Energy Poll

Energy Poll

The U.S. Is Poised to Hit a New Oil Gusher

Oil drillers have their eye on a vast oil field in and around North Dakota, which promises a steady flow of domestic crude for years.

By Jim Ostroff, Associate Editor, The Kiplinger Letter

March 17, 2008

A new black gold rush is under way, this time in North Dakota. The potential payoff is huge -- up to 100 billion barrels of oil. That’s twice the size of Alaska’s reserves and potentially enough to meet all U.S. oil needs for two decades.

Until now, the obstacles to production seemed overwhelming. The crude oil is locked away in rocks that are buried miles underground in the Bakken Play, a field that stretches into Montana and Saskatchewan, Canada.

But times have changed. High oil prices and new technology make it worth the effort. Computer analysis and remote sensing systems, plus smart drills that can probe horizontally or snake left and right, vastly improve the odds of locating new pools and putting them into production. And though oil is unlikely to remain priced at current stratospheric levels, prices won’t drop to much lower levels, which happened several times since the 1970s, and cause new exploration to dry up. Even if prices fell by half, many barrels of oil could still be produced -- profitably -- from the region.

An official government survey of the Bakken region's oil treasure trove is due out next month. The report is expected to play it very conservatively, because it will confine estimates to the amount of oil that likely can be produced profitably based on last year’s oil prices. It will also not take into account any further technological advances that might make it even easier to extract more oil.

"The Bakken is much like the enormous natural gas field that sat for many years under and around Dallas until people figured out the geology and how to drill it out economically," says Lucian Pugliaresi, president of the Energy Policy Research Foundation.

There's at least a smell of the "Old West" as petroleum companies rush to stake their claims in the Bakken Play. Marathon Oil recently acquired about 200,000 acres in the area and will drill about 300 oil wells within five years. Brigham Exploration and Crescent Point Energy Trust are also interested in some of the action. EOG Resources alone figures it can produce 80 million barrels of oil from its Bakken field.

Figure on at least five years before the oil starts flowing in large volumes. A lot of work will need to be done first. In addition to installing drilling gear, firms must build supporting infrastructure, including roads, pipelines as well as new water, sewage and sanitation systems to meet the needs of workers and other area residents.

Note that the Bakken Play region is not an environmentally sensitive area similar to Alaskan tundra that has stymied much oil field development because of concerns about damage to the fragile environment. Still, some environmental protests are sure to emerge and may gum up development for a while, but they’re unlikely to stop oil production from the Bakken fields.

Oil Oil Oil Everywhere?

Oil Oil Oil Everywhere?

 

Don't know how many of you heard about this a few years ago--Bush was getting it set up for drilling.  Wonder why Obama is so quiet about it...

Oil - You'd better sit down
Here's  an interesting read, important and verifiable  information :

About 6 months ago, the writer  was watching a news program on oil and
one of the  Forbes Bros. was the guest. The host said to Forbes,  "I am going to
ask you a direct question and I  would like a direct answer; how much oil
does the   U.S. have in the ground?" Forbes did not miss a beat,  he said, "more
than all the Middle East put  together." Please read below.

The U. S.  Geological Service issued a report in April 2008 that  only
scientists and oil men knew was coming, but  man was it big. It was a
revised report (hadn't  been updated since 1995) on how much oil was  in
this area of the western 2/3 of North Dakota ,  western South Dakota , and       extreme eastern  Montana ...... check THIS out: 

Send IM

  http://oilshalegas.com/bakkenshale.html%3E;
  http://bakkenshale.net/bakkenshalemap.html 

  http://bakkenshale.net/bakkenshalemap.html> 

The  Bakken is the largest domestic oil discovery since  Alaska's Prudhoe
Bay, and has the potential to  eliminate all American dependence on foreign
oil.  The Energy Information Administration (EIA) estimates  it at 503 billion
barrels. Even if just 10% of the  oil is recoverable... at $107 a barrel,
we're  looking at a resource base worth more than $5..3  trillion.

"When I first briefed legislators on  this, you could practically see
their jaws hit the  floor. They had no idea.." says Terry Johnson, the   Montana
Legislature's financial  analyst.

"This sizable find is now the  highest-producing onshore oil field found
in the  past 56 years," reports The Pittsburgh Post Gazette.  It's a
formation known as the Williston Basin , but  is more commonly referred to as the
'Bakken.' It  stretches from Northern Montana, through North Dakota  and
into Canada .. For years, U. S. oil exploration  has been considered a dead
end. Even the 'Big Oil'  companies gave up searching for major oil  wells
decades ago. However, a recent technological  breakthrough has opened up
the Bakken's massive  reserves.... and we now have access of up to  500
billion barrels. And because this is light,  sweet oil, those billions of barrels
will cost  Americans just $16 PER BARREL!

That's enough  crude to fully fuel the American economy for 2041  years
straight. And if THAT didn't throw you on the  floor, then this next one
should - because it's  from 2006!

U. S. Oil Discovery- Largest Reserve  in the World

Stansberry Report Online -  4/20/2006

Hidden 1,000 feet beneath the surface  of the Rocky Mountains lies the
largest untapped  oil reserve in the world. It is more than 2  TRILLION
barrels. On August 8, 2005 President Bush  mandated its extraction. In
three and a half years  of high oil prices none has been extracted. With  this
mother-load of oil why are we still fighting  over off-shore drilling?

They reported this  stunning news: We have more oil inside our  borders,
than all the other proven reserves on  earth. Here are the official estimates:

-  8-times as much oil as Saudi Arabia

- 18-times  as much oil as Iraq

- 21-times as much oil as   Kuwait

- 22-times as much oil as Iran

-  500-times as much oil as Yemen

- and it's all  right here in the Western United States .

HOW  can this BE? HOW can we NOT BE extracting this?  Because the
environmentalists and others have  blocked all efforts to help America
become  independent of foreign oil! Again, we are letting a  small group of
people dictate our lives and our  economy.....WHY?

James Bartis, lead researcher  with the study says we've got more oil in
this very  compact area than the entire Middle East -more than 2  TRILLION
barrels untapped. That's more than all the  proven oil reserves of crude oil in
the world  today, reports The Denver Post.

Don't think  'OPEC' will drop its price - even with this find?  Think
again!
It's all about the competitive  marketplace, - it has to. Think OPEC just
might be  funding the environmentalists?

Got your  attention yet? Now, while you're thinking about it, do  this:

Pass this along. If you don't take a  little time to do this, then you
should stifle  yourself the next time you complain about gas prices -  by
doing NOTHING, you forfeit your right to  complain.

--------

Now I just wonder  what would happen in this country if every one of  you
sent this to every one in your address  book.

By the way...this is all true. Check it  out at the link below!!!

GOOGLE it, or follow  this link. It will blow your mind.

http://www.usgs.gov/newsroom/article.asp?ID=1911

The following link is to a pod cast from the US Geological Survey regarding above--sounds to me like the oil IS THERE!! 

