- Crude Oil
What Is Crude Oil?
Crude oil is a mixture of hydrocarbons formed from plant and animal remains that lived in a marine environment millions of years ago, Over the course of those millions of years, The remains were covered by layers of rock, Sand and silt, A combination of pressure and heat from the layers turned those remains into crude oil, Because it dates back millions of years, Crude oil is known as a "Fossil fuel".
Petroleum products are made from crude oil, Coal, Natural gas or biomass, Examples of petroleum products are gasoline, Jet fuel, Waxes, Asphalt and lubricating oil.
Interestingly, A 42 gallon barrel of crude oil produces about 45 gallons of petroleum products because of a refining phenomenon called refinery processing gain.
✅ It is composed of hydrocarbon deposits and other organic materials that were formed from the remains of animals and plants that lived millions of years ago.
✅ Petroleum is a more general word that refers to crude oil, the raw oil that is extracted out of the ground and other products formed from refined crude oil.
✅ Crude oil is a global commodity that trades in markets around the world, both as spot oil and via derivatives contracts.
✅ Many economists view crude oil as the single most important commodity in the world as it is currently the primary source of energy production.
Petroleum products are made from crude oil, Coal, Natural gas or biomass, Examples of petroleum products are gasoline, Jet fuel, Waxes, Asphalt and lubricating oil.
Interestingly, A 42 gallon barrel of crude oil produces about 45 gallons of petroleum products because of a refining phenomenon called refinery processing gain.
- Keys Takeaways :
✅ It is composed of hydrocarbon deposits and other organic materials that were formed from the remains of animals and plants that lived millions of years ago.
✅ Petroleum is a more general word that refers to crude oil, the raw oil that is extracted out of the ground and other products formed from refined crude oil.
✅ Crude oil is a global commodity that trades in markets around the world, both as spot oil and via derivatives contracts.
✅ Many economists view crude oil as the single most important commodity in the world as it is currently the primary source of energy production.
Understanding Crude Oil
Crude oil is typically obtained through drilling, Where it is usually found alongside other resources such as natural gas ( Which is lighter and therefore sits above the crude oil ) and saline water ( Which is denser and sinks below ), After its extraction, Crude oil is refined and processed into a variety of forms, Such as gasoline, Kerosene and asphalt for sale to consumers.
Crude oil is one of the world’s most important commodities and its price can have ripple effects through the broader economy, Rising oil prices mean higher gasoline prices at the pump, Higher shipping costs and increased input costs for producers, Crude oil prices are driven mainly by the principles of supply and demand, Over supply and shrinking demand lower prices, While rising demand and short supply push prices up, Perceived supply and demand changes can be driven by geopolitical events or natural disasters that affect oil producing nations.
Crude oil is one of the world’s most important commodities and its price can have ripple effects through the broader economy, Rising oil prices mean higher gasoline prices at the pump, Higher shipping costs and increased input costs for producers, Crude oil prices are driven mainly by the principles of supply and demand, Over supply and shrinking demand lower prices, While rising demand and short supply push prices up, Perceived supply and demand changes can be driven by geopolitical events or natural disasters that affect oil producing nations.
Where is Crude Oil found
- The Fast Facts On Crude Oil
Crude oil is often interchangeably referred to as petroleum, This is because petroleum includes both the unrefined crude oil as well as refined petroleum products, It is non-renewable once it’s gone it’s gone and cannot be easily replaced.
The petroleum products that can be processed from one barrel of crude oil :
What is Crude Oil made from?
Dead critters, Plenty of pressure, A lot of heat and hundreds of thousands of years in time.
Crude oil is formed from the remains of dead organisms ( Diatoms ) such as algae and zooplankton that existed millions of years ago in a marine environment, These organisms were the dominant forms of life on earth at the time.
FYI : Dinosaurs weren’t around at this stage, So any of those stories you’ve heard that fossil fuel is from dinosaurs was simply not the case.
As they lived these organisms absorbed energy from the sun and stored it as carbon molecules within their bodies, Once they died their remains sank to the bottom of the oceans or riverbeds and were buried in layers of sand, Mud and rock.
