OIL “Black gold, Texas tea….”

What is it? Crude oil is a blanket term for a mixture of hydrocarbons; some are long chain hydrocarbons, while others are very short Exact proportion of different hydrocarbons determines viscosity and other characteristics; big differences in crude oil from various locations Mayan crude - very thick, almost tarry Saudi crude - very thin, can almost be used directly in diesel motor

Oil Usage Not all crude oil is used for gasoline. Over half of all crude oil used in the U.S. goes to other purposes, such as jet fuel, home heating oil, and plastics Data from Dept. of Energy

Transportation About 65% of crude oil (almost 13.2 MBPD) is used for transportation; of this, the majority (9.1 MBPD) is for gasoline VehicleNumber (million) Miles (million) Fuel Efficiency Fuel Efficiency per passenger mile Cars1361,670, Light Trucks1011,111, Motorcycles713, Heavy trucks9155, Bus.86, Airlines.0088, BTS, 2007

Other Uses About 6% of crude oil is used to heat homes and buildings Another 2% is used for generating electricity Remaining amount (26%) used by industry 3% for asphalt and road oil 9% for LPG 4% for coke 3% for petrochemical feedstock Even if stopped using oil for transportation, will still need it for our modern lifestyles

Oil drilling OffshoreOnshore

Primary Method The cheapest method for extracting oil is to pump it out of the ground using a well This removes about 15-20% of the oil that is stored in the rock matrix

Secondary Method The second cheapest method for extracting oil is to inject water into the reservoir at a low spot while pumping from a high spot This removes another 15-20% of the oil that is stored in the rock matrix

Tertiary Method The most expensive method for extracting oil is inject a surfactant like steam or CO2 while pumping This removes another 10% of the oil that is stored in the rock matrix

Moving Petroleum Once the oil/gas gets to the surface, it must be moved to market. Amount of oil produced from a unit might be thousands to tens of thousands of barrels of oil per day Need reliable system to get oil to refinery or large holding area; boats and trucks not reliable Solution --> Pipeline

Onshore Pipeline Onshore, the pipeline is usually buried in the U.S. Exception is the TransAlaskan pipeline, which must be above ground to prevent permafrost melting. In other countries, done routinely. Above ground pipelines are subject to terrorism, theft, and drunk hunters. Alaska pipeline leak from hunter’s bullet (Source: BBC)

Offshore Pipeline Offshore oil rigs use pipelines running along the bottom of the ocean to get it to nearest land. Repairs can be extremely costly. Most failure incidents are caused by corrosion; most large spills are caused by anchors (about 3,000 bbls oil spilled per incident)

Gulf of Mexico Offshore Louisiana Red lines - Oil Blue lines - Gas Black dots - Structure Each green, gold, and blue square is a 3 mile by 3 mile leased block White squares are not leased Map courtesy of MMS

Tankers Oil is an international commodity. To cross the ocean or seas, oil tankers are used. Amount of oil in transport by tanker is quite large, as the world consumes over 75 million barrels per day Source: BBC Persian Gulf alone accounts for 15 million barrels per day exported Tanker spills account for 29 million gallons of oil spill per year

Oil refining Crude oil is a mixture of different hydrocarbons Different hydrocarbons have different boiling points Separate by heating to various temperatures Can change the percentage of various hydrocarbons by “cracking” (thermally or chemically) them into smaller ones

Environmental Damage Oil wells produce radioactive water Oil spills from wells, tankers, and pipelines occur frequently; usually small, but can be quite large Fumes emitted by refineries are toxic; linked to cancer, lung disease, and host of other problems Sometimes, refineries blow up

Oil Shale and Tar Sand Oil shale - kerogen trapped within the low permeability shale; may be up to 40% of shale U.S. has about 130 billion barrels of oil in this form (2/3 of world total; no production facilities, though; requires mining shale, crushing it, and then passing steam through it to capture oil Tar sand - heavy, asphalt-like crude trapped in sandstone; world reserves possibly 3 times that of conventional oil Can heat the oil in place to low viscosity and remove it; cheaper to mine it like oil shale

U.S. Reserves U.S. reserves have been in a steady decline for almost 40 years. At the same time, our production has also decreased Addition of Alaska

U.S. Production Data from the Department of Energy While consumption of oil in the U.S. has been increasing for 30 year, domestic production peaked in Majority of U.S. oil from the Gulf of Mexico (mostly Texas and Louisiana), Alaska, and California. North Dakota production has increased 300% over the last decade

U.S. Imports U.S. oil imports by source (DOE) Common perception is that all of our oil comes from Saudi Arabia Both Mexico and Canada provide as much as Saudi Arabia Nigeria and Venezuela also provide large quantities By how much would fuel efficiency of cars have to increase so that could replace Saudi Arabia contribution?

World Oil Reserves Current estimates of oil reserves show that Arabia and Eurasia have over 75% of the world’s oil Data from DOE, 2008 and Oil & Gas Journal, 2007 Oil Production (MBD)Oil Reserves (MB) Persian Gulf Nations ,200 Venezuela2.380,012 Nigeria2.236,200 Angola1.98,000 Canada2.6179,210 China3.816,000 Mexico2.612,352 Norway2.17,849 Russia9.460,000 United Kingdom1.33,875 United States5.220,900 Other OPEC3.958,251 Other Non-OPEC14.494,813 World72.41,316,662

World Consumption

How Long? The question is not how much long will we have oil, but how long will we have cheap oil? How will international politics change if this situation plays out? Source: C.J.Campbell, 2004 Source: DOE