Crude oil is the term used for oil that is taken straight out of the ground. It is a "fossil fuel," which means that it formed from organic remains over a period of millions of years. It can be refined into various forms of energy such as gasoline, diesel fuel and heating oil.
It also is a key component in a variety of products. For example, crude oil is an important ingredient in plastics, medicines, crayons and tires. About 84 percent of the United States’ energy consumption comes from fossil fuels and approximately 40 percent of all energy used comes from various petroleum products that start out as crude oil.
Crude oil's characteristics vary from "light" - which is a straw-colored liquid - to "heavy" or tar-black solid. It also is called "sweet" or "sour" depending on the amount of sulfur it contains. An abundant commodity, world proven reserves stand at 1,295,085 million barrels.
Crude oil is processed at refineries and transformed into useable petroleum products. The cost of transporting and moving crude oil to refineries, plus processing fees, greatly affects the final cost of petroleum products. Motor gasoline constitutes about half of the total volume of products produced from crude oil.
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White Cliffs Pipeline® was built by SemGroup and is the only pipeline that directly moves crude oil out of the DJ Basin to the Cushing market.
Glass Mountain Pipeline is currently under construction. The 210-mile pipeline is a joint venture with Gavilon, LLC and will have an initial capacity of approximately 140,000 barrels per day. The pipeline will consist of two laterals. One lateral will originate near the town of Alva in Woods County, Oklahoma. The second lateral will originate near the town of Arnett in Ellis County, Oklahoma. The pipeline will increase in diameter where the laterals intersect near Cleo Springs in Major County, Oklahoma and continue east to Cushing, Oklahoma. Operation is expected to begin in the fourth quarter of 2013.
Wattenberg Oil Trunkline is currently under construction. The project includes a 37-mile, 12-inch diameter pipeline system which will transport crude oil from Noble Energy, Inc.’s production facilities in the DJ Basin to White Cliffs Pipeline. Operation is expected to begin in the fourth quarter of 2013.
Rose Rock Midstream, L.P. is a growth-oriented Delaware limited partnership recently formed by SemGroup Corporation to engage in the business of crude oil gathering, transportation, storage and marketing in Colorado, Kansas, Montana, North Dakota, Oklahoma and Texas.
In Europe, SemLogistics Milford Haven is the largest independent petroleum products storage facility in the United Kingdom, and it is the only one capable of handling crude oil.