Over millions of years, The remains were buried deeper and deeper under more sediment and organic materials, The enormous pressure, High temperatures and lack of oxygen transformed the organic matter into a waxy substance called kerogen.
With even more heat, Pressure and time the kerogen undergoes a process called catagenesis which transforms the kerogen into hydrocarbons, Different combinations of pressure, Heat and the original composition of organic material will determine the type of hydrocarbon formed, In this case, The hydrocarbons form crude oil.
Other examples are asphalt if the temperature is lower and natural gas if the temperature is higher, After the oil is formed it moves through tiny pores in the surrounding rock from an area of high pressure to low pressure, This is often upwards.
Some oil might make it all the way to the surface where it pools in other cases the oil will get trapped under impermeable layers of rock or clay where it will form underground reservoirs.
Crude oil is formed from the remains of dead organisms ( Diatoms ) such as algae and zooplankton that existed millions of years ago in a marine environment, These organisms were the dominant forms of life on earth at the time.
FYI : Dinosaurs weren’t around at this stage, So any of those stories you’ve heard that fossil fuel is from dinosaurs was simply not the case.
As they lived these organisms absorbed energy from the sun and stored it as carbon molecules within their bodies, Once they died their remains sank to the bottom of the oceans or riverbeds and were buried in layers of sand, Mud and rock.
Over millions of years, The remains were buried deeper and deeper under more sediment and organic materials, The enormous pressure, High temperatures and lack of oxygen transformed the organic matter into a waxy substance called kerogen.
With even more heat, Pressure and time the kerogen undergoes a process called catagenesis which transforms the kerogen into hydrocarbons, Different combinations of pressure, Heat and the original composition of organic material will determine the type of hydrocarbon formed, In this case, The hydrocarbons form crude oil.
Other examples are asphalt if the temperature is lower and natural gas if the temperature is higher, After the oil is formed it moves through tiny pores in the surrounding rock from an area of high pressure to low pressure, This is often upwards.
Some oil might make it all the way to the surface where it pools in other cases the oil will get trapped under impermeable layers of rock or clay where it will form underground reservoirs.
What is Crude Oil used for
Canadians consume a lot of products made from oil, In fact, Canadians used 110 billion litres of refined oil products in 2018, Oil is an important part of daily life in canada and the world for transportation, Heating our homes and plastics used in clothing, Electronics and more.
Oil is an important part of daily life in canada and all over the world, Canada consumes 1.5 million barrels of oil per day making up 2.5% of the world’s consumption, This powerful source of energy moves us, Heats our homes and is a component of many everyday products.
Oil is an important part of daily life in canada and all over the world, Canada consumes 1.5 million barrels of oil per day making up 2.5% of the world’s consumption, This powerful source of energy moves us, Heats our homes and is a component of many everyday products.
- Petroleum in Real Life : Home Heating
- How is Oil Used in Canada?
- Using Oil as a Transportation Fuel
✅ Gasoline : Designed for internal combustion engines, Commonly used in private and commercial vehicles.
✅ Diesel : Designed for engines commonly used in trucks, Buses and public transport, Locomotives, Farm and heavy equipment, Diesel contains more energy and power density than gasoline.
✅ Aviation Fuels : Specialized petroleum based fuels used to power various types of aircraft for commercial travel and shipping.
- Electronics
- Textiles
- Sporting Goods
- Health & Beauty Products
- Medical Supplies
- Household Products
Types Of Crude Oil
Once removed from the ground, Crude oil is refined into useful petroleum products such as diesel fuel and gasoline, Because of how valuable crude oil based products are investing in crude oil is common.
Learn more about crude oil, The factors that impact prices and how to invest in it if you decide that it's right for your portfolio.
✅ There are six types of crude oil, Light/Sweet, Light/Sour, Medium/Sweet, Medium/Sour, Heavy/Sweet and Heavy/Sour.
✅ Crude oil prices are subject to geopolitical factors and events which affect supply and demand.
