Most conventional gasoline, jet fuel and natural gas begin with hydrocarbons extracted from underground. In the oil-and-gas industry, upstream—often called Exploration & Production, or E&P—refers to the earliest stage of the value chain. E&P operators and producers are responsible for finding oil and natural gas reservoirs, developing wells and safely bringing those resources to the surface.
How Does This Work
The upstream process involves more than just E&P operators. Many people are involved in the process including; geologists, seismic surveyors, land surveyors, biological surveyors, environmental scientists, engineers, CAD (Computer Aided-Design) drafters, GIS (Geographic Information System) Technicians, drilling engineers, field technicians, truck drivers, and many more skilled workers.
All things from driving to work, the clothes we wear, and the cooling and heating of our homes all depends on a steady, well-managed upstream supply. Understanding where energy starts helps put the rest of the value chain, including the pipelines that move it, into context.
Upstream is where energy comes from, downstream is where it becomes something people use. Downstream refers to the refining, marketing, and distribution of finished petroleum products to homes, businesses, and consumers.
Downstream operations are typically run by refining and marketing companies — including companies that also have upstream or midstream operations, and companies that specialize only in refining and selling finished products. There are many more people involved including but not limited to chemical engineers, process engineers, plant managers, quality control technicians, maintenance crews, safety inspectors, laboratory technicians, and terminal operators. All help support the safe and reliable movement of finished products from the refinery to the communities that rely on them.
Downstream is the stage most people interact with directly, every time we fill up the tank, board a flight, or use a product made from petrochemicals. And none of it happens without the crude oil and natural gas that upstream companies produce, or the pipelines that move it in between.
Without midstream infrastructure, crude oil produced upstream would have no way to reach a refinery, and finished fuel refined downstream would have no way to reach consumers. Midstream is the connection that makes the rest of the energy value chain possible.
Midstream companies don't own the oil or natural gas they transport. Instead, they operate the infrastructure that carries it safely and efficiently from production sites to refineries, and from refineries to the communities that depend on finished fuel. That infrastructure includes:
Midstream operations are typically run by pipeline and infrastructure companies, including Phillips 66, Kinder Morgan, and HF Sinclair, the companies developing the Western Gateway Pipeline. Behind the infrastructure is a workforce of engineers, control room operators, field technicians, right-of-way agents, mapping technicians, safety professionals, and environmental specialists.
The U.S. Energy Information Administration (EIA) describes refined product pipelines as "the backbone of the U.S. fuel supply chain" — the most efficient and lowest-cost way to move fuel from refining centers to the communities that need it. Today, approximately 64,000 miles of refined product pipelines operate across the United States, moving the gasoline, diesel, jet fuel, and home heating oil that power daily life.
Source: U.S. DOE Pipeline Backgrounder — How Refined Product Pipelines Work (PDF)
Oil and natural gas travel a long path before they reach the products people use every day. That path is often described as the energy value chain.
No single stage works without the others. Crude oil produced upstream has no value until it can be transported to a refinery. A refinery can't operate without a steady, reliable supply of crude oil. And finished fuel has no way to reach consumers without the pipelines, trucks, and terminals that make up the midstream and distribution network.
Pipelines like Western Gateway sit at the midstream stage of this chain — the critical connection between where energy is produced and where it's refined and used. By moving refined petroleum products efficiently and safely across long distances, midstream infrastructure helps keep fuel supplies steady and prices more predictable for the communities that depend on them.
Most people interact with petroleum products dozens of times a day without ever thinking about it. This section explains what crude oil becomes, where it goes, and why reliable access to refined fuel is woven into nearly every part of modern life.
Crude Oil is naturally occurring liquid found in underground rock formations. The raw form of crude oil must be refined for use. At a refinery, crude oil is heated and separated through a process called fractional distillation, which sorts its molecules by boiling point into distinct groups called "fractions." Each fraction becomes a different product. The major products produced are gasoline, diesel fuel, jet fuel/kerosene, hydrocarbons (propane, butane, ethane), and lubricants, asphalt, road oil, and petrochemical feedstocks.
Petrochemical feedstocks is where we find the most modern-day interaction that surprises many people. This refined group of petrochemicals becomes the building blocks of plastics, medicines, cosmetics, fabrics, fertilizers, adhesives, cleaning products, and thousands of every day materials.
PHMSA tracks and publicly reports pipeline safety data through two key tools:
In a formal 2018 Report to Congress comparing the safety of shipping oil by truck, rail, and pipeline, PHMSA found that pipelines transported far larger volumes than any other mode and spilled just 0.0010% of total volume — less than rail (0.0076%) or truck (0.0011%). Pipelines also experienced significantly fewer incidents per gallon moved than either alternative mode.
Source: PHMSA Report to Congress — Shipping Crude Oil by Truck, Rail and Pipeline (PDF)
Modern pipelines are monitored around the clock from centralized control rooms using automated sensors that track pressure, flow rate, and temperature. Any anomaly can trigger an immediate shutdown. Pipeline operators are also required to conduct regular integrity inspections, including the use of sophisticated internal inspection tools (called "smart pigs") that detect corrosion, cracks, or other defects from inside the pipe.
