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Petroleum: a Man’s Black Goal

INTRODUCTION

In the essay, "A thirst for oil…Man's search for petroleum"

by R. Williams, he states that oil has a big influence on why
and what man does. At first oil was used for liniment,
medicine, and cementing walls. All over the world, there are
natural places you can recover oil and gas, such as the U.S.
and Canada, but the Middle East was the biggest supplier for
U.S. oil after World War II.

Petroleum first uses included sealants, lubricants, and

medicinal purposes. A product of petroleum, kerosene, was
used as fuel for light and heating. The major current use for
petroleum came with the invention of the automobile.
Petroleum is not just use for fuel; oil is also used in plastics,
fertilizers, and cosmetics.

Early on searching for oil and gas was more difficult, found only near natural oil and gas seeps. Later on,
geochemistry helped in finding that deposits under the earth's surface. Technology is aided in the search for oil,
but instead of just a guessing game it became an actual science with satellites, drilling, and saline injections,
helping to uncover what is beneath the surface of the earth.

Petroleum is a limited resource that the world is obsessed with using until it is gone. People are willing to do
whatever it takes to get all the oil they can, no matter what it means. R. Williams writes, "From a substance
seeping from that earth's surface, ignored by man for centuries, to a commodity that has unprecedented
implications in global relations, petroleum has truly become a man's black goal."

WHAT IS PETROLEUM?

Petroleum (from Greek petra – rock and elaion – oil or Latin oleum – oil) is a naturally occurring,
flammable liquid found in rock formations in the Earth consisting of a complex mixture of hydrocarbons of
various molecular weights, plus other organic compounds.
Petroleum, or crude oil, naturally occurring oily, bituminous liquid
composed of various organic chemicals. It is found in large
quantities below the surface of Earth and is used as a fuel and as a
raw material in the chemical industry. Modern industrial societies
use it primarily to achieve a degree of mobility—on land, at sea, and
in the air—that was barely imaginable less than 100 years ago. In
addition, petroleum and its derivatives are used in the manufacture
of medicines and fertilizers, foodstuffs, plastics, building materials,
paints, and cloth and to generate electricity.

Petroleum "occurs in a liquid phase as crude oil and

condensate and in a gaseous phase as natural gas" The
development of petroleum in gaseous phase is largely dependent on
the "kind of source rock from which the petroleum was formed and
the physical and thermal environment in which it exists.” Petroleum
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is commonly identified as the crude oil, in liquid form, which is found deep below the ground surface around
less than 20,000 feet.

Petroleum is "found in sedimentary basins in sedimentary rocks" and for it to develop accumulations, it has
to meet several conditions, namely:

(1) There must be a source rock, usually high in organic matter, from which petroleum can be generated;
(2) There must be a mechanism for the petroleum to move, or migrate;
(3) A reservoir rock with voids to hold petroleum fluids must exist;
(4) The reservoir must be in a configuration to constitute a trap and be covered by a seal any kind of low-
permeability or dense rock formation that prevents further migration,” The accumulations of petroleum may
also be determined when the source and reservoir rocks occur.

A petroleum geologist is a specialist who identifies possible areas where the accumulation of petroleum is.
As he locates the traps, he keeps track of subsurface information and gathers data in the drilling exploratory
wells. Petroleum geologists run geophysical surveys and interpret them in order to be used to "construct maps,
cross sections, and models" to depict whether or not the subsurface has petroleum, which can be drilled for
possible exploratory wells.

In fact, modern industrial civilization depends on petroleum and its products; the physical structure and way
of life of the suburban communities that surround the great cities are the result of an ample and inexpensive
supply of petroleum. In addition, the goals of developing countries—to exploit their natural resources and to
supply foodstuffs for the burgeoning populations—are based on the assumption of petroleum availability. In
recent years, however, the worldwide availability of petroleum has steadily declined and its relative cost has
increased. Many experts forecast that petroleum will no longer be a common commercial material by the mid-
21st century.

HISTORY OF PETROLEUM

Petroleum, in some form or other, is not a substance new in the world's history.
More than four thousand years ago, according to Herodotus and confirmed by
Diodorus Siculus, asphalt was employed in the construction of the walls and towers of
Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on
Zacynthus. Great quantities of it were found on the banks of the river Issus, one of the
tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting
uses of petroleum in the upper levels of their society.

These surface deposits of crude oil have been known to humans for thousands of
years. In the areas where they occurred, they were long used for limited purposes,
such as caulking boats, waterproofing cloth, and fueling torches. By the time the
Renaissance began in the 14th century, some surface deposits were being distilled to
Statue of Diodorus Sirculus obtain lubricants and medicinal products, but the real exploitation of crude oil did not
begin until the 19th century. The Industrial Revolution had by then brought about a
search for new fuels, and the social changes it effected had produced a need for good, cheap oil for lamps;
people wished to be able to work and read after dark. Whale oil, however, was available only to the rich, tallow
candles had an unpleasant odor, and gas jets were available only in then-modern houses and apartments in
metropolitan areas.
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Oil was exploited in the Roman province of Dacia, now in Romania, where it was called picula. The earliest
known oil wells were drilled in China in 347 CE or earlier. They had depths of up to about 800 feet (240 m) and
were drilled using bits attached to bamboo poles. The oil was burned to evaporate brine and produce salt. By the
10th century, extensive bamboo pipelines connected oil wells with salt springs. The ancient records of China
and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was
known as burning water in Japan in the 7th century. In his book Dream Pool Essays written at 1088 CE, the
Polymathic Scientist and Statesman Shen Kuo of the Song Dynasty used a 2-character Chinese word Shi2 You2,
literally Rock Oil, to name the petroleum, and this word is still being used now in contemporary Chinese.

The Middle East's petroleum industry was established by the 8th century, when the streets of the newly
constructed Baghdad were paved with tar, derived from petroleum that became accessible from natural fields in
the region. In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan, to produce
naphtha. These fields were described by the Arab Geographer Abu al-Hasan 'Alī al-Mas'ūdī in the 10th century,
and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads. The
Persian Alchemist Muhammad ibn Zakarīya Rāzi (Rhazes) distilled petroleum in the 9th century, producing
chemicals such as kerosene in the alembic (al-ambiq), and which was mainly used for kerosene lamps. Arab and
Persian chemists also distilled crude oil in order to produce flammable
products for military purposes. Through Islamic Spain, distillation
became available in Western Europe by the 12th century. It has also
been present in Romania since the 13th century, being recorded as
“păcură.”

The earliest mention of petroleum in the Americas occurs in Sir

Walter Raleigh's account of the Trinidad Pitch Lake in 1595; whilst
thirty-seven years later, the account of a visit of a Franciscan, Joseph
de la Roche d'Allion, to the oil springs of New York was published in
Sagard's Histoire du Canada. A Russian Traveller, Peter Kalm, in his
work on America published in 1748 showed on a map the oil springs
A pumpjack in Texas of Pennsylvania.
In 1710 or 1711 (sources vary) the Russian-born Swiss Physician and Greek Teacher Eyrini d’Eyrinis (also
spelled as Eirini d'Eirinis) discovered asphaltum at Val-de-Travers, (Neuchâtel). He established a bitumen mine
de la Presta there in 1719 that operated until 1986.

Oil sands were mined from 1745 in Merkwiller-Pechelbronn, Alsace under the direction of Louis Pierre
Ancillon de la Sablonnière, by special appointment of Louis XV. The Pechelbronn oil field was active until
1970, and was the birthplace of companies like Antar and Schlumberger. The first modern refinery was built
there in 1857.

The modern history of petroleum began in 1846 with the discovery of the process of refining kerosene from
coal by Nova Scotian Abraham Pineo Gesner. Ignacy Łukasiewicz improved Gesner's method to develop a
means of refining kerosene from the more readily available "rock oil" ("petr-oleum") seeps in 1852 and the first
rock oil mine was built in Bóbrka, near Krosno in Galicia in the following year. In 1854, Benjamin Silliman, a
science professor at Yale University in New Haven, was the first to fractionate petroleum by distillation. These
discoveries rapidly spread around the world, and Meerzoeff built the first Russian refinery in the mature oil
fields at Baku in 1861. At that time, Baku produced about 90% of the world's oil.

The search for a better lamp fuel led to a great demand for “rock oil”—that is, crude oil—and various
scientists in the mid-19th century were developing processes to make commercial use of it. Thus British
entrepreneur James Young, with others, began to manufacture various products from crude oil, but he later
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turned to coal distillation and the exploitation of oil shales. In 1852, Canadian Physician and Geologist
Abraham Gessner obtained a patent for producing from crude oil a relatively clean-burning, affordable lamp
fuel called kerosene; and in 1855 an American chemist, Benjamin Silliman, published a report indicating the
wide range of useful products that could be derived through the distillation of petroleum.

Thus, the quest for greater supplies of crude oil began. For several years, people had known that wells
drilled for water and salt were occasionally infiltrated by petroleum, so the concept of drilling for crude oil itself
soon followed. The first such wells were dug in Germany from 1857 to 1859, but the event that gained world
fame was the drilling of an oil well near Oil Creek, Pennsylvania, by “Colonel” Edwin L. Drake in 1859. Drake,
contracted by the American industrialist George H. Bissell—who had also supplied Silliman with rock-oil
samples for producing his report—drilled to find the supposed “mother pool” from which the oil seeps of
western Pennsylvania were assumed to be emanating. The reservoir Drake tapped was shallow—only 21.2 m
(69.5 ft) deep—and the petroleum was a paraffin type that flowed readily and was easy to distill.

Drake’s success marked the beginning of the rapid growth of the modern petroleum industry. Soon
petroleum received the attention of the scientific community, and coherent hypotheses were developed for its
formation, migration upward through the earth, and entrapment. With the invention of the automobile and the
energy needs brought on by World War I (1914-1918), the petroleum industry became one of the foundations of
industrial society.

The first commercial oil well in Romania was drilled in 1857 at Bend,
North of Bucharest. The first oil well in North America was in Oil
Springs, Ontario, Canada in 1858, dug by James Miller Williams. The US
petroleum industry began with Edwin Drake's drilling of a 69-foot (21 m)
oil well in 1859, on Oil Creek near Titusville, Pennsylvania, for the
Seneca Oil Company (originally yielding 25 barrels per day (4.0 m³/d), by
the end of the year output was at the rate of 15 barrels per day (2.4 m³/d)).
The industry grew through the 1800s, driven by the demand for kerosene
and oil lamps. It became a major national concern in the early part of the
20th century; the introduction of the internal combustion engine provided
a demand that has largely sustained the industry to this day. Early "local" James Miller Williams dug the first oil
finds like those in Pennsylvania and Ontario were quickly outpaced by well in North America at Oil Springs,
demand, leading to "oil booms" in Texas, Oklahoma, and California. Ontario, in 1858, fully one year before
the more famous Drake well in
Pennsylvania.
Early production of crude petroleum in the United States:

* 1859: 2,000 barrels (~270t) * 1889: 35,163,513 barrels (~4.797×106t)

* 1869: 4,215,000 barrels (~5.750×105t) * 1899: 57,084,428 barrels (~7.788×106t)
* 1879: 19,914,146 barrels (~2.717×106t) * 1906: 126,493,936 barrels (~1.726×107t)

By 1910, significant oil fields had been discovered in Canada (specifically, in the province of Ontario), the
Dutch East Indies (1885, in Sumatra), Iran (1908, in Masjed Soleiman), Peru, Venezuela, and Mexico, and were
being developed at an industrial level.

Even until the mid-1950s, coal was still the world's foremost fuel, but oil quickly took over. Following the
1973 energy crisis and the 1979 energy crisis, there was significant media coverage of oil supply levels. This
brought to light the concern that oil is a limited resource that will eventually run out, at least as an economically
viable energy source. At the time, the most common and popular predictions were quite dire. However, a period
of increased production and reduced demand caused an oil glut in the 1980s.
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Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy
consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum's worth as
a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial
chemicals makes it one of the world's most important commodities. Access to it was a major factor in several
military conflicts of the late twentieth and early twenty-first centuries, including World War II and the Persian
Gulf Wars (Iran–Iraq War, Operation Desert Storm, and the Iraq War). The top three oil-producing countries are
Saudi Arabia, Russia, and the United States. About 80% of the world's readily accessible reserves are located in
the Middle East, with 62.5% coming from the Arab 5: Saudi Arabia (12.5%), UAE, Iraq, Qatar, and Kuwait.
However, with today's oil prices, Venezuela has larger reserves than Saudi Arabia due to crude reserves derived
from bitumen.

COMPOSITION OF PETROLEUM

The proportion of hydrocarbons in the mixture is highly variable

and ranges from as much as 97% by weight in the lighter oils to as
little as 50% in the heavier oils and bitumens.

The hydrocarbons in crude oil are mostly alkanes, cycloalkanes

and various aromatic hydrocarbons while the other organic
compounds contain nitrogen, oxygen, and sulfur, and trace amounts
of metals such as iron, nickel, copper, and vanadium. The exact
molecular composition varies widely from formation to formation
Raw bitumen is separated from the sand in giant but the proportions of chemical elements vary over fairly narrow
separation cells. limits as follows:

Carbon 83-87% Oxygen 0.1-1.5%

Hydrogen 10-14% Sulfur 0.5-6%
Nitrogen 0.1-2% Metals <1000 ppm

Crude oil varies greatly in appearance depending on its composition. It is usually black or dark brown
(although it may be yellowish or even greenish). In the reservoir, it is usually found in association with natural
gas, which being lighter forms a gas cap over the petroleum, and saline water which being heavier generally
floats underneath it. Crude oil may also be found in semi-solid form mixed with sand, as in the Athabasca oil
sands in Canada, where it may be referred to as crude bitumen.

Petroleum is used mostly, by volume, for producing fuel oil and gasoline (petrol), both important "primary
energy" sources. 84% by volume of the hydrocarbons present in petroleum is converted into energy-rich fuels
(petroleum-based fuels), including gasoline, diesel, jet, heating, and other fuel oils and liquefied petroleum gas.

Due to its high energy density, easy transportability, and relative abundance, it has become the world's most
important source of energy since the mid-1950s. Petroleum is also the raw material for many chemical products,
including pharmaceuticals, solvents, fertilizers, pesticides, and plastics; the 16% not used for energy production
is converted into these other materials.

Petroleum is found in porous rock formations in the upper strata of some areas of the Earth's crust. There is
also petroleum in oil sands (tar sands). Known reserves of petroleum are typically estimated at around 190 km3
(1.2 trillion (short scale) barrels) without oil sands, or 595 km 3 (3.74 trillion barrels) with oil sands.
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Consumption is currently around 84 million barrels (13.4×106 m3) per day, or 4.9 km3 per year. Because the
energy return over energy invested (EROEI) ratio of oil is constantly falling (due to physical phenomena such as
residual oil saturation, and the economic factor of rising marginal extraction costs), recoverable oil reserves are
significantly less than total oil-in-place.

At current consumption levels, and assuming that oil will be consumed only from reservoirs, known
recoverable reserves would be gone around 2039, potentially leading to a global energy crisis. However, there
are factors which may extend or reduce this estimate, including the rapidly increasing demand for petroleum in
China, India, and other developing nations; new discoveries; energy conservation and use of alternative energy
sources; and new economically viable exploitation of non-conventional oil sources.

CHEMISTRY OF PETROLEUM

The chemical composition of all petroleum is principally hydrocarbons, although a few sulfur-containing
and oxygen-containing compounds are usually present; the sulfur content varies from about 0.1 to 5 percent.
Petroleum contains gaseous, liquid, and solid elements. The consistency of petroleum varies from liquid as thin
as gasoline to liquid so thick that it will barely pour. Small quantities of gaseous compounds are usually
dissolved in the liquid; when larger quantities of these compounds are present, the petroleum deposit is
associated with a deposit of natural gas

Octane, a hydrocarbon found in petroleum, lines are single bonds, black spheres are carbon, white spheres are
hydrogen

Three broad classes of crude petroleum exist: the paraffin types, the asphaltic types, and the mixed-base types.
The paraffin types are composed of molecules in which the number of hydrogen atoms is always two more than
twice the number of carbon atoms. The characteristic molecules in the asphaltic types are naphthenes,
composed of twice as many hydrogen atoms as carbon atoms. In the mixed-base group are both paraffin
hydrocarbons and naphthenes.

Petroleum is a mixture of a very large number of different hydrocarbons; the most commonly found
molecules are alkanes (linear or branched), cycloalkanes, aromatic hydrocarbons, or more complicated
chemicals like asphaltenes. Each petroleum variety has a unique mix of molecules, which define its physical
and chemical properties, like color and viscosity.

The alkanes, also known as paraffins, are saturated hydrocarbons with straight or branched chains which
contain only carbon and hydrogen and have the general formula C nH2n+2 They generally have from 5 to 40
carbon atoms per molecule, although trace amounts of shorter or longer molecules may be present in the
mixture.

The alkanes from pentane (C5H12) to octane (C8H18) are refined into gasoline (petrol), the ones from nonane
(C9H20) to hexadecane (C16H34) into diesel fuel and kerosene (primary component of many types of jet fuel), and
the ones from hexadecane upwards into fuel oil and lubricating oil. At the heavier end of the range, paraffin
wax is an alkane with approximately 25 carbon atoms, while asphalt has 35 and up, although these are usually
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cracked by modern refineries into more valuable products. Any shorter hydrocarbons are considered natural
gas or natural gas liquids.

The cycloalkanes, also known as napthenes, are saturated hydrocarbons which have one or more carbon
rings to which hydrogen atoms are attached according to the formula C nH2n. Cycloalkanes have similar
properties to alkanes but have higher boiling points.

The aromatic hydrocarbons are unsaturated hydrocarbons which have one or more planar six-carbon rings
called benzene rings, to which hydrogen atoms are attached with the formula CnHn. They tend to burn with a
sooty flame, and many have a sweet aroma. Some are carcinogenic.

These different molecules are separated by fractional distillation at an oil refinery to produce gasoline, jet
fuel, kerosene, and other hydrocarbons. For example 2,2,4-trimethylpentane (isooctane), widely used in
gasoline, has a chemical formula of C8H18 and it reacts with oxygen exothermically:

The amount of various molecules in an oil sample can be determined in laboratory. The molecules are typically
extracted in a solvent, then separated in a gas chromatograph, and finally determined with a suitable detector,
such as a flame ionization detector or a mass spectrometer.

Incomplete combustion of petroleum or gasoline results in production of toxic byproducts. Too little oxygen
results in carbon monoxide. Due to the high temperatures and high pressures involved, exhaust gases from
gasoline combustion in car engines usually include nitrogen oxides that are responsible for creation of
photochemical smog.

FORMATION OF PETROLEUM

Petroleum is formed under Earth’s surface by the decomposition of marine organisms. The remains of tiny
organisms that live in the sea—and, to a lesser extent, those of land organisms that are carried down to the sea
in rivers and of plants that grow on the ocean bottoms—are enmeshed with the fine sands and silts that settle to
the bottom in quiet sea basins. Such deposits, which are rich in organic materials, become the source rocks for
the generation of crude oil. The process began many millions of years ago with the development of abundant
life, and it continues to this day. The sediments grow thicker and sink into the seafloor under their own weight.
As additional deposits pile up, the pressure on the ones below increases several thousand times, and the
temperature rises by several hundred degrees. The mud and sand harden into shale and sandstone; carbonate
precipitates and skeletal shells harden into limestone; and the remains of the dead organisms are transformed
into crude oil and natural gas.

Once the petroleum forms, it flows upward in Earth’s crust because it has a lower density than the brines
that saturate the interstices of the shales, sands, and carbonate rocks that constitute the crust of Earth. The crude
oil and natural gas rise into the microscopic pores of the coarser sediments lying above. Frequently, the rising
material encounters an impermeable shale or dense layer of rock that prevents further migration; the oil has
become trapped, and a reservoir of petroleum is formed. A significant amount of the upward-migrating oil,
however, does not encounter impermeable rock but instead flows out at the surface of Earth or onto the ocean
floor. Surface deposits also include bituminous lakes and escaping natural gas.

Geologists view crude oil and natural gas as the product of compression and heating of ancient organic
materials (i.e. kerogen) over geological time. Formation of petroleum occurs from hydrocarbon pyrolysis, in a
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variety of mostly endothermic reactions at high temperature and/or pressure. Today's oil formed from the
preserved remains of prehistoric zooplankton and algae, which had settled to a sea or lake bottom in large
quantities under anoxic conditions (the remains of prehistoric terrestrial plants, on the other hand, tended to
form coal). Over geological time, the organic matter mixed with mud, and was buried under heavy layers of
sediment resulting in high levels of heat and pressure (known as diagenesis). This caused the organic matter to
chemically change, first into a waxy material known as kerogen that is found in various oil shales around the
world, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis.