✅ You can invest in crude oil through exchange traded funds ( ETFs ), Options and futures.
Petroleum products are made from crude oil, Coal, Natural gas or biomass, Examples of petroleum products are gasoline, Jet fuel, Waxes, Asphalt and lubricating oil.
Interestingly, A 42 gallon barrel of crude oil produces about 45 gallons of petroleum products because of a refining phenomenon called refinery processing gain.
The oil industry and regulators use crude oil's density and sulfur content to classify it into several categories, Oil can be grouped by sulfur content as either sweet or sour or by density as either heavy or light, Using these two groups and by creating a group in between, Oil is classified into six classes by the industry and investors :
Heavy oils are used to make industrial products like asphalt and plastics, Medium oils have sulfur content that falls somewhere between heavy and light, Light oils are generally used in diesel, gasoline and aviation fuel because they take less processing, Sour crude has more sulfur and carbon than light crude and requires more refining, Thus, It incurs more costs.
The U.S energy information administration has created a chart that demonstrates where most crude oils come from and the types in those areas.
Learn more about crude oil, The factors that impact prices and how to invest in it if you decide that it's right for your portfolio.
- Key Takeaways
✅ There are six types of crude oil, Light/Sweet, Light/Sour, Medium/Sweet, Medium/Sour, Heavy/Sweet and Heavy/Sour.
✅ Crude oil prices are subject to geopolitical factors and events which affect supply and demand.
✅ You can invest in crude oil through exchange traded funds ( ETFs ), Options and futures.
- What Is Crude Oil?
Petroleum products are made from crude oil, Coal, Natural gas or biomass, Examples of petroleum products are gasoline, Jet fuel, Waxes, Asphalt and lubricating oil.
Interestingly, A 42 gallon barrel of crude oil produces about 45 gallons of petroleum products because of a refining phenomenon called refinery processing gain.
- Types of Crude Oil
The oil industry and regulators use crude oil's density and sulfur content to classify it into several categories, Oil can be grouped by sulfur content as either sweet or sour or by density as either heavy or light, Using these two groups and by creating a group in between, Oil is classified into six classes by the industry and investors :
- Heavy/Sweet
- Heavy/Sour
- Medium/Sweet
- Medium Sour
- Light/Sweet
- Light/Sour
Heavy oils are used to make industrial products like asphalt and plastics, Medium oils have sulfur content that falls somewhere between heavy and light, Light oils are generally used in diesel, gasoline and aviation fuel because they take less processing, Sour crude has more sulfur and carbon than light crude and requires more refining, Thus, It incurs more costs.
The U.S energy information administration has created a chart that demonstrates where most crude oils come from and the types in those areas.
For investing purposes, Classification by geography, Weight and sulfur content is most important because these affect the price the most, However, Some investors might be interested in the environmental protection agency's ( EPA ) classifications which are based on toxicity levels and changes in state.
✅ Class A :
Most refined products and many high quality, Light crude oils are included in Class A, Despite how valuable they are, Class A oils can be extremely toxic to humans, Animals and other organisms.
✅ Class B :
These are waxy and oily in feel and are less toxic than Class A oils, They stick more firmly to surfaces than Class A oils, As temperatures rise, They are more likely to penetrate porous layers or surfaces.
✅ Class C :
These are usually brown or black have a similar density to water and tend to sink, This type of oil doesn't penetrate porous surfaces as quickly as other types of crude oil, In the event of evaporation or weathering of volatiles in a Class C oil, It may produce solid or tarry Class D oil, Even though Class C crude oil is less toxic, It can still harm wildlife.
✅ Class D :
These are residual oils, Heavy crude oils select high paraffin based oils and certain weathered oils, Typically, Class D oils are dark black or brown and if they melt, They can coat surfaces making cleaning up a spill very difficult, Class D crude oil is relatively nontoxic.
These are important for learning more about general toxicity and physical state changes.
✅ The Arab Spring :
Oil prices are dependent upon events in the middle east, War in libya disturbed the organization of petroleum exporting countries' ability to maintain its oil supplies.