Check out the links...it's unbelievable.

http://www.usgs.gov/corecast/details.asp?ep=38
The oil shale reserves were known publically since the 70s when the first oil embargo and oil rationing took place. The country was in a panic. People in the know went public to show that the North American supply of oil shale, while not as easy as sucking up oil out of the ground, is HUGE. I believe even one of the Presidents during or soon after made mention of it and wanted federal funds to get new technologies and companies invested in that.

Big Oil made sure to put the kabash on that. So 40 years later we are still dependant on Big Oil and supplies of oil from mostly countries that don't particularly like us. 

Sometimes I wonder who Big Oil really works for?



But it seems it doesn't matter.

I'll venture this guess, however.

When those oil producing countries, especially those that don't like us, starts to run out of oil, then we'll be sitting pretty good with our oil shale reserves along with all the other alternative energy technologies we'll have well underway. One day it could all pay off - if China doesn't call in our debt and take us over financially.

The guys in Washington are playing a really high stakes poker game here. The play of one wrong card will make either a Big Win or a Big Loss.




The oil shale reserves were known publically since the 70s when the first oil embargo and oil rationing took place. The country was in a panic. People in the know went public to show that the North American supply of oil shale, while not as easy as sucking up oil out of the ground, is HUGE. I believe even one of the Presidents during or soon after made mention of it and wanted federal funds to get new technologies and companies invested in that.

Big Oil made sure to put the kabash on that. So 40 years later we are still dependant on Big Oil and supplies of oil from mostly countries that don't particularly like us.

The oil shale reserves were known publically since the 70s when the first oil embargo and oil rationing took place. The country was in a panic. People in the know went public to show that the North American supply of oil shale, while not as easy as sucking up oil out of the ground, is HUGE. I believe even one of the Presidents during or soon after made mention of it and wanted federal funds to get new technologies and companies invested in that.

Big Oil made sure to put the kabash on that. So 40 years later we are still dependant on Big Oil and supplies of oil from mostly countries that don't particularly like us. 

Sometimes I wonder who Big Oil really works for?



But it seems it doesn't matter.

I'll venture this guess, however.

When those oil producing countries, especially those that don't like us, starts to run out of oil, then we'll be sitting pretty good with our oil shale reserves along with all the other alternative energy technologies we'll have well underway. One day it could all pay off - if China doesn't call in our debt and take us over financially.

The guys in Washington are playing a really high stakes poker game here. The play of one wrong card will make either a Big Win or a Big Loss.

 It appears that the article cautions on temperance as there has been under-estimation and over-estimation on both sides.

Frankly, any policy that depends on non-renewable energy is short sighted at best.  And will leave us vulnerable, yet again.

Unlike the Middle East, North America is blessed with much potential for many forms of renewable Green Power. And most can be used simultaneously. We need to get Big Oil and Big Coal onboard rather than getting in the way. Or get them out of the way.
 If I recall correctly the so called oil shortage of the early 1970's took place during the Nixon and Ford years. President Carter started new alternative fuel programs when he was President but those programs were cancelled when Ronald Reagan became President.

Where Does the US Oil Supply Come From? Bakken is the largest domestic oil discovery

Where Does the US Oil Supply Come From? Bakken is the largest domestic oil discovery

The United States (US) oil supply is a frequent topic of discussion within the US, because of increasing concerns about dependence on oil as a source of fuel. According to the US Department of Energy, 40% of America's energy needs are met through petroleum products. Many citizens are worried about the impacts of oil on the environment, and would like to see the country moving towards more sustainable sources of oil. In addition, there is a great deal of controversy over the sources for American oil, and the political maneuvering which is necessary in order to meet American demands for oil.

Approximately 40% of America's oil comes from domestic oil fields in states like Texas, Alaska, and California. Some of this oil is actually sold to other countries, such as Japan. The other 60% of the US oil supply is from foreign sources. Contrary to popular belief, however, the US has very diverse oil interests all over the world, and receives oil and petroleum products from almost every continent on Earth. This diversity within the US oil supply allows allows for the manufacture of a wide range of petroleum products, using crude oil of various chemical makeups.
Canada, Saudi Arabia, Colombia, Nigeria, Angola, and Iraq all contribute sizable amounts to the US oil supply. America also imports oil from Kuwait, Norway, the United Kingdom, Venezuela, Equatorial Guinea, and Algeria. Numerous other countries ship refined oil products to the United States to supplement the output of American refineries. The diversity of the US oil supply makes it difficult to cut off the country's supply of oil altogether, although wrinkles in the supply chain could be problematic.
Much of the US oil supply comes from member nations of the Organization of the Petroleum Exporting Countries (OPEC). OPEC member nations are supposed to work together to ensure stable oil prices while safeguarding oil reserves and ensuring that countries around the world have access to oil when they need it. The US oil supply is not, however, restricted to OPEC sources, and the country regularly imports oil from countries which are not member nations, such as Canada, at varying prices.

Reserves Oil

Us Oil Supply

Oil Price World

Crude Oil Price World

Barrel Of Oil Price

Oil Prices News

Us Oil Deposits

While the sources for American oil are myriad, many of the countries which contribute the bulk of the US oil supply are economically and politically unstable. This has led to concerns about the security of the US oil supply, since a major political disturbance could be devastating. For this reason, the US also maintains an oil reserve for emergency situations, and is devoting funding to the development of energy alternatives.

The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay

Just poking around the Internet recently, I simply "Googled" the search "Untapped U.S. Oil Reserves," and the result (like the current price of a gallon of gas - BLEW ME AWAY! Go ahead, take a minute and see for youself! Never mind, I'll share some of the highlights I found.

1. Ever heard of the Bakken Formation? GOOGLE it. I did, and again, BLEW my mind. The U.S. Geological Service issued a report in April ('08) that only scientists and oilmen/women knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota; western South Dakota; and extreme eastern Montana ... check THIS out:

The Bakken is the largest domestic oil discovery since Alaska's Prudhoe Bay, and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable ... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.

"When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea." says Terry Johnson, the Montana Legislature's financial analyst.

"This sizeable find is now the highest-producing onshore oil field found in the past 56 years," reports The Pittsburgh Post Gazette. It's a formation
known as the Williston Basin, but is more commonly referred to as the "Bakken." And it stretches from Northern Montana, through North Dakota and into Canada. For years, U.S. oil exploration has been considered a dead end. Even the "Big Oil" companies gave up searching for major oil! wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL! That's enough crude to fully fuel the American economy for 41 years straight.

2. And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO, people! U.S. Oil Discovery - Largest Reserve in the World! Stansberry Report Online - 4/20/2006 Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. What the!? They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth. Here are the official estimates:

  o 8-times as much oil as Saudi Arabia

  o 18 times as much oil as Iraq

  o 21 times as much oil as Kuwait

  o 22 times as much oil as Iran

  o 500 times as much oil as Yemen

and it's all right here in the Western United States.