Geologists often refer to the temperature range in which oil forms as an "oil window"—below the minimum
temperature oil remains trapped in the form of kerogen, and above the maximum temperature, the oil is
converted to natural gas through the process of thermal cracking. Although this temperature range is found at
different depths below the surface throughout the world, a typical depth for the oil window is 4–6 km.
Sometimes, oil that is formed at extreme depths may migrate and become trapped at much shallower depths
than where it was formed. The Athabasca Oil Sands is one example of this.

Crude oil reservoirs. Three conditions must be present for oil

Structural Trap (Anticlinal)
reservoirs to form: a source rock rich in hydrocarbon material buried
deep enough for subterranean heat to cook it into oil; a porous and
permeable reservoir rock for it to accumulate in; and a cap rock (seal)
or other mechanism that prevents it from escaping to the surface.
Within these reservoirs, fluids will typically organize themselves like
a three-layer cake with a layer of water below the oil layer and a layer
of gas above it, although the different layers vary in size between
reservoirs.

Because most hydrocarbons are lighter than rock or water, they often migrate upward through adjacent rock
layers until either reaching the surface or becoming trapped within porous rocks (known as reservoirs) by
impermeable rocks above. However, the process is influenced by underground water flows, causing oil to
migrate hundreds of kilometres horizontally, or even short distances downward before becoming trapped in a
reservoir. When hydrocarbons are concentrated in a trap, an oil field forms, from which the liquid can be
extracted by drilling and pumping.

The reactions that produce oil and natural gas are often modeled as first order breakdown reactions, where
hydrocarbons are broken down to oil and natural gas by a set of parallel reactions, and oil eventually breaks
down to natural gas by another set of reactions. The latter set is regularly used in petrochemical plants and oil
refineries.

Non-conventional oil reservoirs. Oil-eating bacteria biodegrades oil that has escaped to the surface. Oil
sands are reservoirs of partially biodegraded oil still in the process of escaping and being biodegraded, but they
contain so much migrating oil that, although most of it has escaped, vast amounts are still present—more than
can be found in conventional oil reservoirs. The lighter fractions of the crude oil are destroyed first, resulting in
reservoirs containing an extremely heavy form of crude oil, called crude bitumen in Canada, or extra-heavy
crude oil in Venezuela. These two countries have the world's largest deposits of oil sands.

On the other hand, oil shales are source rocks that have not been exposed to heat or pressure long enough to
convert their trapped hydrocarbons into crude oil. Technically speaking, oil shales are not really shales and do
not really contain oil, but are usually relatively hard rocks called marls containing a waxy substance called
kerogen. The kerogen trapped in the rock can be converted into crude oil using heat and pressure to simulate
natural processes. The method has been known for centuries and was patented in 1694 under British Crown
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Patent No. 330 covering, "A way to extract and make great quantityes of pitch, tarr, and oyle out of a sort of
stone." Although oil shales are found in many countries, the United States has the world's largest deposits.

Abiogenic origin. The hypothesis of abiogenic petroleum origin is an alternative hypothesis to the biological
origin theory that was popular in Russia and Ukraine between the 1950s and 1980s. Most petroleum geologists
do not consider it to be of commercial value.

The hypothesis states that natural petroleum was formed from deep carbon deposits, perhaps dating to the
formation of the Earth. The presence of methane on Titan is held as evidence. Supporters of the abiogenic
hypothesis suggest that there may be a great deal more petroleum on Earth than commonly thought, and that
petroleum may originate from carbon-bearing fluids which migrate upward from the mantle.

Although some geologists in the former Soviet Union accepted the abiogenic hypothesis, most geologists
now consider the biogenic formation of petroleum to be supported scientifically. Though evidence exists for
abiogenic creation of methane and hydrocarbon gases within the Earth, studies indicate that they are not
produced in commercially significant quantities (ie median abiogenic hydrocarbon content in extracted
hydrocarbon gases of only one fiftieth of one percent). Glasby, who raises a number of objections, including that
there is no direct evidence to date of abiogenic petroleum (liquid crude oil and long-chain hydrocarbon
compounds), has also recently reviewed the abiogenic origin of petroleum in detail.

CLASSIFICATION OF PETROLEUM

The petroleum industry generally classifies crude oil by the geographic location it
is produced in (e.g. West Texas, Brent, or Oman), its API gravity (an oil industry
measure of density), and by its sulfur content. Crude oil may be considered light if
it has low density or heavy if it has high density; and it may be referred to as sweet
if it contains relatively little sulfur or sour if it contains substantial amounts of
sulfur.

The geographic location is important because it affects transportation costs to the

refinery. Light crude oil is more desirable than heavy oil since it produces a higher
yield of gasoline, while sweet oil commands a higher price than sour oil because it
has fewer environmental problems and requires less refining to meet sulfur
A sample of medium heavy crude standards imposed on fuels in consuming countries. Each crude oil has unique
oil from Haenigsen, Germany. molecular characteristics that are understood by the use of crude oil assay analysis
in petroleum laboratories.

Barrels from an area in which the crude oil's molecular characteristics have been determined and the oil has
been classified are used as pricing references throughout the world. Some of the common reference crudes are:

• West Texas Intermediate (WTI), a very high-quality, sweet, light oil

delivered at Cushing, Oklahoma for North American oil
• Brent Blend, comprising 15 oils from fields in the Brent and Ninian
systems in the East Shetland Basin of the North Sea. The oil is landed at
Sullom Voe terminal in the Shetlands. Oil production from Europe, Africa
and Middle Eastern oil flowing West tends to be priced off the price of
this oil, which forms a benchmark
• Dubai-Oman, used as benchmark for Middle East sour crude oil flowing
to the Asia-Pacific region
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• Tapis (from Malaysia, used as a reference for light Far East oil)
• Minas (from Indonesia, used as a reference for heavy Far East oil)
• The OPEC Reference Basket, a weighted average of oil blends from various OPEC (The Organization of
the Petroleum Exporting Countries) countries

There are declining amounts of these benchmark oils being produced each year, so other oils are more
commonly what is actually delivered. While the reference price may be for West Texas Intermediate delivered at
Cushing, the actual oil being traded may be a discounted Canadian heavy oil
delivered at Hardisty, Alberta, and for a Brent Blend delivered at the Shetlands, Clangnuts: Brent Crude Cartoon
it may be a Russian Export Blend delivered at the port of Primorsk

KEY INGREDIENTS FOR PETROLEUM ACCUMULATION

PETROLEUM CHARGE RESOURCE

There are several ‘ingredients’ or geological conditions that are prerequisites for every subsurface
accumulation of petroleum. They are petroleum charge, reservoirs, seals, and traps. We will look at each of
these in turn in the following sections.

Petroleum charge is an abstract concept concerning the likelihood that petroleum can form, migrate and
accumulate in a body of sedimentary rocks. It depends on interactions that involve a number of factors, i.e. it
concerns a dynamic system in a sedimentary basin.

An effective petroleum charge system requires:

• A source rock rich in organic debris that could potentially generate liquid and/ or gaseous hydrocarbons –
petroleum;
• Changes in temperature and pressure through time that induce the organic debris to undergo chemical
reactions that produce petroleum fluids: the source rock must mature;
• A pathway along which petroleum fluids can migrate. As hydrocarbons are less dense than water they
migrate upwards, and sometimes sideways toward the Earth's surface, through water-saturated permeable
rocks;
• An impermeable rock or seal, somewhere along the migration pathway, beneath which the hydrocarbons
can become trapped.

If all these factors combine, then hydrocarbons start to fill up or charge the pore spaces in a reservoir rock.
To understand petroleum charge geoscientists need to consider the nature of source rocks, maturation and its
timing, and migration, and we will look at each of these in turn.

Source rocks. Source rocks are sediments that contain sufficient organic matter to generate petroleum when
they are buried and heated. Under normal conditions very little dead plant and animal tissue is preserved in
sediments. Higher concentrations tend to occur only in environments where there is unusually high productivity
of organic matter, such as in coastal upwellings, shallow seas, mires and lakes. Even then, the organic matter
reaching the sediment–water interface must be protected from scavengers or aerobic bacteria. If not, these
microorganisms use enzymes to digest and oxidise most of the organic matter completely to produce carbon
dioxide and water. Under these circumstances there is clearly no potential for the sediments to preserve
sufficient hydrocarbons to constitute a source rock.
 11

The preservation of organic matter under reducing conditions is a common factor underlying the formation
of both petroleum source rocks and coal. However, most petroleum source rocks form under water, unlike coals
that are almost entirely products of organic accumulations at the land surface, albeit in very wet conditions.
Note that coal does generate methane and coal deposits have given rise to natural gas resources, for instance
those beneath the southern North Sea. So coal can be a petroleum source rock, but usually for gas fields.
Petroleum source rocks can form on the beds of freshwater lakes and brackish lagoons, but the most important
ones are marine.

There have been prolonged but isolated periods in the geological past when ocean water did not circulate as
it does now. Under these conditions oxygen did not reach the sea floor, leading to widespread anoxia there.
Decomposition by anaerobic bacteria involves chemical processes of reduction that produce methane and
hydrogen, along with hydrogen sulphide, carbon dioxide and water, but leave a residue of organic compounds
that are enriched in carbon and have high molecular weight. If enough organic matter has been buried, this leads
to a concentration of hydrocarbons within the source rock. Since anoxia is characterised by stagnant water –
currents would bring in oxygen – source rocks are products of very low energy deposition.

Anoxic conditions can also occur on a smaller scale where water circulation is restricted. For example, the
present-day Oslo Fjord, Norway has an anoxic bottom layer because a shallow lip of rock prevents water from
the Skagerrak from circulating around the fjord. The bottom waters of the Black Sea are also strongly reducing
because it is essentially a stagnant saline lake.

Another setting that encourages preservation of organic matter is provided by shallow, often land-locked
seas in tropical or subtropical latitudes. Evaporation produces a highly saline surface water layer that is denser
than the underlying water column and so it sinks to form a salty layer immediately above the sea floor. Organic
material derived from plants and animals that thrive in the normally saline water column sinks onto the salty sea
bed. Here it remains undisturbed as only rather specialised bacteria survive in this environment. The Dead Sea
is a modern example of such a system.

Kerogen. Organic material in buried sediments is called kerogen, a word derived from the Greek for ‘wax
producer’. The concentration of kerogen in a potential source rock is usually expressed in terms of the
percentage, by weight, of organic carbon in the rock. Rocks with more than 0.5% organic carbon may be
effective source rocks, but prolific source rocks have more than 5% and occasionally much higher
concentrations of kerogen. The world's first commercial petroleum products to be created on a large scale – in
1850 – were from black ‘oil shales’ that outcrop in the Scottish Midland Valley. These shales, or mudstones,
contain more than 15% of kerogen, and when heated in sealed vessels by James ‘Paraffin’ Young they yielded
the light liquid hydrocarbons from which he got his nickname.

Conventionally, kerogen is subdivided into four main types on the basis of its chemical composition, which
reflects its original source material. Each type has characteristic ratios of carbon, hydrogen, and oxygen and
they each generate contrasting petroleum products when they mature. Type I kerogen, is comparatively rare as
it is derived mainly from algal sources in lake and/or lagoonal environments: the Scottish Midland Valley ‘oil
shales’ used by ‘Paraffin’ Young contain kerogen of this kind. Type II kerogen, the most abundant, is typically
derived from plant debris, phytoplankton and bacteria in marine sediments; it is the common source of crude oil
but also yields some natural gas. Type III kerogen comes mainly from remains of land plants found in coals and
it principally generates natural gas. Type IV kerogen includes oxidised plant remains and fragmentary charcoal
derived from forest fires; it has virtually no petroleum potential being devoid of hydrogen.
 12

Characteristics of the main types of kerogen.

Box 1 summarises some of the characteristics of the Kimmeridge Clay (150 Ma), which is a mudstone
sequence of Upper Jurassic age that is widespread in northern Europe. This world-class source rock is the
primary reason why there is a North Sea oil industry.

Box 1: Kerogen in the Kimmeridge Clay formation.

The Kimmeridge Clay Formation is the most important source rock for North Sea oil deposits.
It has an average organic carbon content of 5%, rising to 20–30% in the richest ‘oil shales’ that
outcrop along the coasts of Yorkshire and Dorset in England (Figure 3a). It has an H:C ratio
varying from 0.9 to 1.2.

Bacterially degraded marine algae and degraded humic matter and woody debris of land
origin make up about 75% of the total carbon content. Other marine algae, land-plant spores and
oxidised land-plant fragments form the remainder. The relative proportion of these constituents
varies widely according to the depositional setting of the mudstones. The most organic-rich
intervals developed in deeper basins where the highly anoxic bottom waters and high
sedimentation rates favoured organic preservation.
PETROLEUM CHRAGE RESOURCE (continued)

Maturation. The process of biological, physical and chemical alteration of kerogen into petroleum is known
as maturation. Source rocks that experience the right conditions for these processes and can generate petroleum
are termed mature. Maturation begins within an organic-rich sedimentary layer while it is being deposited. Here
a series of low-temperature reactions that involve anaerobic bacteria reduce the oxygen, nitrogen and sulphur in
the kerogen, leading to an increased concentration of hydrocarbon compounds. This stage continues until the
source rock reaches about 50 °C. Thereafter the effect of elevated temperatures becomes much more
pronounced as the reaction rates and solubility of some of the organic compounds increase.

Since temperature increases with depth in the Earth, heating is naturally achieved by burial of the source
rock. The actual temperature reached at a given depth depends on the rate of increase of temperature with depth,
the geothermal gradient. Significant amounts of petroleum only begin to form at temperatures over 50 °C and
the largest quantity of petroleum is formed as the kerogen is heated to temperatures between 60 and 150 °C. At
still higher temperatures oil becomes thermally unstable and breaks down or ‘cracks’ to natural gas. Even after
maturation, some of the kerogen remains unaltered as a carbon-rich residue.
 13

The relationship between depth of burial,

temperature and the relative amount of crude oil
and natural gas formed from Type II kerogen in
an area with a geothermal gradient of about 35
°C km−1.

The most important factors in maturation studies are the amount and type of kerogen, the temperature and
time. Maturation rates generally increase exponentially with respect to temperature (up to a point) and linearly
with respect to time. Thus crude oil can form in old basins with low geothermal gradients (‘cold’) as well as in
young basins where the geothermal gradient is high (‘hot’). However, it cannot form in young, cold basins
except in trace amounts. It is usually destroyed in old, hot basins, assuming that subsidence has been
continuous, because temperature eventually rises to a point where all kerogen and any crude oil formed earlier
has been converted into gas.

The source rocks in the Paris Basin, the North Sea Viking Graben and the Los Angeles Basin are different in
terms of age and composition, and each has been subjected to differing burial histories. The point at which
petroleum generation starts is known as the threshold, and this was reached after 40 million years in the Paris
Basin (i.e. about 140 million years ago) when Early Jurassic (175 Ma) source rocks were buried to a depth of
1400 m. In contrast, it took some 80 million years before the Kimmeridgian (150 Ma) source rocks in the
Viking Graben started to generate petroleum during early Tertiary times.

Reconstruction of burial histories of rocks from

three basins; the Paris Basin in northern
France, the Viking Graben in the northern North
Sea and the Los Angeles Basin in the USA.

Migration. Migration refers to the movement of fluid petroleum through rocks. This process begins with
primary migration, i.e. the expulsion of petroleum from the source rock. The driving force for this process is the
pressure difference caused by the loading effect of overlying rocks. Overburden loading preferentially compacts
mudstones, making it difficult for fluids within them to escape. As a result, pressure builds up in them until it is
 14

sufficient to drive the water and petroleum into adjacent rocks that are at a lower pressure because they are more
permeable. In the context of water resources, these rocks would be termed aquifers, and at depth they would
inevitably be saturated with water, but in petroleum parlance they are reservoir rocks.

(a) A potential Jurassic source rock exposed in Dorset, the Kimmeridge Clay, whose black colour is due to high kerogen
content. (b) A potential Jurassic reservoir rock exposed in Dorset, the Bridport Sand. (c) Migration of petroleum out of a
source rock and upwards through a reservoir to a trap.

Once expelled from the source rock, buoyancy takes petroleum (both liquid and gas) from depth up towards
the surface of the Earth because it is less dense than pore water and ‘floats’ on top of it in the reservoir rock.
This is known as secondary migration, and its effectiveness depends on the permeability of the reservoir rocks
and the density and viscosity of the petroleum fluids flowing through them. At that point they segregate
according to their density; gas is lighter so it will pool immediately beneath the permeability barrier, whereas oil
is heavier and will accumulate beneath the gas. Rocks beneath will be saturated with pore water. Secondary
migration serves to concentrate petroleum and by the time it reaches the trap it can occupy more than 90% of
the pore volume in the reservoir.

Timing of the petroleum charge relative to the formation of a trap is critical, simply because a trap has to
pre-date petroleum migration in order for an accumulation to develop: migration before suitable traps have
formed would ultimately result in all petroleum escaping at the Earth's surface. The horizontal impermeable
layer both truncated and sealed the dipping reservoir rocks, creating a trapping configuration, before migration
occurred; otherwise the petroleum could not have been trapped.

As discussed above, petroleum generation may occur only a few million years after the source rock was
deposited or tens of millions of years later, depending on the rate of burial and the geothermal gradient. An
understanding of basin evolution is vital in this context, not only to determine when potential traps were
formed, but to assess the degree to which they were subsequently filled, and the chances of petroleum having
escaped.

RESERVOIR ROCKS RESOURCE

Reservoir rocks. The properties of a petroleum reservoir rock are very similar to those of an aquifer since
both petroleum and water can be contained within and move between its pore spaces and fractures. Sedimentary
rocks that are well cemented have only small voids between grains and hence low porosity.

Which sedimentary rock type is most likely to be a potential reservoir rock? The most porous reservoir
rocks are generally well-sorted, poorly cemented sandstones, and these make up some of the most important
petroleum reservoirs around the world.

Migrating waters can increase porosity and permeability by dissolving the cement that holds the grains
together and widening small fractures that run through the rock. This effect is often enhanced if the waters are
 15

slightly acidic. Many limestones are well cemented and therefore have low porosity, but the calcium carbonate
(CaCO3) that makes up the grains and cement is soluble in weakly acidic water. Consequently limestones can
form good reservoirs, and in fact limestones hold 40% of the world's resources of petroleum.

The essential properties that describe a reservoir rock are porosity (the void space expressed as a percentage)
and permeability (a measure of the degree to which fluid passes through it, measured in millidarcies, mD).
Another property that is commonly used is the ratio of porous and permeable (net) intervals to the overall
reservoir (gross) thickness. This is referred to as net to gross and it is important because it recognises that most
sandstone and limestone reservoirs are not entirely homogeneous, but contain intervals or strata that less readily
allow fluid flow.

To put these properties in context, In the reservoir data for 20 oil and gas fields in the North Sea. Note the
very wide range of net to gross and permeability values, despite the fact that most of the reservoirs are of the
same (sandstone) type. Porosities are typically in the range 15–30%, but the more telling parameter is
permeability because that largely determines petroleum flow rates. Permeability cut-offs of 1 mD for gas and 10
mD for light oil are often used as a rule-of-thumb for productive reservoirs; less permeable rocks are not usually
capable of sustaining commercial flow rates. Notice also that one of the two Cretaceous Chalk reservoirs in the
Ekofisk field exhibits chalk's characteristic properties of high porosity and low permeability – the latter results
from very small channels that connect the pores between the tiny calcareous plankton shells that form chalky
sediments. The other chalk reservoir in Ekofisk has higher permeability because it has been fractured
tectonically

Properties of
reservoirs within
North Sea oil and gas
fields. Note: A
formation is a
distinctive sequence
of sedimentary rocks
in a particular field.
 16

SEALS RESOURCE

Above permeable reservoir rocks there must be an impermeable layer (known as a seal or cap rock) to stop
migrating petroleum from rising further towards the surface of the Earth. Seals are fine-grained or crystalline,
low-permeability rocks such as mudstone, anhydrite and salt. Rock salt is by far the most effective seal, because
it is crystalline and therefore impermeable. Seals are also enhanced if they are ductile (ductile deformation
prevents the formation of open fractures and joints), substantially thick and laterally continuous; little surprise
then that the largest oil fields in the Middle East are sealed by evaporites with these characteristics.

