Crude oil is the starting point for all the fuels we will discuss. Natural gas, propane, heating oil, and gasoline (petroleum) are all the result of crude oil’s processing and refining.

In extremely general terms, natural gas is a byproduct during the oil drilling process. Propane, heating oil, and petroleum are all results of the refining process.

Our peninsula, and state overall, are in the unique position of receiving 90-100 percent of our crude oil from the northern slope of Alaska. This puts less emphasis on foreign markets and the increased volatility associated with that influence.

Once being transported from Alaska, the crude oil (apart from natural gas) goes to one of six refineries in western Washington. Two refineries each are located in Tacoma, Anacortes, and Ferndale (near Bellingham). When the refining process is completed, the fuel is transported to one of three terminals in either Seattle, Tacoma, or Tumwater where it awaits distribution.
On the other hand, Kitsap’s natural gas comes from one of three sources:

• San Juan Basin
• British Columbia, east of Vancouver
• Alberta Canada

Should our county lose one of these links, there is a looped pipeline from a New Mexico terminal where upon reaching Shelton it becomes a parallel line running to Bremerton.

One industry source mentioned that there are no set amounts of inventory reserves (amount on hand) at any given time due to the usage of an inventory method known as “on time/real time.” In simple terms, this method is known as a perpetual method since it is continuous and is difficult to measure. For instance, 10,000 barrels come in and 10,000 barrels go out. Inventory levels are kept low, if at all.

Having covered our county’s fuel sources and reserves, let’s turn to each area in more detail to try to gain a greater insight into its importance to us.

According to a research study done during the mid-90’s, Kitsap County had the highest concentration of heating oil usage statewide due to the number of older homes. Houses used to be built utilizing oil as their heating source. With the increasing development of our county, heating oil is being replaced by either propane or natural gas.

Propane and natural gas are popular fuels for the home since they are easily converted and very flexible. For instance, we all know about the various uses for natural gas, but did you know propane can be used for your clothes dryer, your cooking, and your heating? It is also being used in more and more newer buildings.
Natural gas has made its way into Kitsap only in the very recent past. Poulsbo starting using it only two years ago, for instance. There still is no usage of it in North Kitsap, Seabeck area, Bainbridge Island and/or north Mason County.

No county figures could be obtained regarding fuel purchases or usage’s. Due to budget cuts in the past few years, there is no central clearinghouse for how our state expends energy. Prior to that time, it was handled by the Energy Council. In addition, amounts for fuel purchases (obtainable from fuel tax returns) were available at the state level, but not county level. So be it for demographics regarding fuel breakdowns in Kitsap.

A pricing comparison between King and Kitsap counties regarding fuel depends on varying circumstances. It would seem logical that prices would be higher in Kitsap due to the added expense of freight from Seattle. But what if our supplier was in Tacoma? Wouldn’t that be cheaper? Or, how about if there were “price wars” going on in one county and not the other? Needless to say, a comparison is difficult. Overall, pricing in Seattle (at the pumps, anyway) appears higher at first glance. It changes continuously, however.

There are two methods of pricing fuel. The first is known as “distributor pricing” and is based on the “spot market.” The spot market is where traders buy and sell fuel — a stock market involving fuel, if you will. The other method of pricing fuel is known as “direct supplied station” which is priced at the street market value. Whatever supply and demand dictate.

FYI: Included in our state’s pricing of crude oil is a $.05/barrel tax for the spill prevention program.

All this talk about pricing brings us to our final fuel source, the one we gripe about every time we go to the gas pump...gasoline (petroleum).

There are 235,000 registered vehicles in Kitsap and it is estimated that the amount an individual spends on transportation annually is $7600, according to a 1998 report published by an independent energy agency. Included in this transportation category are autos, ferries, bicycles and freight. It also was stated in the report that $5400 per individual was spent on auto ownership. This would include fuel, insurance, maintenance, etc.

A final point of interest lies in our state, and ultimately our county, not being land locked (meaning we are not surrounded by land on all four sides). If, for some unforeseen circumstance, our transportation link was in shambles — we could receive goods and services via the waters and its various modes. For the purpose of this article, we’ll worry about transporting the goods from point of entry when it occurs.

In closing, this article touches just the ‘tip of the barrel’ regarding the vastly complex and confusing world of fuel.

(Author’s Note: Thank you to the numerous individuals who freely shared their industry knowledge with me and helped me realize the enormity of a field I had no comprehension of. To say it is appreciated is an understatement.).