1. Oil http://www.eia.gov/

2. Overview
Petroleum, like natural gas and coal, is a fossil fuel that formed in the earth millions of years ago from plants and animals which converted sunlight into stored energy. It is found underground in tiny holes in rocks. We use oil wells to locate and pump the oil out of the ground. Some wells can be 2 miles long. Much oil is found offshore in the Gulf of Mexico and there is potential for more oil on the east and west coasts.
All fossil fuels are non renewable.
70% of our petroleum consumption is for transportation.
1.1% of our petroleum usage is for electricity generation.
Factories use oil to make plastics, paints medicines, and many other products. We use more petroleum than any other energy source.
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3. Overview continued
The United States produces 10% of the world’s petroleum and consumes 24%.
In % of our petroleum products were imported. These included:
gasoline, diesel fuel, heating oil, jet fuel, chemical feed stocks, asphalt, and other products. Still, most petroleum products consumed in the United States were refined here.

4. How Oil is processed
Crude oil that is pumped out of the ground is taken through pipelines to refineries where it is boiled in fractionating towers. There the hydrocarbons in the crude oil are separated by their vaporization temperatures. From there different hydrocarbons are sent to markets such as gas stations, airports and chemical plants.

5. Products made from a Barrel of Crude Oil

6. Advantages
Petroleum is relatively cheap compared to other energy sources due to the infrastructure set up to accommodate it.
It has been plentiful and easily obtained until recently.
It has many uses – transportation fuel, electricity generation, production of such products as plastics and medicines.
It is light and compact so it is easy to use for transportation.
It can withstand high heat so is good as a lubricant.
It can generate electricity any time so is good for base load and peak load electricity generation.

7. Disadvantages
Exploring and drilling for oil may disturb land and ocean habitats.
Oil is a carbon based fuel and the primary way it is used is to burn it, releasing more than its weight in CO2 because of the added oxygen. CO2 is a greenhouse gas and is expected by most scientists to be a cause of global warming.
The other uses of petroleum products also give off pollutants –
carbon monoxide, nitrogen oxides, particulate matter, and unburned hydrocarbons –which help form air pollution

8. Disadvantages continued
We are running out. Estimates vary from 50 to 150 years before we run out of oil. This is impossible to predict, but most major oil companies have been failing to discover new reserves.
Much of the remaining oil in the world is in politically unstable areas including Africa, Middle East, Russia, and parts of Southeast Asia.
Transporting oil through pipelines and tankers can be difficult especially as sources become more and more remote.

9. Technical Considerations
Technological developments have made petroleum a much safer energy source:
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 make it possible for a single well to produce oil from much larger areas

10. Economic Considerations
Factors affecting oil and gas prices
As with most products, the price of gasoline is affected mostly by supply and demand.
The supply of oil is affected greatly by
the production quota set by OPEC
Oil reserves including what is available in U.S. refineries and stored in the Strategic Petroleum Reserves.
The demand for oil is determined mostly from the U.S. demand as estimated by the Energy Information Agency . (EIA)
The EIA bases its demand forecasts on
Forecasts for travel during the summer from AAA.
Weather forecasts for the winter which determine potential home heating oil use.
Potential world crises in oil-producing countries which can dramatically increase oil prices.

11. Gas prices explained
Taxes - a monthly national average of federal and state taxes
Distribution & Marketing Costs & Profits - the difference between the average retail price of gasoline or diesel fuel as computed from EIA's weekly survey and the sum of the other 3
Refining Costs & Profits - the difference between the price they can get for the gasoline or diesel fuel and the price of the amount of the crude oil needed to make it.
Crude oil - the average price of crude oil purchased by refiners.

12. Environmental Considerations
Exploring and drilling for oil may disturb land and ocean habitats.
Oil is a carbon based fuel and the primary way it is used is to burn it, releasing more than its weight in CO2 because of the added oxygen. CO2 is a greenhouse gas and is expected by most scientists to be a cause of global warming.
The other uses of petroleum products also give off pollutants –
carbon monoxide, nitrogen oxides, particulate matter, and unburned hydrocarbons –which help form air pollution

13. Legal/Regulatory Considerations
The U.S. is a member of the International Energy Association whose 28 member countries work together to create policies which obtain the goals of the “Three E’s” of balanced energy policy making: energy security, economic development and environmental protection.
The U.S. Department of Energy works to promote
Energy Security:  Promoting America’s energy security through reliable, clean, and affordable energy  
Nuclear Security:  Ensuring America’s nuclear security  
Scientific Discovery and Innovation:  Strengthening U.S. scientific discovery, economic competitiveness, and improving quality of life through innovations in science and technology  
Environmental Responsibility:  Protecting the environment by providing a responsible resolution to the environmental legacy of nuclear weapons production  
Management Excellence:  Enabling the mission through sound management
Regulatory Information

14. Anticipated Status
The world has produced about 1 trillion barrels of oil to date. Over the next century or so, approximately 2 trillion barrels more are expected to be produced from conventional proved reserves and undiscovered conventional oil.
It is expected that the rise in population will increase the demand for oil products yet improved technology will lessen the increase.
Key issues that will affect energy market trends will be:
uncertain world oil prices and production effected by increased demand by developing countries
growing concern about greenhouse gas emissions and its impacts on energy investment decisions
the increasing use of renewable fuels
the increasing production of unconventional natural gas
the shift in transportation to more efficient vehicles
improved efficiency in end-use appliances

15. Summary
Although petroleum usage is highly criticized for contributing to greenhouse gases and global warming, it will remain our major source of transportation energy for several generations to come.
If the U.S. can reduce its reliance on foreign oil it will improve our national security, but this will require a great deal of investment in research and development, exploration and processing. Efficiency and conservation, political and social awareness are all vital parts of the energy outlook.