HOW can this BE!? HOW can we NOT BE extracting this!? Because we've not DEMANDED Legislation to come out of Washington allowing its extraction, that's why!

James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East - more than 2 TRILLION barrels. Untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.

Don't think "Big Oil" will drop its price - even with this find? Think again! It's all about the competitive marketplace, and if they can extract it (here) for less, they can afford to sell it for less - and if they DON'T, others will. It will come down - it has to.

Got your attention fired up yet? Hope so! Now, while you're thinking about it ... and hopefully P.O'd, do this:

3. Take 5-10 minutes and compose an e-mail; fax or good old-fashioned letter to our elected officials in Washington ... and their respected leaders. We'll start with them, and here's how you can send them your e-mail/fax, DEMANDING the immediate Legislation/an Energy PLAN that calls for tapping into these (OUR OWN!) Reserves, as well as allowing for the offshore drilling for OUR oil, in OUR offshore waters and Inter-continental shelf ... not to mention Alaska. Technology ain't what it used to be people (ever had arthroscopic surgery?). They can surgically extract OUR oil, and get us on the way to at least some measure of Energy independence.

Origins:   This item about untapped oil reserves in the Bakken formation (which lies within portions of North Dakota, South Dakota, and Montana) appears to have been taken from a tout sheet intended to sell subscriptions to an investment newsletter. It is vaguely true in the sense that geologists have estimated there is a good deal of undiscovered, technically recoverable oil in that area, and as the price of crude oil increases and the technology for extracting resources from formations like Bakken improves, that area becomes more and more economically viable as a source of oil for the U.S. However, the estimate of over 500 billion barrels of oil to be recovered from the Bakken formation is an overly optimistic one based on incomplete, outdated information.

A November 2006 report from the Energy Information Administration (EIA) stated that: The U.S. Geological Survey (USGS) released its assessment of undiscovered oil resources in the Bakken formation in April 2008, and although it reported a 25-fold increase in the amount of oil that could be recovered from that area compared to its 1995 estimate, the 2008 USGS estimate was still far short of the 503 billion barrel volume cited above: Certainly 3.65 billion barrels of recoverable oil is nothing to sneeze at, but a little perspective is in order. The U.S. currently imports an average of about 10 million barrels of oil per day (for a total of about 3.65 billion barrels of oil per year), so even if all the estimated undiscovered oil in the Bakken formation were extracted today, it would only be enough to wean the U.S. off of crude oil imports for one year. That's still a good thing, but it's not nearly "enough crude to fully fuel the American economy for 41 years straight" as claimed above.

As for the second part of the article, a 2005 study co-authored by James T. Bartis for the RAND Corporation (a nonprofit research organization) noted that estimates had placed upper range of shale oil resources to be found within the Green River Formation range of Colorado, Utah, and Wyoming at between 1.5 and 1.8 trillion barrels. However, the report also stated that not all of that oil was recoverable and offered a midpoint estimate of about 800 billion barrels of recoverable oil shale resources. Moreover, the report also noted that even under "high growth assumptions," an oil shale production level of 1 million barrels per day (about 10% of the amount of oil the U.S. currently imports daily) is "probably more than 20 years in the future," and depends upon scientists overcoming some substantial obstacles first:

But development of the resource hinges on overcoming economic, technical and environmental obstacles, Bartis said.

"No work has been done on the impacts of development and ways to mitigate those impacts," he said.

For example, shale development requires large expenditures of water and energy, produces air pollution and carbon emissions and leaves toxic byproducts that could endanger the environment.

Last updated:   27 March 2009 The URL for this page is http://www.snopes.com/politics/gasoline/bakken.asp

With new horizontal drilling and completion technology taken into account, the technically recoverable resource base for the entire Bakken Formation is potentially much larger. A draft study by the late organic geochemist Leigh Price provides estimates ranging from 271 to 503 billion barrels (mean of 413 billion) of potential resources in place. The study represents Dr. Price's work as it stood at the time of his death in August 2000. It was conducted while he was working for the USGS, but it did not receive a complete scientific peer review by the USGS and was not published as a USGS product. A new assessment of the entire basin, due out in about a year, will provide an updated USGS estimate of the technically recoverable oil resources in the Bakken Formation.

North Dakota and Montana have an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil in an area known as the Bakken Formation.

A U.S. Geological Survey assessment, released April 10, shows a 25-fold increase in the amount of oil that can be recovered compared to the agency's 1995 estimate of 151 million barrels of oil.

New geologic models applied to the Bakken Formation, advances in drilling and production technologies, and recent oil discoveries have resulted in these substantially larger technically recoverable oil volumes. About 105 million barrels of oil were produced from the Bakken Formation by the end of 2007.

The USGS estimate of 3.0 to 4.3 billion barrels of technically recoverable oil has a mean value of 3.65 billion barrels. Scientists conducted detailed studies in stratigraphy and structural geology and the modeling of petroleum geochemistry. They also combined their findings with historical exploration and production analyses to determine the undiscovered, technically recoverable oil estimates.

How Much Natural Gas is There?

How Much Natural Gas is There?
There is an abundance of natural gas in North America, but it is a non-renewable resource, the formation of which takes thousands and possibly millions of years. Therefore, understanding the availability of our supply of natural gas is important as we increase our use of this fossil fuel.
This section will provide a framework for understanding just how much natural gas there is in the ground available for our use, as well as links to the most recent statistics concerning the available supply of natural gas.
As natural gas is essentially irreplaceable (at least with current technology), it is important to have an idea of how much natural gas is left in the ground for us to use. However, this becomes complicated by the fact that no one really knows exactly how much natural gas exists until it is extracted. Measuring natural gas in the ground is no easy job, and it involves a great deal of inference and estimation. With new technologies, these estimates are becoming more and more reliable; however, they are still subject to revision.
A common misconception about natural gas is that we are running out, and quickly. However, this couldn't be further from the truth. Many people believe that price spikes, such as were seen in the 1970's, and in the early to mid-2000s, indicate that we are running out of natural gas. The two aforementioned periods of high prices were not caused by waning natural gas resources - rather, there were other forces at work in the marketplace. In fact, there is a vast amount of natural gas estimated to still be in the ground. In order to better understand exactly what these estimates mean and their importance, it is useful first to learn a bit of industry terminology for the different types of estimates.
U.S. Natural Gas Resource Estimates
Below are three estimates of natural gas reserves in the United States. The first, compiled by the Energy Information Administration (referred to as the EIA), estimates that there are 2,587 trillion cubic feet (Tcf) of technically recoverable natural gas in the United States. This includes undiscovered, unproved, and unconventional natural gas. To learn more about these classifications, click here. As can be seen from the table, proved reserves make up a very small proportion of the total recoverable natural gas resources in the U.S. The most recent EIA data on proved reserves in the U.S. can be found here.