However, seals are rarely, if ever, perfect. Hydrocarbons can migrate through almost all rock types, but at
different rates that depend upon any fracturing and microscale fluid flow, and whether liquids adhere to or are
repelled by the surfaces of mineral grains. Many oil and gas fields have active surface seeps of petroleum
overlying them that provide a direct indication as to their location. In marine settings, seeps may be detected as
bubbles of gas rising from the seabed, or as an oily sheen on the water. On land, plant communities are stunted,
surface layers of rock and soil may be altered, tarry residues may encrust the surface, and sometimes there may
be active oil seeps. The first oil fields to be developed in the 19th century were located beneath such obvious
features. It is thought that ignition (by lightning strikes) of petroleum escaping above the huge oilfields of Iran
gave rise to the fire-worshipping Zoroastrian religion. Even odder, the Ancient Greek Oracle at Delphi is
thought to have made her prognostications while hallucinating under the influence of escaping natural
petroleum gas.

TRAPS RESOURCE

Petroleum that accumulated as a thin layer at the top of an extensive horizontal reservoir would be
uneconomic to extract. That is because many wells, each with only a small rate of production and lifetime,
would be needed to extract the petroleum. To be worth working, a sealed petroleum-bearing ‘container’ or trap
must be shaped naturally to retain and focus petroleum, rather as the curved upper surface of a balloon traps
buoyant hot air. The lower surface of a trap is defined either by a petroleum–water contact or sometimes by
another seal.

There are many different styles of trap but the most common are structural traps in the form of anticlines
produced by tectonic processes, by differential compaction of soft rocks above hard, irregular surfaces and by
evaporitic salt masses that rise gravitationally. The low density of salt, combined with its ductility, enables it to
rise to form domes and intrusive masses. Because they produce distinctive geological and geophysical features,
structural traps are the easiest to find.

Types of traps. Types A to E

are explained in the text. A–C
are structural traps, D is a
stratigraphic trap and E is a
combination trap.
 17

About 80% of the world's petroleum reserves are held in structural traps. They include simple anticlines,
faulted structures that juxtapose reservoirs against seals, and traps created at the flank of a salt dome or in the
compaction anticline above it. Most fields in the North Sea occur in structural traps.

Stratigraphic traps result from lateral changes in rock type and typically consist of discontinuous sandstone
bodies encased in mudstone. Sometimes referred to as ‘subtle traps’, they currently contain about 13% of the
world's petroleum reserves, but much of the remaining undiscovered petroleum will probably be found in these
settings because the more obvious structural traps have long since been exploited.

In practice, traps often form through a sequence of different processes over the course of tens of millions of
years. For example, in E the reservoir was first deposited, then folded, uplifted and eroded, before being
overlain by a much younger impermeable mudstone. The resulting configuration is appropriately called a
combination trap. Provided it was intact before the reservoir received a petroleum charge, it forms a valid trap
regardless of how long it took to form.

As petroleum accumulation continues, it is possible for traps to fill beyond their natural spill-point, when
petroleum can escape sideways to re-migrate to other traps or to the Earth's surface where it emerges as oil or
gas seeps.

COMBINING THE INGREDIENTS RESOURCE

Having examined the essential ingredients for a petroleum accumulation. This is a particularly useful
concept, since it consolidates what is known (or not known) about the petroleum potential of a particular level
within a basin and forms the basic strategy for oil and gas exploration. A play is defined as a perception or
model of how a petroleum charge system, reservoir, seal, and trap may combine to produce petroleum
accumulations at a specific stratigraphic level. By examining whether each of the play ingredients is both
present and effective, it is possible to define parts of a basin where petroleum accumulations can reasonably be
expected to exist. This process can be conducted systematically in a given area to generate a play fairway map
that depicts where the ingredients coexist, even though the precise details of trap location and size may not be
known. As more data become available, the play becomes better defined, but even when the play is proven by a
discovery, it does not imply that every trap within the same fairway will contain a petroleum accumulation. It is
in the nature of exploration that more often than not geoscientists are wrong with their predictions, but this
approach at least helps to reduce their uncertainty.

Upper Jurassic petroleum

plays of the North Sea

There are two play types: the Kimmeridgian–Volgian deep marine play and the slightly older Oxfordian–
Volgian shallow marine play. Whilst the depositional settings for the two reservoir types are quite different,
both plays share the same petroleum charge, seal and trap ingredients. Importantly, notice that the onset of
petroleum generation comfortably post-dates trap formation. For simplicity, the two plays can be combined and
their distribution plotted to create an Upper Jurassic play fairway map. This illustrates the close correspondence
between the limit of mature Upper Jurassic Kimmeridge Clay source rocks and the fairway, such that the
 18

migration pathways between the two are short (less than 15 km) and highly permeable. More than 60 Upper
Jurassic fields have been discovered to date beneath the North Sea. They have combined oil reserves of about
2.5×109 toe (tonnes of oil equivalent) and account for 23% of total North Sea production.

The Upper Jurassic play fairway in the North

Sea. Beyond the mapped fairway limits one or
more of the key ingredients of the play, for
instance suitable traps, seals or reservoir rocks,
are missing and therefore it is unlikely that
Upper Jurassic petroleum discoveries will be
made there. The golfing analogy of staying
within the fairway in order to be successful
seems particularly appropriate in the context of
exploration.

PETROLEUM INDUSTRY

The petroleum industry includes the global processes of exploration, extraction, refining, transporting
(often by oil tankers and pipelines), and marketing petroleum products. The largest volume products of the
industry are fuel oil and gasoline (petrol). Petroleum is also the raw material for many chemical products,
including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into
three major components: upstream, midstream and downstream. Midstream operations are usually included in
the downstream category.

Petroleum is vital to many industries, and is of importance to the maintenance of industrialized civilization
itself, and thus is a critical concern to many nations. Oil accounts for a large percentage of the world’s energy
consumption, ranging from a low of 32% for Europe and Asia, up to a high of 53% for the Middle East. Other
geographic regions’ consumption patterns are as follows: South and Central America (44%), Africa (41%), and
North America (40%). The world at large consumes 30 billion barrels (4.8 km³) of oil per year, and the top oil
consumers largely consist of developed nations. In fact, 24% of the oil consumed in 2004 went to the United
States alone. The production, distribution, refining, and retailing of petroleum taken as a whole represent the
single largest industry in terms of dollar value on earth.

Oil industry the business of discovering oil ( petroleum ), extracting it from the ground, refining it into a
variety of products, and distributing it to the public. The development of the oil industry in the 19th and 20th
cent. provided a source of energy that now supplies about two fifths of the world's energy needs as well as a raw
material that chemical and petroleum industries refine into a number of essential chemicals and industrial
products.

Early History. Petroleum seeping out of underground reservoirs has been collected and used for light
throughout recorded history. In the 4th cent. AD the Chinese drilled for oil and natural gas, but in the 1850s, oil
was still being recovered by skimming it off the tops of ponds. As whale oil became less abundant, producers
looked for new ways to extract oil. Edwin Drake dug the first modern oil well in Titusville, Pa, hitting oil at
69.5 ft (21.2 m), touching off an oil rush in the area. (Most modern wells go down over 4,700 ft (1,432 m).) In
1861 the first oil refinery was set up.
 19

Development of the Modern Industry. During the late 19th cent., many of the modern oil companies were
created: John D. Rockefeller invested in a Cleveland oil refinery during the Civil War and in 1870 created
Standard Oil, which refined about 95% of the United States' oil in 1880. In 1911, Standard Oil was declared an
illegal monopoly and split into 34 companies, including Esso (renamed Exxon in 1972), Mobil, Chevron,
Atlantic Richfield (later ARCO), and Amoco. Texaco (founded in 1902), Shell (1907), and British Petroleum
(1909) were also established in this period. As the auto industry vastly increased the demand for gasoline
refined from oil, oil companies expanded their search for new reserves. In the 1930s oil companies began
exploiting a huge E Texas oil field that would eventually produce 4 billion barrels of oil. Chevron, Texaco,
Exxon, and Mobil expanded their reserves by purchasing the rights to the extensive Saudi Arabian oil fields for
only $50,000. In 1946 oil replaced coal as the world's most popular energy source.

Late-Twentieth-Century and Early-Twenty-First-Century Developments. In 1960 the Organization of

Petroleum Exporting Countries (OPEC) was formed. Over the next decade, OPEC required that the major oil
companies provide them with a larger percentage of the profits from their fields. After the oil embargo in 1973,
OPEC boosted prices to $35 a barrel in 1981. The resulting energy crisis forced many developing countries to
pay more for energy, negatively affecting Third World debt; industrialized countries implemented new measures
to conserve and develop new sources of energy. Some new oil fields in Alaska and the North Sea were
developed, boosting the world's oil reserves from 645.8 billion barrels in 1978 to 1,052.9 billion barrels in 1998.
With an abundant supply, oil prices dropped and stayed low through the 1990s, until 1999 when OPEC
announced that it would cut production in order to increase oil prices worldwide. With the help of non-OPEC
oil-producing nations, the organization was subsequently generally able to maintain prices between $20 and $30
a barrel, and world events and demand have driven prices significantly higher.

Economies dependent on oil production remain

subject to the gyrations of the market. The collapse of oil
prices in the mid-1980s ruined many independent refiners
and helped produce a recession in such states as Texas; it
also hurt Mexico, Venezuela, and other oil-producing
nations. In contrast, the rise in oil prices since 1999 has
been responsible for economic growth in Russia,
Venezuela, and other oil producers. Improved recovery
methods combined with higher prices that justify more
expensive extraction costs have rejuvenated production in
some older oil fields, increased the estimates of reserves in
existing fields, and made feasible the exploitation of
deposits once considered uneconomical.
Ten-day moving average of prices of NYMEX Light Sweet
Crude, taken from data at the New Mexico Institute of Many oil-producing nations in the Middle East and
Mining and Technology Latin America have set up their own refining operations
since the 1970s, and state-owned oil companies in OPEC
countries are now among the world's largest. Many large oil companies have diversified into chemicals, and oil
prices are increasingly set on commodity trading exchanges such as the New York Mercantile Exchange.
Beginning in the late 1990s, the industry saw increased consolidation as already large oil companies merged
with each other, including Exxon (the largest U.S. oil company) with Mobil (the second largest; forming
ExxonMobil), Chevron with Texaco and Unocal as Chevron, British Petroleum with Amoco and ARCO as BP,
and Conoco with Phillips Petroleum as ConocoPhillips.

In the Industry structure, American Petroleum Institute divides the petroleum industry into five sectors:
 20

• Upstream (exploration, development and production of crude oil or natural gas),

• Downstream (oil tankers, refiners, retailers, and consumers),
• Pipeline,
• Marine, and
• Service and Supply.

Oil companies can also be categorized as "Supermajors" (BP, Chevron, ExxonMobil, ConocoPhillips, Shell
and Total S.A.), "majors," and "independents" or "jobbers." Most upstream work in the oil field or on an oil
well is contracted out to drilling contractors and oil field service companies.

PETROLEUM EXPLORATION

EXTRACTION

The extraction of petroleum is the process by which usable petroleum is extracted and removed from the
earth.

Locating the oil field. Nowadays, geologists use seismic surveys

to search for geological structures that may form oil reservoirs. The
"classic" method includes making underground explosion nearby and
observing the seismic response that provides information about the
geological structures under the ground. However, "passive" methods that
extract information from naturally-occurring seismic waves are also
known.

Other instruments such as gravimeters and magnetometers are also

sometimes used in the search for petroleum. When extracting crude oil, it
normally starts by drilling wells into the underground reservoir. When an
oil well has been tapped, a geologist (known on the rig as the
"mudlogger") will note its presence.

Historically, in the USA, some oil fields existed where the oil rose
naturally to the surface, but most of these fields have long since been
used up, except certain places in Alaska. Often many wells (called
multilateral wells) are drilled into the same reservoir, to ensure that the
extraction rate will be economically viable. Also, some wells (secondary
wells) may be used to pump water, steam, acids or various gas mixtures
multilateral horizontal wells reaching out to into the reservoir to raise or maintain the reservoir pressure, and so
maximize oil recovery maintain an economic extraction rate.

Oil extraction and recovery (primary recovery). If the underground pressure in the oil r eservoir is
sufficient, then this pressure will force the oil to the surface. Gaseous fuels, natural gas or water are usually
present, which also supply needed underground pressure. In this situation, it is sufficient to place a complex
arrangement of valves (the Christmas tree) on the well head to connect the well to a pipeline network for
storage and processing.

Usually, about 20% of the oil in a reservoir can be extracted using primary recovery methods.
 21

Oil extraction and recovery (secondary recovery). Over the lifetime of the well the pressure will fall, and at
some point there will be insufficient underground pressure to force the oil to the surface. If economical, as often
is, the remaining oil in the well is extracted using secondary oil recovery methods.

Secondary oil recovery uses various techniques to aid in recovering oil from depleted or low-pressure
reservoirs. Sometimes pumps, such as beam pumps and electrical submersible pumps (ESPs), are used to bring
the oil to the surface. Other secondary recovery techniques increase the reservoir's pressure by water injection,
natural gas reinjection and gas lift, which injects air, carbon dioxide or some other gas into the reservoir.

Together, primary and secondary recovery generally allow 25% to 35% of the reservoir's oil to be recovered.

Oil extraction and recovery (tertiary recovery). Tertiary oil recovery reduces the oil's viscosity to increase
oil production. Thermally enhanced oil recovery methods (TEOR) are tertiary recovery techniques that heat the
oil and make it easier to extract. Steam injection is the most common form of TEOR, and is often done with a
cogeneration plant. In this type of cogeneration plant, a gas turbine is used to generate electricity and the waste
heat is used to produce steam, which is then injected into the reservoir. This form of recovery is used
extensively to increase oil production in the San Joaquin Valley, which has very heavy oil, yet accounts for 10%
of the United States' oil production. In-situ burning is another form of TEOR, but instead of steam, some of the
oil is burned to heat the surrounding oil. Occasionally, detergents are also used to decrease oil viscosity as a
tertiary oil recovery method.

Another method to reduce viscosity is carbon dioxide flooding.

Tertiary recovery allows another 5% to 15% of the reservoir's oil

to be recovered.

Tertiary recovery begins when secondary oil recovery isn't

enough to continue adequate production, but only when the oil can
still be extracted profitably. This depends on the cost of the
extraction method and the current price of crude oil. When prices
are high, previously unprofitable wells are brought back into
production and when they are low, production is curtailed.

Recovery rates. The amount of oil that is recoverable is

determined by a number of factors including the permeability of Phase diagram of carbon dioxide
the rocks, the strength of natural drives (the gas present, pressure
from adjacent water or gravity), and the viscosity of the oil. When
the reservoir rocks are "tight" such as shale, oil generally cannot flow through but when they are permeable
such as in sandstone, oil flows freely. The flow of oil is often helped by natural pressures surrounding the
reservoir rocks including natural gas that may be dissolved in the oil, natural gas present above the oil, water
below the oil and the strength of gravity. Oils tend to span a large range of viscosity from liquids as light as
gasoline to heavy as tar. The lightest forms tend to result in higher production rates.

ALTERNATIVE METHODS

During the oil price increases since 2003, alternative methods of producing oil gained importance. The most
widely known alternatives involve extracting oil from sources such as oil shale or tar sands. These resources
exist in large quantities; however, extracting the oil at low cost without excessively harming the environment
remains a challenge.
 22

It is also possible to chemically transform methane or coal into the various hydrocarbons found in oil. The
best-known such method is the Fischer-Tropsch process. It was a concept pioneered during the 1920s in
Germany to extract oil from coal and became central to Nazi Germany's war efforts when imports of petroleum
were restricted due to war. It was known as Ersatz (English:"substitute") oil, and accounted for nearly half the
total oil used in WWII by Germany. However, the process was used only as a last resort as naturally occurring
oil was much cheaper. As crude oil prices increase, the cost of coal to oil conversion becomes comparatively
cheaper. The method involves converting high ash coal into synthetic oil in a multi-stage process.

Currently, two companies have commercialized their Fischer-

Tropsch technology. Shell Oil in Bintulu, Malaysia, uses natural gas as a
feedstock, and produces primarily low-sulfur diesel fuels. Sasol in South
Africa uses coal as a feedstock, and produces a variety of synthetic
petroleum products.

© Sasol’s company logo. The company Sasol today uses the process in South Africa to
produce most of the country’s diesel fuel from coal. The process was
used in South Africa to meet its energy needs during its isolation under Apartheid. This process produces low
sulfur diesel fuel but also produces large amounts of greenhouse gases.

An alternative method of converting coal into petroleum is the Karrick process, which was pioneered in the
1930s in the United States. It uses low temperatures in the absence of ambient air, to distill the short-chain
hydrocarbons out of coal instead of petroleum.

Oil shale can also be used to produce oil, either through mining and processing, or in more modern methods,
with in-situ thermal conversion.

Conventional crude can be extracted from unconventional reservoirs, such as the Bakken Formation. The
formation is about two miles (3 km) underground but only a few meters thick, stretching across hundreds of
thousands of square miles. It further has very poor extraction characteristics. Recovery at Elm Coulee has
involved extensive use of horizontal drilling, solvents, and proppants.

More recently explored is thermal depolymerization (TDP), a process for the reduction of complex organic
materials into light crude oil. Using pressure and heat, long chain polymers of hydrogen, oxygen, and carbon
decompose into short-chain hydrocarbons. This mimics the natural geological processes thought to be involved
in the production of fossil fuels. In theory, thermal depolymerization can convert any organic waste into
petroleum substitutes.

USES OF PETROLEUM

The chemical structure of petroleum is composed of hydrocarbon chains of different lengths. Because of
this, petroleum may be taken to oil refineries and the hydrocarbon chemicals separated by distillation and
treated by other chemical processes, to be used for a variety of purposes.

Petroleum has been a known commodity through areas of natural seepage to the surface since early man, but
was generally inaccessible to the masses. Its full potential had not yet begun to be realized. Population growth
placed great economic stress on traditional fuels, and rising prices encouraged the search for alternatives.
 23

In 1854, Canadian Abraham Gesner discovered an alternative to whale oil for use in lighting lamps by
distilling kerosene from coal and oil. Edwin Laurentine Drake drilled the first successful oil well in 1859 in
Titusville, Pennsylvania, and created an industry that would go on to make petroleum the most significant single
economic factor to date over the entire history of the world. Industries not possible without petroleum and its
derivatives now dominate world economy.

Petroleum exists within the substrata of the earth in a number of forms depending on the hydrocarbon
source, maturation process, elemental exposure, and the temperature and pressure of the reservoir. Crude oil is
the most common form of petroleum and may range in specific gravity from being as light as 0.73 to being as
heavy as over 1.07. Under standard surface conditions, the lightest crude oil will be a thin liquid of a brown or
brownish-blue/green color, while the
heaviest will be a black solid tar-like
substance. The corresponding physical
properties and chemical compositions also
vary widely and determine which products
may be derived from each specific crude oil
and what refining processes will be most
efficient in doing so.

Gasoline is the primary fuel used to

power internal combustion engines widely
used in vehicles and machines. Jet fuel is
used to power the extremely powerful
engines that drive high performance
aircraft.

Distillates are used to produce lower

Fractional distilation of crude oil and its products
other everyday items.
grade fuels such as kerosene for use as a
heating fuel and diesel fuel for use in
powerful vehicles such as trucks, ships and
industrial machinery. Other even lower
grade fuels are used to provide energy to
industrial processes not requiring the same
combustion quality required by higher
speed engines. Distillates also yield a wide
variety of waxes that are turned into
products used for lining milk cartons, as
water repellant coatings, cosmetics,
electrical insulators, sealants, medicinal
tablet coatings, crayons, candles, and many

Petrochemical feedstock is processed into supplying an ever growing assortment of products such as anti-
freeze, bases for paints, cleaning agents, detergents, dyes, explosives, fertilizers, industrial resins, plastics,
synthetic fibers (nylon, polyester, rayon), synthetic rubber, solvents, thinners, and varnishes. Though all of these
products have helped improve how people live, the impact of plastics is among the most consequential
petroleum products in the civilized world.
 24

Lubricants help overcome friction and are produced in an assortment of greases and oils used to lubricate
moving parts in machinery; pull electrical wire through insulating conduit; lubricate sewing needles, sliding
doors, heavy loads, and surgical medical equipment; and to reduce drag on surf boards as they pass through
water.

Finally, the heavy residue left over is in the form of tar, pitch, and asphalt. Tar and pitch were first
discovered by early man laying in surface seeps or pools, having been cooked off from oil deposits deep within
Earth's surface and was used to seal boats and preserve wood. Today, more refined forms of these heavy
residues are used in much the same way and also to pave roadways.
Petroleum products are useful materials derived from crude oil (petroleum) as it is processed in oil
refineries.

According to crude oil composition and demand, refineries can produce different share s of petroleum
products. Largest share of oil products is used as energy carriers: various grades of fuel oil and gasoline.
Refineries also produce other chemicals, some of which are used in chemical processes to produce plastics and
other useful materials. Since petroleum often contains a couple of percent sulfur, large quantities of sulfur are
also often produced as a petroleum product. Hydrogen and carbon in the form of petroleum coke may also be
produced as petroleum products. The hydrogen produced is often used as an intermediate product for other oil
refinery processes such as hydrogen catalytic cracking (hydrocracking) and hydrodesulfurization.

