Part Four, Issue 7 Oil and Natural Gas

Objectives After reading the assigned chapter and reviewing the materials presented the students will be able to understand: What are proven reserves of oil and gas? How fast are we consuming these resources?

Background Oil gradually overtook coal as the most important fuel source in the United States. Today, oil provides half of U.S. energy, and nearly all of our transportation fuel. By 2006, global oil demand was around 85 million barrels (1 barrel = 42 U.S. gallons) per day, with the United States responsible for a quarter of that demand (20 – 21 million barrels per day).

Origin, Distribution, and Extraction of Oil Oil is not a renewable resource. Over millions of years, buried organic matter in the absence of oxygen, under pressure and temperature became crude oil (petroleum), usually accompanied by natural gas. Once extracted from underground reservoirs, oil is processed in refineries. The processed oil results in products such as gasoline, diesel fuel, or asphalt. Refineries are among the most polluting industrial sites.

How much oil is left? World proven oil reserves are less than the actual oil in place. New technology may increase oil recovery, or the price of oil may go up making it economic to spend more money to get more oil out. Companies frequently underestimate the amount of oil in a field for competitive reasons. Chevron estimated in 1991 that 6,700 billion barrels of oil could be recovered, assuming a price of $ 60 per barrel in 1990 dollars.

Technology Enhances Oil Discoveries and Production Companies use seismic data and powerful computers to create 3-D images of deepwater basins to see geologic structures beneath the surface. Dry holes are exploratory wells that did not hit oil and can cost up to $ 15 million each. Recent advances in drilling techniques have lowered production costs and increased oil and gas yields from known fields. The Persian Gulf region contains more than half of the world’s proven oil reserves. The proven reserves in 2004 were 1, 190 billion barrels. That divided by the annual production of 31 billion barrels per year, will yield the number of years that oil could be produced at current rate before it is all gone. In reality oil production will gradually decline over a long period of time.

ANWR’s Oil Reserves The U.S. Geological Survey (USGS) estimates that the Arctic National Wildlife Refuge(ANWR) on Alaska’s north slope holds between 5.6 and 16 billion barrels of oil. Environmental scientists are concerned about the impact of oil exploration on the environment.

Natural Gas Methane (CH4) is the main constituent of natural gas (about 75%). Ethane, propane, and butane are other constituents of natural gas. Natural gas presently meets more than 20 % of the world’s energy needs. Natural gas may be transported in two ways: in pipelines as a pressurized gas, or as super cooled liquid (LNG, liquefied natural gas) using specially constructed tankers. Global proven reserves of natural gas were estimated at 6,040 trillion cubic feel (TCF) in 2005. World natural gas consumption was 92 TCF and U.S. consumption was around 22 TCF.

Summary Today, oil provides half of U.S. energy, and nearly all of our transportation fuel. By 2006, global oil demand was around 85 million barrels (1 barrel = 42 U.S. gallons) per day, with the United States responsible for a quarter of that demand (20 – 21 million barrels per day). Over millions of years, buried organic matter in the absence of oxygen, under pressure and temperature became crude oil (petroleum), usually accompanied by natural gas. The processed oil results in products such as gasoline, diesel fuel, or asphalt. Companies use seismic data and powerful computers to create 3-D images of deepwater basins to see geologic structures beneath the surface. Dry holes are exploratory wells that did not hit oil and can cost up to $ 15 million each. The proven reserves in 2004 were 1, 190 billion barrels. That divided by the annual production of 31 billion barrels per year, will yield the number of years that oil could be produced at current rate before it is all gone. In reality oil production will gradually decline over a long period of time. Natural gas presently meets more than 20 % of the world’s energy needs. Natural gas may be transported in two ways: in pipelines as a pressurized gas, or as super cooled liquid (LNG, liquefied natural gas) using specially constructed tankers.

Home Work 1. By 2006, how much oil did the world use per day, and how much did the U.S. use per day? 2. What are the end products of processed crude oil? 3. By what two ways can gas be transported?