The following table includes an estimate of natural gas resources compiled by the National Petroleum Council in its 2007 report, Facing the Hard Truths about Energy.  In its 2007 report, the NPC estimated total traditional natural gas resources to total 1,451 Tcf, and forecasted that advances in technology over the upcoming 20 years could bring natural gas resources to 1,887 Tcf. The National Petroleum Council has undertaken an updated analysis of resources, the “NorthAmerican Resources Study,” which is scheduled to be released in March 2011. 

It is important to note that different methodologies and systems of classification are used in the various estimates. There is no single way that every industry player uses to quantify estimates of natural gas. Therefore, it is important to delve into the assumptions and methodology behind each study to gain a complete understanding of the estimate itself.
Below is an estimate completed by the Potential Gas Committee. This estimate places total U.S. natural gas resources at just over 1,836 Tcf.  The PGC’s estimate classifies natural gas resources into three categories: probable resources, possible resources, and speculative resources, which are added together to reach a total potential resource estimate.  And when combined with EIA’s latest estimate of proved natural gas reserves, the Potential Gas Committee’s report said total available future supply is 2,074 Tcf, equaling about 100 years of supply at current rates of consumption.  (Americans consume an average 22 Tcf/year.)

There are a myriad of different industry participants that formulate their own estimates regarding natural gas supplies, such as production companies, independent geologists, the government and environmental groups, to name a few. While this leads to a wealth of information, it also leads to a number of difficulties. Each estimate is based on a different set of assumptions, completed with different tools, and even referred to with different language. It is thus difficult to get a definitive answer to the question of how much natural gas exists. In addition, since these are all essentially educated guesses as to the amount of natural gas in the earth, there are constant revisions being made. New technology, combined with increased knowledge of particular areas and reservoirs mean that these estimates are in a constant state of flux. Further complicating the scenario is the fact that there are no universally accepted definitions for the terms that are used differently by geologists, engineers, accountants, and others.

Source: Energy Information Aministration

Historical Proved Natural Gas Reserves
The graph, using data recorded by EIA, shows the change in proved natural gas reserves in the United States from 1977 to 2008. As can be seen, the levels of proved reserves in the United States have changed significantly over the past 10 years. If the additions to proved reserves in a given year are larger than the subtractions from production, then proved reserves will increase, and vice versa. Usually, however, the additions are close enough to the subtractions to maintain a relatively constant level of proved reserves. For the most recent reserve statistics, including more in depth-analysis, click here to visit the EIA's website.
Where Are These Reserves?

Dry Natural Gas Proved Reserves by State- 2008

Source: EIA

Most of the natural gas that is found in North America is concentrated in relatively distinct geographical areas, or basins. Given this distribution of natural gas deposits, those states that are located on top of a major basin have the highest level of natural gas reserves. As can be seen from the map on the right, U.S. natural gas reserves historically have been concentrated around Texas and the Gulf of Mexico.  With the recent onset of shale production the number of states across the U.S with significant resources has increased, with major shale gas-producing states including New York, Pennsylvania, Arkansas and Oklahoma, as well as Texas and Louisiana.  For more information about the importance and size of shale gas, please visit the shale section.
The map above gives a general impression of where most of the proved natural gas resources are in the United States.  Visit the EIA for more in-depth analysis into natural gas reserves across the country and to access geographical natural gas data.
World Natural Gas Reserves
The EIA, in conjunction with the Oil and Gas Journal and World Oil publications, estimates world proved natural gas reserves to be around 5,210.8 Tcf. As can be seen from the graph, most of these reserves are located in the Middle East with 1,836.2 Tcf, or 34 percent of the world total, and Europe and the Former U.S.S.R. with 2158.7, or 42 percent of total world reserves. The United States, by this calculation, possesses 3 percent of the world total natural gas reserves.

Source: International Energy 2010 - EIA

For more information on international natural gas reserves, visit the EIA’s international data international data section.

Now that the methods of reserve estimation and the most recent data concerning North America and the World's supply of natural gas have been discussed, proceed to learn about the many uses of this vital gas.

THE END OF THE AGE OF OIL

THE END OF THE AGE OF OILBy David Goodstein
This article is adapted from a talk that Caltech vice provost and professor of physics and applied physics David Goodstein presented at an April 29 program of the Institute support group, the Caltech Associates. Goodstein’s new book, Out of Gas: The End of the Age of Oil, was published in February by W. W. Norton. On December 5, the New York Times Book Review named Out of Gas one of its 100 Notable Books of the Year.

In the 1950s, it was not Saudi Arabia but the United States that was the world’s greatest producer of oil. Much of our military and industrial might grew out of our giant oil industry, and most people in the oil business thought that this bonanza would go on forever. But there was one gentleman who knew better. He was an oil exploration geologist named Marion King Hubbert.
In about 1950, Hubbert realized that the trajectory of oil discovery in the continental United States was going to be a classic bell-shaped curve, for the decades from 1910 to 1970, in billions of barrels per year (see figure 1, below). He also saw that there would be a second bell-shaped curve that would represent production, or consumption, or extraction. The oil industry likes to call it “production,” but the industry doesn’t really produce any oil at all. It does, however, reflect the rate at which we use the oil up. Perhaps you could call it supply.

Hubbert realized that using what he knew in 1950 about the history of discoveries, along with what was already known about consumption, and a little mathematics, he should be able to predict that second bell-shaped curve. And so he did (see figure 2, below). The red, bell-shaped curve is the kind of curve he predicted. The black points are the actual historical data, and the uppermost point represents what has come to be known as Hubbert’s Peak. Obviously, he was doing something right.

© BP
The situation worldwide is a little less well-determined. A third graphic provided by the energy conglomerate BP, shows what the world’s known crude oil reserves are (see figure 3, left-hand graph, below). The amount that we have now is a trillion barrels of oil. So people in the industry might say, we have a trillion barrels just sitting there waiting to be pumped out of the ground; we’re using it up at a rate of about 25 billion barrels a year, and so we have 40 more years to go—there’s nothing to worry about. But as Hubbert has shown us, that’s the wrong way of looking at it .

