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Oil: Background

What is Oil?

Oil, also called petroleum, is a naturally occurring liquid formed from dead marine microorganisms. It is usually black or dark brown in color, but can vary from yellow to greenish. It is an organic substance and consists of several hydrocarbons (compounds made of hydrogen and carbon). It is typically found underground in sedimentary rocks. Sometimes it rises to the surface. Oil is a fossil fuel. When it is extracted from bedrock it is called crude oil. The chemistry of crude oil varies from one deposit to another, depending on the source material and the amount of heat it was exposed to during formation. Crude oil can be separated into different products using industrial processes in refineries.

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Uses of Crude Oil

microscopic image of crude oil
Millions of microscopic diatoms,
like the one shown, are the
ingredients of crude oil.
© Wikipedia

Crude oil is rich in flammable hydrocarbons and has a high energy density. This means that upon combustion (burning) it releases a lot of energy. For this reason, crude oil is a very important source of energy. The major use of crude oil is as fuel for transportation. Crude oil is separated into various fuel types in refineries. Their names denote differences in chemistry; e.g. gasoline for cars, diesel for various vehicles including ships, and jet fuel for aircraft. Crude oil is also used as a lubricant for the moving parts of engines and can also be used as a coolant. Heating oil is another product refined from crude oil and used to keep buildings warm. Other uses are less obvious, despite their everyday importance. For example, components of crude oil are used in pharmaceuticals, paints, solvents, plastics, clothing, fertilizers, and pesticides.

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diagram products made from oil
A barrel of oil contains 42 gallons.
© Department of Energy

How is Oil Formed?

When tiny marine plants and animals that live in the surface waters of the ocean die, they sink to the sea floor. Consequently, much of the sea floor is covered with muddy sediments washed from the continents and organic remains. As fine sediments accumulate, some of the organic material is trapped and buried before decomposing. Over thousands of years, great thicknesses of sediments gradually build up. The overburden pressure causes the compaction of sediments and grains are forced together and water is squeezed out to form sedimentary rocks. Most oil is found in rocks that are millions of years old. Scientists consider that the formation of oil by biogenic processes is a very slow process.

Electricity Generation by Fuel 2010
The oil we drill today began forming hundreds of millions of years ago.
Source: NASA

At depths of several thousand meters, the organic material is geothermally heated under pressure. The geothermal gradient from Earth's inner heat rises by approximately 2° C per 100 meters from the surface. Heat and pressure cause the remains to metamorphose, first into a waxy material known as kerogen. At depths averaging between 4-6 kilometers, the organic matter literally cooks. Crude oil begins to form as minute droplets or bubbles in the pores between grains of sediment. The first oil to form consists of large molecules that form heavy oils. Maturing occurs between temperatures of 50° to 100° C, known as the "maturation window". With more heating, these molecules break down to form lighter hydrocarbons and thinner oils. Further heating above 120° C transforms liquid oils to natural gas, with even lighter molecules.

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Which Geologic Materials Contain Oil

The heating of organic matter at depth produces a fluid with a relatively lower density than the surrounding layers of rock. The fluid migrates upwards through the pores between the grains in sedimentary rocks. Where oil reaches the surface it can ooze out as seeps both on land and under the ocean. Under special geologic conditions, porous rocks may be capped by an impermeable layer without interconnected pores, for example clay or salt, through which the migrating oil cannot pass. The cap rock acts as a seal and causes the oil to accumulate within the pores of the sedimentary rocks below. When a lot of oil builds up, the structure is called a trap and contains a reservoir of oil that can be drilled into and pumped out. Good reservoirs are both porous and highly permeable, and allow the oil to flow freely upon release. Shale and sandstone are both very effective. Oil fields are large areas that contain many reservoirs and can cover areas of hundreds of square kilometers. Individual reservoir rocks can be as little as a few tens of meters thick.

sedimentary reef system
A massive reef system from millions of years ago is now exposed at the surface.
These sedimentary rocks reveal important information about the kinds of
materials that contain oil deep in the crust.
© Marli Miller, University of Oregon

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Discovering Oil

Geophysicists use special technologies to make observations of rock layers, and any oil they might contain, deep below the surface. One common method is to artificially release seismic waves using special vibrating trucks or small explosions. The waves travel as vibrations through the layers of rock within the Earth. When the seismic waves come to a boundary where two different kinds of rock are in contact, some of the waves are reflected back towards the surface at an angle. Information about the returning waves is recorded using special detectors called geophones. This data reveals the speeds, distances, and directions of the waves during their journey. Scientists input the data into computer programs to make models that reveal the shapes of rock bodies deep within the Earth. Some models are made in three dimensions in a way similar to medical imaging done by CAT scans. This requires lots of data from waves that crisscross past each other as they are reflected from deep Earth rock structures. If results indicate that there is a good chance of finding an oil reservoir then test wells are drilled.