Major products of oil refineries:

• Petrochemicals (Plastic) • Kerosene

• Asphalt • Liquefied petroleum gas
• Diesel fuel (LPG)
• Fuel oils • Lubricating oils
• Gasoline • Paraffin wax
• Tar

Petrochemicals have a vast variety of uses. They are commonly used as

monomers or feedstocks for monomer production. Olefins such as alpha-olefins
and dienes are often used as monomers, although aromatics can also be used as
Liquified Petroleum Gas monomer precursors. The monomers are then polymerized in various ways to
form polymers. Polymer materials can be used as plastics, elastomers, or fibers,
or possibly some intermediate form of these material types. Some polymers are
also used as gels or lubricants. Petrochemicals can also be used as solvents or as feedstock for producing
solvents. Petrochemicals can also be used as precursors for a wide variety of chemicals and substances such as
vehicle fluids, surfactants for cleaners, etc.

FUELS

The most common distillations of petroleum are fuels.

Fuels include:

• Ethane and other short-chain alkanes • Gasoline • Liquefied petroleum gas (LPG)
• Diesel fuel (petrodiesel) • Jet fuel • Natural gas
• Fuel oils • Kerosene
 25

OTHER DERIVATIVES

Certain types of resultant hydrocarbons may be mixed with other non-hydrocarbons, to create other end
products:

• Oil refineries will blend various feedstocks,
mix appropriate additives, provide short term
storage, and prepare for bulk loading to trucks,
barges, product ships, and railcars.
• Gaseous fuels such as propane, stored and
shipped in liquid form under pressure in
specialized railcars to distributors.
• Liquid fuels blending (producing automotive
and aviation grades of gasoline, kerosene,
various aviation turbine fuels, and diesel fuels,
adding dyes, detergents, antiknock additives,
oxygenates, and anti-fungal compounds as
required). Shipped by barge, rail, and tanker
ship. May be shipped regionally in dedicated
pipelines to point consumers, particularly
aviation jet fuel to major airports, or piped to
distributors in multi-product pipelines using
product separators called pipeline inspection
gauges ("pigs").
• Lubricants (produces light machine oils,
motor oils, and greases, adding viscosity
stabilizers as required), usually shipped in
bulk to an offsite packaging plant.
• Sulfur (or sulfuric acid), byproducts of sulfur
removal from petroleum which may have up
to a couple percent sulfur as organic sulfur-
containing compounds. Sulfur and sulfuric
acid are useful industrial materials. Sulfuric
acid is usually prepared and shipped as the
acid precursor oleum.
• Bulk tar shipping for offsite unit packaging for
use in tar-and-gravel roofing or similar uses.
• Asphalt - used as a binder for gravel to form
asphalt concrete, which is used for paving
roads, lots, etc. An asphalt unit prepares bulk
asphalt for shipment.
• Petroleum coke, used in specialty carbon
products such as certain types of electrodes, or
as solid fuel.
• Petrochemicals or petrochemical feedstocks,
which are often sent to petrochemical plants
for further processing in a variety of ways.
The petrochemicals may be olefins or their
precursors, or various types of aromatic
petrochemicals.

• Wax (paraffin), used in the packaging of • Alkenes (olefins) which can be manufactured
frozen foods, among others. May be shipped into plastics or other compounds
in bulk to a site to prepare as packaged blocks.
ENVIRONMENTAL EFFECTS

The presence of oil has significant social and environmental impacts, from accidents and routine activities
such as seismic exploration, drilling, and generation of polluting wastes not produced by other alternative
energies.

Drilling oil wells also creates environmental problems because large volumes of salt water often accompany
the petroleum pumped up from deep reservoir rocks. This brine contains numerous impurities, so it must either
be injected back into the reservoir rocks or treated for safe surface disposal. The extraction of unconventional
crude oil sources, such as bitumen, poses even greater environmental problems due to the large number of
pollutants produced and the use of fossil fuels involved in the extraction.
 26

Extraction. Oil extraction is costly and sometimes environmentally damaging, although Dr. John Hunt of
the Woods Hole Oceanographic Institution pointed out in a 1981 paper that over 70% of the reserves in the
world are associated with visible macroseepages, and many oil fields are found due to natural seeps. Offshore
exploration and extraction of oil disturbs the surrounding marine environment. Extraction may involve
dredging, which stirs up the seabed, killing the sea plants that marine creatures need to survive. But at the same
time, offshore oil platforms also form micro-habitats for marine creatures.

Oil spills. Volunteers cleaning up the aftermath of the Prestige oil spill. Crude oil and refined fuel spills
from tanker ship accidents have damaged natural ecosystems in Alaska, the Galapagos Islands, France and
many other places.

The quantity of oil spilled during accidents has ranged from a few hundred tons to several hundred thousand
tons (Atlantic Empress, Amoco Cadiz...). Smaller spills have already proven to have a great impact on
ecosystems, such as the Exxon Valdez oil spill

Oil spills at sea are generally much more damaging than those on
land, since they can spread for hundreds of nautical miles in a thin
oil slick which can cover beaches with a thin coating of oil. This can
kill sea birds, mammals, shellfish and other organisms it coats. Oil
spills on land are more readily containable if a makeshift earth dam
can be rapidly bulldozed around the spill site before most of the oil
escapes, and land animals can avoid the oil more easily.

Control of oil spills is difficult, requires ad hoc methods, and often

a large amount of manpower. The dropping of bombs and incendiary
devices from aircraft on the Torrey Canyon wreck produced poor
results; modern techniques would include pumping the oil from the
wreck, like in the Prestige oil spill or the Erika oil spill.

Global warming. Adding to the urgency of finding alternatives to petroleum and other fossil fuels is the
problem of global warming. Petroleum combustion releases carbon dioxide, a greenhouse gas, into the
atmosphere, and most atmospheric scientists believe that rising levels of greenhouse gases are driving climate
change. These changes could cause numerous environmental problems, including disrupted weather patterns
and polar ice cap melting. Disrupted weather patterns could lead to extensive drought and desertification. Polar
ice cap melting could cause flooding and profound changes in ocean circulation. Many environmental
organizations are urging governments and individuals to reduce greenhouse gas emissions by conserving energy
with fuel-efficient technologies and by developing alternative, renewable energy sources such as wind and solar
power. In the United States most environmental groups have urged the U.S. government to ratify the Kyōto
Protocol, a global treaty that sets a specific timetable for reducing greenhouse gas emission..

Burning oil releases carbon dioxide (CO2) into the atmosphere, which is generally acknowledged as
contributing to global warming. Per joule, oil produces 15% less CO2 than coal, but 30% more than natural gas.
However, the unique role of oil as the main source of transportation fuel makes reducing its CO 2 emissions a
difficult problem. While large power plants can, in theory, eliminate their CO 2 emissions by techniques such as
carbon sequestering or even use them to increase oil production through enhanced oil recovery techniques, these
amelioration strategies do not generally work for individual vehicles.

Whales. It has been argued that the advent of petroleum-refined kerosene saved the great cetaceans from
extinction by providing a cheap substitute for whale oil, thus eliminating the economic imperative for whaling.
 27

The first principal use of whale oil was as an illuminant in lamps and as candle wax. Other uses came in
time. In the 1700's it was noted that the burning oil from sperm whales glowed brightly and clearly and did not
have a disagreeable odor like the oil from right whales did. The sperm whale was the main whale being sought
for its oil when the petroleum industry opened in 1859. The whale fishery, however, was in a declining state and
had been so a decade or more before Drake struck petroleum in his drilled well and before general refining of
crude oil commenced in Oil Creek Valley and elsewhere.

One would think that there would have been a great competitive clash between whale oil and kerosene from
coal (coal oil) and petroleum in the opening years of the 1860's. However, these illuminants did not earnestly
join in battle for the U.S. market at that time because the Civil War, beginning in April, 1861, brought the New
England whaling fleet to a virtual halt. A large number of the whaling ships were captured and sunk by the
Confederacy. This hazard made an expedition perilous before the whaling waters were even reached.
Nevertheless, the reversal was weathered and sperm whale oil production carried on with its normally expected
highs and lows.

Through all this, whale fisheries continued to hunt

the sperm whales, and a great number of uses for the oil
and the other whale products continued to develop.
However, refined products from petroleum began to
replace some of these other products as well and even
whale ambergris, the valuable base for perfumes, was
finally replaced by synthetics.

To sum it all up, the presence of oil has significant

social and environmental impacts, from accidents and
routine activities such as seismic exploration, drilling,
and generation of polluting wastes. Oil extraction is
costly and sometimes environmentally damaging, Japan’s method of whaling
although Dr. John Hunt from Woods Hole pointed out in
a 1981 paper that over 70% of the reserves in the world
are associated with visible macroseepages, and many oil fields are found due to natural leaks. Offshore
exploration and extraction of oil disturbs the surrounding marine environment. Extraction may involve
dredging, which stirs up the seabed, killing the sea plants that marine creatures need to survive. Crude oil and
refined fuel spills from tanker ship accidents have damaged fragile ecosystems in Alaska, the Galapagos Islands,
Spain, and many other places.

Burning oil releases carbon dioxide into the atmosphere, which contributes to global warming. Per energy
unit, oil produces less CO2 than coal, but more than natural gas. However, oil's unique role as a transportation
fuel makes reducing its CO2 emissions a particularly thorny problem; amelioration strategies such as carbon
sequestering are generally geared for large power plants, not individual tailpipes.

Renewable energy source alternatives do exist, although the degree to which they can replace petroleum and
the possible environmental damage they may cause are uncertain and controversial. Sun, wind, geothermal, and
other renewable electricity sources cannot directly replace high energy density liquid petroleum for
transportation use; instead automobiles and other equipment must be altered to allow using electricity (in
batteries) or hydrogen (via fuel cells or internal combustion) which can be produced from renewable sources.
Other options include using biomass-origin liquid fuels (ethanol, biodiesel). Any combination of solutions to
replace petroleum as a liquid transportation fuel will be a very large undertaking.
 28

ALTERNATIVES TO PETROLEUM

ALTERNATIVES TO PETROLEUM-BASED VEHICLE FUELS.

When Fred Flintstone stepped into his car and headed off to the
rock quarry, he didn't have to worry about the effects of gasoline
pollution--Fred's car was fueled by his own feet. Of course, Fred was
also a cartoon, so trying to follow his example is a moot point.

In the real world, gasoline emissions from motor vehicles account

for about 44 percent of the primary ingredient in smog--hydrocarbons,
which is released into the air during fuel evaporation. With 150 million
cars and trucks on American roads, being driven almost 2 trillion miles
each year, it's no wonder there is a serious problem with the quality of
our air. Certainly air quality could be improved if we reduced the
evaporative emissions from these millions of vehicles, both new and
old. Fuel evaporation from vehicles stalled in heavy traffic, for example, is responsible for in large part for the
smog in a major cities such as Los Angeles.

But even if we cracked down on the auto makers to build cars with higher standards--and today's new cars
do eliminate 96 percent of the hydrocarbons, 96 percent of the carbon monoxide, and 76 percent of the nitrogen
oxides that come out of the tailpipe--there are other problems associated with the use of gasoline.

As futuristic writer George Orwell observed in his 1937 essay, The Road to Wigan Pier, "Our civilization is
founded on coal". If we update that to reflect the present day use of petroleum, it still applies. But we can't
continue to power our cars by burning fossil fuel without serious risk to our environment. Other than air
pollution, acid rain is another consequence of fossil fuel use. We also must consider global warming, the risks
of which can't be reduced without development of alternatives, for one thing, the use of fossil fuel in our cars.

In the late 19th century, the fuels that were most suitable for the automobile were coal tar distillates. By the
early 20th century the oil companies began producing gasoline as a simple distillate from petroleum, but the car
engines were being improved and it was a clear a better fuel was needed. During the 1910s, Charles F. Kettering
modified an internal combustion engine to run on kerosene. It did, however, have a tendency to ‘knock.' When it
was determined that this knock came from a rapid rise in pressure after ignition, it led to a search for anti-knock
agents, and the subsequent discovery of tetra ethyl lead. Typically gasoline for cars in the mid-1920s was 40 -
60 octane. By the 1930s, the petroleum industry had determined that the larger hydrocarbon molecules
(kerosene) had major adverse effects on the octane of gasoline, and so they developed specifications for to
overcome this problem. By the 1950s, higher octane fuels were being used in our cars, which resulted in
increased levels of lead.

At this point in time, no one considered that the lead in the gasoline might have adverse affects on our
atmosphere--it was simply a case of what method could be used to best run our cars. Minor improvements were
made to gasoline formulas to improve yields and octane until the 1970s, at which time unleaded fuels were
introduced for environmental reasons. From 1970 until 1990 gasolines were slowly changed as lead was phased
out, and in 1990 the Clean Air Act started forcing major compositional changes on gasoline in an attempt to
curb one of our major sources of pollution .

In the late 1980s, when President Bush introduced his Clean Air bill, a spokesman for the "Big Three"
automakers--Chrysler, Ford and General Motors--said, "The automobile industry will do its share to help clean
 29

up the nation's air." Finding alternatives or renewable substitutes for gasoline used in transportation vehicles in
not an easy challenge, but we need to look at how to rely less on gasoline as the power source for our cars in the
future.

Alternative fuel vehicles (AFVs)--cars, trucks or buses--need to be designed or modified so that they can
operate on alternative fuels. These fuels include ethanol, methanol, natural gas, liquefied petroleum gas,
hydrogen, electricity, and any other fuel or energy source that is not produced from petroleum. Renewable
substitute power sources are needed, too, such as the development of electric cars or fuel cells. Most
importantly, it must be cost effective--not only for the manufacturers but for the consumer.

Electricity-powered cars were popular in the 1900s, but

consumers preferred the gasoline-powered models because of
their greater range and power. Today, electric cars are making a
comeback. In California, there is a law that requires that 10
percent of cars sold in that state in the year 2003--and every
year beyond that--be electric. Although many car companies
argue that the market is small for electrics, General Motors
already has an electric car. U.S. News & World Report
describes it as, "a two-seat car that carries about as much fuel
as others do when their gauges read ‘empty.' The car costs
nearly as much as a luxurious V-8 Oldsmobile Aurora Sedan,
yet has a lower top speed--just 80 miles per hour -- than
practically anything else on the road today".

Electric cars need to overcome the problem of using an

impractical, heavy battery pack, or their limited range and frequent need for recharging. In Europe, Peugeot has
introduced a compact (two-seater) electric car prototype with a range of 60 km and a top speed of 75 km/h, but
this isn't available for sale.

One promising experiment is the hybrid that runs on electricity by generating its own electricity, using
gasoline, diesel or other fossil fuel. This would solve the problem of city smog--the car can run on zero-
polluting electricity in urban areas, then switch to gasoline out in the countryside. That doesn't, however,
address the problem of pollutants being emitted into the country air.

Another alternative is the hydrogen fuel cell, considered by some to be the most promising replacement for
the internal combustion engine in the early part of the 21st century. But this is not without its problems--fuel
cell cars need to find room to store the hydrogen in the car. There's also the problem of developing a system of
getting hydrogen to motorists. It's estimated these two problems alone could cost up to $150 billion to put in
place. Vehicles powered by hydrogen fuel cells, one of which was unveiled by Chrysler in January at the North
American International Auto Show, won't be available to the public for at least 10 years. But the prototype
allows us to see the type of system that could bring fuel cells much closer to reality.

As Jerald terHorst tells us, "What comes out of the tailpipe is directly related to what goes into the fuel tank.
In other words, the type of fuel can make a difference in reducing smog". Developing substitute fuel for gasoline
is always an option. According to various estimates, fuels such as ethanol, methanol, and plant oils (a substitute
for diesel fuel), could power at least 30 percent of cars and trucks in the United States. Plants and trees could be
grown specifically to provide the raw materials, as well as using forestry and agricultural wastes. In Freiburg,
Germany, a local cab company is fueling its cabs with a product manufactured from grape seed oil . Veggie fuel'
is also available to the Freiburg general public for slightly more than ordinary diesel fuel. .
 30

The most logical solution for a replacement to gasoline is the use of substitute fuels. Although ethanol and
methanol cost more than gasoline, the power to the vehicle is roughly equivalent. It would be a simple matter
for consumers to switch over to alternative fuel, as it doesn't require buying any new parts or a new vehicle. A
replacement battery for an electric car, for example, is 15 to 20 percent of the cost of the vehicle itself. Fuel
cells are also impractical at this point, given their stage of development which isn't ready yet for the general
public. But alternative fuels can be used now, with no reduction in power to the vehicle, and an only slightly
higher cost.

An additional use of alternative fuel, but one which does involve purchasing a new vehicle, is Ford Motor
Company's "flexible-fuel vehicle," capable of using ethanol, methanol, gasoline, or any combination of these
fuels with one common fuel tank. The engine adjustment is automatic no matter which fuel is used, and the road
tests have shown excellent performance in the last three years. Our concern for the environment and the
depletion of our fossil fuels should be such that we heartily embrace this action. It certainly is an easier
alternative to eliminating smog than using a Flintstone "foot power" car.

ALTERNATIVE TO USING OIL INDUSTRY

As noted in our article Oil Hegemony, Re-colonizing Iraq, and

Why Oil-Consuming Nations Must Diversify, if the world is to
successfully rein in the US war drive, all the peace-desiring nations
of the world must do a lot more to decrease their dependence on
imported oil. Not only is this an imperative, it is also an increasingly
viable option that could not only help create a cleaner environment
but also open new employment opportunities in the rural heartlands
of Asia, Africa and Central and South America. While some new
technologies are only in the stage of capability demonstration -
others are already in use, and could be readily adopted on a larger
scale.

Several new power alternatives have also emerged in the arena

of transportation. Thanks to pressure from the Centre for Science
and Environment (CSE) and subsequent Supreme Court rulings,
Delhi's buses and three-wheelers have now switched to Compressed Biodiesel: an altrentaive fuel
Natural Gas (CNG). Seoul has also begun a switchover to CNG.
Other Indian metros, and cities in Indonesia, Iran are considering similar moves. Cairo and Dhaka are also
drawing up CNG plans so as to reduce intolerable levels of urban air pollution and reduce consumption of petrol
or diesel.

Ethanol-doping or Ethanol fuelled cars is another option. Last year, the Government of India made doping
of petrol with 5% ethanol mandatory in nine states and four union territories, following the success of pilot
projects in Maharashtra and Uttar Pradesh. According to the Indian Sugar Mills Association, most Indian
distilleries are currently producing less than 1.5 billion litres of alcohol against their production capacity of 3.2
billion litres. The mandatory use of 5% ethanol (with plans of increasing this to 10%) will improve the capacity
utilization of the distilleries.

Although, to date, implementation has been stalled due to foot-dragging by local governments and sections
of the oil industry, the use of ethanol not only reduces vehicular emissions, it is also a good replacement for lead
additives in gasoline. By blending 22% anhydrous ethanol with gasoline to produce gasohol, Brazil has been
 31

able to eliminate completely the requirement for lead (or MtBE) as an octane enhancer. Sweden has begun to
promote ethanol derived from grain and timber.

Bio-diesel is another important emerging alternative. The essential element of biodiesel is oil - whether from
an animal or vegetable source (extracted fresh, or recovered from waste). Treated with alcohol and a catalyst,
mixed for an hour then left to settle overnight, the result is a pure diesel fuel compatible with currently
manufactured motor vehicle engines. Not only are bio-fuels less polluting, (they emit lower levels of CO, SO 2,
CO2, and fewer harmful particulates), the fuels are typically biodegradable - 98% within 21 days (fossil oils -
50%) - and do not give off the offensive, choking smell when used.

Oils from soy beans, sunflowers, canola or cotton seed, waste products such as fryer oils and cooking
grease, as well as beef tallow and pork lard, can all be used as sources for biodiesel. In addition, inedible oils
from wild trees can also be used. Udupi Srinivasa, Chief Programme Executive of the Sustainable
Transformation of Rural Areas (SuTRA) project noted that biodiesel fuels could completely replace fossil fuels.
In his presentation on "Biofuels: powering India's future" at the Bio 2002 conference in Bangalore, he observed
that oil bearing trees like the pongamia pinnata, (known as Honge in Kannada), was ideal for this purpose. Dr
Srinivasa was first made aware of the potential of the Honge tree when vilagers in Kagganahalli mentioned that
their grandparents had used the inedible Honge oil for lamps!