© BP
Before we leave that curve, though, I want to point out that a sudden jump of 300–400 billion barrels of oil in OPEC (the Organization of the Petroleum Exporting Countries) reserves occurs in the late 1980s (see figure 3, left-hand graph, above). But there were no significant discoveries of oil in OPEC countries during that period. What happened instead is that OPEC changed its quota for how much each country could pump on the basis of what it claimed in reserves, and politicians discovered 400 billion barrels of oil without ever drilling a hole in the ground! This helps us to understand how undependable these numbers are for worldwide proven oil reserves.
As you can see, the curve that traces the historic record of oil discovery peaks around 1960. In other words, Hubbert’s peak for oil discovery came and went 40 years ago.
The curve for oil usage, as you can see, is a rising curve and will become a bell-shaped curve eventually. Note that for the last quarter century, we’ve been using oil faster than we have been discovering it. World reserves should have decreased during that time by about 200 billion barrels. Instead, as we’ve seen, they’ve increased by 400 billion barrels. In any case, it should be possible, given this much information, to make a prediction similar to the one that Hubbert made for the continental United States for worldwide oil production.
One such estimate was published in 1998 in Scientific American. It predicts that we will have a worldwide maximum in oil production just about now—around the middle of the decade 2000–2010. What will happen when we reach that peak we don’t really know. But we had a foretaste in 1973 and ’79 when the OPEC countries took advantage of the supply shortage in the United States and shut down the valve a bit. What happened, as you may recall, is that we had instant panic and despair for the future of our way of life, and mile-long lines at gas stations.
We don’t know what’s going to happen at the next peak, but we do know that those past peaks were artificial and temporary. The next one will not be artificial and it will not be temporary.
However, we have to use caution in evaluating these types of predictions. One crucial quantity that goes into making such an estimate is knowing how much oil Mother Nature originally made for us—that is, how much oil was in the ground before we ever started pumping it. The Scientific American estimate used 1.8 trillion barrels of oil as the baseline number. Today it looks like 2.1–2.2 trillion barrels might be more accurate. That number—the total amount of oil that ever existed—tends to increase with time for a variety of reasons.
First, new technology and new discoveries have exactly the same effect—they both make more oil available. Secondly, as oil becomes scarcer and the price goes up, more oil becomes available at the increased price, because you can invest more capital into pulling it out of the ground. And finally, these estimates depend to some extent on those proven reserve numbers and, as we’ve already seen, those numbers are not very reliable. Nevertheless, the central idea of the Hubbert Curve is certainly correct: the supply of any natural resource invariably rises from zero to a maximum point, and then it falls forever. Oil will behave in the same way.
In 1997, Kenneth Deffeyes, a former Shell Oil geologist who’s now an emeritus professor of geosciences at Princeton, published a book he entitled Hubbert’s Peak—The Impending World Oil Shortage. In it, Deffeyes said he knew that Hubbert had been right and that the peak for domestic production had been reached when he saw this sentence in 1971 in the San Francisco Chronicle: “The Texas Railroad Commission announced a 100% allowable for next month.”
To demystify that sentence, the Texas Railroad Commission was the quaintly named cartel that controlled the U.S. oil industry by making strategic use of the excess capacity for pumping in Texas. When the commission said, “100% allowable for next month,” it meant that there was no longer any excess capacity. They were pumping flat-out, and therefore Hubbert’s Peak had been reached.
Ever since reading this, I’ve thought that the signal that the worldwide peak had been reached would be when we found out that Saudi Arabian production had peaked. For the last few decades, the Saudis have been using excess pumping capacity to manipulate the world oil market in exactly the same way the Texans once did.
Well, on February 24 of this year, a story appeared on the front page of the New York Times entitled “Forecast of Rising Oil Demand Challenges Tired Saudi Fields.” Among other things, the article said that Saudi Arabia’s oil fields are in decline, prompting industry and government officials to raise serious questions about whether the kingdom will be able to satisfy the world’s thirst for oil in the coming years.
This is a New York Times story, so it’s very long, as many Times stories are, and it’s written in a style in which each successive paragraph is contradicted by the next paragraph. This is called “balanced reporting.” Sure enough, much farther down in the article, we find these words: “Some economists are optimistic that if oil prices rise high enough, advanced recovery techniques will be applied, averting supply problems.” But here comes the contradiction in the next paragraph, “But, privately, some Saudi oil officials are less sanguine.”
I don’t know whether we will look back years from now and say that this was the beginning of the end of the age of oil. We’re much too close to it to tell, and our figures are, overall, much too uncertain. But, to those people who are aware of the Hubbert’s Peak predictions, as the writer of this article apparently was not, this was a chilling report.
Economists tell us that there can never be a gap between supply and demand because the process is regulated by price. That’s never been true in the case of oil, because it has always been controlled by cartels, first in Texas and later by OPEC. However, once the peak occurs, OPEC will lose control of the situation, and the price mechanism will kick in with a vengeance. But the supply can keep up with the price only if there is something to supply.
I’m sometimes asked, what about replenishing our oil reserves through deep-ocean exploration? I’m already factoring in close-to-shore oil production, but the deep oceans are essentially unexplored and, it’s true, we don’t know whether there’s any oil out there. Over the last hundreds of millions of years, oil typically has been manufactured in places that are rich in life, which deep oceans are not. But the landmasses have moved around over geologic time, so there may be deep-ocean oil reserves.
Even so, deep oceans are technically extremely difficult places to drill for oil. That leaves us with only two remaining reservoirs—the South China Sea, which currently has seven countries claiming mineral rights to it; and Siberia, which has very bad access problems. And those resources, of course, are finite also. So let’s see what else there is to use, aside from oil.
The word “oil” covers more than just the conventional light crude that we’ve been pumping up to now. It also covers heavy oil, oil sands, and tar sands. Heavy oil is essentially what’s left behind in the field after you pump the light crude away. And, of course, if you put more money in—that’s the price mechanism—you can usually squeeze a little more oil out of any field. But it’s both more costly and more time-consuming to get that oil out. And the more you pump out, the heavier it gets.
Natural gas could be a very good substitute for oil. Cars that are not very different from those we drive today can run on compressed natural gas, and it’s a particularly clean-burning fuel. But if we turn to natural gas in a major way to replace diminishing supplies of oil, it will only be a temporary solution. The Hubbert Peak for natural gas is only a decade or so behind Hubbert’s Peak for oil.
Oil was created when so-called source rock, full of organic inclusions, sank deep within the earth. The inside of the earth is heated by natural radioactivity, and the deeper you go, the hotter it gets. This source rock sank just deep enough into the heated interior for the organic matter to get cooked into oil. Rock that sank deeper got overcooked and became natural gas. Rock that sank to a more shallow level became shale oil, which is essentially unborn oil that can be made into a fuel by strip-mining, crushing, and heating the rocks until you generate a usable liquid. People who have invested many millions of dollars into trying to exploit this resource have come to the conclusion that it will probably always be energy-negative, meaning that you will always have to put more energy into acquiring and processing it than you will ever get out of it.
Methane hydrate is a solid that looks like ice, but that burns if you ignite it. It consists of methane trapped in a sort of cage of water molecules and it gets created when methane comes into contact with water under very high pressure at very low temperatures close to the freezing point of water. Nobody has any idea of where all it is, how much there is, whether it can be mined, or how it could be used—all we know is that this stuff exists.
Finally, there is coal. We are told that there is enough coal in the ground for hundreds, maybe even thousands of years, at the present rate of use. The fact that these estimates range over a factor of ten tells you immediately that nobody has the foggiest notion of how much coal is actually available. But even those projections might be considered reliable, compared to the second part of that optimistic sentence: “at the present rate of use”! We’ll get to that in a moment.
The largest coal deposits are in the United States, and China and Russia have very large reserves as well. Coal can be liquefied and made into a substitute for oil. That was done in Nazi Germany during World War II, and in South Africa under apartheid. That alone should tell you that you have to be fairly desperate to do it, but it can be done.
But, coal is a dirty, dirty fuel. It often comes with nasty impurities, including mercury, arsenic, and sulfur. The mercury that accumulates in the bodies of tuna or swordfish—and which has led to FDA warnings to limit our consumption of these fish—originates in coal-fired power plants in the United States. We use now about twice as much energy from oil as we do from coal, so if you wanted to mine enough coal to replace the missing oil, you’d have to mine it at a much higher rate, not only to replace the oil, but also because the conversion process to oil is extremely inefficient. You’d have to mine it at levels at least five times beyond those we mine now—a coal-mining industry on an absolutely unimaginable scale.
And even that doesn’t take into account the world’s increasing population, or the fact that nations like China and India want to have a higher standard of living, which means burning more energy. Finally, it doesn’t take into account the Hubbert’s Peak effect, which is just as valid for coal as it is for oil. Long before we have mined the last ton, we will have started to deplete our ability to get the stuff out of the ground. So, it’s a very good bet that the governing “rate of use” number I mentioned earlier is not hundreds or thousands of years, and that no more than one-tenth of that timeframe represents a realistic estimate.
What all this suggests is that if we accept the economists’ solution and just let the marketplace do its thing as we make use of all the fossil fuel we can, we’ll start running out of all fossil fuels by the end of this century.
So, what does the future hold? Well, for one thing, there will be an oil crisis very soon. Whether that means it has already begun or won’t happen until later in this decade or sometime in the next decade, I don’t know. In my view, the numbers are not dependable enough for us to say. However, while the difference between those estimates may be very important to us, it’s of no importance at all on the timescale of human history. Either we, our children, or perhaps our grandchildren, are in for some very, very bad times. If we turn to all the other fossil fuels and burn them up as fast as we can, they will all probably start to run out by the end of the 21st century. Assuming that our planet remains habitable after such a vast consumption binge, we will have to invent a way to live without fossil fuels. (See sidebar “Too Hot To Handle?”)
How about hydrogen? Both President Bush and California governor Schwarzenegger have publicly embraced hydrogen as a solution to our fuel problems. But there are only two commercially viable ways of making hydrogen. One is to make it out of methane, which is a fossil fuel. The other is to use fossil fuel to generate the electricity that you need to electrolyze water and get hydrogen. The economics of doing that are such that you end up using the equivalent of six gallons of gasoline to make enough hydrogen to replace one gallon of gasoline. So this solution is not a winner in the short run. In the long run, if the problem of harnessing thermonuclear fusion can be solved and we have more power than we know what to do with, you could use that form of energy to make hydrogen for mobile fuel. I’ll get to that a little later.
There is also wind power, which many now see as a viable energy alternative. And it is, but only to a limited extent. In regions like northern Europe, where fossil fuels are very expensive and the wind is really strong, wind power will someday come to rival hydroelectric power as a source of energy. But there are relatively few places on earth where the wind blows strongly and steadily enough for it to be a dependable energy source, and people don’t really like wind farms—they’re ugly and they’re noisy. Wind power will always be a part of the solution. But it’s not a magic bullet. It’s not going to save us.
In recent years, the debate over nuclear power has revived, with proponents maintaining that we can find environmentally sound and politically acceptable ways to deal with the waste and security hazards. But even assuming that to be true, the potential is limited. To produce enough nuclear power to equal the power we currently get from fossil fuels, you would have to build 10,000 of the largest possible nuclear power plants. That’s a huge, probably nonviable initiative, and at that burn rate, our known reserves of uranium would last only for 10 or 20 years.
As things stand today, the only possible substitutes for our fossil-fuel dependency are light from the sun and nuclear energy. Developing a way of running a civilization like ours on those resources is an enormous challenge. A great deal of it is social and political—we’re in the midst of a presidential election, and have you heard either party say a word about this extremely important subject? But there are also huge technical problems to be solved. So, you might well ask, what can Caltech do to help?
The ultimate solution to our energy problem would be to master the power of controlled thermonuclear fusion, which we’ve been talking about doing for more than half a century. The solution has been 25 years away for the past 50 years, and it is still 25 years away. Beyond those sobering statistics, there are at least five or six schemes for harnessing fusion energy that I know of. One of them, called the spheromak, is studied here at Caltech in an experimental program run by Professor of Applied Physics Paul Bellan and his research group.
In the spheromak, electric currents flowing in a hot ionized gas—otherwise known as a plasma-—interact with magnetic fields embedded in the plasma. As these fields and currents push the plasma around, new fields
and currents are created. There’s a sort of self-organizing interaction occurring. You can see in this sequence of snapshots below, starting from the top, that the plasma is organizing itself into a jet and then a kink develops in the jet. This is something that happens all by itself, and it’s not something that happens only occasionally—the gas always self-organizes like that. After the kink develops, it breaks away from the body of the jet as a doughnut. If you can find a way to maintain that doughnut and keep it going—that is to pump in enough energy to keep it from decaying—the doughnut has the perfect geometry required for containing a hot plasma undergoing thermonuclear fusion.