✅ Demand :
Increasing demand from china and middle eastern countries caused a rise in prices.
✅ Bottlenecks In Transportation :
The united state experienced a slowdown in crude oil transportation.
✅ The Debt Crisis :
Europe was in the throes of a significant crisis dealing with countries that had taken on too much debt.
✅ Strategic Petroleum Releases :
Members of the international energy agency released oil from their reserves to meet rising demand.
Price differences can stem from various reasons such as where the oil is produced, Transportation costs, Political and economic conditions in the regions where the oil is sold and refining costs.
Because oil benchmarks are usually priced in united state dollars, Oil prices can also fluctuate in response to variations in the value of the united state dollar.
✅ United State Energy Information Administration ( EIA ) Weekly Reports;
✅ American Petroleum Institute ( API ) Weekly Reports;
✅ Organization of the Petroleum Exporting Countries ( OPEC ) Meetings;
✅ Refinery Capacity Reports;
✅ Gross Domestic Product ( GDP ) Reports;
✅ Natural Gas Inventory Reports;
✅ Weather Events and
✅ Import/Export Policy Changes
- EPA Classifications for Crude Oil
✅ Class A :
Most refined products and many high quality, Light crude oils are included in Class A, Despite how valuable they are, Class A oils can be extremely toxic to humans, Animals and other organisms.
✅ Class B :
These are waxy and oily in feel and are less toxic than Class A oils, They stick more firmly to surfaces than Class A oils, As temperatures rise, They are more likely to penetrate porous layers or surfaces.
✅ Class C :
These are usually brown or black have a similar density to water and tend to sink, This type of oil doesn't penetrate porous surfaces as quickly as other types of crude oil, In the event of evaporation or weathering of volatiles in a Class C oil, It may produce solid or tarry Class D oil, Even though Class C crude oil is less toxic, It can still harm wildlife.
✅ Class D :
These are residual oils, Heavy crude oils select high paraffin based oils and certain weathered oils, Typically, Class D oils are dark black or brown and if they melt, They can coat surfaces making cleaning up a spill very difficult, Class D crude oil is relatively nontoxic.
These are important for learning more about general toxicity and physical state changes.
- Factors That Impact Crude Oil Prices
✅ The Arab Spring :
Oil prices are dependent upon events in the middle east, War in libya disturbed the organization of petroleum exporting countries' ability to maintain its oil supplies.
✅ Demand :
Increasing demand from china and middle eastern countries caused a rise in prices.
✅ Bottlenecks In Transportation :
The united state experienced a slowdown in crude oil transportation.
✅ The Debt Crisis :
Europe was in the throes of a significant crisis dealing with countries that had taken on too much debt.
✅ Strategic Petroleum Releases :
Members of the international energy agency released oil from their reserves to meet rising demand.
Price differences can stem from various reasons such as where the oil is produced, Transportation costs, Political and economic conditions in the regions where the oil is sold and refining costs.
Because oil benchmarks are usually priced in united state dollars, Oil prices can also fluctuate in response to variations in the value of the united state dollar.
- Other Factors
✅ United State Energy Information Administration ( EIA ) Weekly Reports;
✅ American Petroleum Institute ( API ) Weekly Reports;
✅ Organization of the Petroleum Exporting Countries ( OPEC ) Meetings;
✅ Refinery Capacity Reports;
✅ Gross Domestic Product ( GDP ) Reports;
✅ Natural Gas Inventory Reports;
✅ Weather Events and
✅ Import/Export Policy Changes
- What are the four uses of crude oil?
- What crude oil is the best quality?
What is Crude Oil in chemistry GCSE
Crude oil means a mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities :
(1) Depending upon the characteristics of the crude stream, it may also include any of the following :
(i) Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric conditions
( Temperature and pressure ) after being recovered from oil well ( Casing-head ) gas in lease separators and are subsequently commingled with the crude stream without being separately measured, Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included.
(ii) Small amounts of nonhydrocarbons such as sulfur and various metals.