In Warangal, Andhra Pradesh, the Azamshahi Textile Mills, set up by the Nizam of Hyderabad in 1940,
generated all the power needs of the factory using non-edible oils until its recent closure; and it had surplus
power left over for the city's needs. Since Dr Srinivasa's rediscovery of the potential of he Honge tree, Dandeli.
Ferroalloys of Dandeli, Karnataka, converted all five of their diesel engines to run entirely from Honge oil.
Powered by Honge fuel, Kagganhalli's villagers have now been able to pump enough water to turn their dry and
desolate village into one that can produce watermelons, mulberry bushes, sugar cane and grains.

On December 31, 2002, the Indian Railways conducted a successful trial run of an express passenger train
on the Delhi-Amritsar route using five per cent of "biodiesel'' as fuel. The fuel is extracted from the seeds of the
`Jatropha' plant which is well-adapted to semi-arid or arid conditions and demands low soil-fertility and
moisture.

The Rural Community Action Centre in Tamil Nadu State has also demonstrated the biofuel potential of the
plant and a successful demonstration has also taken place in Bamako, Mali. There are reports that Jatropha may
also be used for biodiesel in Ghana, while in Gambia, groundnut oil is planned for biofuel use. Plans are afoot
to increase awareness and set up demonstration projects in other African nations such as Somalia, Ethiopia,
Zambia, Zimbabwe, Tanzania and Sudan.

The Council of Scientific and Industrial Research in India (CSIR) has shown that the Pongam Tree (Indian
Beach) can also be used as a diesel equivalent. The Newsletter of the Combustion, Gasification & Propulsion
Laboratory, Indian Institute of Science, Bangalore has identified several other potential energy sources
including trees such as the common Neem, Mohua and Sal.

In Cedar Rapids, Iowa, city buses have begun to use diesel doped with 20% biodiesel derived from Soy
Beans while ongoing experiments evaluate jet fuel doped with biodiesel.

In Greenville, Carolina, Matt Hafner, a Clemson-educated mechanical engineer, re-fitted his 1982
Volkswagen Rabbit diesel truck with about $600 worth of parts so that it could run on used vegetable oil. His
truck starts off using regular diesel fuel, but can switch over to vegetable oil when the engine temperature
reaches 170 degrees - usually after about five to 10 miles of driving. The vegetable oil is obtained from fast-
 32

food restaurants who are only too happy to give away the oil left behind after frying. The truck's performance is
comparable to diesel. Hafner learned to convert the truck's fuel system from a book titled "From the Fryer to
the Fuel Tank: The Complete Guide to Using Vegetable Oil as an Alternative Fuel."

Studies have also been conducted to demonstrate the viability of hemp oil as a fuel. Hemp oil converts fairly
simply into a biodiesel fuel once mixed with caustic lye dissolved in methanol, a technique which makes the oil
less viscous and more combustible. Environmental defense attorney Don Wirtshafter, (proprietor of the Ohio
Hempery, the company providing the oil) notes that fuel and glycerine are generated from the process, and the
glycerine can be used to make soap or candles. Potassium hydroxide used as the caustic agent results in
fertilizer. The only modification made to the hemp car was the replacement of rubber hoses with synthetic
rubber tubes - biodiesels erode rubber. There has also been some research in extracting fuels from used tires.

British Industrial chemist, Paul Day (and founder of AquaFuel Research) has been conducting research on a
fuel mix that blends diesel with water using a stabilizing extract from castor beans. Experiments have indicated
that the blend burns more efficiently and lowers emissions.

At the Paris Motor Show (Sep, 2002), a French company unveiled their latest model of a car that can run on
compressed air, aimed at urban delivery vehicles, taxicabs, and other urban drivers.

Swiss manufacturer demonstrated a car that used fermented organic household waste as one of its fuel
supplies.

Environmental engineers at Penn State have shown

that by that by using certain industrial wastewater as
feedstock, and fermentation using hydrogen producing
soil bacteria, hydrogen for energy uses can be released
continuously. Wastewater from confectioners,
canneries, sugar refineries, rich in glucose and sucrose
could be used to drive cars.

While some of these technologies are still in an

early stage, Hybrid cars that are twice as fuel-efficient
as regular cars are already running in California and
Japan. Moves towards energy alternatives are no longer
in the realm of fantasy but are now very realistic
options. These must be actively supported and
Hybrid cars
encouraged by democratic and progressive
organizations throughout the world.

ALTERNATIVES TO BURNING PETROLEUM FOR ELECTRICITY

Some recent developments demonstrate the growing potential of solar power. By 2010, five solar-thermal
electricity generators in the Australian desert will produce enough electricity to supply a million homes. Studies
have also looked at the feasibility of space-based solar power.

Further progress has been reported in the area of photovoltaics. Professor W.S. Sampath and his research
group at the Materials Engineering Laboratory at Colorado State have developed a manufacturing technology to
efficiently produce low-cost, high-power photovoltaic solar cells. According to Sampath, photovoltaics, the new
generation of solar energy, can be one of the most affordable and efficient energy sources of the future.
 33

"Without moving parts or external fuel, photovoltaic devices directly convert absorbed sunlight into
electrical current," said Sampath. "The high-powered devices produce no waste or pollution, and by using the
technology developed at Colorado State, the devices can potentially be mass produced at low costs."

New variations on wind energy are also becoming more viable as UK's first offshore windfarm was unveiled
near the coast of Northumberland last December. Researchers in British Columbia claim that the recently
devised Davis Hydro Turbine works like an underwater windmill that could meet up to 40 percent of the world's
electrical needs while not harming the environment or depending on solar cycles.

While energy from cow-dung is not new to India - (Gobar-Gas

plants have been around for more than a decade), the trend is now
also picking up in the farmlands of the US. Using what is called an
anaerobic digestor, a California dairy farmer produces enough
energy every day to run his 130-acre, 350-head Butte County dairy
farm, plus the family home - and then sell the excess to Pacific Gas
and Electric Co.

UK's first dung-fired power station began producing electricity

last July. Methane gas from fermented dung slurry will power the
plant at Holsworthy in Devon and produce electricity for the
national grid. It will also provide hot water for low-cost heating
around Holsworthy, and organic manure for farmers to use on their
land.

New research has turned up other innovative solutions. An

Icelandic team has invented a device which can produces electricity Thermator L thermoelectric generator
from water using a "Thermator" that works on the thermo-electric
effect. Professor Thorstein Sigfusson, of the University of Iceland,
says it works by translating the difference between the temperature of hot and cold water into energy.

Research by University of Massachusetts microbiologists suggests that certain microorganisms known as

Geobacters can transform organic matter commonly found at the bottom of the ocean into electrical energy. .

In oil producing countries with little refinery capacity, oil is sometimes burned to produce electricity.
Renewable energy technologies such as solar power, wind power, hydroelectricity, micro hydro, biomass and
biofuels could be used to replace these generators.

FUTURE OF PETROLEUM PRODUCTION

Hubbert peak theory. The Hubbert peak theory (also known as peak oil) posits that future petroleum
production (whether for individual oil wells, entire oil fields, whole countries, or worldwide production) will
eventually peak and then decline at a similar rate to the rate of increase before the peak as these reserves are
exhausted. It also suggests a method to calculate the timing of this peak, based on past production rates, the
observed peak of past discovery rates, and proven oil reserves. The peak of oil discoveries was in 1965, and oil
production per year has surpassed oil discoveries every year since 1980.

In 1956, M. King Hubbert correctly predicted US oil production would peak around 1971. When this
occurred and the US began losing its excess production capacity, OPEC gained the ability to manipulate oil
 34

prices, leading to the 1973 and 1979 oil crises.

Since then, most other countries have also peaked.
China has confirmed that two of its largest
producing regions are in decline, and Mexico's
national oil company, Pemex, has announced that
Cantarell Field, one of the world's largest offshore
fields, was expected to peak in 2006, and then
decline 14% per annum.

Controversy surrounds predictions of the

timing of the global peak, as these predictions are
dependent on the past production and discovery
data used in the calculation as well as how
unconventional reserves are considered. Supergiant
The Hubbert curve, devised by Dr. King Hubbert, is a model of future fields have been discovered in the past decade, such
oil availability (the amount of oil that will be available in the future). as Azadegan, Carioca/ Sugar Loaf, Tupi, Jupiter,
Ferdows/ Mounds/ Zagheh, Tahe, Jidong Nanpu/
Bohai Bay, West Kamchatka, and Kashagan, as well
as tremendous reservoir growth from places like the Bakken and massive syncrude operations in Venezuela and
Canada. However, while past understanding of total oil reserves changed with newer scientific understanding of
petroleum geology, current estimates of total oil reserves have been in general agreement since the 1960s.
Further, predictions regarding the timing of the peak are highly dependent on the past production and discovery
data used in the calculation.

It is difficult to predict the oil peak in any given region, due to the lack of transparency in accounting of
global oil reserves. Based on available production data, proponents have previously predicted the peak for the
world to be in years 1989, 1995, or 1995-2000. Some of these predictions date from before the recession of the
early 1980s, and the consequent reduction in global consumption, the effect of which was to delay the date of
any peak by several years. Just as the 1971 U.S. peak in oil production was only clearly recognized after the
fact, a peak in world production will be difficult to discern until production clearly drops off.

PETROLEUM BY COUNTRY

Consumption rates. There are two main ways to measure the oil consumption rates of countries: by
population or by gross domestic product (GDP). This metric is important in the global debate over oil
consumption/energy consumption/climate change because it takes social and economic considerations into
account when scoring countries on their oil consumption/energy consumption/climate change goals. Nations
such as China and India with large populations tend to promote the use of population based metrics, while
nations with large economies such as the United States would tend to promote the GDP based metric.

GDP-to-consumption
ratio
Selected Nations (US$1000/(barrel/year))
Switzerland 3.75
UK 3.34
Norway 3.31
Austria 2.96
France 2.65
Germany 2.89
Sweden 2.71
 35

Italy 2.57
European Union 2.52
DRC 2.4
Japan 2.34
Australia 2.21
Spain 1.96
Bangladesh 1.93
Poland 1.87
US 1.65
Belgium 1.59
WORLD 1.47
Turkey 1.39
Canada 1.35
Mexico 1.07
Ethiopia 1.04
South Korea 1.00
Philippines 1.00
Brazil 0.99
Taiwan 0.98
China 0.94
Nigeria 0.94
Pakistan 0.93
Myanmar 0.89
India 0.86
Russia 0.84
Indonesia 0.71
Vietnam 0.61
Thailand 0.53
Saudi Arabia 0.46
Egypt 0.41
Singapore 0.40
Iran 0.35

Per Capita energy

consumption, oil
equivalent
Selected Nations (barrel/person/year)
DRC 0.13
Ethiopia 0.37
Bangladesh 0.57
Myanmar 0.73
Pakistan 1.95
Nigeria 2.17
India 2.18
Vietnam 2.70
Philippines 3.77
Indonesia 4.63
China 4.96
Egypt 7.48
Turkey 9.85
Brazil 11.67
Poland 11.67
WORLD 12.55
 36

Thailand 13.86
Russia 17.66
Mexico 18.07
Iran 21.56
Europian Union 29.70
UK 30.18
Germany 32.31
France 32.43
Italy 32.43
Austria 34.01
Spain 35.18
Switzerland 34.64
Sweden 34.68
Taiwan 41.68
Japan 42.01
Australia 42.22
South Korea 43.84
Norway 52.06
Belgium 61.52
US 68.81
Canada 69.85
Saudi Arabia 75.08
Singapore 178.45

Production. In petroleum industry parlance, production refers to the quantity of crude extracted from
reserves, not the literal creation of the product.

# Producing Nation 103bbl/d (2006) 103bbl/d (2007)

1 Saudi Arabia (OPEC) 10,665 10,234
2 Russia1 9677 9876
3 US1 8331 8481
4 Iran (OPEC) 4148 4043
5 China 3845 3901
6 Mexico1 3707 3501
7 Canada2 3288 3358
8 UAE (OPEC) 2945 2948
9 Venezuela (OPEC)1 2803 2667
1
0 Kuwait (OPEC) 2675 2613
11 Norway1 2786 2565
1
2 Nigeria (OPEC) 2443 2352
1
3 Brazil 2166 2279
1
4 Algeria (OPEC) 2122 2173
1
5 Iraq (OPEC)3 2008 2094
1
6 Libya (OPEC) 1809 1845
1
7 Angola (OPEC) 1435 1769
1 UK 1689 1690
 37

8
1
9 Kazakhstan 1388 1445
2
0 Qatar (OPEC) 1141 1136
2
1 Indonesia 1102 1044
2
2 India 854 881
2
3 Azerbaijan 648 850
2
4 Argentina 802 791
2
5 Oman 743 714
2
6 Malaysia 729 703
2
7 Egypt 667 664
2
8 Australia 552 595
2
9 Colombia 544 543
3
0 Ecuador (OPEC) 536 512
3
1 Sudan 380 466
3
2 Syria 449 446
3 Equatorial Guinea 386 400
3
# Exporting nation (2006) 103bbl/d 103m3/d
3 Yemen 377 361
41 Saudi Arabia (OPEC) 8651 1376
32 Russia1
Vietnam 6565
362 1044
352
53 Norway1 2542 404
34 Iran (OPEC)
Thailand 2519
334 401
349
65 UAE (OPEC) 2515 400
36 Venezuela
Denmark(OPEC)1 2203
344 350
314
77 Kuwait (OPEC) 2150 342
38 Congo
Nigeria (OPEC) 247
2146 250
341
89 Algeria (OPEC)1 1847 297
310 Gabon 1
Mexico 237
1676 244
266
911 Libya (OPEC)1 1525 242
4 Soouth Afrrica 204 199
12 Iraq (OPEC) 1438 229
0
13 Angola (OPEC) 1363 217
Source: U.S. Energy 14 Kasakhstan 1114 177
Information 15 Canada2 1071 170
Administration
1 Peak production of conventional oil already passed in this state
2 Although Canadian conventional oil production is declining, total oil production is increasing as oil sands production grows. If oil sands are included, it has the
world's second largest oil reserves after Saudi Arabia.
3 Though still a member, Iraq has not been included in production figures since 1998

Export. In order of net exports in 2006 in thousand bbl/d and thousand m³/d:
 38

Source: US Energy Information Administration

1 peak production already passed in this state
2 Canadian statistics are complicated by the fact it is both an importer and exporter of crude oil, and refines large amounts of oil for the U.S. market. It is the leading
source of U.S. imports of oil and products, averaging 2.5 MMbbl/d in August 2007.

Total world production/consumption (as of 2005) is approximately 84 million barrels per day (13,400,000
m³/d).

Consumption. In order of amount consumed in 2006 in thousand bbl/d and thousand m³/d:

# Consuming Nation 2006 103bbl/day 103m3/day

1 US1 20,588 3,273
2 China 7274 1157
3 Japan2 5222 830
4 Russia1 3103 493
5 Germany2 2630 418
6 India2 2534 403
7 Canada 2218 353
8 Brazil 2183 347
9 South Korea2 2157 343
10 Saudi Arabia (OPEC) 2068 329
11 Mexico1 2030 323
12 France2 1972 314
13 UK1 1816 289
14 Italy2 1709 272
15 Iran (OPEC) 1627 259
Source: US Energy Information Administration
1 peak production of oil already passed in this state
2 This country is not a major oil producer

Import. In order of net imports in 2006 in thousand bbl/d and thousand m³/d:

# Importing Nation 2006 103bbl/day 103m3/day

1 US1 12,220 1,943
2 Japan 5097 810
3 China2 3438 547
4 Germany 2483 395
 39

5 South Korea 2150 342

6 France 1893 301
7 India 1687 268
8 Italy 1558 248
9 Spain 1555 247
10 Taiwan 942 150
11 Netherlands 936 149
12 Singapore 787 125
13 Thailand 606 96
14 Turkey 576 92
15 Belgium 546 87
Source: US Energy Information Administration
1 peak production of oil already passed in this state
2 Major oil producer whose production is still increasing

Non-producing consumers. Countries whose oil production is 10% or less of their consumption.

# Consuming Nation 2006 103bbl/day 103m3/day

1 Japan 5,578,000 886,831
2 Germany 2,677,000 425,609
3 South Korea 2,061,000 327,673
4 France 2,060,000 327,514
5 Italy 1,874,000 297,942
6 Spain 1,537,000 244,363
7 Netherlands 946,700 150,513
Source: CIA World Factbook

Diagram of maps for petroleum by country:

Oil consumption
per capita
(darker colors
represent more
consumption).

Oil producing
 40

Graph of Top Oil Producing

Countries 1960-2006, including
Soviet Union

Oil exports by country

Oil imports by country

WRITERS COVERING THE PETROLEUM INDUSTRY

Brian Black. Brian Black is an U.S. professor of history and environmental studies at Pennsylvania State
University, Altoona, Pennsylvania. Dr. Black received his BA in English in 1988 from Gettysburg College, an
 41

MA in American Civilization in 1991 from New York University and his Ed.D in American Studies from the
University of Kansas in 1996. His research focuses on deals with the landscape and environmental history of
North America. He has published articles and books on the history of petroleum and history of the environment.

Colin J. Campbell. Colin J. Campbell, Ph.D. Oxford, (born in Berlin,

Germany in 1931) is a retired British petroleum geologist who predicts that oil
production will peak by 2007. The consequences of this are uncertain but drastic,
due to the world's dependence on fossil fuels for the vast majority of its energy.
His theories have received wide attention, but are disputed by some in the oil
industry and have not significantly changed U.S. governmental energy policies at
this time. In order to deal with declining global oil production, he has proposed
the Rimini protocol.

Influential papers by Campbell include The Coming Oil Crisis, which he

wrote with Jean Laherrère in 1998, and is credited with convincing the
International Energy Agency of the coming peak; and The End of Cheap Oil,
which was published the same year in Scientific American. He was referred to as a "doomsayer" in the The Wall
Street Journal in 2004

Kenneth S. Deffeyes. Kenneth S. Deffeyes is a geologist who worked with M. King Hubbert of Hubbert's
peak fame, at the Shell Oil Company research laboratory in Houston, Texas. In 1967 he began teaching at
Princeton University, where he is now Professor Emeritus.

He is the author of the book Hubbert's Peak (2001). In 2005 he published the book Beyond Oil - The view
from Hubbert's peak. On February 11, 2006 Deffeyes claimed that world oil production peaked on December 16
2005.

Thomas Gold. Thomas Gold (May 22, 1920 – June 22, 2004) was an Austrian born astrophysicist, a
professor of astronomy at Cornell University, and a member of the U.S. National Academy of Sciences. Gold
was one of three young Cambridge scientists who in the 1950s proposed the now mostly abandoned 'steady
state' hypothesis of the universe. Gold's work crossed academic and scientific boundaries, into biophysics,
astrophysics, space engineering, and geophysics.

"Hydrocarbons are not biology reworked by geology (as the traditional view would hold) but rather geology
reworked by biology." – Thomas Gold

Gold achieved fame for his 1992 paper "The Deep Hot Biosphere" in the Proceedings of the National
Academy of Sciences, which presented a controversial view of the origin of coal, oil, and gas deposits, a theory
of an abiogenic petroleum origin. The theory suggests coal and crude oil deposits have their origins in natural
gas flows which feed bacteria living at extreme depths under the surface of the Earth; in other words, oil and
coal are produced through tectonic forces, rather than from the decomposition of fossils. At the beginning of his
1992 paper Gold also referred to ocean vents that pump bacteria from the depth of the earth towards the ocean
floor in support of his views. A number of new such hydrothermal vents have since been discovered, as recently
as 2007.
 42

According to Gold and the Soviet geologists who originated the abiogenic theory, bacteria feeding on the oil
accounts for the presence of biological debris in hydrocarbon fuels, obviating the need to resort to a biogenic
theory for the origin of the latter. The flows of underground hydrocarbons may also explain oddities in the
concentration of other mineral deposits.

Most western geologists and petrologists consider petroleum

abiogenic theories implausible and believe the biogenic theory of
'fossil fuel' formation adequately explains all observed hydrocarbon
deposits. Most geologists do recognize the geologic carbon cycle
includes subducted carbon, which returns to the surface, with studies
showing the carbon does rise in various ways. Gold and geology
experts point out the biogenic theories do not explain phenomena
such as helium in oil fields and oil fields associated with deep
geologic features.

However, recent discoveries have shown that bacteria live at

depths far greater than previously believed. Whilst this does not
prove Gold's theory, it may lend support to its arguments. A thermal
depolymerization process which converts animal waste to carbon
fuels does show some processes can be done without bacterial
action, but does not explain details of natural oil deposits such as
magnetite production.

An article on abiogenic hydrocarbon production in the February 2008 issue of Science Magazine reported
how the abiotic synthesis of hydrocarbons in nature may occur in the presence of ultramafic rocks, water, and
moderate amounts of heat.

David Goodstein. Goodstein is a U.S. physicist and educator. Since 1988, he has served as Vice-provost of
the California Institute of Technology (Caltech), where he is also a professor of physics and applied physics, as
well as (since 1995) the Frank J. Gilloon distinguished teaching and service professor.

