinds of another fuel/ oil are produced, or HAS THE ABILITY OF BEING PRODUCED, in a barrel of crude oil. Simple question.......... somewhat simple answer (for the purposes of this post anyway).

micr0behunter said...

Hey y'all,
The question being answered in the post is: if you decrease (or increase) gasoline consumption by 1 million gallons, how many barrels of oil does that translate to? Well, one barrel of crude produces 19.5 gal of gasoline plus 22.7 gallons of other petroleum products (or 2.2 gallons more than the original 42 gallons. So, 1MM/19.5=51,282 barrels of oil needed to produce 1MM gallons of gasoline plus 1.16MM gallons of other petroleum products.

Anonymous said...

If you are looking for a rough answer to your question about how many gallons of "If you save 1 billion gallons of gasoline, how many barrels of oil does that translate into?" I think the answer is about 1.46 billion gallons of oil.

Anonymous said...

How about taking some of the billions for the defense budget and creating a state run oil company that produces, "gasoline only" and would operate specifically to break even regardless of their costs. They sell it as cheap as they can after overhead. Let big oil compete with that! They would have to compete, but make fewer profits.

Martin said...

What I want to know is how much are the oil companies paying to the U.S. Government for a barrel of oil or a similar quantity of natural gas. (I do not know the standard units for natural gas.) World market oil is selling near the $100 per barrel point which translates, using the 42 gallon of gasoline, a rate of $2.38 per gallon which includes the cost of refining and distribution. This evening I paid $3.68 for a gallon of gasoline. That means that $1.30 profit is being split between the oil company and the service station owner. I am assuming that the refining cost includes all costs and overheads including all wages and salaries, and value of the production facility.
Now back to my opening statement of the cost of a barrel of oil or cost of the equivalent quantity of natural gas paid by the oil companies to the U.S. government.
I have heard that the oil companies are paying at the rate of 22 percent of the world market value for a barrel of oil. I would like to know if this is a correct value. So at $100 per barrel of oil on the world market the oil companies are paying $22 dollars per barrel of oil. That figures out to be 52 cents per gallon of gasoline. Add in the refining & distribution cost, using $17 per barrel of oil or $.40 per gallon of gasoline we get $.92 cost per gallon of gasoline. This results in a profit being split between the oil company and gasoline station owners (many times one in the same)of $3.68 per gallon paid at the pump less the $.92 cost for a result of $2.76 of pure profit per gallon of gasoline that was extracted from U.S. governments public lands. So why do we keep re-electing the bums in Washington. Its about time we wipe the slate clean and kick them all out and start over. Making sure that the oil companies are required to use the average cost paid for a gallon of crude plus a reasonable profit of 15 to 16 percent. This would reduce the cost of all types of fuel oil and the impact that they have had on the price of goods that we purchase each and every day.
Martin

JRBeaman said...

"How about taking some of the billions for the defense budget and creating a state run oil company that produces, "gasoline only" and would operate specifically to break even regardless of their costs. "

That would make the price of the oil go up by a factor of four. It's cheaper to keep the middle east stable.

What do you think would happen to our economy if gasoline was $12 per gallon, or more?

obakesan said...

Hi

thanks for your work on this topic ... fits nicely with a bit of my own research and blogging

http://cjeastwd.blogspot.com/2011/05/do-electric-scooters-dream-of-being.html

:-)

Anonymous said...

dear fat...or martin...taxes...don;t forget as your margin needs to be somewhat reducted....... what are the taxes ultimately levied per gallon of gas.....or per barrel for that matter if you can generalize

Anonymous said...

Don't forget the cost impact of higher regulations imposed by the EPA to reduce plant emissions(water, air & soil)plus the cost of exploration and drilling. Exxon/Mobil employs over 33,000 people can you imagine what their health care cost will be? Need to eliminate Internal Combustion Engine or use CNG for transportation.

Anonymous said...

Given the petrolium industry states that on average 19.4 gallons of gasoline are produced from a 42 gallon barrel of oil (the 42 gallons of oil end up as over 44.5 gallons of various products) it follows that at, say, $100.00 per barrel cost to the refiner, the gasoline it produces has an adjusted buying cost to the refinery (for the 19.4 gallos of gasoline it finally produces per 42 gallon barrel) of just about $48.10, or $2.48 per gallon.

