Skip to main content

Are you on the right long-term path? Get a full financial assessment

Get a full financial assessment
← Back to T Definitions

Thermal cracking

Thermal Cracking

What Is Thermal Cracking?

Thermal cracking is a fundamental refinery process in the energy sector that uses high temperatures and pressures to break down large, complex hydrocarbon molecules found in crude oil into smaller, more valuable petroleum products such as gasoline, diesel fuel, and kerosene. This process is crucial for increasing the yield of lighter, more in-demand fuels from heavier, less valuable fractions of crude oil. By altering the molecular structure of hydrocarbons, thermal cracking plays a vital role in the economics of refining and the overall commodity markets.

History and Origin

The concept of thermal cracking emerged from the need to produce more light distillates, particularly gasoline, as the automotive industry began to flourish in the early 20th century. Before cracking processes were widely adopted, refiners primarily used atmospheric and vacuum distillation, which yielded a limited amount of gasoline from each barrel of crude oil.

The first commercially viable thermal cracking process, known as the Burton process, was patented in 1913 by William Merriam Burton, a chemist at Standard Oil Company (Indiana). This innovation involved heating heavier oils under pressure to split their large molecules into smaller, more marketable fractions. The Burton process significantly increased gasoline production, sometimes more than doubling the output from various types of oil. Standard Oil of Indiana quickly implemented this technology, with its Whiting refinery reportedly having 12 Burton-Humphreys adapted stills in service by January 1913, expanding to 900 units within a decade. The widespread adoption of thermal cracking revolutionized the petroleum industry, enhancing profit margins for refiners and contributing to the development of petrochemicals.9, 10, 11

Key Takeaways

  • Thermal cracking is a refinery process that converts heavy crude oil fractions into lighter, more valuable products through high heat and pressure.
  • It increases the yield of marketable fuels like gasoline and diesel from less desirable heavy oils.
  • The process has been instrumental in meeting the growing demand for transportation fuels since the early 20th century.
  • While an older technology, modern variants of thermal cracking, such as coking and visbreaking, remain essential for processing heavy, residual oils.
  • The efficiency and cost-effectiveness of thermal cracking directly impact refinery economics and global fuel supply chain dynamics.

Interpreting Thermal Cracking

In the context of the energy sector, understanding thermal cracking involves recognizing its role in optimizing crude oil utilization. Refineries that employ thermal cracking processes can enhance their ability to transform low-value residual oils into high-value products. This flexibility allows them to adapt to shifts in market volatility and demand for various fuels. The degree to which a refinery utilizes thermal cracking, often measured by its "coking capacity," indicates its ability to handle heavier, cheaper crude oil grades, potentially leading to higher profit margins when heavy crude differentials are wide.

Hypothetical Example

Consider a hypothetical refinery, "Evergreen Fuels," that primarily uses atmospheric distillation. With this method, a barrel of heavy crude oil yields, for example, 30% gasoline, 20% diesel, and 50% residual fuel oil, which has lower market demand.

To improve its product slate and profitability, Evergreen Fuels invests in a new thermal cracking unit, specifically a delayed coker. This involves significant capital expenditure. After the installation, the refinery can now take the low-value residual fuel oil and feed it into the thermal cracking unit. The cracking process breaks down these heavy hydrocarbons, yielding an additional 15% gasoline and 10% diesel from the original barrel, along with petroleum coke as a byproduct.

Now, from the same barrel of crude, Evergreen Fuels produces 45% gasoline, 30% diesel, and 25% petroleum coke. This shift in product mix allows the company to capture higher revenues from the more valuable fuels, thereby enhancing its overall financial performance and supporting its investment strategy.

Practical Applications

Thermal cracking, in its various modern forms like visbreaking and coking, is widely applied in petroleum refining to maximize the output of valuable products.

  1. Increased Gasoline and Diesel Production: It enables refiners to convert heavier, less desirable fractions of crude oil into high-demand transportation fuels, directly impacting global refining capacity. For instance, U.S. thermal cracking (or coking) capacity increased by 1.9% in 2023, reflecting ongoing investments in processing heavier crude grades.8
  2. Processing Heavy Crudes: Refineries equipped with thermal cracking units can process cheaper, heavier crude oil grades, providing a competitive advantage and resilience against fluctuating oil prices.
  3. Production of Petrochemicals: Beyond fuels, thermal cracking yields lighter hydrocarbons, including naphtha, which are essential feedstocks for the petrochemical industry. These are used to produce plastics, synthetic rubbers, and other materials.
  4. Waste Minimization: By converting residual oils that might otherwise be sold at a deep discount or used as low-value bunker fuel, thermal cracking helps optimize crude oil utilization and minimizes heavy waste streams.

