Department of Energy

The How's and Why's of Replacing the Whole Barrel

October 19, 2011

You are here

A 42-U.S. gallon barrel of crude oil yields about 45 gallons of petroleum products. Source: Energy Information Administration, “Oil: Crude Oil and Petroleum Products Explained” and Annual Energy Outlook 2009 (Updated February 2010).

A 42-U.S. gallon barrel of crude oil yields about 45 gallons of petroleum products. Source: Energy Information Administration, “Oil: Crude Oil and Petroleum Products Explained” and Annual Energy Outlook 2009 (Updated February 2010).

For many, a barrel of oil is almost synonymous with its most prominent product, gasoline. While almost 40% of a barrel of oil is used to produce gasoline, the rest is used to produce a host of products including jet fuel and plastics and many industrial chemicals. As the United States works to reduce its dependence on foreign oil, we must recognize the complexity of that dependence and work to replace the whole barrel. Over the summer, the Energy Department’s Biomass Program hosted its fourth annual conference, Biomass 2011, on exactly this theme: Replace the Whole Barrel, Supply the Whole Marketthe New Horizons of Bioenergy.  

More than 600 speakers, exhibitors, industry leaders, researchers, decision makers and attendees came to hear about the most current technology innovations and business developments in the field of bioenergy. This theme highlighted the primary strategy of the Department’s Biomass Program, which concentrates on research, development, demonstration and deployment of a range of technologies to replace the entire barrel of petroleum crude and supply all segments of the national market for fuels, products and power generation.  

During his opening keynote presentation at Biomass 2011, Secretary Steven Chu remarked, “When oil prices rise, markets tend to panic; when oil prices stabilize, markets tend to hit the ‘snooze button.’ Oil prices will continue to increase and biofuels can help alleviate this disruptive effect.”  

The American Petroleum Institute estimates that the United States currently spends about $1 billion each day on oil imports. Of that, more than 70% is consumed by the U.S. transportation sector, according to the Energy Information Agencies Annual Energy Review. Reducing dependence on oil requires developing technologies to replace gasoline, diesel, jet fuel and heavy distillates, and produce a range of bio-based chemicals and products.

Many products are made from a barrel of petroleum. If we replace only one of those products, such as gasoline, petroleum refineries as they are currently constituted cannot readily shift all of the displaced molecules into other products. If we reduce total petroleum usage as a percent of one market, we need to think about how that impacts other markets. The most obvious issue is that we have to replace diesel and jet in proportion to gasoline, since their combined volume is approximately 75% that of gasoline and their markets are projected to grow significantly faster. The largest proportion of the “other products” shown in the barrel above is the petrochemical industry, virtually all of which is based on crude oil and natural gas.

If we do not replace the whole barrel, we risk creating knock-on effects that will cause shortages or surpluses in other markets, with the attendant economic consequences. In order to effectively displace crude oil imports, biomass substitutes must be developed for gasoline, diesel, jet fuel and the other petroleum products.  

Replacing the entire barrel of oil is critical, not only to our energy security, but to our national economy. The annual Energy Department Biomass Program conference is just one of many efforts that the Department undertakes to meet the nation’s mission-critical energy goals. The Department, national labs, universities and industry partners are making strides in developing the latest technology in drop-in biofuels and bioproducts that can replace all of the products we get from a barrel of crude oil today, and that can also be compatible with existing refining, distribution and vehicle infrastructure.