(iii) Drip gases and liquid hydrocarbons produced from tar sands, Oil sands, Gilsonite and oil shale.
(iv) Petroleum products that are received or produced at a refinery and subsequently injected into a crude supply or reservoir by the same refinery owner or operator.
(2) Liquids produced at natural gas processing plants are excluded, Crude oil is refined to produce a wide array of petroleum products including heating oils; Gasoline, Diesel and jet fuels, Lubricants; Asphalt; Ethane, Propane and butane and many other products used for their energy or chemical content.
(1) Depending upon the characteristics of the crude stream, it may also include any of the following :
(i) Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric conditions
( Temperature and pressure ) after being recovered from oil well ( Casing-head ) gas in lease separators and are subsequently commingled with the crude stream without being separately measured, Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included.
(ii) Small amounts of nonhydrocarbons such as sulfur and various metals.
(iii) Drip gases and liquid hydrocarbons produced from tar sands, Oil sands, Gilsonite and oil shale.
(iv) Petroleum products that are received or produced at a refinery and subsequently injected into a crude supply or reservoir by the same refinery owner or operator.
(2) Liquids produced at natural gas processing plants are excluded, Crude oil is refined to produce a wide array of petroleum products including heating oils; Gasoline, Diesel and jet fuels, Lubricants; Asphalt; Ethane, Propane and butane and many other products used for their energy or chemical content.
How is Crude Oil extracted
Oil is produced ( Extracted ) using different methods depending on geology and location, After recovering the oil, It is sent to refineries to create refined products we use every day, Such as gasoline.
The first efforts to tap the oil sands resource began in the mid 20th century using hot water to separate bitumen from sand, Since then the process has evolved into the sophisticated methods we use to extract oil today.
Oil is classified as light, Medium, Heavy or extra heavy, Light and medium oil can flow naturally to the earth’s surface and is generally extracted from the ground using vertical drilling and pumping this includes canada’s offshore oil, Some light oil is trapped in “Tight” ( Non-porous ) rock formations usually shale, This “Light tight oil” can be recovered using horizontal drilling and hydraulic fracturing, Heavy oil has a thick consistency that does not flow easily often requiring advanced technology to extract.
The canadian regions with tight oil reservoirs include the bakken, Which is found primarily in saskatchewan; Several fields in alberta including cardium and viking and the montney and duvernay in alberta and B.C.
✅ Conventional Oil
Conventional oil is extracted from underground reservoirs using traditional drilling and pumping methods, Conventional oil is a liquid at atmospheric temperature and pressure, So it can flow through a wellbore and a pipeline unlike bitumen ( Oil sands oil ) which is too thick to flow without being heated or diluted, It’s easier and less expensive to recover conventional oil and it requires less processing after extraction, Conventional oil development is both land based and offshore.
✅ Unconventional Oil
Unconventional oil cannot be recovered using conventional drilling and pumping methods, Advanced extraction techniques, Such as oil sands mining and in situ development are used to recover heavier oil that does not flow on its own, Oil found in geological formations that make it more difficult to extract, Such as light tight oil ( LTO ) is also called unconventional oil because non-traditional techniques are needed to extract the oil from the underground reservoir, Light tight oil is found throughout much of the western canadian sedimentary basin ( WCSB ) plus in central and eastern canada, Light tight oil ( LTO ) is found deep below the earth’s surface, Primarily within low-permeability rock formations including shale, Sandstone and mudstone reservoirs, This kind of oil extraction uses horizontal drilling and hydraulic fracturing.
The first efforts to tap the oil sands resource began in the mid 20th century using hot water to separate bitumen from sand, Since then the process has evolved into the sophisticated methods we use to extract oil today.
- What is Oil?
Oil is classified as light, Medium, Heavy or extra heavy, Light and medium oil can flow naturally to the earth’s surface and is generally extracted from the ground using vertical drilling and pumping this includes canada’s offshore oil, Some light oil is trapped in “Tight” ( Non-porous ) rock formations usually shale, This “Light tight oil” can be recovered using horizontal drilling and hydraulic fracturing, Heavy oil has a thick consistency that does not flow easily often requiring advanced technology to extract.