In recent times, while continuing to teach and conduct research in experimental condensed matter physics,
he has turned his attention to issues related to science and society. In articles and speeches, he has addressed
conduct and misconduct in science, and issues related to fossil fuels and the climate of Planet Earth. He is the
author of the book Out of Gas: The End of the Age of Oil.

Daniel H. Yergin. Daniel H. Yergin (born February 6, 1947) is an American

author, speaker, and economic researcher. Yergin is the co-founder and chairman of
Cambridge Energy Research Associates, an energy research consultancy. It was
acquired by IHS Energy in 2004.

Daniel Yergin is best known for The Prize: The Epic Quest for Oil, Money, and
Power, a number-one bestseller that won the Pulitzer Prize for General Non-Fiction
in 1992. The book was adapted into a PBS mini-series seen by more than 20 million
viewers. Yergin was awarded the 1997 United States Energy Award for "lifelong
achievements in energy and the promotion of international understanding."
According to a biographical note in the March/April 2006 issue of Foreign Affairs,
Yergin is currently at work on "a new book on oil and geopolitics."
 43

Derrick Jensen. Derrick Jensen (born December 19, 1960) is an American author and environmental
activist living in Crescent City, California. He has published several books questioning contemporary society
and its values, including A Language Older Than Words, The Culture of Make Believe, and Endgame. He holds
a B.S. in Mineral Engineering Physics from the Colorado School of Mines and an M.F.A. in Creative Writing
from Eastern Washington University. He has also taught creative writing at Pelican Bay State Prison and
Eastern Washington University.

FAMOUS PEOPLE WHO DISCOVER PETROLEUM

Here are some scientists, discoverers, and major and famous people who plays important role in the
development of petroleum industry in the world:

Shen Kuo. Shen Kuo or Shen Kua (1031–1095), was a polymathic Chinese scientist
and statesman of the Song Dynasty (960–1279). Excelling in many fields of study and
statecraft, he was a mathematician, astronomer, meteorologist, geologist, zoologist,
botanist, pharmacologist, agronomist, archaeologist, ethnographer, cartographer,
encycloped ist, general, diplomat, hydraulic engineer, inventor, academy chancellor,
finance minister, governmental state inspector, poet, and musician. He was the head
official for the Bureau of Astronomy in the Song court, as well as an Assistant Minister of
Imperial Hospitality

Abu al-Hasan Ali ibn al-Husayn íbn Ali al-Mas'udi. Abu al-Hasan Ali ibn al-Husayn íbn Ali al-Mas'udi
(born c. 896, Baghdad, Iraq died September 956, Cairo, Egypt), was an Arab historian and geographer, known
as the “Herodotus of the Arabs”. He was one of the first to combine history and scientific geography in a large-
scale work, Muruj adh-dhahab wa ma'adin al-jawahir (The Meadows of Gold and Mines of Gems), a world
history.

Abū Bakr Muhammad ibn Zakariyā Rāzī. Abū Bakr Muhammad ibn Zakariyā Rāzī was a Persian
alchemist, chemist, physician, philosopher, and scholar. According to Biruni, Razi was born in Rayy, Iran in the
year 865 (251 AH) and died there in 925 (313 AH).

Razi made fundamental and enduring contributions to the fields of medicine, alchemy, and philosophy,
recorded in over 184 books and articles in various fields of science. He was well-versed in Persian, Greek and
Indian medical knowledge and made numerous advances in medicine through own observations and
discoveries.He was an early proponent of experimental medicine and is considered the father of pediatrics. He
was also a pioneer of neurosurgery and ophthalmology.

Abraham Pineo Gesner. Abraham Pineo Gesner, born May 2, 1797 in Cornwallis Township, Nova Scotia,
Canad– died April 29, 1864 in Halifax, Nova Scotia, was a physician and geologist who invented kerosene and
became the primary founder of the modern petroleum industry.

Gesner's research in minerals resulted in his 1846 development of a process to

refine a liquid fuel from coal. His new discovery, which he named kerosene but
which was frequently referred to as coal oil, burned cleaner and was less expensive
than competing products such as whale oil. In 1850, Gesner created the Kerosene
Gaslight Company and began installing lighting in the streets in Halifax and other
cities. By 1854 he had expanded to the United States where he created the North
American Kerosene Gas Light Company at Long Island, New York. Demand grew
 44

to where his company’s capacity to produce became a problem but the discovery of petroleum, from which
kerosene could be more easily produced, solved the supply problem.

Abraham Gesner continued his research on fuels and wrote a number of scientific studies concerning the
industry including an 1861 publication titled, "A Practical Treatise on Coal, Petroleum and Other Distilled
Oils" that became a standard reference in the field. Eventually Gesner's company was absorbed into the
petroleum monopoly, Standard Oil and he returned to Halifax, where he was appointed a Professor of Natural
History at Dalhousie University.

In 1933, Imperial Oil Ltd., a Standard Oil subsidiary, erected a memorial in Camp Hill Cemetery in Halifax
to pay tribute to Abraham Gesner's contribution to the petroleum industry. In 2000, he was honored by the
placement of his image on a postage stamp by Canada Post.

Benjamin Silliman. Benjamin Silliman (8 August 1779 – 24 November 1864) was an American chemist,
one of the first American professors of science (at Yale University), and the first to distill petroleum.

Returning to New Haven, he studied its geology, and made a chemical analysis of the meteorite that fell near
Weston, Connecticut, publishing the first scientific account of any American meteorite. He lectured publicly at
New Haven in 1808 and came to discover many of the constituent elements of many minerals. The mineral
sillimanite was named after him. Upon the founding of the Medical School, he also taught there as one of the
founding faculty members. As professor emeritus, he delivered lectures at Yale on geology until 1855; in 1854,
he became the first person to fractionate petroleum by distillation.

James Miller Williams. James Miller Williams (September 14, 1818 – November 25, 1890) was a
businessman and political figure in Ontario, Canada. He represented Hamilton in the Legislative Assembly of
Ontario from 1867 to 1879. He is also commonly viewed as the father of the petroleum industry in Canada.

He was born in Camden, New Jersey in 1818 and apprenticed as a

carriage maker. He came to London in Upper Canada with his family in
1840. With a partner, he set up a business manufacturing carriages,
eventually buying out his partner. He moved to Hamilton and expanded
his business, manufacturing vehicles for public transit and also railway
cars. During the 1850s, he entered the business of refining petroleum in
Lambton County. Williams was the first person to produce a commercial
oil well in North America, in 1858, one year before Edwin Drake.
Already operating a small 150 gallon/day asphalt well, Williams set out
during a drought to dig a drinking water well down-slope from it but
struck free oil instead. He is also credited with setting up Canada's first
refinery of crude oil to produce kerosene, based on the laboratory work of
Abraham Gesner. Two years later in 1860, he set up the Canada Oil Company which produced, refined and
marketed petroleum resources in the area; he later sold the company to his son. He was also involved with
insurance companies, railways and the manufacturing of tin ware. In 1879, he was appointed registrar for
Wentworth County and served until his death in Hamilton in 1890.

Edwin Laurentine Drake. Edwin Laurentine Drake (March 29, 1819 – November 9, 1880), also known as
Colonel Drake, was an American oil driller, popularly credited with being the first to drill for oil in the United
States.
 45

Drake is famous for pioneering a new method for producing oil from the ground. He drilled using piping to
prevent borehole collapse, allowing for the drill to penetrate further and further into the ground. Previous
methods for collecting oil had been limited. Ground collection of oil consisted of gathering it from where it
occurred naturally, such as from oil seeps or shallow holes dug into the ground. Drake tried the latter method
initially when looking for oil in Titusville. However, it failed to produce economically viable amounts of oil.
Alternative methods of digging large shafts into the ground also failed, as collapse from water seepage almost
always occurred. The significant step that Drake took was to drive a thirty two foot iron pipe through the ground
into the bedrock below. This allowed Drake to drill inside the pipe, without the hole collapsing from the water
seepage. The principle behind this idea is still employed today by many companies drilling for hydrocarbons.

James Young. James Young (13 July 1811–May 13, 1883) was a Scottish chemist best known for his
method of distilling paraffin from coal.

In 1848 Young left Tennants', and in partnership with his friend and assistant Edward Meldrum, set up a
small business refining the crude oil. The new oils were successful, but the supply of oil from the coal mine
soon began to fail (eventually being exhausted in 1851). Young, noticing that the oil was dripping from the
sandstone roof of the coal mine, theorized that it somehow originated from the action of heat on the coal seam
and from this thought that it might be produced artificially.

Following up this idea, he tried many experiments and eventually succeeded, by distilling cannel coal at a
low heat, a fluid resembling petroleum, which when treated in the same way as the seep oil gave similar
products. Young found that by slow distillation he could obtain a number of useful liquids from it, one of which
he named "paraffine oil" because at low temperatures it congealed into a substance resembling paraffin wax.

The production of these oils and solid paraffin wax from coal formed the subject of his patent dated October
17 1850. In the summer of 1850 Young & Meldrum and Edward William Binney entered into partnership under
the title of E.W. Binney & Co. at Bathgate in West Lothian and E. Meldrum & Co. at Glasgow; their works at
Bathgate were completed in 1851 and became the first truly commercial oil-works in the world, using oil
extracted from locally-mined Torbanite, shale, and bituminous coal to manufacture naphtha and lubricating
oils; paraffin for fuel use and solid paraffin were not sold till 1856.

In 1852 Young left Manchester to live in Scotland and that same year took
out a US patent for the production of paraffin oil by distillation of coal. Both
the US and UK patents were subsequently upheld in both countries in a series
of lawsuits and other producers were obliged to pay him royalties.

In 1865 Young bought out his business partners and built second and
larger wo rks at Addiewell, near West Calder, and in 1866 sold the concern to
Young's Paraffin Light and Mineral Oil Company. Although Young remained
in the company, he took no active part in it, instead withdrawing from
business to occupy himself with looking after the estates which he had
purchased, yachting, travelling, and scientific pursuits. The company
continued to grow and expanded its operations, selling paraffin oil and
paraffin lamps all over the world and earning for its founder the affectionate
nickname ‘Paraffin’ Young. Other companies worked under license from
Young's firm, and paraffin manufacture spread over the south of Scotland.

When the reserves of Torbanite eventually gave out the company moved on to pioneer the exploitation of
West Lothian's oil shale deposits, the only workable deposits in Europe outside Russia, if not so rich in oil as
 46

Torbanite. In 1862 the distillation plants began production and by the 1900s nearly 2 million tons of shale were
being extracted annually, employing 4,000 men.

George Henry Bissell. George Henry Bissell (November 8, 1821 – November 19, 1884) is often considered
the father of the American oil industry. He was born in Hanover, New Hampshire.

In 1853 he observed by chance the primitive oil-gathering industry in western

Pennsylvania, although his interest in what was then known as "rock oil" had been
piqued by seeing samples while a student at Dartmouth College. At the time, oil
was gathered by such crude methods as soaking blankets in surface oil and then
draining the blankets over barrels. The oil was used mainly for medicinal
purposes.

Bissell had the innovative idea of using this oil to produce kerosene, then in high
demand. After getting confirmation of the usefulness of the product from Yale
chemist Benjamin Silliman Jr., he formed the Pennsylvania Rock Oil Company for
this purpose. In 1856, after seeing pictures of derrick drilling for salt, Bissell
conceived of the idea of drilling for oil, rather than mining it. This was widely
considered ludicrous at the time but on August 27, 1859, the company first
succeeded in striking oil, on a farm in Titusville, Pennsylvania. Bissell invested heavily in the surrounding
region and ended up becoming a wealthy business man.

The company's agent, Edwin Drake, is sometimes credited with the "discovery" of oil.

EXPLORING FOR OIL AND GAS

DETECTION, EXPLORATION, EVALUATION

It would be prohibitively expensive to explore for oil and gas on a random basis, and most of the effort
would be wasted. When geological knowledge was far more limited than it is today, most of the discoveries
were beneath quite obvious signs of petroleum seepage at the surface. Eventually, such easy targets ran out,
although some are still being discovered. The key ingredients for petroleum accumulation were gleaned from
the knowledge gained by drilling such targets and examining the geology around them. As more has been
learned, increasingly sophisticated methods have been developed that increase the odds of making a discovery
in less obvious situations.

Surface detection methods. Field mapping is a well established technique that has contributed to the
discovery of billions of barrels of petroleum. In the pioneering era of onshore exploration the search for
anticlinal structures at shallow, drillable depths usually began with the recognition of an overlying part of such a
structure at the surface. These days, with ready access to various forms of subsurface data, field mapping is
more commonly used to assess the structural style of a basin and to provide analogues for concealed reservoirs
or source rocks. Far from being an outdated technique, modern fieldwork is becoming increasingly
sophisticated as digital data collection is underpinned by Global Positioning Systems (GPS), satellite imagery
and digital terrain models. In Norway's Lofoten Islands a detailed analysis of onshore fault and other structural
patterns is being extrapolated offshore in order to calibrate three-dimensional (3-D) seismic data in unexplored
portions of the Norwegian continental shelf.

Remote sensing methods. Remote sensing involves gathering information of many kinds at a distance from
the object of investigation: it gives a regional picture and helps sort the likely areas to follow up from those
 47

much larger areas that are less favourable. Satellite, gravity and magnetic methods are commonly used during
the early phase of exploration when a sedimentary basin, or at least a substantial part of it, is not known in
sufficient detail to deploy more expensive methods. Their interpretation is simple and can be done relatively
cheaply in the office. Satellite images take the form of spectral data over a wide range of wavelengths, from the
visible through infrared to microwave (radar). They can sometimes detect unknown petroleum seepages. On
land, the presence of a seep is often associated with a change in vegetation or soil colour, especially if the seep
is of crude oil, whilst in the offshore setting rising gas bubbles may draw deep water to the surface, giving a
cool thermal image. Alternatively, satellites can provide photographic imagery with an extraordinarily good
resolution, sufficient to map rock exposures, analyse topography, and to locate roads, habitations and so on.

Gravity surveys are often used to analyse sedimentary basins at the regional scale. Because sedimentary
rocks usually have a lower density than crystalline rocks, thick sequences of relatively low-density sediments
effectively reduce the Earth's gravitational force and they are characterised by regional gravity lows. Gravity
data may be collected on land, at sea or by air and they are particularly useful in areas of difficult terrain, such
as jungles and deserts, where access is difficult. Regional airborne magnetic surveys can also be used to define
the shape and gross structure of a basin and they are often acquired in tandem with gravity surveys. Magnetic
rocks cause perturbations in the Earth's magnetic field, whereas non-magnetic rocks have little effect. Sediments
are typically poorly magnetic because they do not contain large amounts of iron-rich minerals, whereas igneous
rocks such as volcanic lavas often do. So sedimentary basins characteristically have a low, uniform magnetic
signature that contrasts markedly with the highly variable magnetic anomalies associated with metamorphic
basement rocks and near-surface volcanic intrusions. Where faults juxtapose rocks with different magnetic
properties at depth, the faults show up as distinctive linear features.

Seismic data and interpretation. Seismic surveying is by far the most widely used and important method of
gaining an impression of the subsurface. Seismic surveys can be acquired at sea as well as on land. The marine
method is the most common in petroleum exploration although the same principles apply to any seismic
reflection survey.

Marine seismic acquisition – pulses of

sound energy penetrate the subsurface
and are reflected back towards the
hydrophones from rock interfaces.

Compressed air guns towed behind a boat discharge a high-pressure pulse of air just beneath the water
surface. The place of detonation is called the shot point and each shot point is given a unique number so that it
can be located on the processed seismic survey. The sound waves (effectively the same as seismic P-waves
produced by earthquakes) pass through the water column and into the underlying rock layers. Some waves
travel down until they reach a layer with distinctively different seismic properties, from which they may be
 48

reflected in roughly the same way that light reflects off a mirror. For this reason such layers are called seismic
reflectors.

The reflected waves rebound and travel back to the surface receivers (or hydrophones), reaching them at a
different time from any waves that have travelled there directly. Their exact time of travel will depend on the
speed that sound travels through the rock: its seismic velocity. Other waves may pass through the first layer and
travel deeper to a second or third prominent reflector. If these are eventually reflected back to the hydrophones
they will arrive later than waves reflected from upper horizons.

The hydrophones therefore detect ‘bundles’ of seismic waves arriving at different times because they have
travelled by different routes through the rock sequence. Computer processing allows the amalgamation of
recordings from all the shot points, filtering out unwanted signals of various sorts. The final result is a two-
dimensional (2-D) seismic section. By using closely spaced survey lines or hydrophones arranged in a grid it is
possible to produce 3-D seismic datasets. These are usually interpreted on a PC workstation and colours are
normally used to enhance the image and aid interpretation. The data can be viewed in any orientation in order to
create a 3-D visualisation of selected horizons

Seismic data of all forms (2-D or 3-D) are displayed with the horizontal axis indicating geographic
orientation and distance, whereas the vertical axis is calibrated in time. The time, measured in seconds, records
how long it took the seismic wave to travel from shot to reflector and then back to the hydrophone, so it is
described as two-way travel time (TWT). Further processing and the incorporation of seismic velocity data
allows TWT to be converted into depth. Depth-converted seismic data is the mainstay of exploration since it
provides a meaningful basis for all subsequent interpretation.

A 3-D view of the Palaeocene reservoir in the Nelson

Field, North Sea. The image is derived from a ‘cube’
of closely spaced 3-D seismic data, onto which the
paths of the production wells are superimposed.
Bright colours in this perspective view relate to
depths to a particular reflecting boundary. Reds and
greens are structurally highest, where petroleum may
be trapped.

What would happen to seismic waves if there was a strongly reflective layer, such as an igneous sill or salt
body, in the shallow subsurface? It would tend to reflect most of the seismic waves back towards the surface
and reduce the quality of seismic imaging beneath it.

Interpreting seismic sections is something of a ‘black art’, requiring both experience and a certain amount
of interpretative flair. At the outset, interpretation involves tracing continuous reflectors on 2-D sections in order
 49

to build up a plausible structural representation of the subsurface. In the context of an initial exploration
programme to find possible traps this is often sufficient.

An example of a seismic section. The (vertical) arrival time axis in milliseconds (ms) is roughly equivalent to increasing
depth. Towards the top of the section a pair of dark lines indicate major coal seams. They are displaced by a fault near the
centre of the traverse (marked by the dashed red line). Many other features show up, including greater complexity in the
deeper part of the section, and towards the left of the section deep, more steeply dipping reflectors are truncated by the
Box
simpler ones at 2: Applications
shallower depths: this isofan3-D seismic data
unconformity (solid blue line).

Modern 3-D seismic data can be used for many purposes other than simply defining
Good quality 3-D seismic
trap geometry. data provides
Sometimes it is sufficiently fine resolution
possible to identify for exhaustive
the presence processing
of petroleum and analysis to
directly,
help in managing and developing known oilfields (Box 2).
particularly dispersed gas which tends to dissipate seismic waves and produce an ill-
defined ‘shadow zone’ above a leaking trap. The changes in acoustic properties across
a gas–water or gas–oil contact may also be detected as a horizontal reflector that
conforms to the geometry of the trap.

More commonly, however, seismic data are used to map rock characteristics at a
variety of scales. Starting with the recognition of distinctive reflector geometries and
seismic sequences, and then by applying a range of seismic techniques, depositional
environments can be mapped over a very wide area. As drilling progresses and data on
rock properties (such as seismic velocity and density) become available, increasingly
sophisticated reservoir descriptions can be developed. These commonly include an
assessment of lithology, the amount of petroleum that is present, fluid type and
porosity.

Interpretation of 3-D seismic data is an enormously varied and rapidly developing area
of petroleum exploration that is beyond the scope of this unit.

Seismic technology has been transformed since the 1980s. Today, 3-D seismic, rather
than single 2-D sections, are routinely used for exploration purposes in offshore
environments because the data can now be acquired quickly and cheaply. New
processing techniques and improved computerised visualisation tools add clarity to the
data, helping to provide an unparalleled impression of the subsurface. The emphasis in
exploration is to reduce the risk of drilling a dry hole and wasting a great deal of
investment. This can only be achieved by integrating all the appropriate types of data,
and with thoughtful analysis.
 50

Exploration drilling. When seismic data highlight a suitable prospect, the next step is to drill into the
reservoir in order to establish whether or not petroleum is trapped, and, if it is, to establish how large the
accumulation might be. There are several types of drilling rig, ranging from relatively small ones as deployed
on land that can be dismantled and transported by truck or helicopter, to large offshore units that are capable of
working in a range of water depths and sea conditions. An offshore jack-up rig is a barge with lattice steel legs
that can be raised and lowered. It is towed into position by tugs and its legs are lowered to the seabed before the
barge is raised 10–30 m out of the water to create a stable drilling platform. They usually operate in water
depths up to 200 m.

