Tulsa Paper - Evaporation Loss of Petroleum – Theories and Their Application (with Discussion)

Granting that about 600,000,000 bbl. of light oil will be produced in the United States this year and taking the Bureau of Mines' statement that 71/2 per cent. of the total crude production will be lost before the finished gasoline is shipped from the refinery, the volumetric evaporation will be 45,000,000 bbl. of the cream of the gasoline. This is a ConseNative figure and is equivalent to 1,890,000,000 gal. The real value of this liquid is at least 150 per cent. of the value of an equal volume of motor fuel. At only 10 c. per gal., the value lost is $189,000,000; at 15 e. per gal. the loss is $283,000,000. If 750,000,000 bbl. of light and heavy oil are produced here this year and the average price per barrel is $1.333, the gross return to producers will be $1,000,000,000 and the net returns about $200,000,000, if the cost of production is only $1 per barrel. Thus, the evaporation bill is about 20 per cent. of the gross income and is equal to the net income of the crude-oil producers. Two other comparisons with popular phases of the petroleum industry will help give an adequate conception of the evaporation problem. These are: cost of preventing evaporation compared to cost of cracked gasoline and volume of gasoline evaporated compared to volume of gasoline manufactured from natural gas. When gasoline is manufactured from heavy oils by the cracking process, there are two important divisions of the total cost of the product: the manufacturing cost, such as plant cost, operation, maintenance, etc., and the cost of the barrel of heavy oil, from which the cracked gasoline is made. In preventing evaporation loss the cost first mentioned enters into the total cost, but the second cost is eliminated; that is, no charge is necessary for stock from which to manufacture the saving. A detailed analysis of these two costs on a large scale shows that the net income from a dollar spent in preventing evaporation loss from the lease through the refinery is twice the net income from a dollar spent in cracking. Of