Bitumen

DEFINITION of 'Bitumen'

A substance produced through the distillation of crude oil and known for its waterproofing and adhesive properties. Bitumen production through distillation removes lighter crude oil components, such as gasoline and diesel, leaving the “heavier” bitumen behind. It is often refined several times in order to improve its grade.

BREAKING DOWN 'Bitumen'

In modern times bitumen is most likely to be manufactured from crude oil, but bitumen can be found in nature. Deposits of naturally occurring bitumen can be found at the bottom of ancient lakes, where prehistoric organisms have since decayed and have been subjected to heat and pressure.

Bitumen is generally for industry use. Early uses of bitumen involved its natural adhesive and waterproofing characteristics, but it was also used as a medicine. It was used to bind building materials together, as well as to line the bottoms of ships. Herodotus, a fifth century BC Greek historian, claimed that the walls of ancient Babylon were strengthened through the use of bitumen. The material was traded between ancient civilizations.

Bitumen is composed of complex hydrocarbons, and contains elements such as calcium, iron, sulfur, and oxygen. The quality of material and ease of production is dependent on the source and type of crude oil it is derived from.

The material is used most often in road paving, in which bitumen is called asphalt. Most roads in the United States is made of either bitumen, or a combination of bitumen and aggregates, such as concrete. Bitumen can be recycled, meaning that engineers replacing asphalt roads can reuse the material on other road projects. It is also used in the creation of roofing products due to its waterproofing qualities

Under heavy loads bitumen can be permanently deformed, depending on the composition of the asphalt mixture, the ambient temperature, and the amount of stress places on the material. Bitumen oxidizes, which can leave the asphalt brittle and result in it cracking. 

RELATED TERMS
  1. Oil Sands

    Sand and rock material which contains crude bitumen (a heavy, ...
  2. Oil Refinery

    An industrial plant that refines crude oil into petroleum products ...
  3. Keystone XL Pipeline

    A proposed extension of the Keystone pipeline system that is ...
  4. Hydrocarbon

    An organic chemical compound composed exclusively of hydrogen ...
  5. Petroleum

    A naturally occurring liquid found beneath the Earth’s surface ...
  6. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
Related Articles
  1. Stock Analysis

    ConocoPhillips' 3 Most Profitable Lines of Business (COP)

    Learn about the oil and natural gas glut, its impact on producers such as ConocoPhillips, and the energy giant's top three most profitable lines of business.
  2. Economics

    Canadian Oil Sands: Only Lucrative At The Right Price (SU.TO, IMO.TO)

    Canadian oil sands projects are economically viable at oil prices above US$84.99/bbls, and they provide many benefits to the Canadian energy industry.
  3. Investing Basics

    What is Crude Oil?

    Crude oil is a natural petroleum product that’s composed of organic materials, including hydrocarbon deposits.
  4. Stock Analysis

    The 3 Best Canadian Dividend Stocks (CNQ)

    Learn about the state of the Canadian stock market and three Canadian dividend-paying stocks that are worth taking a look at in late 2015.
  5. Economics

    Ending The Limits On U.S. Crude Oil Exports

    As US storage capacity reaches its limit, industry participants and their lobby groups in Washington are calling for an end to the crude oil exports ban.
  6. Economics

    The Most Indebted US Oil Companies

    The recent sharp decline in oil prices along with the industry’s high cost of operations have pushed these 10 US oil companies deeply into debt.
  7. Options & Futures

    Commodities: Crude Oil

    By Noble DrakolnCrude oil is a naturally-occurring substance found in certain rock formations in the earth. To extract the maximum value from crude, it needs to be refined into petroleum products. ...
  8. Investing

    The Reasons for the Mexican-U.S. Oil Swap

    The U.S. government is getting close to a historic deal to allow U.S. producers to swap the light, sweet crude oil that is in too much supply with Mexico, in return for heavy crude.
  9. Stock Analysis

    ConocoPhillips's Well-Oiled Profit Machine

    By focusing on upstream production and farming out subsequent links in the chain, ConocoPhillips maximizes profits in a very capital-intensive industry.
  10. Investing Basics

    Learn How To Trade Crude Oil in 5 Steps

    Crude oil and energy markets are specialized venues. Here are five steps to take to build consistent profits.
RELATED FAQS
  1. What is a heavy oil differential and how does it affect oil producers?

    Learn what the phrase "heavy oil differential" refers to and the significance of heavy oil differentials for oil production ... Read Answer >>
  2. Do all oil companies received the quoted price of West Texas Intermediate for their ...

    Learn about the three benchmark oil prices, the primary factors that determine the quality of crude oil and the price it ... Read Answer >>
  3. What economic indicators are especially important to oil traders?

    Economic indicators are used by traders and investors in an attempt to understand the underlying fundamentals of the market. ... Read Answer >>
  4. Does a company logo change require a material disclosable event?

    A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all ... Read Answer >>
  5. How are oil reserves accounted for on an oil company's balance sheet?

    Oil reserves are estimated quantities of crude oil that have a high degree of certainty, usually 90%, of existence and exploitability. ... Read Answer >>
  6. If oil producers run out of room to store oil, will the price of gasoline plummet?

    Learn about what happens to gasoline price when room to store oil runs out and whether this creates a good situation for ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center