The canadian regions with tight oil reservoirs include the bakken, Which is found primarily in saskatchewan; Several fields in alberta including cardium and viking and the montney and duvernay in alberta and B.C.
- How is Oil Extracted?
✅ Conventional Oil
Conventional oil is extracted from underground reservoirs using traditional drilling and pumping methods, Conventional oil is a liquid at atmospheric temperature and pressure, So it can flow through a wellbore and a pipeline unlike bitumen ( Oil sands oil ) which is too thick to flow without being heated or diluted, It’s easier and less expensive to recover conventional oil and it requires less processing after extraction, Conventional oil development is both land based and offshore.
✅ Unconventional Oil
Unconventional oil cannot be recovered using conventional drilling and pumping methods, Advanced extraction techniques, Such as oil sands mining and in situ development are used to recover heavier oil that does not flow on its own, Oil found in geological formations that make it more difficult to extract, Such as light tight oil ( LTO ) is also called unconventional oil because non-traditional techniques are needed to extract the oil from the underground reservoir, Light tight oil is found throughout much of the western canadian sedimentary basin ( WCSB ) plus in central and eastern canada, Light tight oil ( LTO ) is found deep below the earth’s surface, Primarily within low-permeability rock formations including shale, Sandstone and mudstone reservoirs, This kind of oil extraction uses horizontal drilling and hydraulic fracturing.
What is Crude Oil gcse
Crude oil is a finite resource that is found in the Earth's crust, It is the remains of organisms that lived and died millions of years ago, Mainly plankton which was buried in mud, Crude oil is a complex mixture of hydrocarbons, The carbon atoms in these molecules are joined together in chains and rings.
Where does Crude Oil come from?
Crude oil is a naturally occurring fossil fuel, Meaning it comes from the remains of dead organisms, Crude oil is made up of a mixture of hydrocarbons, hydrogen and carbon atoms, It exists in liquid form in underground reservoirs in the tiny spaces within sedimentary rocks.
How deep underground is crude oil?
Oil seemingly keeps getting deeper and deeper, But that isn’t the total truth.
In reality, The oil if anything has only ever moved upwards, It is only the drilling for the oil that keeps needing to go deeper and further as the higher up and easier to reach oil reservoirs are used up.
The earliest year where data is available, 1949, Shows the average depth of oil wells drilled was 3,500 feet.
By 2008 the average rose to 6,000 feet and the deepest well currently existing is a massive 40,000 feet deep, That’s 11,000 feet more than the height of mount everest.
Not all drilling is straight down, When they say depth it means how far they had to drill, Sometimes this means covering huge horizontal distances too.
In reality, The oil if anything has only ever moved upwards, It is only the drilling for the oil that keeps needing to go deeper and further as the higher up and easier to reach oil reservoirs are used up.
The earliest year where data is available, 1949, Shows the average depth of oil wells drilled was 3,500 feet.
By 2008 the average rose to 6,000 feet and the deepest well currently existing is a massive 40,000 feet deep, That’s 11,000 feet more than the height of mount everest.
Not all drilling is straight down, When they say depth it means how far they had to drill, Sometimes this means covering huge horizontal distances too.
How do you know where to find oil?
Geologists are the masters of locating oil, Often called oil exploration, Geologists will look for an area that ticks all the boxes of finding an oil trap aka striking ( Black ) gold.
Oil is often found in the vast underground reservoirs where ancient seas were once located, This can either be beneath land or out in the ocean below the seabed.
During the earlier years of oil mining, The geologists would study the soil, Surface rock and other surface features to determine if oil may be lying below.
Later came satellite imagery along with more technological advances such as gravity meters, Means to test the earth’s magnetic field and ‘sniffers’ that detect the smell of hydrocarbons.
The most common way used today is to generate shock waves that pass through the rock layers and reflect back to the surface where they can be interpreted for signs of oil traps, This is done with seismic source devices such as a compressed air gun, A thumper truck or explosives .
They then mark the location using GPS coordinates on land or by marker buoys on water.
