C magazine

Capturing crude: Getting more from every drop

Operator checking mechanical equipment in refinery

Operator Chad Blasi checks on the mechanics at the CHS refinery at Laurel, Mont. While crude oil is further refined into gasoline and diesel fuel, byproducts are created.

Feb 26, 2020

CHS squeezes more diesel out of every drop of crude oil and creates other valuable products along the way. 

At the CHS refinery in Laurel, Mont., Operations Supervisor Darin Foote explains how the materials inside the fluid catalytic cracker reach temperatures of more than 900 degrees Fahrenheit, causing heat to radiate from the reactor. It’s in this unit that the heavier parts of crude oil start their path to becoming lighter petroleum products, like gasoline and diesel.

A quarter-mile away, the product has continued its journey through the refinery at the coker. Here, the long-chain hydrocarbon molecules in the crude are broken down into short-chain molecules. Operator Chad Blasi sits nearly 200 feet off the ground at the top of the coker, while operator Lexi White uses a front-end loader in the coker pit to separate hot petroleum coke — one of a number of byproducts created when crude is turned into fuel — from water and load it into a railcar loading system.

At the two CHS refineries in McPherson, Kan., and Laurel, scenes like these run around the clock to turn crude oil into diesel fuel for farmers.

Laurel refinery
Refinery Operations Supervisor Darin Foote looks out over the CHS refinery at Laurel from atop the fluid catalytic cracker. The refinery covers more than 250 acres.

From planting crops to harvesting and bringing products to market, agriculture relies on diesel engines. That thirst for diesel fuel covers every kind of equipment from the farm to the consumer. More than two-thirds of all farm equipment is powered by diesel engines. Ninety-six percent of the trucks that move agricultural commodities run on diesel. And almost every train and ship that takes crops to market and returns with next season’s inputs depends on diesel power.

This hunger for diesel fuel shapes the energy supply chain that serves cooperatives and farmers. From working to meet daily transportation needs to long-term capital investments, producing more diesel is a driving force for CHS.

Engineered for Diesel 

Manipulating refinery diesel output relies on specialized engineering and investments. In 75 years of refining, CHS refineries have been transformed specifically to maximize diesel production from every barrel of crude oil.

“At many refineries in the U.S., twice as much gasoline is produced as diesel. At our refineries, about 50 percent of the fuels we produce are diesel,” says John Traeger, senior vice president, CHS Refineries, Pipelines and Terminals.

Oil barrels

*Processed petroleum products have a lower specific gravity than crude oil, so there is an increase in volume during the refining process, referred to as processing gain.

Continued Investments

Making more diesel from every drop of crude requires continuous investments and a unique strategy. The investments are implemented during turnarounds — complete or partial refinery shutdowns when large-scale projects are installed and in-depth maintenance happens. In the past two years, both CHS refineries have undergone turnaround projects focused on processing different grades of crude and wringing more diesel from each barrel.

Both refineries have “metaled up.” The metals in key equipment were upgraded to a special grade of stainless steel, allowing the refineries to process more Canadian crude, a lower-cost but more corrosive crude oil. McPherson also upgraded its hydrocracker, increasing diesel production by 10 percent. “By improving the diesel conversion of the hydrocracker, we’re using this asset to its fullest potential,” says Traeger.

Projects like these create more diesel, as well as more value for CHS owners. “Our focus on the needs of farmers and our owners differentiates us from the other 135 refineries in the United States,” says Traeger.

“As the nation’s largest cooperative refiner, our refineries play a vital role in creating connections to power farmers and rural communities across America,” says Traeger.

How Crude Oil Moves Through a Refinery

The refining process starts with crude oil. Crude oil is made up of hydrocarbons, all with different boiling points. Each refinery has its own unique combination of refining processes based largely on location and desired products. Here’s how oil becomes gas and diesel fuel.

Crude oil refining process chart
Click image to view larger

Learn how refined fuels get from the oil well to the pump.


Building on Byproducts 

Petroleum coke in the pit of a coker

In the pit of the coker, petroleum coke is constantly separated from water and loaded into a railcar system. From here, it becomes a heat source in manufacturing plants.

