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Transportation Fuels Logistics 101
Course Syllabus
Introduction
This course is created and designed to provide basic information on how Crude Oil, a natural
resource is found, how gasoline and diesel are manufactured and provided to the motoring
consumer in the United States. The information in this course will provide a better understanding
of the logistics of the petroleum business to those who support the various links in the supply
chain. There will be discussion on the economics at each phase of the logistical movement
including cost of product and transportation costs. Some agencies that would benefit from this
course that work tangentially to the petroleum industry include insurance brokers, attorneys and
state energy officials.
The course is divided into 4 modules:
1. Exploration and Production
2. Refinery Operations
3. Midstream Terminal Operations
4. Wholesale, Retail and Commercial Operations
Module 1. Exploration and Production, commonly referred to as E&P or Upstream, will focus on
the fundamentals of finding the crude oil in the over 130 countries around the world and the
transportation of the crude to a refinery. We will learn about the major components of the refining
process up to when it is ready for transport and public consumption.
Module 2. Refinery Operations will concentrate on what happens from the time the crude oil
enters the refinery until it departs as a refined transportation fuel.
Module 3. Midstream Terminal Operations, also referred to as marketing operations or
Midstream, will focus on the movement of large bulk shipments from the refinery to the next
logistical stop, the bulk terminals. We will discuss the product movements to and from the
terminal by mode of transportation, terminal operations and the impact of regulations on terminal
operations.
Module 4 Wholesale, Retail and Commercial Operations, or Downstream, will focus on the
functions of the wholesale, retail and commercial end users. Throughout the course, the costs of
product will be woven into the discussion as will regulatory and safety requirements.
Students will be given assignments for independent research and study for the purpose of
broadening the discussion and stimulating the debate. Students will be asked to demonstrate
what they have learned based on facts that emerge from research and analysis.
All four modules will be available for download on June 16, 2014. The cost to download TFL101
is $600.
References for information on the topics to be discussed will be noted in each module along with
assignments.
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Module 1. Exploration and Production
Crude oil is a natural resource that is the base ingredient for the production of transportation fuels
such as gasoline, diesel fuel, jet fuel and heavier bunker products. The transportation fuels also
have other co-products such as home heating oil, industrial lubricants, propane and kerosene. In
this module we will discuss the following:
1.1
1.2
1.3
1.4
1.5
Why is it called crude oil?
Crude oil discovery and extraction
Enhanced Drilling Technologies
The location of the major crude oil deposits
The major difference in crude oil found around the world
Module 2. Refinery Operations
In this module, we will look at refinery operations from the time the crude oil enters until it departs
as a refined transportation fuel. We will discuss the multiple processes, along with the machinery
used in modern refineries. We will explain myriad supporting processes and regulations and
government compliance issues.
2.1
2.2
2.3
2.4
2.5
History of refining
Form of crude receipts into refinery: Tankers, Pipelines, Rail
Storage and handling
Key chemicals used in refining process
Key machinery equipment components in the refining process and what each process does
[i.e. distillation, desulfurization, reshaping molecules (Reforming), cracking (FCC,
Hydrocrack or coke) or synthesize molecules (Alkylation)].
2.6 Phases of refining
2.7 Environmental considerations
2. 8 Safety considerations
2.9 Key refinery locations in United States
2.10 Import vs. domestic manufacturing
2.11 Costs associated with refinery profits
Module 3. Midstream Terminal Operations
In this module we will discuss the next link in the supply chain as the refined products from the
crude oil proceeds to the market as gasoline, diesel fuel, jet fuel or home heating oil. We will
discuss the role of transport either by thousands of miles of pipeline or marine cargo shipments in
barges and ships and trucks.
We will examine how bulk terminals operate using the latest technology along with the challenges
of environmental compliance. We will also examine how renewables are brought together with
petroleum products before reaching the consumer. The specifics of terminal operations include
the following:
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Product receipts by marine vessels, pipeline or rail
Quality control procedures
Storage and handling method
Environmental equipment for air and water protection
Loading rack operations and capacity
Mechanical equipment: pumps, piping, containment areas, fire protection and response
equipment (marine terminals)
Government compliance requirements
Trucking operations
3.8.a Truck sizes and capacity
3.8.b Driver qualifications w/ DOT – medical, training, hours of service, TWIC
3.8.c Company owned, hired carrier, owner operator, distributor (jobber)
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3.9 RVP/TVP requirements
3.10 Renewables as a share of fuels logistics
3.10.a
Ethanol
3.10.b
Biodiesel
3.10.c
Ethanol storage handling and blending at the rack
3.11. Other Additives for terminal blending
Module 4. Retail, Wholesale and Commercial Operations (Downstream Operations)
In this module, we will examine retail, wholesale and commercial distribution to the consumer.
There are four fundamental classes of trade for the sale of gasoline and diesel to the motoring
public. We will explain the differences and the transparency to the public of each. The wholesale
link is critical to retail operations and we will show how it connects and why it is important. Lastly,
government agencies along with commercial or industrial users are an important consumer of
transportation fuels. The topics for discussion include:
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
Explaining the four classes of trade
4.1.a Company owned and operated
4.1.b Franchise dealer
4.1.c Distributor (jobber)
4.1.d End dealer
4.1.e Big box (Costco, etc.)
Supply of products to individual locations
Pricing factors
Quality control measures
Hyper markets (Sheetz, WaWa)
Storage tanks
Inventory management
Multifranchising Exxon tiger mart w/ Subway, Dunkin Donuts
Commercial and governmental outlets
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