Oil is often found in the vast underground reservoirs where ancient seas were once located, This can either be beneath land or out in the ocean below the seabed.
During the earlier years of oil mining, The geologists would study the soil, Surface rock and other surface features to determine if oil may be lying below.
Later came satellite imagery along with more technological advances such as gravity meters, Means to test the earth’s magnetic field and ‘sniffers’ that detect the smell of hydrocarbons.
The most common way used today is to generate shock waves that pass through the rock layers and reflect back to the surface where they can be interpreted for signs of oil traps, This is done with seismic source devices such as a compressed air gun, A thumper truck or explosives .
They then mark the location using GPS coordinates on land or by marker buoys on water.
Which country has the most oil?
According to the most recent data from the IEA, An average of 100 million barrels of oil were produced per day worldwide in 2018, That includes 32 million barrels a day of crude oil only and 68 million barrels of crude oil, Condensates, NGLs and oil from non-conventional sources.
The top ten oil producing countries are :
1. United States
2 Saudi Arabia
3 Russia
4 China
5 Canada
6 Iraq
7 Iran
8 United Arab Emirates
9 Brazil
10 Kuwait
In the United States, Petroleum is produced in 31 states, Those states that produce the most petroleum are Texas, Alaska, California, Louisiana and Oklahoma.
The top ten oil producing nations are responsible for over half of the world’s production of crude oil, The top ten oil producing countries are :
1. United States 14 Billion
2 Saudi Arabia 12 Billion
3 Russia 11 Billion
4 China 4 Billion
5 Canada 4 Billion
6 Iraq 4 Billion
7 Iran 4 Billion
8 United Arab Emirates 3 Billion
9 Brazil 3 Billion
10 Kuwait 2 Billion
Base on they Years Oil Production ( Barrels per day )
The top ten oil producing countries are :
1. United States
2 Saudi Arabia
3 Russia
4 China
5 Canada
6 Iraq
7 Iran
8 United Arab Emirates
9 Brazil
10 Kuwait
In the United States, Petroleum is produced in 31 states, Those states that produce the most petroleum are Texas, Alaska, California, Louisiana and Oklahoma.
The top ten oil producing nations are responsible for over half of the world’s production of crude oil, The top ten oil producing countries are :
1. United States 14 Billion
2 Saudi Arabia 12 Billion
3 Russia 11 Billion
4 China 4 Billion
5 Canada 4 Billion
6 Iraq 4 Billion
7 Iran 4 Billion
8 United Arab Emirates 3 Billion
9 Brazil 3 Billion
10 Kuwait 2 Billion
Base on they Years Oil Production ( Barrels per day )
How much oil is left in the world?
With production still on the rise as it has been for decades, Experts are trying to calculate when, If ever, Oil will run out, It isn’t a simple science because well, It is still unknown exactly how much oil is trapped in the earth in places unexplored, However BP have made an estimate.
The estimate comes from the amount of oil each country believes they can produce from “Proved reserves” ( The reserves they currently have access to ) using their existing technology, While still turning a profit at the current rate of extraction.
And the year they give for the end of oil production if things remain the exact same as they are today - 2067, Yep, Only another 48 years.
That means without finding more reservoirs, Reducing our consumption or developing new technology, Oil production could cease in 2067, But It wouldn’t put that date down in permanent marker. Every previous doom-date prediction made has always been pushed back.
The estimate comes from the amount of oil each country believes they can produce from “Proved reserves” ( The reserves they currently have access to ) using their existing technology, While still turning a profit at the current rate of extraction.
And the year they give for the end of oil production if things remain the exact same as they are today - 2067, Yep, Only another 48 years.
That means without finding more reservoirs, Reducing our consumption or developing new technology, Oil production could cease in 2067, But It wouldn’t put that date down in permanent marker. Every previous doom-date prediction made has always been pushed back.
What happens if we run out of oil?
As Charles Darwin stated to survive we must be able to adapt to change.
Not to say we can’t survive without oil, But the consequences of the end of oil production could force modern society as we know it to change drastically.
