From an article at WiseGeek
Plastic bottles are used to package a wide variety of things, from juice to soft drinks, and they play a ubiquitous role in the lives of many consumers, along with other plastic products. With a growing awareness of the environmental issues which surround plastics, many people have become interested in the life cycles of plastic products, from manufacturing to eventual disposition in a landfill or recycling facility. Being aware of the process behind the production of plastics can encourage consumers to think more carefully about how they use and dispose of such plastics. Because plastic bottles are a very visible form of plastic use, plastic bottles make an easy target for activism and education.
The life cycle of a plastic bottle starts, obviously, with the creation of the plastic used to make it. The vast majority of plastic bottles are manufactured from petroleum, some of which comes from deposits as much as three billion years old. Some manufacturers use bioplastics made from plant materials to create their plastic bottles, out of concern for the environment.
Once oil has been extracted, it is typically moved into container tankers for shipping to refinery facilities. At a refinery, the oil can be submitted to a variety of distillation processes, such as fractional distillation, where the crude oil is heated, causing its various components to separate so that the refinery can make gas, fuel oil, plastics, and a variety of other products. Crude oil can also be “cracked” with chemical catalysts to generate hydrocarbon chains of a desired length; this practice is common, because demand for various petroleum products constantly fluctuates, and cracking ensures that oil is used extremely efficiently and generates the maximum possible profit.