To get from the ground to your home and vehicles, oil and natural gas pass through three industry sectors: upstream, midstream and downstream. Upstream involves locating oil and natural gas and bringing it to the surface. Downstream takes refined petroleum products, natural gas and liquified natural gas and makes sure it gets to the people and industries that need it.
Stuck in the middle with you
Historically, the midstream sector was a small part of both the upstream and downstream sectors. And while those sectors still bookend it, it’s importance has grown in tandem with the Texas shale boom. Record amounts of oil and especially natural gas are coming up from the Eagle Ford and the Permian Basin. Without the midstream sector, all of these resources would be all brought up with nowhere to go.
An oil well can get to work in as little as a week, depending on the type of well. Pipelines take considerably longer to construct. But despite the slow going, once the work is done and the pipeline is brought online, the benefits are countless. It is hard, indeed, to measure freedom, and the new energy freedom our country is experiencing is priceless.
Pipelines make our lifestyles possible
Crude oil comes out of the ground into gathering tanks. It is then moved off-site to storage facilities and refineries. Once refined, it is transported again to end-users, like gas stations, and then to you. Natural gas and natural gas liquids (NGL) flow together from the wells until they arrive at the processing facility where they part ways. The NGLs might eventually fill your propane tank, for example. The natural gas might end up heating your home this winter.
Oil and natural gas can be transported from the wells to the refineries via either truck, rail or pipeline. Tanker trucks are by far the most costly. Rail is a better option and is sometimes used to avoid congested pipelines. But it’s by pipeline that the majority of our resources get where they are going. The United States has the largest network of pipelines in the world with around 2.4 million miles of pipelines.
Supply and demand
The midstream sector has steady business. Without it, there would be no fuel for us or anyone else. But it is not without its own risks. A healthy midstream sector depends on a healthy upstream sector. If there is little oil or gas being produced, there is nothing to move. If there is a diminished demand, there is no need to move what is produced. Both of these scenarios are unlikely at the moment, however. The importance of fossil fuels as a reliable energy source for the improvement of life both here and across the globe has never been more evident, and America is producing more than ever.