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Drilling for Oil

Oil is removed from the ground through a well, which is a small hole drilled into an oil reservoir. Drilling depths vary from shallow wells a few tens of meters deep to very deep wells several kilometers deep. The Perdido Spar platform in the Gulf of Mexico is in nearly 3000 meters of water and drills a further 3000 meters in sediment and rock on the sea floor. A well is created by a drill rig rotating a drill bit that cuts into the rock. Attached to the drill bit are sections of drill pipe. During drilling a mixture of mud and water is forced into the hole to float out the rocky debris being drilled. As the hole gets deeper more sections of drill pipe are added. At a certain depth, the hole must be protected from collapsing inwards. This is done by inserting segments of casing into the hole to protect its walls. Then the bottom of the well is plugged and the gap between the casing and the walls is filled with cement. The drilling continues until the rock cuttings reveal oil within the rock pores. At this point, the drill is removed and the reservoir rock is tested to determine the pressure in the rock and the structure of its layers. Afterwards, explosive charges are lowered into the hole to perforate the casing and to allow the oil to flow. A smaller diameter length of tubing is lowered into the hole through with the oil flows. Finally, special fluids are added, depending on the rock type, which help the oil to flow into the well by enhancing the permeability of the reservoir surrounding the well

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Onshore and Offshore Wells

In the early days of the oil industry, wells were on land and often less than 30 m deep. Today oil wells are drilled in both onshore and offshore environments. Both kinds of wells are drilled in a similar way but offshore drilling is affected by many other factors including water depth, remoteness, and climatic conditions. The greatest difference is the nature of offshore platforms. Offshore platforms, or oil rigs, are either floating of fixed to the sea floor.

diagram on different types of oil rigs
There are many kinds of oil rigs. In shallow depths of less than 170 meters, jack up rigs can moved from place to place. They are
towed into place by tugboats and then their legs are jacked up until the platform is at the surface and the legs rest on the seafloor.
Source: Oil States Retrieved from: NOAA
full view of perido spar rig
The Perdido Spar oil platform is the deepest drilling
operation in the world. The top of the can-shaped
spar can be seen below the platform.
Source: Shell

Fixed platforms are built on steel or concrete legs anchored directly to the sea floor. The deck contains the drilling and production facilities and the living quarters. Because they cannot be moved, they are long term structures and installed at depths of up to 550 meters. In deeper waters, platforms are mounted on flexible towers that can withstand the motions of water that is between 400 - 950 meters deep. Semi-submersible platforms rest on floating pontoons that can be filled with ballast to adjust their position in the water. Once over the drill site, they are anchored by chains and cables to the sea floor. They can be operated in depths of 60 to 3000 meters. In deep water, approaching 4000 meters, drill ships can be positioned over wells. As oil is extracted it fills storage tanks in the hull of the ship. Drill ships are often leased from the builders and can cost $200,000 per day. In very deep water, floating platforms contain a cylindrical hull, called a spar, which controls buoyancy and acts as a counterweight. By adjusting the mooring lines, the spar can be precisely positioned using GPS above a group of wells in an oilfield. The Perdido spar operates in the Gulf of Mexico in 2500 meters of water. It cost more than $3 billion.

close view of decks on spar
The Perdido spar rig has access to 22 wells on
the sea floor. Source: Shell

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Transportation and Refinement of Oil

Transporting oil from one location to another is a vital part of the oil production process. The most common methods for moving oil are through oil pipelines and on oil tankers. For example, beneath the Gulf of Mexico are more than 45,000 km of pipeline that line the seafloor and bring oil from drilling platforms to the shore. In Alaska, the Trans-Alaska pipeline zigzags for 1300 km overland to connect the oil fields of Prudhoe Bay in the north, to the ice free ports and the refineries at Valdez, in the south. This pipeline extends above and below the surface to minimize damage to the sensitive frozen ground of that region. Pumping stations keep the oil moving at speeds of 6 km an hour. The maximum flow recorded in a single day through the Trans-Alaska pipeline is approximately 2 million barrels. The capacity of a single ocean-going supertanker, on the other hand, is approximately 2-3 million barrels.

gas truck
Gasoline is transported from refineries by road.
Source: Wikipedia

Oil refineries are factories that transform crude oil into various products, including gasoline. The components of oil are separated by heating the oil to manipulate the chemical properties of the compounds it contains. Different hydrocarbon products have different boiling points. Lighter products, like gasoline, boil off first. Their vapors are collected at the top of cooling towers where they are condensed into liquids. The heaviest products, called gas oils, collect at the bottom of the towers. Medium weight products, like diesel and kerosene, collect in the middle. Following separation, the products are enhanced by applying heat and pressure to "crack" their heavier carbon molecules and form smaller ones, e.g. gasoline. Finally, the products are refined and blended to meet government standards and customer specifications.

oil tanker
A tanker with a storage capacity of 750,000 barrels of oil. Petroleum is transferred from ships to refineries using pipelines.
Source: Wikipedia

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Oil History in the United States