Source: Pipeline Safety Trust — Hazardous Liquid Pipelines: Basics and Issues (PDF)
A single refined products pipeline can carry several different fuels simultaneously, each in a scheduled "batch." Pipeline operators carefully sequence shipments — gasoline, then diesel, then jet fuel — and use pump stations (typically located every 20 to 100 miles along the route) to push product through at 3 to 8 miles per hour. At its destination, fuel is delivered to distribution terminals where it's loaded onto trucks for the final leg to your local gas station.
Source: U.S. DOE Pipeline Backgrounder — How Refined Product Pipelines Work (PDF)
At the federal level, pipelines are regulated two different agencies. The Pipeline and Hazardous Materials Safety Administration (PHMSA) who regulates the safety and operation of pipelines, and the Federal Energy Regulatory Commission (FERC) that handles the routing, siting, and environmental approvals for interstate natural gas pipeline projects along with economic regulation (rate setting) for interstate pipeline projects.
PHMSA is the primary federal regulator for pipeline safety. PHMSA sets and enforces mandatory safety standards for the design, construction, testing, operation, maintenance, and emergency response of all pipeline facilities carrying hazardous liquids, including gasoline, diesel, and jet fuel like those that will flow through the Western Gateway Pipeline.
The FERC separately regulates the business practices and shipping rates of interstate oil and gas pipelines to ensure fair, equal access for all shippers. They also review and permit interstate liquified natural gas and natural gas projects.
Together, these agencies ensure pipeline operators meet rigorous national standards before, during, and after construction.
Source: PHMSA — General Pipeline FAQs (official government resource)
The permit process for pipelines varies depending on what product is being shipped and if the pipeline is crossing state lines. The FERC permits pipelines that cross state lines (interstate) that are shipping natural gas or liquified natural gas. The pipeline project would still need to be reviewed and approved by other regulatory agencies both state and federal, but the FERC is the main agency with oversight and sets the schedule for the process.
Liquid fuels, oil, jet fuel, and gasoline fall outside of FERC's jurisdiction for permitting and approvals, so pipelines like the Western Gateway Pipeline will follow the National Environmental Protection Act (NEPA) permitting process. The NEPA sets the foundation for the permitting process including consulting agencies, scoping, stakeholder comment periods, and the final decision. Other agencies that participate in the permitting process are the Bureau of Land Management (BLM), the Army Corps of Engineers (USACE), U.S. Fish & Wildlife, state-level Departments of Environmental Quality, state-level Historical Preservation Offices, and other state-level agencies that hold stake in the project and vary by state.
Sources: U.S. EPA — National Environmental Policy Act Review Process FERC Process
Energy is always changing, and innovations are being made every day. But today, in communities across the Southwest and West, the fuel that runs cars, trucks, school buses, ambulances, planes, and farming equipment still depends on a reliable, affordable, pipeline-connected supply of refined petroleum products.
Powering Daily Life
In 2025, transportation attributed to 67% of petroleum consumption with industrial uses ranking at 28%, residential, commercial, and electric power the other 5%. This means our daily drive to work, the summer vacation, ER visit, and nearly all manufactured goods like cell phones, computers, and even solar panels and wind turbines would not be able to be produced.
Global Farming
Without petroleum products food insecurity would affect the global population. The vast majority of farming operations depends on petroleum-derived synthetic fertilizers to sustain crop yields. Without them, and without the diesel-powered machinery used to plant, harvest, and transport food, food production would fall dramatically and the cost of food would rise sharply for everyone.
Supplying Everyday Essentials
Everyday products would disappear from homes and hospitals. Sterile, disposable supplies used in healthcare rely on petroleum-derived plastics. Most clothing would be eliminated, relying on natural fibers alone for clothing would require vast amounts of land for farming operations.
None of this means the energy industry stands still. The companies behind Western Gateway are each investing in lower-carbon solutions alongside their conventional fuel operations, working to meet today's energy needs while helping build tomorrow's.
Phillips 66 is leveraging renewable power solutions to decarbonize strategic assets, lower the carbon intensity of its renewable fuels, reduce operational costs, and support regulatory compliance. The company is one of the world's largest producers of sustainable aviation fuel (SAF), and its Rodeo Renewable Energy Complex in California, a converted oil refinery, can produce up to 150 million gallons of neat SAF annually.
Kinder Morgan operates an energy transition ventures group focused on lower-carbon projects, including renewable natural gas (RNG) production and evaluation of carbon capture, utilization, and storage (CCUS). Its Autumn Hills RNG plant, which came online in 2025, produces pipeline-quality renewable natural gas that could displace more than 4 million gallons of diesel fuel per year when used as transportation fuel.
HF Sinclair operates three renewable diesel plants in Artesia, New Mexico, and Cheyenne and Sinclair, Wyoming, producing fuel that is up to 80% less emissions-intensive than traditional diesel over its lifecycle. In 2024, the company produced more than 237 million gallons of renewable diesel and grew its renewable diesel production by more than 170% since 2020.