Fusion research at Caltech.
But attaining this objective is far off. The existing apparatus is much too small to reach the hundred million degree temperatures needed to generate power. The Bellan team is studying the fundamental physics of the self-organizing process in the hope it can be used to create and sustain the desired fusion plasma confinement geometry in a reliable, controlled manner.
There’s another group at Caltech whose efforts are aimed largely at the other alternative—solar energy. Their program is called Power the Planet: Caltech Center for Sustainable Energy Research. Members include applied physicist Harry Atwater, chemists Harry Gray, Nathan Lewis, and Jonas Peters, and materials scientist Sossina Haile.
Furthermore, our former provost Steve Koonin recently stepped down from the provostship and took a leave of absence from the Caltech physics faculty to become chief scientist at BP. BP, formerly British Petroleum, is one of the largest energy companies in the world, and so he now has one of the most important energy positions in the world.
The fact that these and similar scientific and technical efforts are under way at Caltech and elsewhere are encouraging, but they are not enough. What we really need is leadership with the courage and vision to talk to us as John F. Kennedy did in 1960, when he pledged to put a man on the moon by the end of the decade. It’s the same kind of problem. We understand the basic underlying scientific principles, but we have huge technical problems to overcome.
If our leaders were to say to the scientific and technical community, “We will give you the resources, and you—right now, even before it becomes imperative—will find a way to kick the fossil-fuel habit,” I think that it could be done. But we have to have the political leadership to make it work.

Oil (petroleum) Basics

Oil (petroleum) Basics

How Was Oil Formed?