For crude oil to become refined fuel, it is separated into multiple components by a chemical process called fractional distillation that capitalizes on the boiling point of each component. At cooler temperatures — up to 400 degrees Fahrenheit — propane and gasoline are separated. As temperatures continue to rise to 600 degrees Fahrenheit and hotter, diesel, petroleum coke and asphalt are pulled out of the mix.  

“Ultimately, gasoline is also created when creating diesel fuel,” says John Traeger, senior vice president of CHS Refineries, Pipelines and Terminals. The CHS refineries produce a combined 1.4 billion gallons of gasoline every year, which is sold through the Cenex® retail network and to wholesale customers. 

The other byproducts, including petroleum coke, asphalt and sulfur, add value for farmers and rural communities. The refineries hold very little storage for these byproducts, which must move out of the refinery so diesel production can continue. “If we don’t sell these byproducts, the refinery simply doesn’t run,” says Mackenzie Nauman, residual marketing manager at the CHS refinery at Laurel. 

“From byproducts to fuels, CHS aims to produce the most valuable product for our customers,” says Traeger. 

Fire iconPetroleum coke heats up manufacturing
In the refining process, the heaviest molecule found in crude oil becomes petroleum coke, which has similar properties to coal. There are different grades of petroleum coke depending on the crude oil a refinery is processing. Some grades can be used in making metals like aluminum, but the coke from CHS refineries is generally used as a heat source in industrial facilities, for example kilns at cement plants. These facilities need to heat some products to 2,000 degrees Fahrenheit.

Road iconAsphalt paves roads
The CHS Laurel refinery gets about 95 percent of its crude from Canada. The upside of using heavy, sour Canadian crude is its ready availability within North America and lower costs. But that reliable, cost-effective supply produces more asphalt, which must be removed from the refinery to keep it operating efficiently. As the Canadian crude is heated to create gasoline and diesel, about 6,500 barrels of asphalt are created every day. It is sold to contractors to pave roads in Montana, Wyoming, North Dakota, South Dakota and Minnesota.  

Field iconSulfur feeds crops
Crude oil sources have varying amounts of naturally occurring sulfur. Kansas crude is about 0.5 percent sulfur, while Canadian crude can be up to 4 percent sulfur. To reduce sulfur dioxide emissions, the U.S. Environmental Protection Agency requires nearly all sulfur to be removed from crude oil in the refining process. 

At the CHS McPherson refinery, the sulfur is taken out of the crude and becomes one of two products through a process called hydrotreating. The first is elemental sulfur, which goes into the production of phosphate fertilizers. The second is ammonium thiosulfate (ATS or 12-0-0, 26s), which helps boost levels of the secondary nutrient sulfur in deficient soils across the Corn Belt and western United States. 


Sweet to Sour: U.S. Crude Oil Grades

From the heavy, sour crudes of western Canada to the lighter, sweet crudes of Texas, crude oils across North America have different density, viscosity and sulfur content based on where they are extracted.

Crude oil map

Light crude oil from areas like Texas is sold at a higher price than heavy crude oil from Canada on commodity markets because it takes fewer refinery processes to turn into gasoline and diesel fuel. Click image to view larger


Relying on Landowners  

When Richard Morris moved to central Kansas in the early 1960s, he began selling the crude oil produced on his land to the National Cooperative Refinery Association (NCRA) refinery in McPherson, Kan. At the time, CHS was one of the cooperative owners of NCRA, which is now fully owned by CHS. In 2011, Morris’s grandson Chase Gann took over the operation. 

“Grandpa always told me to keep doing business with cooperatives and with CHS,” says Gann, who sells about 1,000 barrels of crude to CHS every month. “We sell grain to CHS and have a longstanding relationship with the cooperative. That loyalty and history means a lot to me and my family.” 

In addition to the pump jacks on his land, Gann is a cattle rancher who grows wheat, soybeans and alfalfa. “CHS is a trusted partner for landowners in Kansas,” he says. “We know that our oil is going to our fellow farmers, and we’re proud to help fuel and feed the world.”


Check out the full C magazine with this article and more.