Pipelines like Western Gateway move the fuel the world runs on today, even as the companies operating them help build the lower-carbon fuel supply of tomorrow.
Sources:
EIA U.S. Petroleum Product Consumption by Source and Sector, 2025ScienceNotes.org-Petrochemicals in Medicine
Pipelines are what make affordable, reliable supply possible. Without pipelines the only way to move refined fuel would be by truck, rail, or ship — all of which are slower, more expensive, and statistically produce more incidents per gallon moved than pipeline transport. Pipelines are the safest and most affordable way to move fuel over long distances.
Before construction can begin, pipeline operators must go through a highly regulated, multi-year process to receive all the necessary permits and acquire the land through easements. Construction itself is often the shortest part. Before a single foot of pipe goes into the ground, a project must satisfy a long list of conditions, many of them tied to environmental review and approval. Understanding that sequence helps explain why pipeline projects take years to plan and why environmental clearances are treated as a prerequisite, not a formality.
A pipeline project doesn't get to choose whether to address environmental concerns, it must. Environmental clearances function as binding conditions with specific, enforceable requirements set by regulatory agencies that a project must satisfy before construction can proceed, and often must continue to meet throughout construction and operation. These conditions are what ensure a project accounts for water quality, wildlife, wetlands, and cultural resources before ground is ever disturbed and not as an afterthought, but as a precondition for moving forward with construction.
The Pipeline Construction Process, Step by Step
Once all required permits, environmental clearances, and landowner agreements are in place, pipeline construction follows a careful, sequential process. Each step depends on the one before it, and each is inspected before work moves forward.
Before any equipment arrives, land surveyors walk the approved route with highly accurate GPS equipment and mark the exact centerline of the pipeline with stakes and flagging. This defines precisely where the pipe will be installed and establishes the boundaries of the construction right-of-way on either side of it — often incorporating buffer zones identified during environmental review to protect nearby sensitive areas.
Once the centerline is staked, crews clear vegetation from the right-of-way and grade the surface to create a stable, level work area. Topsoil is typically stripped and stored separately from subsoil so it can be replaced in its original layer during restoration — a common permit requirement that helps the land recover its original productivity after construction ends.
Excavation crews dig the trench that the pipeline will be lowered into, using equipment sized to the pipe diameter and local soil and rock conditions. Trench depth is engineered to provide adequate cover over the pipe once buried, and specialized techniques are used at road, railroad, and waterway crossings. Most crossings will be horizontally directionally drilled (HDD) instead of trenching through it.
Individual joints of pipe, typically 40 to 80 feet long, are transported to the right-of-way and laid out end-to-end alongside the trench in the order they'll be welded together. This process is called "stringing," and it allows crews to inspect each joint and stage materials efficiently before welding begins.
Pipelines rarely run in a perfectly straight line. Where the route curves, climbs, or descends, individual pipe joints are precisely bent to match the contour of the land and the engineered route, rather than relying on sharp angles that would weaken the pipe.
Pipe joints are welded together end-to-end by certified welders following strict industry codes. Every weld is inspected using x-ray or ultrasonic testing to confirm it meets safety and quality standards before the pipe moves to the next stage. Any weld that doesn't pass inspection is cut out and redone.
Welded sections are coated with a protective material designed to prevent corrosion once the pipe is buried. Coating is required by PHMSA for quality control for all buried or submerged pipelines. Before lowering the pipe into the trench, crews use an electrical inspection process called "holiday detection" to find and repair any small gaps or flaws in the coating that could otherwise become a corrosion point over time.
Once welding, inspection, and coating are complete, the continuous string of pipe is carefully lowered into the trench using specialized equipment that supports its full length at once, minimizing stress or bending as it's placed.
The trench is filled back in, typically using padding material immediately around the pipe to protect its coating, followed by the excavated soil. Subsoil and topsoil are replaced in the same order they were removed, consistent with restoration requirements set during permitting.
Before the pipeline can carry any product, it's filled with water and pressure-tested well above its normal operating pressure to confirm the integrity of every weld and joint along its length. This test must be completed successfully before the pipeline is placed into service.
Once testing is complete, crews finish restoring the right-of-way. Restoration involves reseeding vegetation, repairing any fencing or drainage affected by construction, and removing equipment and temporary work areas. Many permits require follow-up monitoring for one or more growing seasons to confirm the land has been successfully restored.
Environmental and regulatory conditions don't stop once construction begins and they are verified by environmental inspectors along the way. Often times tribal monitors are also assigned during the construction process to ensure that if sacred sites or artifacts are found the proper procedures take place. A permit might dictate the time of year clearing can occur to avoid nesting season, require specific erosion controls during trenching near a waterway, or set exact restoration standards that must be met before a project is considered complete. Inspectors and monitors verify compliance with these conditions at each stage, alongside standard engineering and safety inspection.
June 21, 2016
Presentation by: Kinder Morgan
April 17, 2019
Presentation by: David Jost, Vice President of Phillips 66 (formerly DCP Midstream)
7th Annual Garfield County Energy & Environment Symposium Oil and Gas Education for Local Government
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