This is of course without taxes, transportation costs, refining costs, storage costs and profits along the chain from refiner to delivery added on.

So, if we assume all the related and added on costs to a gallon of gasoline remaing stable, taxes included, every dollar paid by the refiner over the basic $100.00 per barrel cost should raise the price of gasoline at the pump $.0248 per gallon to the consumer. Thus $125.00 per gallon cost of oil to the refinery should translate to $0.0248 X 25 or = a $0.62 increase per gallon passed on to the consumer.

At $4.00 per gallon at the pump, with oil at $127.00 per barrel, the refiners need $3.15 per gallon to recover their buying costs. The $0.73 paid at the pump over that is for all other costs.

More of the oil becoming gasoline via better cracking methods ups the cost per gallon a refiner pays for the gasoline part of the barrel and reduces the profit it can get from other petrolium products as their percenage volume and their part of cost per barrel declines in proportion. That is yet another variable that should affect gasoline prices at the pump.

Jordan said...

Awesome article on oil. I was wondering this and searched. Great analysis and research to reach your conclusion.

Thank you!

Anonymous said...

Using conversation and estimation it is easy to find unity, rationalization for our process, and this was a wonderful tour. However, I would like to focus on a quote in the article that answers the question from a separate source:
"Given the differences I took a look at what the average barrel of oil produces. American Petroleum Institute reports that 1 barrel of oil produced 19.4 gallons of gasoline per barrel based on average yields for U.S. refineries in 2000."
The article further states that the total volume of product (not gasoline) from a barrel of oil is 44.6 gallons. Unless there was a change in the specific gravity of the product I would tend to believe that the increased volume was from additives as much as a separation and recombination process throudh massive centrifuges.
The number of your gallons of oil got smaller in the example, not larger, in order to make room for changes that were introduced to the product by 5%. Again, that is products, not gasoline.
I would propose that since we do not have the formula with the exact proportions of "additives" that we should accept the value cited in the source. Another example of additives that would not affect the crude imported but is consumed when using commercially available gasoline for automobiles, it ethanol.
Some would argue that the introduction of ethanol at the gas pumps is a 10 or 15% reduction in gasoline; however, for those of us who have used the product can atest, their is a degradation of performance with the ethanol laced products. My personal experience includes auto fuel efficiency decrease of 11%. So in a 10% ethanol formula I have to buy 1% more fuel to get the same work. (Note: if the state were not subsidizing ethanol, it would cost an additional .30 to purchase over current rates and real gasoline could be less expensive it the roll backs the taxes could be put to proper use.)
As far as the state running our gas stations and refineries; the energy program is bad enough without their help. Venezuela(CITGO), Cuba and the Soviet Union can provide examples of how that works, "rationing".
Referencing the excellent comment that cited that after refinery costs there is a $0.73 available for other expenses. In the U.S. about $0.385 of this value reflects federal and state taxes at the pump (actual rates vary from state - state).
And anyone who believess that 15% - 20% price over raw costs will keep a company afloat needs to revisit a business management course and learn where the costs are and find out who shares in the big profit numbers and why.
Without digressing further into taxation and economics of a process that we don't apparently have the expertise to evaluate fully. I believe that if you could reduce the demand of the United States by one billion gallons of gasoline per year, and assume that the demand other petroleum products did not change; then the number of barrels of oil that would not consumed by the United States would be 32.2 Million Barrels / year.
This would not necessarily significantly reduce production considering the demands of other markets on this global commodity. The price at the pump not show a significant or protracted change due to the time of implementation, the reaction of the market,the changes required to production schedules and existing inventories.

Anonymous said...

Simple question. Probably complicated answer. I'm stumped. Why does it cost more for a quart of motor oil than it does for a gallon of gasoline?

John Lake said...

I had been wondering about this. I assumed that since crude oil is considerable thicker than pump gas, the conversion rate would show many gallons of gas to a single gallon of oil. But this new information is quite to the contrary.
I wonder about competition in the oil industry, and if there is much US government oversight.

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