Drilling in greater water depths requires a floating unit and the semi-submersible rig is the most common
and versatile type. The working platform is supported on vertical columns that are attached to submerged
pontoons. Once in position, the rig is anchored to the seabed and the pontoons are flooded with water to
submerge them beneath wave level. The lower the pontoons are beneath the water, the less likely they are to be
affected by wave action. This makes them stable in rough seas. Some semi-submersible rigs have computer-
controlled positioning propellers, rather than anchors, to keep them in position and they can be used in water
depths down to 1000 m or more.

Mobile drilling units can operate on land (a) or in

a variety of water depths. Jack-up rigs at rear and
front right in (b) are used in water up to 200 m
deep, whilst semi-submersible rigs foreground in
(b) and (c) and drill ships (d) can operate in much
deeper water.
 51

Drill ships resemble conventional ships and they can move easily around the world. They too have dynamic
positioning that allows them to stay on location with remarkable accuracy in all but the most severe storms.
Since they are not ballasted they can be unstable in high seas but their advantage is that they can drill in water
depths in excess of 2000 m.

What type of rig would be used to drill in the Amazonian rainforest and what preparation would be required
before drilling commenced? Components of a land rig could be taken into the rainforest by river boats or
helicopters and assembled on site. Before that process began it would be essential to survey the drilling site,
determine the best access route, clear the site sensitively and safeguard local water supplies from any risk of
contamination. In ecologically sensitive areas the cost of site preparation and restoration may exceed the drilling
costs.

Drilling for oil and gas is a sophisticated and very expensive process. Wells often penetrate over 3000 m
into sedimentary rock; the deepest exceed 6500 m. At such depths the fluid pressures in the rock formations are
so high that a dense drilling mud is continuously pumped into the borehole to counter-balance the pressure. This
significantly reduces the possibility of an uncontrolled surge of petroleum to the surface, a situation that is
graphically described as a ‘blowout’. The enduring image of rig workers celebrating beneath a gushing fountain
of crude oil in the pioneer days of exploration distorts reality, since blowouts and the release of associated toxic
gases such as hydrogen sulphide (H2S) are very dangerous. Every modern well is fitted with hydraulic rams that
instantly isolate the borehole if excess pressures cause the well to flow. The other useful functions of drilling
mud are to lubricate and cool the drill bit, to circulate rock fragments (cuttings) back to the surface and, in some
cases, to power a turbine that rotates the drill bit.

Well evaluation. To some extent, well evaluation is similar to evaluation of coalfields. Traditionally an
exploration well is evaluated at discrete stages by withdrawing the drill bit, lowering instruments (colloquially
known as ‘tools’) down the hole on a steel cable and then hauling them slowly back to surface. This process is
known in the petroleum industry as wireline logging. As the tools are withdrawn they record the properties of
the rocks that surround the well and the fluids in them. Nowadays this approach is supplemented by
measurements that are made while drilling is in progress, which has the advantages of providing near
instantaneous data and incurs none of the expense of halting the drilling process.

The rock properties that are of interest include those used for identifying lithologies and small-scale
structural or sedimentological features. Other tools help estimate porosity, permeability, pressure and fluid
content. None provide a completely definitive description of the borehole wall, but in combination the data
acquired by wireline logging provide sufficient information to determine whether further evaluation is justified.

The most useful geological data are derived from pieces of rock recovered from specific depth intervals.
They range in size from small fragments of rock (drill cuttings) produced as the drill bit cuts into rock, to
thumb-size and larger (5–15 cm diameter) cores of solid rock that are retrieved with special tools. These provide
the basis for a detailed description of the reservoir, although cores may also be taken in mudstones to gain
biostratigraphic and/or geochemical information.

Some exploration wells, particularly those that encounter significant volumes of petroleum, justify an
extensive evaluation programme that is designed to recover fluid samples from selected intervals down the well.
The fluids (oil, gas and water) are captured in situ at reservoir temperature and pressure, and then brought to the
surface in a small sealed chamber for analysis. Less commonly, the fluids may be sampled by allowing them to
flow to the surface. Such well testing may continue for several days. During that time it is possible to draw
some preliminary conclusions about the nature of the reservoir, flow rates and the commercial potential of the
petroleum accumulation.
 52

PETROLEUM PRODUCTION

Appraising the discovery. Once quantities of oil or gas have been discovered by exploration drilling, the
next step is to carry out an appraisal programme to determine whether the accumulation is worth developing
into a producing field. To justify the move into production, the field must contain enough petroleum to repay the
huge cost of development, finance day-to-day operations and still make a profit. The steps required to translate
the excitement of an offshore discovery into a commercial product at the refinery, a process that may take
several years because it involves a huge amount of data collection and additional drilling.

During the appraisal stage, the size of an oilfield discovery must be established as accurately as possible
and the most cost-effective way to produce petroleum from the reservoir(s) sought. Geologists and engineers
focus on the reservoir in particular, by attempting to provide an improved definition of the trap geometry and
considering whether or not the reservoir is segmented by barriers to lateral flow, such as faults or impermeable
layers that will require wells to be drilled into each segment. This work is normally underpinned by a more
detailed 3-D seismic survey acquired on a closely spaced grid (with less than 50 m between shot points) to
provide maximum resolution. Such surveys give much more detail about the trap configuration, the depth to
reservoir units and, to a certain extent, the nature of the reservoir rocks themselves.

Further drilling will improve the knowledge of how reservoir fluids (oil, gas and water) and boundaries
between them are distributed. Rock properties are used to calibrate the seismic data, thereby allowing specific
reservoir rock types to be mapped in areas beyond existing wells. The resulting reservoir model provides the
basis for calculating the volume of petroleum trapped in the reservoir, and differing production scenarios can be
assessed to determine the likely reserves that are recoverable during the life of the field.

Running in tandem with the technical work there is also a complex web of commercial, regulatory and
sometimes political issues to be resolved. For example:

* How much will it cost to build, install, operate, maintain and, eventually abandon, the production
facilities?
* Is the production facility to be located in an environmentally sensitive area or a shipping lane?
* How will the petroleum be transported from the well to its point of use?
* Are new tax laws envisaged that will impact profitability?
* Might the field be confiscated if the political regime changes?

The decision to commit to developing a new field will only be made when the bulk of these issues are
satisfactorily resolved. The go ahead then relies on approvals being granted by the owner(s) of the asset,
governing bodies and financial underwriters. It quickly becomes evident that large-scale appraisal projects are
hugely complex undertakings that require careful data integration and a multidisciplinary approach.

Development options. The approach to field development is as varied as petroleum accumulations

themselves, so what follows is a brief summary. Most major petroleum field development projects in the 1990s
and early 21st century were located offshore, and often presented the challenge of very deep water (over 1500
m) and elevated reservoir temperatures and pressures. One reason for long-term optimism about the future of
the petroleum industry lies in its growing ability to access remote and difficult resources safely. The pace of
technological innovation is rapid, and that emphasises why the perception of global petroleum resources and
reserves will always change; what is inaccessible today may not be tomorrow.
 53

Deep-water
development systems:
The petroleum
industry has a
growing ability to
access remote abd
difficult resources
safely. This examples
describes the various
systems currently
available.

Production techniques. In order to develop offshore fields economically, numerous directional wells radiate
out from a single platform or from several sub-sea wellheads to drain a large area of the reservoir. This allows
each well to produce as much petroleum as possible at economic rates. Wells which deviate at more than 65°
from the vertical and reach out horizontally more than twice their vertical depth are known as extended reach
wells. Where reservoirs are thin or suffer from low permeability it may be appropriate to drill production wells
at more than 80° from the vertical and these are called horizontal wells. The flow rate from a horizontal well
may be more than five times that from a vertical well, thereby justifying the higher cost of drilling a well with a
complex geometry. In order that wells that deviate from the ‘standard’ vertical drilling can be guided precisely
through layered reservoirs, real-time information about the location and inclination of the drill bit is transmitted
back to surface. This allows the driller to ‘steer’ the bit assembly to intersect particularly productive zones.

All fluid petroleum is confined underground at high pressure, which provides a natural ‘drive’ for
production, rather like artesian water supplies.

(a) Wells at a variety of angles extract petroleum

from all parts of a large, saturated reservoir, (b)
Superimposition of the plan of the wells shown
in (a) over central London gives a graphic
expression of the area that can be exploited from
a single production platform by deviated drilling
into a reservoir.
 54

During the early stages of production, getting these fluids to the surface safely means allowing a controlled
release of fluids under pressure. To prolong extraction later in the life of an oil or gas field, it usually becomes
necessary to maintain the pressure underground by injecting pressurised water or gas, or both, into the reservoir.

When production begins, during primary recovery, pressurised fluids within the reservoir rise up the
borehole and reach the surface. As the pressure is released, any gas dissolved in the oil comes out of solution, to
rise and escape along with the oil. As production continues, the pressure of the petroleum remaining in the
reservoir begins to fall. This fall in pressure and the loss of dissolved gas increases the viscosity of the oil, so
that it will not flow so readily. Typically only 5–30% of the petroleum in the reservoir is brought to the surface
during the primary recovery stage.

As the natural drive of the petroleum dwindles, secondary recovery techniques are needed for continued
production. These techniques maintain reservoir pressure by injecting gas into the gas cap that often lies above
the oil, thus forcing the oil downwards, or by flooding water into the aquifer below the oil to force it upwards.
In some reservoirs both gas and water may be injected at the same time or alternately, increasing the recovery of
petroleum to 25–65% of the volume contained in the reservoir. The gas required for injection may be derived
from the production stream (the fluids that emerge from the well, which comprises gas, oil and water) itself, or
from an adjacent field. Similarly, the water for injection may be water from a producing well or sea water.

Oil and gas production techniques. When the natural pressure within the reservoir has
dissipated, the drive can be maintained by injecting (a) gas into the gas cap at the top of the
reservoir, or (b) water into the aquifer beneath the oil. In some reservoirs both techniques are
used at the same time.
 55

In order to improve recovery still further, chemical or biological additives may be added to the injected
water, or steam may be pumped into the reservoir, in order to reduce the viscosity of the crude oil (tertiary
recovery). Secondary and tertiary recovery methods can result in over 70% of the initial oil being recovered, but
the processes are expensive and for many smaller fields the amount of extra oil recovered may not be worth the
investment.

The percentage of petroleum that can actually be recovered from a reservoir is a function of both fluid and
reservoir properties, as well as the method of extraction. Viscous, waxy oils are more difficult to extract than
light, mobile oils, and low-permeability, segmented reservoirs yield less petroleum than good quality,
homogeneous ones, even using secondary recovery. Much oil can be left behind if the displacing fluids follow a
few discrete pathways rather than flushing out the oil uniformly from the bulk rock. Even with modern
techniques the percentage of recovered petroleum varies enormously: in North Sea oil fields it varies from
around 10% up to 70% for the best reservoirs, with the average typically in the range of 30–40%. For gas fields,
percentage recovery is generally much higher, with figures in the 70–80% range, because gas is many orders of
magnitude less viscous than oil.

Imagine that you are the Managing Director of Spoof Oil, a small, entrepreneurial company that owns a 100
million barrel oil field with a primary recovery of 25%. Studies indicate that an alternating water and gas
injection scheme would cost $80 million to install, but would increase recovery to 45%. Would you make the
investment if forecasts of future oil prices are likely to remain above $30 per barrel? Yes. Spoof Oil can access a
further (0.45–0.25)×100 = 20 million barrels by installing the secondary recovery scheme for $80 million, a cost
of $4 per barrel. Allowing for operating costs and taxes there are still very significant profits to be made while
oil price remains high.

During the course of field production the amount of new dynamic data that becomes available rises
exponentially and it allows an improved description and visualisation of the reservoir. Constant interaction
between reservoir engineers and geoscientists is required to ensure that modelled outcomes are matched by
production performance. Specific initiatives such as novel drilling strategies, time-lapse (4-D) seismic surveys
and well-stimulation programmes may be used to maximise recovery and manage the long-term decline. It
should be clear that the incentive to produce an additional 5% of reserves from a large field is very significant,
particularly in an environment of rising petroleum prices.

Getting petroleum ashore. Most offshore oil and all offshore gas are transported to shore by pipelines; the
safest, most cost-effective and environmentally friendly solution to transporting large volumes of petroleum
without interruption. Pipelines may be buried if the seabed conditions are suitable or they may rest on the
seabed and be covered with rock and gravel to provide protection.

Where seabed topography makes pipelines vulnerable or where they cannot be justified on economic
grounds, tankers transport oil from production platforms or storage systems. Storage systems may be within
massive fixed platforms or in floating ‘spar’ type offshore terminals. More commonly, storage is provided
within tankers themselves and these are known as floating, production, storage and offloading (FPSO) vessels.
FPSOs may remain on location at a single field for many years, offloading stabilised crude to a shuttle tanker at
regular intervals. Alternatively the FPSO can move between one or more fields and the shore terminal, and be
redeployed as each field is abandoned.

SAFETY AND THE ENVIRONMENT

Safety issues. Safety and the environment have increasingly become matters of prime concern to the
petroleum industry. Losses of life, particularly offshore, and large oil spillages increasingly raise outcries and
 56

make headline news. As with the mining industry, governments in many countries have legislated to ensure that
companies conform to acceptable norms of conduct.

Following the fire on the North Sea Piper Alpha platform in 1988, which killed 167 people, the industry
implemented safety improvements, most notably the Offshore Installations (Safety Case) Regulations 1992,
which changed the approach to management of safety worldwide. The regulations require the operator or owner
of every fixed and mobile installation operating in UK waters to submit a safety case to the Health and Safety
Executive (HSE).

Safety cases are required at the design stage for fixed installations and cover all subsequent operations and
decommissioning. The safety case gives full details of the arrangements for managing health and safety and
controlling major accident hazards on the installation. It must demonstrate, for example, that safety
management systems are in place, that risks are identified and reduced as reasonably practicable, and that there
are provisions for safe evacuation and rescue.

In the UK, current safety legislation sets out the objectives that must be achieved, but allows flexibility in
the choice of methods or equipment that may be used by companies to meet their statutory obligations. The
HSE employs a team of inspectors who are responsible for enforcing the regulations; their work includes
regular inspection visits to offshore installations and investigation of incidents. They have the authority to shut
down an installation and prosecute if necessary.

Figure below shows the safety performance of the UK offshore petroleum industry between 1996/97 and
2003/04. The trend in the number of reported injuries resulting in more than 3 days sick leave (called ‘over-3-
day injuries’) shows an encouraging decrease, but the trend in ‘combined fatal and major injuries’ is considered
far from acceptable. In 2003/04 there were 3 fatalities and 48 major injuries among 18,793 workers, the main
causes of which were handling, lifting and carrying. Whilst safety legislation and management commitment is
clearly vital, the challenge of improving safety performance is largely met by workers feeling responsible for
their own safety as well as that of their colleagues. In this sense employee commitment to safety is an attitude of
mind rather than a taught discipline, although it can be enhanced by training and incentive schemes.

Frequency of all significant injuries

(including fatalities) among workers in
the British offshore petroleum industry.
Note: The statistics are expressed by
convention per 100 000, whereas no more
than 20 000 people work in the industry.

Environmental management. Management of the environmental impact of projects is not only a legislative
requirement, but also good business. It is cost effective, provides a competitive advantage, responds to the
public demand for scrutiny, and allows operations to continue in an area. Environmental management, like
safety, is now an integral part of all phases of the petroleum business, from early exploration activity through to
decommissioning a petroleum field.

Base-line studies and environment impact assessments are commonly used schemes for describing the
potential impact of a project on the local environment. A base-line study describes the initial natural state of the
 57

flora, fauna and land/seabed conditions prior to any activity. Such a benchmark allows future changes to be
identified and provides a reference point if restoration or improvement is required. Such studies are often
conducted by independent scientific specialists in order to provide rigour and objectivity.

Environmental impact assessments (EIAs) are detailed ecological studies that are linked to the planned
activities of a particular phase of work. They build on the findings of the base-line study and aim to develop or
use specified techniques and procedures to minimise the impacts on the environment. These measures may
range from using ‘soft-start’ airguns at the start of a seismic survey in order to alert nearby marine mammals,
which can be disoriented by repeated loud noises, to avoiding drilling in fish spawning grounds and reducing
the use of oil-based drilling muds. Effective EIAs involve widespread co-operation and consultation amongst
the industry and stakeholders in order to achieve the best possible outcomes. As an example, the Atlantic
Frontier Environmental Network (AFEN) focuses on the Atlantic waters to the west of Orkney and Shetland,
and involves a consortium of oil companies, government bodies and conservation organisations.

Environmental risks. The most significant environmental risks from petroleum production come from oil
spills. Despite precautions, accidents do occur. Perhaps the best documented case history is provided by the
Exxon Valdez, which ran aground in 1989 in Prince William Sound off Alaska. Some 37,000 tonnes of oil were
spilled (roughly equivalent to 125 Olympic-sized swimming pools), to affect more than 2000 km of coastline.
Whilst this spill was not the highest ever in terms of volume, it is widely considered the worst in terms of
damage to the environment, because of the rugged shoreline and abundance of wildlife. The clean-up
(remediation) process cost more than 2 billion dollars and took several years. Today there is only very localised
evidence of the spill.

Two much larger spills, from the Braer (85,000 tonnes) and Sea Empress (72,000 tonnes), caused far less
environmental damage and had only short-lived effects. The Braer, which foundered in 1993 on the Shetland
Isles, was carrying a relatively light and easily biodegradable crude oil which was quickly dispersed into the
water column by storm force winds and high seas. Similarly, the Sea Empress was transporting a light crude oil
when she grounded approaching the oil refinery at Milford Haven, South Wales in 1996. Although more than
100 km of outstanding coastline were initially polluted, the combination of efficient clean-up operations and
rapid natural dispersion restored their visually aesthetic appeal within six months. The point is that whilst oil
spills are never good news, their long-term effect is rarely enduring.

Despite the increasing number of large tankers carrying crude oil around the world, the number of large
spills shows a significant decrease over the last several decades. This is encouraging but it does not provide
grounds for complacency and maritime safety systems continue to be improved. Nevertheless, many analysts
contend that more oil is ‘spilt’ each year by the deliberate flushing of tanks at sea than is lost by accident.

Annual number of large oil spills

(over 700 tonnes) worldwide. (The
horizontal bold red lines represent
the 10-year averages.)
 58

Aside from oil spills, there are several other significant environmental concerns for the petroleum industry.
Gas venting and flaring has traditionally been used to dispose of excess gas in fields where no containment or
transport facilities existed. This practice releases large amounts of methane and carbon dioxide into the
atmosphere, both of which are greenhouse gases. The World Bank estimates that the annual volume of natural
gas being vented and flared is about 100 billion cubic metres, enough fuel to provide the combined annual gas
consumption of Germany and France. There is now an increasing effort to make commercial use of excess gas,
as in the Clair field west of Shetland. That field was inaugurated in 2005, some 27 years after it was first
discovered. With an estimated 5 billion barrels of oil in place it was considered one of the largest undeveloped
resources on the UK continental shelf. The oil is being exported to the Sullom Voe Terminal in Shetland via a
105 km pipeline and the gas will be transferred to the Magnus field and re-injected there to enhance oil
recovery.

Dealing with environmental issues. One of the most promising schemes for dealing with greenhouse gases
is known as gas sequestration. This involves injecting carbon dioxide into a depleted underground reservoir and
monitoring the integrity of the trapped gas with time-lapse seismic data. Successful trials in Norway indicate
that this technique has the capacity to make significant reductions to the carbon dioxide emissions throughout
northern Europe. Interestingly, at pressures of a few atmospheres and temperatures below 30–40 °C, carbon
dioxide forms a stable liquid that is denser than water. At temperatures lower than 10 °C it can combine with
water to form an ice-like substance known as a gas hydrate. Provided the temperature in a depleted petroleum
reservoir is below that where pressured carbon dioxide is only stable as a gas, storage can be indefinite.
Methane can also be stored in similar settings, or in underground salt caverns, and recovered according to
demand. The key issues now appear to be cost and legislation, rather than feasibility.

The safe disposal of waste products such as drill cuttings and oily water is subject to increasingly tight
regulations and innovative solutions have emerged. For offshore installations this may involve transporting all
waste to the shore for proper treatment and recycling; for example, drill cuttings are commonly recycled as cat
litter, fertiliser or used in the construction of footpaths. Alternatively they are cleaned on site and re-injected
underground. On a far larger scale there remains the challenge of decommissioning the 6500 offshore
installations worldwide as they come to the end of their productive life. Most will be completely removed from
their current location and brought to shore for reuse or recycling. The remainder will be examined on an
individual basis to establish what is technically feasible and safe to remove. The debacle of the Brent Spar
illustrates the need to resolve the technical, commercial and environmental debate before embarking on a
prescribed course of action.