Oil was formed from the remains of animals and plants (diatoms) that lived millions of years ago in a marine (water) environment before the dinosaurs. Over millions of years, the remains of these animals and plants were covered by layers of sand and silt. Heat and pressure from these layers helped the remains turn into what we today call crude oil. The word "petroleum" means "rock oil" or "oil from the earth."

Click to enlarge »

Source: U.S. Energy Information Administration (Public Domain)

Crude oil is a smelly, yellow-to-black liquid and is usually found in underground areas called reservoirs. Scientists and engineers explore a chosen area by studying rock samples from the earth. Measurements are taken, and, if the site seems promising, drilling begins. Above the hole, a structure called a 'derrick' is built to house the tools and pipes going into the well. When finished, the drilled well will bring a steady flow of oil to the surface.

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File Scrub L3 ::::: EE ... oil_home-basics ... oil_where-basics

Getting (Producing) Oil

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Where Is Oil Produced?

Crude oil is produced in 31 States and U.S. coastal waters. In 2009, 50% of U.S. crude oil production came from five States:

• Texas (21%)
• Alaska (12%)
• California (11%)
• North Dakota (4%)
• Louisiana (3.5%)

About one-third of U.S. crude oil was produced from wells located offshore in State and Federally administered waters of the Gulf of Mexico.
Although total U.S. crude oil production has generally decreased each year since it peaked in 1970, it increased by 7% in 2009 from 2008, in large part due to a 35% increase in production in Federal waters of the Gulf of Mexico.
Natural gas plant liquids (NGPL) are liquids that are separated from natural gas at processing plants and used in petroleum refineries. Production of NGPL fluctuates with natural gas production, but their share of total U.S. petroleum production has increased from 8% in 1950 to 26% in 2009.
In 2009, the U.S. imported about 52% of the crude oil and refined petroleum products that it used.
About 100 countries produce crude oil and NGPL; the top five producing countries in 2009, and their share of total world production:

• Russia (12.3%)
• Saudi Arabia (12.0%)
• United States (9.0%)
• Iran (5.2%)
• China (4.7%)

After the fall of the Soviet Union, Saudi Arabia became the world’s top petroleum producer — until 2009, when Russia narrowly surpassed it.

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File Scrub L3 ::::: EE ... oil_home-basics ... oil_offshore-basics

Offshore Drilling

What Is Offshore?

Image of a Coastline

Source: Stock photography (copyrighted)

Map Showing Exclusive Economic Zone Around the United States and Territories

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Source: National Energy Education Development Project (Public Domain)

Diagram of Shore and Ocean Overlayed With Territorial Sea, Exclusive Economic Zone, the Continental Shelf, and Continental Slope

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Source: National Energy Education Development Project (Public Domain)

When you are at your favorite beach in Florida or California, you are not at the very edge of the country.
Although it might seem like the ocean is the border of the United States, the border is actually 200 miles out from the land. This 200-mile-wide band around the country is called the Exclusive Economic Zone (EEZ).
In 1983, President Reagan claimed the area of the EEZ in the name of the United States. In 1994, all countries were granted an EEZ of 200 miles from their coastline according to the International Law of the Sea.
There is a lot of activity just beyond the beach. The beach extends from the shore into the ocean on a continental shelf that gradually descends to a sharp drop, called the continental slope. This continental shelf can be as narrow as 20 kilometers or as wide as 400 kilometers. The water on the continental shelf is shallow, rarely more than 150 to 200 meters deep. The EEZ is part of the United States. The Federal government manages the land under the sea on behalf of the American people.
The U.S. Minerals Management Service (MMS) leases the land under the ocean to producers. These companies pay MMS rental fees and royalties on all the minerals they extract from the ocean floor. Individual states control the waters off their coasts out to 3 miles for most states and between 9 and 12 for Florida, Texas, and some other States.
The continental shelf drops off at the continental slope, ending in abyssal plains that are three to five kilometers below sea level. Many of the plains are flat, while others have jagged mountain ridge, deep canyons, and valleys. The tops of some of these mountain ridges form islands where they extend above the water.
Most of the energy we get from the ocean is extracted from the ground. Oil, natural gas, and minerals all come from the ocean floor.
People are working on other new ways to use the ocean. Solar and wind energy have been used on land, and now they are also being used at sea. Other energy sources that are being explored in the ocean are wave energy, tidal energy, methane hydrates, and ocean thermal energy conversion.
Read about Energy Ant's visit to an offshore rig or learn about jobs in the offshore.

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File Scrub L3 ::::: EE ... oil_home-basics ... oil_refining-basics

What Fuels Are Made From Crude Oil?

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What Fuels Are Made from Crude Oil?

After crude oil is removed from the ground, it is sent to a refinery by pipeline, ship, or barge. At a refinery, different parts of the crude oil are separated into useable petroleum products. Crude oil is measured in barrels (abbreviated "bbls").
A 42-U.S. gallon barrel of crude oil provides slightly more than 44 gallons of petroleum products. This gain from processing the crude oil is similar to what happens to popcorn, which gets bigger after it's popped. The gain from processing is more than 6%.
One barrel of crude oil, when refined, produces about 19 gallons of finished motor gasoline, and 10 gallons of diesel, as well as other petroleum products. Most petroleum products are used to produce energy. For instance, many people across the United States use propane to heat their homes.

Other products made from petroleum include:

• Ink
• Crayons
• Dishwashing liquids
• Deodorant
• Eyeglasses
• CDs and DVDs
• Tires
• Ammonia
• Heart valves

What Is a Refinery?

A refinery is a factory. Just as a paper mill turns lumber into paper, a refinery takes crude oil and turns it into gasoline and many other useful petroleum products.

Refineries Operate 24/7

A typical refinery costs billions of dollars to build and millions more to maintain. A refinery runs 24 hours a day, 365 days a year and requires a large number of employees to run it. A refinery can occupy as much land as several hundred football fields. Workers often ride bicycles to move from place to place inside the complex.

A Night Photo of the Pascagoula Refinery in Mississippi

Source: Stock photography (copyrighted)

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Refining Process

How Crude Oil Is Refined into Petroleum Products

The world uses gasoline and petroleum products to move merchandise and people, help make plastics, and do many other things. At a refinery, different parts of the crude oil are separated into useable petroleum products. Today, some refineries turn more than half of every 42-gallon barrel of crude oil into gasoline.
How does this transformation take place? Essentially, refining breaks crude oil down into its various components, which then are selectively reconfigured into new products.
All refineries perform three basic steps:

1. Separation
2. Conversion
3. Treatment

Source: Adapted from Chevron

Separation

Heavy petroleum components or "fractions" are on the bottom; light fractions are on the top. This difference in weights allows the separation of the various petrochemicals. Modern separation involves piping oil through hot furnaces. The resulting liquids and vapors are discharged into distillation towers.
Inside the towers, the liquids and vapors separate into fractions according to weight and boiling point.
The lightest fractions, including gasoline and liquid petroleum gas (LPG), vaporize and rise to the top of the tower, where they condense back to liquids.
Medium weight liquids, including kerosene and diesel oil distillates, stay in the middle.
Heavier liquids, called gas oils, separate lower down, while the heaviest fractions with the highest boiling points settle at the bottom.