The oil industry in North America has a rich history. The first oil well in the United States was drilled by Colonel Edwin Drake to a depth of 21 meters in northwestern Pennsylvania. Oil wells were soon drilled throughout the Appalachian region. At that time, oil was mainly drilled to produce kerosene for use as a lamp oil. In 1861, oil wells were drilled in California and large oil fields were discovered. By the end of the 19th century, production on land was occurring in Ohio, West Virginia, New York, Kentucky, Kansas, Oklahoma, Louisiana, Texas, Colorado, California, and Alaska. In 1901, petroleum production was boosted by the discovery of vast reserves at the Spindletop Oil field in Texas. Drilling beneath water began on the Canadian side of Lake Erie in the early 1900's. As the popularity of automobiles increased in the 1920's, the demand for oil grew. In 1937, off the coast of Louisiana, the first offshore fixed platform was constructed in 4 m of water and nearly 1 mile from the shore.

1st oil well
The first oil well in the United States, Titusville, Pennsylvania, 1859.
Source: USGS

In the early 1940's, during World War II, attacks on tankers lead to the expansion of onshore pipelines to transport oil from Texas and Oklahoma to the East Coast. In the 1950's and 1960's, U.S. oil companies began exploring overseas for oil in the Middle East, the North Sea, South America, and Canada, and for the first time the U.S. became an importer of oil. With an increase in the population of the West came oil pipelines. Following the discovery of the Alaskan Prudhoe Bay oil field in 1968, the Trans-Alaska Pipeline was built and completed in 1977. It continues to transport more than a million barrels of oil per day across 800 miles of mountains and tundra. In the early 1980's, the Iraq-Iran war reduced regional supplies of oil to the world market and the nominal price of crude oil doubled from $14 in 1978 per barrel to $34 in 1981. This highlighted the reliance of North America and other countries on oil imports from the Middle East.

In the 1990's a new pattern emerged where smaller oil companies contributed more to supply than before. Advanced technologies have allowed these smaller companies to reduce their finding costs to levels comparable to those of the major companies. In 1997, the non-major companies produced an estimated 44 percent of U.S. oil. Since 2000, most of the oil bearing regions in the United States have been explored and many drilled. As oil is depleted from major reservoirs, the extraction of oil from other materials will probably increase. One source is oil sands where heavy oil (resembling tar) occurs in deposits of sands and clays. Oil sands are common to California and Alberta, Canada. As reservoirs become depleted, increasing attention will also be placed on more remote areas, such as the Arctic National Wildlife Refuge, where there is a lot of oil. But, conservationists are trying to protect the natural environment from the impacts of oil extraction. Another resource frontier is offshore drilling in deeper water.

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The Global Distribution of Oil Basins

Oil is not evenly distributed across the Earth. In fact, 90 percent of the world's oil reserves are held by only 12 countries. The Middle East region contains approximately 65 percent of oil reserves. Saudi Arabia has approximately 25 percent of the world's oil. Venezuela and Russia have the greatest reserves outside of the Middle East, with 8 and 5 percent respectively. The United States, China, Nigeria, and Mexico, each have between 2 and 3 percent of the world's oil reserves. Many countries do not have oil reserves and rely on imports of oil and alternative forms of energy.

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The Advantages and Disadvantages of Oil

The use of oil for energy has a number of advantages over other sources of fuel. Oil has a high energy density, which means that is contains a lot of energy in a relatively small volume compared to other fuels. It is also fairly low in mass. Oil is also quite easy to extract from the ground and transport across long distances. The processes for the refinement of oil are well understood and relatively simple. The development of infrastructure for oil is well practiced and understood. Oil has many uses, from transportation fuel to essential raw materials for the production of plastics, fertilizers, paints, asphalt, medicines, and other products. Historically, oil has also been quite abundant, relative to demand.

Oil also has several major disadvantages compared to other sources of fuel. Because of its chemistry, the combustion of oil products releases carbon dioxide into the atmosphere. Carbon dioxide is considered to be a major ingredient in global warming. Gasoline in cars also releases sulfur dioxide, which, if unchecked is a pollutant. Oil also contains benzene, which can have negative health effects. Oil is a non-renewable fuel source. This means that global oil reserves have a finite or fixed supply. The supply is vulnerable to hazards from severe weather, earthquakes, and war. As the number of cars increases, the demand on oil also increases and the life expectancy of existing oil reserves becomes shorter, unless new reserves are discovered. New reserves are typically located in more remote locations and deeper water, and are therefore expensive. The global distribution of oil is also uneven. Oil from politically unstable regions is subject to volatile prices. The environmental threat from accidents can be severe, both on animals, plants, and the natural environment. This includes leakages from supertankers, pipelines, oil platforms and oil wells. Remediation of serious accidents is difficult, time consuming, and expensive.

Deepwater Horizon on fire
The offshore oil leak at Deepwater Horizon in 2010 leaked an estimated 4.9 million barrels of oil into
the Gulf of Mexico before being successfully stopped. Source: USGS

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