The Energy Industry, at a Glance

Energy Industry Segments

Although I write here on Substack about energy markets each week, that is primarily a hobby. Professionally, I work as a hydraulic engineer in midstream space.

Energy is a vital component of everyday modern life. For the average consumer, there’s often a limited recognition of where that energy is derived. The energy complex often does a poor job of describing the details to the public. Traders see prices on a screen. But those numbers represent a physical commodity that has inherent challenges getting to market.

Periodically, I’ll try to write about some of the underlying aspects of energy industry for my readers in non-technical terms.

For this introductory piece, we’ll cover the very basics. The energy industry is generally divided into three segments; upstream, midstream and downstream.

Upstream- Upstream refers to crude oil production. Exploration and production (E&P) companies are responsible for locating deposits of crude oil and natural gas and extracting those reserves.

Midstream- Midstream connects upstream and downstream segments. Midstream companies own and operate pipelines.

Downstream- Although much attention is paid to the price of crude oil, the consumer doesn’t actually use crude oil. The consumer uses petroleum products that are derived from the refinement of crude oil and gas. Downstream companies operate crude oil refineries and processing plants.

As mentioned above, my professional career has been entirely in midstream. I know other parts of the industry tangentially, but my expertise is exclusively in this segment. This is primarily where I will focus these technical discussions.

I also plan to invite industry friends who are subject-matter-experts in other areas to write about their experience.

For those readers who are only concerned about market data sets and graphs, my weekly report will continue as normal.