 This presentation on crude oil refining once again, you'll see the familiar energy commodities logistics and value chain diagram. This point will be in the second phase for crude oil and that is refining. Here's a picture of a large crude oil refining complex in Port Arthur, Texas on the Gulf Coast north of Houston. This is a map showing the distribution of crude oil refineries throughout the United States. You can see there are divided by pads and you'll notice the single largest concentration of refineries are along the Gulf Coast, stretching from south Texas all the way across, including Louisiana and the Mobile Bay area of Alabama and Mississippi. There are a few refineries in the west coast and some in the northeast, mostly ranging from Philadelphia up to northern New Jersey and the Port of New York. Here is a diagram showing the overall process in terms of the movement of the crude oil. You'll see the tankers offloading to the onshore refineries. You have the offshore rigs, either drilling, the initial drilling for crude oil or the production rigs, which continue to produce the crude oil from wells that have already been completed. There are also some barge traffic on the seafloor. You'll notice multiple wells being connected to a single delivery point, which then pumps the crude into the pipelines to be brought onshore. And then between the refinery and the metropolitan area there's a petrochemical refinery, which further breaks down the products received from a crude oil refinery and those are distributed to the large urban sites. Here's a simple diagram of the interconnectivity between crude oil refineries and petrochemical refineries in the Port Arthur area. Again, on the Gulf Coast, the Houston Ship Channel. Here are the products typically made from a single barrel of crude oil shown in gallons. You can see the single largest portion is gasoline followed by diesel. You have a multiple of other products and then jet fuel. A small portion being the heavy fuel oil or what we call the residual fuel oil. That is the oil that's left over. It can't be further broken down into a usable product. And then we also have the liquefied petroleum gases or LPG. Refining process is basically broken into two larger processes, one of distillation and one of conversion. When we think of distillation, picture heating some type of a liquid up and then cooling it off. There's always going to be some type of moisture given off. That's the compensation process. Refining and processing of natural gas is very much a process of condensation. Heat something up, cool it down or increase the pressure on something, which as we all recall from high school physics also increases the temperature. And then when you lower the pressure, have immediate pressure drop, you lower the temperature. And again, condensate liquids will fall out during that process. So specifically what does the distillation process do? We separate the heavier and lighter components by heating raw crude oil, feeding it into a distillation tower where the cooling occurs. The lighter so-called fractions rise to the top while the heavier fractions remain on the bottom layers, according to their weight and boiling points. So these are the primary fractions that are extracted from a barrel of crude oil during the distillation process. Liquefied petroleum gases, naphtha, kerosene, diesel, heavy oils, residual oil. And then in the reforming process, alkylation, cracking and other coking will further refine those. Now hopefully you prepared for this lecture by going to the HowStuffWorks website where you saw these diagrams. So they should already be familiar to you. You can see here a distillation column. Crude oil is heated and then these fractions are extracted according to their weight, the lighter gases and other products will come off near the top. And at the bottom remains the residual fuel oil which will be sent to a coking unit. The next step in the refining process after distillation is conversion where we're going to further break down or combine some of these products to make others. And we use the term cracking. We're utilizing heat and pressure to crack heavier hydrocarbons into lighter ones. For instance, gasoline, jet fuel and diesel fuel are all the products of the cracking process. We're talking about reforming. You're going to use heat, pressure and some type of chemical catalyst to combine smaller molecules into larger ones. So for instance, naphtha can be used to form gasoline. Another couple of processes in the overall conversion process. We talk about alkylation. This is where low weight molecules are combined using a catalyst again to form high octane hydrocarbons for gasoline blending the so-called anti-knocking compounds that are added to gasoline. The coking process is where the residual oil that's taken from the distillation process is heated and broken down into heavy oils. Again, more gasoline can be derived from that. And naphtha, which as we said in the previous slide, can also be converted into gasoline. The remaining product is referred to as coke. It's used as a fuel source. It's used in iron ore smelting and in dry cell batteries. So if you ever opened up a dry cell battery, the black powdery substance in there is what we call coke. And it is derived from the heavy fuel oils and the end of the process of distillation of crude oil. As you can see here, oil refinery is a combination of these units. You have the boiler, you have the distillation column. You see the reformer on the right. The catalytic cracking unit, the alkylation unit, and the coking unit.