Results from experiments conducted at the

Monterey Bay Aquarium Research Institute,
California to test the feasibility of
sequestering carbon dioxide in deep ocean
basins. (a) A typical ocean water column
temperature profile (solid red line) for
Monterey Bay, California overlain on a
diagram showing physical states in which
carbon dioxide occurs at different pressures
and temperatures. (b) Liquid carbon dioxide
being poured onto the sea bed at a depth of
around 900 m.

The combination of legislation and good practice has led to a significant reduction in the environmental
impact of the petroleum industry over the last decade. Quite properly, this shows no sign of slackening.
 59

However, the lasting damage done to the environment by petroleum is not primarily caused by ongoing
operations or oil spills, but through society's deliberate use of petroleum products as fuels.

OIL AND GAS RESERVES

Estimating reserves. Exploration companies need to understand how much petroleum remains to be found
in a given area or play before they commit significant expenditure to new ventures. More generally, reserves
and their depletion in different parts of the world have profound political implications for ensuring future
energy supplies: petroleum resources lie at the centre of global political affairs.

Estimating the amount of petroleum in a field can be achieved in a variety of ways and with differing levels
of accuracy, according to the amount of data that is available. The reserves estimate for a virgin basin – one that
has yet to be drilled – may be based simply on the supposed richness of the source rock or comparisons with
analogous basins that contain petroleum. Conversely, in an established play that is peppered with wells and
seismic data, it should be possible to define the undrilled prospects and determine how likely they are to contain
given reserves.

In recent years a virgin basin to the north of the Falkland Islands in the southern Atlantic has begun to be
evaluated, and several exploration wells have been drilled. Media reports (and some oil companies) claim that
more than 5 billion barrels of oil will be discovered here in due course. How would you assess the validity of
their claim? Any estimation of reserves that is based on sparse data must be treated with caution. It would be
more correct to quote the range of likely outcomes (e.g. 0 to over 5 billion barrels) at this early stage, rather than
one possible outcome. Billion-barrel oil provinces normally have prolific source rocks, large structural traps and
excellent reservoir rocks, so the diligent geoscientist should seek such evidence.

It is also possible that the reports are designed to generate enthusiasm and encourage potential investors,
particularly because the initial drilling campaign off the Falkland Islands was allegedly disappointing.

One particularly useful approach to reserves estimation is based on the observation that the largest
discoveries are normally made early in the life of a play, because they are in the biggest structures that get
identified and drilled first: they are the least risky and income from them allows costs to be recovered quickly.
Then, as the number of exploration wells increases, so the average volume of reserves proven by each discovery
diminishes. This typical pattern is illustrated in Figure below where, at point A, the first major discovery defines
the play and reserves estimates increase rapidly. Over time, when point B is reached, only smaller fields within
the play remain undiscovered and the rate of reserves additions declines. If only one play exists in this basin,
then the total reserves discovered over time will approach the estimate at point B*. This trend, described by the
curve A–B–B*, is referred to as a creaming curve by analogy with skimming the cream off the top of the milk.

However, if a second play is discovered (figure below, point C), reserves estimates increase rapidly again,
and the cumulative reserves for the basin as a whole will approach point D* in time. Discovery of a third play,
at point E, will increase the reserve estimate still further. The discrete creaming curves describe the evolution of
plays over time and give a measure of their contribution to the basin as a whole.
Hypothetical creaming curves for new
plays discovered within a basin. See text
for discussion of the figure.
 60

It is clear therefore that assessments of reserves rely upon the current state of knowledge within a basin or
play. Many basins that appear to be thoroughly explored continue to provide surprises as new play tests are
conducted, and thus it is useful to remember the explorer's adage:

‘We usually find oil in new places with old ideas. Sometimes, also, we find oil in an old place with a new idea,
but we seldom find oil in an old place with an old idea. Several times in the past we thought we were running
out of oil whereas we were only running out of ideas.’
(Parke A. Dickey)

Reserves categories and reporting. There are inherent difficulties in estimating petroleum reserves
accurately, not only within a given area or play, but also within a single field. Reserves never equate solely with
physical measurements such as the petroleum-saturated pore volume in a trap, but instead are influenced by a
combination of technological, commercial, and sometimes political, factors, as are all other physical resources.

Petroleum reserves are an estimate of future cumulative production from known fields, and they are
typically defined in terms of a probability distribution into ‘proved’, ‘probable’ and ‘possible’ categories. A
probability cut-off of 90% is often used to define proved reserves, meaning that there is a better than 90%
chance that they will be produced over the lifetime of the field. Although there is no single technical definition
of proved reserves, a commonly used description is as follows:

The estimated quantities of petroleum which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs under current economic and operating
conditions.

Probable reserves are often considered to have a better than 50% chance of being technically and
economically producible, whilst possible reserves are those which are estimated to have a significant, but less
than 50% chance of being technically and economically producible.

In general, a proportion of a field's probable and possible reserves tends to get converted into proved
reserves over time, as experience from its operating history reduces the uncertainty around what remains in the
reservoir. This is an aspect of the phenomenon referred to as ‘reserves growth’. Petroleum companies have to be
very careful in assigning their reserves to the proper category since most value is attached to those that are
proven.

The global picture. The global occurrence of petroleum is very patchy and there are sound geological
reasons for this. The most significant is the distribution of continental and oceanic crust, because source rocks,
the prerequisite for any petroleum system, are confined to continental crust, including continental shelves.
Elsewhere, and mainly concealed beneath the world's great oceans, vast areas of oceanic crust have no source
rocks and therefore no petroleum potential. Similarly, igneous and most metamorphic rocks cannot source and
 61

rarely host petroleum, so areas where they predominate, such as Scandinavia and the Canadian Shield, are poor
in petroleum resources.

In contrast, petroleum-rich countries generally have one of the following two features:

1. Particularly prolific petroleum basins within their borders. The top five countries in terms of their
share of proved world oil reserves (as at end 2004) are: Saudi Arabia 22.1%, Iran 11.1%, Iraq 9.7%,
Kuwait 8.3% and the United Arab Emirates 8.2%.

2. Large continental or continental shelf areas, which are statistically more likely to contain sedimentary
basins with the key ingredients for petroleum. For example, the five largest countries in the world (by
area) contain the following share of total proven world oil reserves (as at end 2004): Russian
Federation 6.1%, Canada 1.4%, China 1.4%, United States 2.5% and Brazil 0.9%.

There are specific features of the geology of the Middle East that make it so richly endowed with petroleum.
The region contains several world-class source rocks ranging in age from Palaeozoic to Tertiary, with very
thick reservoirs and seals above them, in enormous, low-relief anticlines. In addition, most of its reserves were
easily discovered because of the simplicity and sheer size of the traps.

World oil statistics. According to BP's Statistical Review of World Energy, which is generally taken as a
reliable source, world proved crude oil reserves at end 2004 were estimated at 1188.6 billion barrels or 161.6
billion toe (1 barrel is equivalent to 0.136 toe). Figure below shows the breakdown of this total by region. Note
that Europe and Eurasia, Africa, and South and Central America each have about 10% of world reserves, but
they are overwhelmed by the Middle East which has 61.7%.

Proved world oil reserves by

region at the end of 2004 in
billions of tonnes of oil
equivalent (109 toe).

Proved oil reserves (at the end of

2004, in billions of toe)
 62

One useful measure of assessing reserves is the reserves-to-production (R/P) ratio. If the reserves remaining
at the end of any year are divided by the production in that year, the R/P ratio is the length of time that those
remaining reserves would last if production were to continue at that level. The world oil R/P ratio rose sharply
during the 1980s because significant new discoveries in the Middle East outpaced the steady growth in world
production. Since reaching a peak of 43.7 years in 1989 it has hovered around the 40-year mark. Whilst this
figure conceals some strong regional differences, it supports the notion that reserves are sufficient to bridge the
gap between current demand and a transfer to alternative energy sources in the future.

World oil consumption continued to rise inexorably, and reached 80 million barrels per day during 2004.
Growth was a global phenomenon, with consumption in all regions rising above the 10-year average on the
back of a strong world economy. In particular, Chinese oil consumption rose by just under 16%. The Middle
East accounted for 41% of world crude oil exports in 2004 (about 21% of Middle East production is consumed
there). The USA accounted for about 26% of global imports, and 19% of US imports were from the Middle East
(Canada, South and Central America accounted for 27%). European imports accounted for 22% of global oil
trading (26% of Europe's oil imports came from the Middle East, and 50% from the former Soviet Union and
North Africa). The other major industrialised part of the world, SE Asia, received 78% of its imports from the
Middle East. It is quite clear why the Middle East is an area of such great political concern, and that it will
remain so for a long time.
Box 3: Petroleum and units of measurement

The petroleum industry has a somewhat lax attitude towards standardisation of units. Whereas
scientists have adopted the SI system universally, relics of the past prevail amongst oil-industry
production engineers and statisticians. As you will know, crude oil is still sold by the barrel; a unit
of volume that was defined by US coopers in the 19th century as 42 US gallons. Unfortunately, the
US gallon differs from the Imperial gallon formerly used in the UK (1 barrel = 35 Imperial gallons).

Box 3: Petroleum and units of measurement

In SI units a barrel has a volume of about 0.16 m3. Since the density of oil varies from 0.79 to 0.97 t
m−3, with an average around 0.84 t m−3, expressing oil in terms of mass is rather vague. We use the
average density in converting reserves quoted in barrels into tonnes of oil equivalent (toe).

Natural gas might seem an easier material as regards units, and the unit used most commonly is the
cubic metre (usually in multiples of a trillion or 1012 m3), although in the US cubic feet are still
commonly used. The problem arises when the energy content of natural gas, and those of other
energy resources, are needed for comparison with that of oil. It is common practice to convert
volumes into toe, and many global statistics use the toe. Again there is imprecision, as different oils
have different energy contents (in joules, J) and so too do different ‘varieties’ of other fossil fuels,
including natural gas. It would be convenient to compare every kind of energy source in terms of
the fundamental unit of energy, the joule. You will appreciate that is not possible in the case of
fossil fuels, so we stick with toe for oil, and m 3 for natural gas, but retain barrels of crude oil in
places, because we hear of the changing price of oil in terms of barrels on such a regular basis.

World gas statistics. At the

end of 2004, world proved
gas reserves were estimated
at 179.53 trillion cubic
 63

metres (179.53 × 1012 m3). Figure below shows the distribution of this total by region and it is notable that the
Middle East, and Europe and Eurasia are far more equitable in terms of gas reserves than for oil. Together they
account for 76.3% of the world reserves.

Proved gas reserves by

region (at the end of 2004).

Proved gas reserves by

region at end 2004. Volumes
in trillion cubic metres (1012
m3).

The world gas R/P ratio has risen over the last 20 years despite a 75% increase in gas production. This is
because the 1990s was a particularly successful decade for gas discoveries in Russia and the Middle East and
these cumulative reserves have outpaced production. With the exception of North America, all regions are well
endowed with natural gas and have R/P ratios sufficient for several decades.

World gas consumption rose by 3.3% in 2004 to reach 2.69 × 1012 m3. Growth was robust outside North
America where consumption stagnated in the face of high prices and industrial restructuring. That said, North
America still accounted for 29% of world gas consumption, outstripped only by Europe and Eurasia (41%).

The largest exporters of gas by pipeline were the Russian Federation and Norway, mainly to countries such
as Germany, Italy, France and Turkey that have a particularly strong dependency on imported gas. The North
American market was sustained by the net import of 93 billion m3 of gas from Canada to the USA. The
principal movement of liquified natural gas (LNG) was in the South Asia and Pacific region where Japan and
South Korea imported 60% of total world LNG, principally from Indonesia, Malaysia and the Middle East.

The UK context. For the sake of comparison, it is interesting to note that at the end of 2004 the UK had
proved reserves of 4.5 billion barrels of oil (611 million toe) and 590 billion m3 of gas. This implied a R/P ratio
of only about 6 years and a UK contribution of less than 0.5% to the world share of proven oil reserves, and
about the same percentage for UK gas. These rather stark statistics conceal the fact there are probably still very
significant reserves to be exploited. Remaining oil reserves at the end of 2004 were estimated to be between 23–
31 billion barrels (3.2 to 4.2 billion toe), which is about the same volume that has been produced to date. Some
of these reserves are proved because they are associated with producing fields, whilst the remainder fall within
the probable and possible reserve categories as they are ascribed to undeveloped discoveries and exploration
potential.
 64

Oil reserves estimated to be beneath the UK

continental shelf in 2004, compared with production
up to 2004. Note that the proven reserves are
included within the producing/being developed
category, some of which are probable reserves
because of remaining uncertainties. Undeveloped
discoveries are mainly probable reserves, while the
exploration potential covers possible reserves.

The exploitation of remaining reserves presents a major challenge to all stakeholders (operators,
government, contractors, trade unions). Fields are smaller and more complex, unit costs are high and
infrastructure may not be accessible – all these factors will determine the economics of development and dictate
the lifespan of the British North Sea petroleum fields.

Whereas the UK passed its peak production in 2000 it is expected to remain self-sufficient in oil until 2009–
10. UK gas production currently meets over 90% of demand and is forecast to fulfil 60% of demand in 2010.
Thereafter, the North Sea will still sustain meaningful production for several more decades.

What difference would a decade of consistently high oil prices make to the North Sea fields? It would allow
the relatively small discoveries that have been made in recent years to be developed and would sustain the
production from existing fields through increased drilling and improved recovery factors. These measures
should prolong the economic life of the North Sea fields and reduce the UK's need for importing oil and gas.

The price of oil is mainly determined by the rate at which oil is produced from the vast oilfields of the
Middle East, where costs are much lower than for North Sea fields. Much of the variability in oil price depends
on political decisions in Middle Eastern oil-producing countries, and the extent to which political (and other)
pressures from major oil importers affect those decisions.

NON-CONVENTIONAL SOURCES OF PETROLEUM

Oil sands. Non-conventional sources of petroleum, such as oil sands, heavy oil and gas hydrates, greatly
exceed the world's entire endowment of conventional petroleum. Yet, because of technological, commercial and
environmental constraints to production, non-conventional petroleum currently accounts for only about 5% of
global consumption. This huge imbalance will slowly change as the inevitability of declining conventional
petroleum reserves and increasing prices hits home.

If a near-surface rock has good reservoir properties, large volumes of oil can flow into it from mature source
rocks buried deep below. Exposure of crude oil to air and bacteria close to the surface degrades it to thick,
viscous bitumen. Over time, tens of metres of rock from the surface downward can become completely
impregnated with bitumen, forming a deposit known as oil sand.

Oil sand is composed of bitumen, sand, clays and water. Bitumen, in its raw state, is black and thicker than
treacle. It requires treatment to make it fluid enough to transport by pipeline and to be usable by conventional
refineries. The process involves large-scale surface strip-mining of enormous volumes of oil sand. The sands
are then heated to between 35–80 °C to separate and chemically change the bitumen to lighter hydrocarbons
using water-based extraction methods. The upgraded product consists of light and heavy oils that are blended to
produce a light crude oil with a low sulphur and nitrogen content.
 65

The world's largest producer of crude oil from oil sand, Syncrude, is based in the Athabaska area of northern
Alberta in Canada. Their product is called Syncrude Sweet Blend, and in 2004 it accounted for about 10% of
Canada's total crude oil production. With billions of barrels recoverable using current technology, the Athabasca
deposit constitutes a resource for decades to come. Importantly, the drive to reduce operating costs to their
current level of around US$10 per barrel has also been accompanied by significant reductions in sulphur
emissions, water abstraction and power usage during the upgrading process.

Large-scale extraction of oil

sand in northern Canada. (a)
Satellite image of the Syncrude
operation at Fort McMurray,
Alberta. Active and near-future
operations are at lower left and
top centre. The image is about 15
km across.

(b) To operate continuously, oil-sand mines need the world's largest

excavators. This is the Krupps Bagger 288, a bucket wheel reclaimer,
which is the largest land vehicle ever built. It is on its way to a lignite
mine in Germany: similar machines operate in the Canadian oil-sand
mines.

When oil sands occur at depths that are too great for surface mining, in situ extraction involves injecting
steam and/or hot carbon dioxide to lower the viscosity of the oil and enable it to be pumped to the surface.

Petroleum accumulations that will not flow to the surface under natural reservoir pressure are referred to as
heavy oils. They are characterised by high viscosity that increases with their density, low hydrogen/carbon
ratios, low gas/oil ratios and significant sulphur, asphalt and heavy-metal contents. Heavy oils can form for a
variety of reasons, such as kerogen composition, level of maturity, depth of burial and exposure to water, air or
bacteria. The economics of heavy oil production typically suffer from high extraction costs and a discounted
value because of their inferior quality. As a result, the vast remaining global resource of heavy oils is still very
much underexploited.

Gas hydrates. The temperature and pressure of the deep oceans are controlled, respectively, by deep, cold
currents that move from polar latitudes along the sea floor and by the mass of the overlying water column.
Consequently, at depths exceeding 300–500 m the sea floor is at a temperature of around 1–2 °C and a pressure
that is several hundred times greater than atmospheric pressure. Under these physical conditions, gases such as
methane (CH4) and carbon dioxide (CO2) can combine with water to form solid, ice-like crystalline compounds
known as gas hydrates. Clearly, economically interesting gas hydrates are those which contain proportionally
far more hydrocarbon gases in their structure than CO2. Depending on the geothermal gradient, the base of the
hydrate stability zone may extend to depths of more than 1000 m beneath the ocean floor.

Hydrocarbon gas hydrates can form in deep ocean water but they are not found as a carpet on the sea floor.
This is because such hydrates have a lower density than that of seawater (850 kg m−3 compared with 1025 kg
m−3). As soon as they form, they float upwards and turn back into methane and water in the lower pressures and
warmer temperatures of the upper layers of the ocean.
 66

However, within the sediments just beneath the sea floor, crystals of hydrocarbon gas hydrate form and
move upwards buoyantly. Frequently the rising crystals form a ‘log-jam’ within the pore space of the sediment
and once this occurs, more gas hydrate crystals become trapped in the pore spaces beneath. Eventually, all
available pore spaces in the sediment become completely filled by gas hydrate crystals that readily absorb
methane into their lattice. Fully saturated gas hydrates can hold up to 200 times their own volume of methane,
creating a zone that is denser than seawater and thus gravitationally stable.

The gas required for formation of gas hydrates comes from two principal sources: biogenic and
thermogenic. Biogenic gases are those produced in situ by bacterial breakdown of organic matter contained
within the sea-floor sediment. The dominant biogenic gas is CH4 (>99%) with traces of CO2 and H2S. Such
gases typically form in oceanic areas that have relatively high rates of sedimentation and plenty of organic
matter, such as the coastal margins of North America and the North Pacific Ocean. In contrast, thermogenic
gases are those produced by the maturation of kerogen at much greater depths and elevated temperatures.
Thermogenic gas hydrates contain significant amounts of ethane, propane and butane, and they occur in
petroleum-rich provinces, such as the Gulf of Mexico and Caspian Sea, where leakage to the surface is
common.

Gas hydrates do not form only in the oceans, but also in deep lake sediments and onshore permafrost zones
across Arctic Canada and Russia. Current estimates suggest that gas hydrates globally may contain 1–5 × 1015
m3 of methane, a figure that dwarfs the remaining proven reserves of conventional gas. But there are some
issues of both concern and potential.

On the positive side, the potential of methane hydrates as a major strategic energy reserve is obvious and
much research is being conducted to develop appropriate extraction techniques. This extends to considering
whether methane production could be combined with CO2 disposal, thus addressing the twin challenges of this
century – reducing the emissions of greenhouse gases and providing a low-carbon fuel to replace oil and coal.

On the negative side, it is now recognised that gas hydrates are a potential geohazard. Dissociation of
hydrates at the base of the gas hydrate stability zone can cause increased pore-fluid pressures in under-
consolidated sediments, forming a zone of weakness and a site of potential sea-floor failure. Slope failure can
threaten underwater installations and, in extreme cases, generate tsunamis. It has even been suggested that
during periods of climatic warming such as we are experiencing at present, onshore hydrates become
destabilised, liberate methane to the atmosphere and thus accelerate global warming.

Illustration of the major issues concerning gas hydrates in sea-floor sediments. (Left) Earthquakes trigger gas-
hydrate instability that in turn triggers massive slumping of sea-floor sediments and tsunamis. Installing large
structures on the sea bed might result in rapid release of gas and instability of their foundations. Any release of
methane promotes global warming. (Right) The huge potential for developing gas hydrates as resources – they
are readily discovered by their distinct ‘signatures’ on seismic sections.
 67

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