Crude oil and natural gas are often found together in nature, both developing from the same process over millennia. Important energy resources, they influence daily life and global economies.
About Crude Oil & Natural Gas
Crude Oil
Crude oil is a naturally occurring, unrefined mixture of hydrocarbons found beneath the Earth's surface. It's a thick, black liquid composed of organic compounds and impurities.
Natural Gas
Primarily composed of methane (CH4), natural gas is a gaseous fossil fuel found alongside crude oil deposits or in separate reservoirs. It contains other hydrocarbons like ethane, propane, and butane.
Creation of Oil & Gas
Fossil fuels are formed from remains of ancient marine organisms (plankton and algae) and plant life.
Accumulation: When these organisms die, they sink to the bottom of oceans or lakes, where they mix with sediment.
Burial: Over time, layers of sediment bury the organic matter deeper and deeper, increasing pressure and temperature. This organic material is known as kerogen.
Transformation: It takes about 10 million years for kerogen to turn into crude oil or natural gas. Under intense pressure and heat, the organic matter undergoes processes of diagenesis and catagenesis.
Diagenesis encompasses the physical, chemical, and biological alterations of sediments, after deposition and before becoming sedimentary rocks; this affect the development and quality of petroleum reservoirs.
Catagenesis is the thermal degradation of kerogen into liquid and gaseous hydrocarbons. This happens as burial depth and temperature increase.
Migration and Accumulation: The newly formed hydrocarbons migrate through porous rocks until they reach a non-porous rock layer (cap rock). Trapped beneath this layer, they accumulate to form oil and natural gas reservoirs.
Types of Oil and Natural Gas
Crude Oil
Light Crude Oil: Flows easily, has a low density, and generally gets a higher price due to its ease of refining into gasoline. Flow and high API gravity make it easier and cheaper to refine into gasoline.
Heavy Crude Oil: Thick, viscous, it often needs more extensive and costly processing.
Sweet Crude Oil: Contains low levels of sulfur, making it less expensive to refine.
Sour Crude Oil: Contains high levels of sulfur, requiring additional processing to remove the sulfur.
Natural Gas
Dry Natural Gas: Primarily methane with minimal liquid hydrocarbons, used for heating and cooking.
Wet Natural Gas: Contains significant liquid hydrocarbons like ethane, propane, and butane, often utilized for industry.
Shale Gas: Natural gas trapped within shale rock formations, extracted via fracking.
Coal Bed Methane (CBM): Natural gas found absorbed onto the surface of coal seams.
Oil & Gas Extraction
Oil Drilling
Oil drilling is about creating a borehole to access underground reservoirs. In this process a rotating drill bit cuts through rock. Secondary recovery techniques, like water flooding, are used to enhance oil recovery by maintaining reservoir pressure.
Injections of CO2 can displace unreachable crude. Drilling can be aground or offshore. There are 590 oil rigs in the North Sea up from 184 in 2018. 180 are the Red Sea, 124 (down from 175) in the erstwhile Gulf of Mexico, US. Those in the Persian Gulf number up to 160.
Natural Gas Extraction
Gas extraction uses similar methods but includes hydraulic fracturing, or fracking. Fracking injects high-pressure fluid into rock formations, like shale beds, to break the rock and release trapped gas. It provides up to 80% of the natural gas produced in the US.
Oil & Gas Processing
Crude Oil Refining
Crude oil is taken to refineries and processed by fractional distillation, cracking, and other methods. These separate and convert it to marketable products like gasoline, diesel fuel, kerosene, and asphalt. A typical refinery can process 250,000 barrels of crude oil per day.
Natural Gas Processing
Natural gas undergoes purification, such as separating hydrocarbons. Water, carbon dioxide, and sulfur compounds are removed.
It's then separated into components including methane, ethane and propane. Once processed, it can be transported by pipeline or stored in liquefied form for easier transport.
Oil and Gas Products
Oil Products: Gasoline, diesel fuel, jet fuel, heating oil, kerosene, lubricating oils, asphalt, plastics, synthetic rubber, fertilizers, and pharmaceuticals.
Gasoline: Fuels personal and commercial vehicles, accounting for over 40% of total petroleum consumption in the U.S.
Diesel: Powers trucks, buses, and trains, representing roughly 18% of petroleum products.
Jet Fuel: Essential for commercial airlines, with global demand for jet fuel expected to reach $180 billion by 2025.
Natural Gas Products: Methane (used for heating and electricity generation), ethane (used in petrochemicals), propane (used for heating and cooking), butane (used in LPG).
Petrochemicals: Serve as raw materials for plastics, fertilizers, and pharmaceuticals, demonstrating their wide-ranging applications.
Importance to the World and Economy
Energy Source: Oil and gas are major energy sources for transportation, generating electricity, heating, and industry.
Economic Drivers: The oil and gas industry creates jobs, generates revenue for governments, and contributes to global trade.
Manufacturing: Oil and gas are raw materials for producing plastics, chemicals, and other manufactured goods.
Transportation: Gasoline, diesel, and jet fuel derived from crude oil power vehicles, trucks, ships, and airplanes.
Countries abundant in oil, like Saudi Arabia and the US, often have a higher GDP per capita, reinforcing the economic significance of these resources. Fluctuations in oil prices strongly affect global markets.
Environment
Greenhouse Gas & Air Pollution: Burning oil and gas releases carbon dioxide (CO2), a major greenhouse gas. Methane leakage during natural gas production and transportation is a concern.
Combustion of oil and gas releases pollutants like nitrogen oxides (NOx), sulfur dioxide (SO2), and particulate matter, contributing to smog and respiratory problems.
Refineries release toxic waste into water, soil, and air. Pollution from refineries can cause asthma, bronchitis, cancer, reproductive problems, and abnormal brain and nervous system development. Pollution also adds to extreme heat rising to lethal proportions in some cities.
Oil Spills: Accidental spills during extraction can devastate marine life. For example, the Deepwater Horizon spill in 2010 releases about 4.9 million barrels of oil.
Bioremediation is one method used to help clean up the Horizon disaster.
Before cleanup can happen, oil spills destroy undersea and shore life.
Habitat Destruction: Oil and gas exploration and production disrupt habitats and displace wildlife. Extraction processes cause land degradation and ecosystem collapse.
Water Contamination: Fracking can contaminate groundwater. Hydraulic fracturing raises concerns as the majority of water wells near fracking sites show increased levels of methane.
Facts about Oil & Gas
Finite Resources: Oil and gas are non-renewable resources, meaning their supply is limited and will eventually be depleted.
Geopolitics: Oil and gas reserves are concentrated in certain regions, leading to geopolitical tensions and influencing international relations. Globally there are about 1.7 trillion barrels of proven oil reserves. The Middle East controls half these reserves.
Natural gas is considered a cleaner-burning fossil fuel than oil, emitting less carbon dioxide and other pollutants when burned
Price Volatility: Oil and gas prices are subject to fluctuations based on supply and demand, geopolitical events, and other factors.
Technological Advances: Horizontal drilling and fracking have increased oil and gas availability.
Energy Transition: The world is transitions towards cleaner energy, leading to a shift away from fossil fuels. This transition inspires much investment in renewable energy technologies and alt energy sources.
Regulation: To address environmental and safety concerns, the oil and gas industry is heavily regulated by governments around the world.
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