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OIL. “Black gold, Texas tea….”. What is it?.

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OIL

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OIL

“Black gold, Texas tea….”


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What is it?

Crude oil is a blanket term for a mixture of hydrocarbons; some are long chain hydrocarbons, while others are very shortExact proportion of different hydrocarbons determines viscosityand other characteristics; big differences in crude oil from various locationsMayan crude - very thick, almost tarrySaudi crude - very thin, can almost be used directly in diesel motor


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Oil Usage

Data from Dept. of Energy, http://www.eia.doe.gov/emeu/aer/txt/tab0511.htm

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


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Transportation

About 65% of crude oil (almost 13 MBPD) is used for tansportation;

of this, the majority (8.5 MBPD) is for gasoline

BTS, 2001, http://www.bts.gov/publications/national_transportation_statistics/2002/index.html


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Other Uses

About 6% of crude oil is used to heat homes and buildingsAnother 2% is used for generating electricityRemaining amount (26%) used by industry

3% for asphalt and road oil9% for LPG4% for coke3% for petrochemical feedstock

Even if stopped using oil for transportation, will still need itfor our modern lifestyles


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Oil drilling

Offshore

Onshore


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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


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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


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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


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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 ofthousands 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


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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 subjectto terrorism, theft, and drunk hunters.

Alaska pipeline leak from hunter’s bullet(Source: BBC)


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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 spillsare caused by anchors (about 3,000 bbls oil spilled per incident)


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Gulf of Mexico

Offshore LouisianaRed lines - Oil Blue lines - Gas Black dots - StructureEach green, gold, andblue square is a 3 mileby 3 mile leased blockWhite squares are notleased

Map courtesy of MMS


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Tankers

Oil is an international commodity.To cross the ocean or seas, oil tankers are used.

Amount of oil in transport by tankeris quite large, as the world consumesover 75 million barrels per day

Source: BBC

Persian Gulf alone accounts for 15 million barrels per day exportedTanker spills account for 29 million gallons of oil spill per year


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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


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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


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Oil Shale and Tar Sand

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


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Historical U.S. Oil Data (Data: DOE)

U.S. Production

While consumption of oil in the U.S.has been increasing for 20 year, domestic production peaked in 1970.

Majority of U.S. oil from the Gulf of Mexico (mostly Texas and Louisiana),Alaska, and California

Data from the Hubbert Center, http://www.hubbertpeak.com/us/


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U.S. Imports

Common perception is that all of our oil comes from Saudi Arabia

Both Mexico and Canada provide as much as Saudi Arabia

U.S. oil imports by source (DOE)

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?


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World Oil Reserves

Data from the Hubbert Center, http://hubbert.mines.edu/news/Campbell_02-3.pdf

Current estimates of oil reserves show that Arabia andEurasia have over 75% of the world’s oil


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How Long?

The question is not how much long will we have oil, but how longwill we have cheap oil?

Source: C.J.Campbell, 1996

How will international politics change if this situation plays out?


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