These applications underscore the financial significance of thermal cracking in the modern refining landscape.

Limitations and Criticisms

Despite its importance, thermal cracking has several limitations and criticisms:

  • Lower Product Quality: Compared to more advanced methods like catalytic cracking, thermal cracking can produce a lower quality gasoline with higher olefin content, which can lead to gum formation and engine knocking. Subsequent processes are often required to upgrade these products.
  • High Energy Consumption: The process requires very high temperatures and pressures, leading to substantial capital expenditure for equipment and significant ongoing energy consumption, affecting profit margins.
  • Coke Formation: A significant byproduct of severe thermal cracking is petroleum coke, a solid carbonaceous material. While coke can be sold as fuel or for other industrial uses, its overproduction can be a challenge for refiners, requiring additional handling and storage infrastructure.
  • Environmental Concerns: Like other refining processes, thermal cracking operations can generate pollutants. Refineries must adhere to stringent environmental regulations regarding air emissions and wastewater discharges. The U.S. Environmental Protection Agency (EPA) sets effluent guidelines and standards for petroleum refining wastewater discharges to control pollutants.6, 7 While regulations exist, concerns have been raised about the adequacy of enforcement and the cumulative impact of refinery discharges on waterways.3, 4, 5
  • Limited Flexibility: Pure thermal cracking processes generally offer less flexibility in tailoring product yields compared to catalytic methods, which can be adjusted more precisely to market demand.

Thermal Cracking vs. Catalytic Cracking

Both thermal cracking and catalytic cracking are essential processes in petroleum refining aimed at breaking down heavy hydrocarbons into lighter, more valuable fuels. However, they differ fundamentally in their mechanism, resulting in distinct advantages and disadvantages.

FeatureThermal CrackingCatalytic Cracking
MechanismUses only high temperatures and pressures (thermolysis)Uses catalysts (e.g., zeolites) at lower temperatures
TemperatureVery high (e.g., 450-750°C)Lower than thermal cracking (e.g., 480-550°C)
PressureHighLower than thermal cracking
Product QualityLower octane gasoline, more olefinsHigher octane gasoline, fewer olefins
YieldProduces more heavy residuals or cokeHigher yields of gasoline and light olefins
FlexibilityLess flexible in product distributionMore flexible, can be tuned for specific product demands
ByproductsMore coke, lower quality gasLess coke, higher quality gas and petrochemical feedstocks
Energy InputHighLower due to catalytic reaction

The key distinction lies in the use of a catalyst. Catalytic cracking employs chemical catalysts to facilitate the molecular breakdown, allowing for milder operating conditions, higher selectivity towards desired products like high-octane gasoline, and reduced production of undesirable byproducts like coke. While thermal cracking, especially in its early forms, was revolutionary, catalytic cracking largely superseded it for gasoline production due to its superior efficiency and product quality. H1, 2owever, modern thermal cracking processes like delayed coking remain crucial for processing the heaviest, most difficult-to-crack residual oils that catalysts cannot effectively handle.

FAQs

Why is thermal cracking important for the energy sector?

Thermal cracking is important because it allows refineries to convert less valuable, heavy crude oil components into higher-demand products like gasoline, diesel fuel, and naphtha. This process maximizes the economic value extracted from each barrel of crude oil, directly impacting refinery profitability and global fuel supply.

Is thermal cracking still used today?

Yes, thermal cracking is still used today, although often in more specialized forms like visbreaking and delayed coking. While it has largely been replaced by catalytic cracking for primary gasoline production, it remains essential for upgrading heavy residual oils and producing petroleum coke, which is used in industries like aluminum and steel manufacturing.

What are the main products of thermal cracking?

The main products of thermal cracking typically include a higher yield of light fuels such as gasoline, diesel fuel, and kerosene. It also produces lighter hydrocarbon gases and a significant amount of petroleum coke, depending on the severity of the process.

How does thermal cracking affect commodity markets?

By increasing the supply of refined petroleum products from heavier crude oil fractions, thermal cracking influences the balance of supply and demand for various fuels. This can help stabilize prices for gasoline and diesel, while also impacting the market for heavy fuel oil and petroleum coke. Its efficiency contributes to the overall diversification of refined product outputs.

What are the environmental concerns related to thermal cracking?

Environmental concerns primarily revolve around air emissions (like sulfur dioxide and nitrogen oxides from burning byproducts) and wastewater discharges containing pollutants. Refineries must comply with environmental regulations, but continuous efforts are needed to minimize the ecological footprint of these industrial processes.

AI Financial Advisor

Get personalized investment advice

  • AI-powered portfolio analysis
  • Smart rebalancing recommendations
  • Risk assessment & management
  • Tax-efficient strategies

Used by 30,000+ investors