Definitions are important if you are part of the energy industry. For instance – gas and gasoline. Not the same thing.

When an energy person talks about gas it is typically natural gas, a fossil energy source from deep in the earth. It is the remains of plants and animals. Pressure and heat in the earth changed some of this carbon and hydrogen-rich material into coal, some into oil, and some into natural gas.

Gasoline is the liquid fuel for vehicles. A lot of the gasoline in the US contains about 10 percent ethanol. That is added to gasoline to hit Renewable Fuel Standards, intended to reduce greenhouse gas emissions and lower the amount of oil that the United States imports.

People who listen to financial news usually hear and know the difference. Out on the road overall, of course, we shortcut gasoline station with gas station.

Gasoline is a fuel made from crude oil and other petroleum liquids. Petroleum refineries and blending facilities produce motor gasoline for sale at retail gasoline fueling stations.

In addition to the different grades of gasoline – unleaded, midgrade, premium – the formulation of gasoline can differ depending on the location where it is sold or the season of the year. Some areas of the country are required to use specially formulated gasoline to reduce certain emissions, and the formulation may change during winter and summer months.

Natural gas is found by drilling (above). Gasoline is made by refining petroleum.

Now, maybe to add some confusion, there are companies that make and sell gasoline and drill and transport natural gas. BP, ExxonMobil, Chevron, for instance.

In the energy industry, drilling and producing natural gas (or oil) is in the upstream end of the business. When a product is put in a pipeline and goes to a consumer it is downstream. Of course, there are pipeline companies called, what else, midstream. 

How can product names that sound so much alike be so different?


Some source material from the Energy Information Agency.