Fluid Catalytic Cracking Distillation Column

Photo courtesy of Chevron.

Refining Workers Overlooking a Refinery

Photo courtesy of Chevron.

Conversion

Cracking and rearranging molecules takes a heavy, low-valued feedstock — often itself the output from an earlier process — and change it into lighter, higher-valued output such as gasoline. This is where refining's fanciest footwork takes place — where fractions from the distillation towers are transformed into streams (intermediate components) that eventually become finished products.
The most widely used conversion method is called cracking because it uses heat and pressure to "crack" heavy hydrocarbon molecules into lighter ones. A cracking unit consists of one or more tall, thick-walled, bullet-shaped reactors and a network of furnaces, heat exchangers, and other vessels.
Cracking and coking are not the only forms of conversion. Other refinery processes, instead of splitting molecules, rearrange them to add value.
Alkylation, for example, makes gasoline components by combining some of the gaseous byproducts of cracking. The process, which essentially is cracking in reverse, takes place in a series of large, horizontal vessels and tall, skinny towers that loom above other refinery structures.
Reforming uses heat, moderate pressure, and catalysts to turn naphtha, a light, relatively low-value fraction, into high-octane gasoline components.

Treatment

The finishing touches occur during the final treatment. To make gasoline, refinery technicians carefully combine a variety of streams from the processing units. Among the variables that determine the blend are octane level, vapor pressure ratings and special considerations, such as whether the gasoline will be used at high altitudes.

Storage

Both the incoming crude oil and the outgoing final products need to be stored. These liquids are stored in large tanks on a tank farm near the refinery. Pipelines then carry the final products from the tank farm to other tanks all across the country.
All of these activities are required to make the gasoline that powers our cars, the diesel fuel that brings our food to market, and the jet fuel that flies our planes. These provide us with the energy we need to get from place to place quickly and comfortably.

Tank Farm Near a Refinery

Photo courtesy of Chevron.

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File Scrub L3 ::::: EE ... oil_home-basics ... oil_environment-basics

Oil & the Environment

How Does Oil Impact the Environment?

Products from oil (petroleum products) help us do many things. We use them to fuel our airplanes, cars, and trucks, to heat our homes, and to make products like medicines and plastics. Even though petroleum products make life easier — finding, producing, moving, and using them can harm the environment through air and water pollution.

Emissions and Byproducts Are Produced from Burning Petroleum Products

Petroleum products give off the following emissions when they are burned as fuel:

• Carbon dioxide (CO2)
• Carbon monoxide (CO)
• Sulfur dioxide (SO2)
• Nitrogen oxides (NOX) and Volatile Organic Compounds (VOC)
• Particulate matter (PM)
• Lead and various air toxics such as benzene, formaldehyde, acetaldehyde, and 1,3-butadiene may be emitted when some types of petroleum are burned

Nearly all of these byproducts have negative impacts on the environment and human health:

• Carbon dioxide is a greenhouse gas and a source of global warming.1
• SO2 causes acid rain, which is harmful to plants and to animals that live in water, and it worsens or causes respiratory illnesses and heart diseases, particularly in children and the elderly.
• NOX and VOCs contribute to ground-level ozone, which irritates and damages the lungs.
• PM results in hazy conditions in cites and scenic areas, and, along with ozone, contributes to asthma and chronic bronchitis, especially in children and the elderly. Very small, or “fine PM” is also thought to cause emphysema and lung cancer.
• Lead can have severe health impacts, especially for children, and air toxics are known or probable carcinogens.

Laws Help Reduce Pollution from Oil

No Dumping/Drains to River Sign

Source: Stock photography (copyrighted)

Fish Swimming Through "Rigs-to-Reefs" Project

Source: Courtesy of the Mississippi Department of Marine Resources

Over the years, new technologies and laws have helped to reduce problems related to petroleum products. As with any industry, the Government monitors how oil is produced, refined, stored, and sent to market to reduce the impact on the environment. Since 1990, fuels like gasoline and diesel fuel have also been improved so that they produce less pollution when we use them.

Reformulated Fuels

Because a lot of air pollution comes from cars and trucks, many environmental laws have been aimed at changing the make-up of gasoline and diesel fuel so that they produce fewer emissions. These "reformulated fuels" are much cleaner-burning than gasoline and diesel fuel were in 1990.

Technology Helps Reduce Drilling's "Footprint"

Exploring and drilling for oil may disturb land and ocean habitats. New technologies have greatly reduced the number and size of areas disturbed by drilling, sometimes called "footprints."2 Satellites, global positioning systems, remote sensing devices, and 3-D and 4-D seismic technologies make it possible to discover oil reserves while drilling fewer wells.
The use of horizontal and directional drilling makes it possible for a single well to produce oil from a much bigger area. Today's production footprints are also smaller those 30 years ago because of the development of movable drilling rigs and smaller "slimhole" drilling rigs.
When the oil in a well becomes uneconomic to produce, the well must be plugged below ground, making it hard to tell that it was ever there. As part of the "rigs-to-reefs" program, some old offshore rigs are tipped over and left on the sea floor to become artificial reefs that attract fish and other marine life. Within six months to a year after a rig is toppled, it becomes covered with barnacles, coral, sponges, clams, and other sea creatures.
If oil is spilled into rivers or oceans, it can harm wildlife. When we talk about "oil spills," people usually think about oil that leaks from a ship that is involved in an accident. The amount of oil spilled from ships dropped significantly during the 1990s partly because new ships were required to have a "double-hull" lining to protect against spills.

The Greatest Share of Oil in the Sea Comes from Natural Seeps

While oil spills from ships are the most well-known source of oil in ocean water, more oil actually gets into water from natural oil seeps coming from the ocean floor.
Leaks also happen when we use petroleum products on land. For example, gasoline sometimes drips onto the ground when people are filling their gas tanks, when motor oil gets thrown away after an oil change, or when fuel escapes from a leaky storage tank. When it rains, the spilled products get washed into the gutter and eventually flow to rivers and into the ocean. Another way that oil sometimes gets into water is when fuel is leaked from motorboats and jet skis.
When a leak in a storage tank or pipeline occurs, petroleum products can also get into the ground, and the ground must be cleaned up. To prevent leaks from underground storage tanks, all buried tanks are supposed to be replaced by tanks with a double lining.

1. U.S. Environmental Protection Agency, Climate Change State of Knowledge.
2. U.S. Department of Energy, Environmental Benefits of Advanced Oil and Gas Exploration and Production Technology (October 1999).