We depend on oil for so much more than you might even realise, Oil is present in almost every single part of our lives from the transport and production of food, Clothing, Materials, Pharmaceuticals and the plastics used to make a whole plethora of products.
The impact of how drastic this change may be will depend heavily on the rate of decline and the development and adoption of oil alternatives, In terms of the rate of decline that will always be a hard one to measure with new techniques, Such as enhanced oilfield recovery and new locations becoming viable oil may not be in decline for many years yet to come and when it does come, It can’t imagine it will be such a surprise to cause a staggering decline that doomsday preppers predict.
However, There is a possibility that oil prices will rise higher due to more complicated and expensive practices being required to source and extract along with the increase in supply and demand, Speaking of supply and demand, That has consistently been rising for the last decade and even with all the environmental concern, It is yet to slow down with a growth forecast of 1.3 million barrels of oil to be produced in 2020.
It is more likely then that consumers will begin to look for more cost effective alternatives if prices rise or more efficient ways to produce and refine, The future of oil seems like it won’t be going anywhere in a hurry.
It will more likely be a matter of our hand being forced than a global choice to change our ways as oil is just so essential to everyday life as we know it, But it is clear that we either need to research alternative resources or use our current resources even more efficiently than ever before.
Not to say we can’t survive without oil, But the consequences of the end of oil production could force modern society as we know it to change drastically.
We depend on oil for so much more than you might even realise, Oil is present in almost every single part of our lives from the transport and production of food, Clothing, Materials, Pharmaceuticals and the plastics used to make a whole plethora of products.
The impact of how drastic this change may be will depend heavily on the rate of decline and the development and adoption of oil alternatives, In terms of the rate of decline that will always be a hard one to measure with new techniques, Such as enhanced oilfield recovery and new locations becoming viable oil may not be in decline for many years yet to come and when it does come, It can’t imagine it will be such a surprise to cause a staggering decline that doomsday preppers predict.
However, There is a possibility that oil prices will rise higher due to more complicated and expensive practices being required to source and extract along with the increase in supply and demand, Speaking of supply and demand, That has consistently been rising for the last decade and even with all the environmental concern, It is yet to slow down with a growth forecast of 1.3 million barrels of oil to be produced in 2020.
It is more likely then that consumers will begin to look for more cost effective alternatives if prices rise or more efficient ways to produce and refine, The future of oil seems like it won’t be going anywhere in a hurry.
It will more likely be a matter of our hand being forced than a global choice to change our ways as oil is just so essential to everyday life as we know it, But it is clear that we either need to research alternative resources or use our current resources even more efficiently than ever before.
Benchmark ( Crude Oil )
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil, There are three primary benchmarks, West Texas Intermediate ( WTI ), Brent Blend and Dubai Crude, Other well known blends include the OPEC reference basket used by OPEC, Tapis crude which is traded in Singapore, Bonny Light used in Nigeria, Urals oil used in Russia and Mexico's Isthmus, Energy intelligence group publishes a handbook which identified 195 major crude streams or blends in its 2011 edition.
Benchmarks are used because there are many different varieties and grades of crude oil, Using benchmarks makes referencing types of oil easier for sellers and buyers.
There is always a spread between West Texas Intermediate ( WTI ), Brent and other blends due to the relative volatility ( High API gravity is more valuable ), Sweetness/Sourness ( Low sulfur is more valuable ) and transportation cost, This is the price that controls world oil market price.
For many years, Most of the oil producers in the middle east have taken the monthly spot price average of dubai and oman as the benchmark for sales to the far east ( West Texas Intermediate ( WTI ) and Brent futures prices are used for exports to the atlantic basin ), In July 2007, A potential new mechanism arose in the form of the dubai mercantile exchange, Which offers futures contracts in omani crude, Whether the DME will be successful and whether omani futures prices will be adopted by producers and buyers as a benchmark, Remain to be seen.
The canadian crude Index ( CCI ) serves as a benchmark for oil produced in canada, It allows investors to track the price, Risk and volatility of the canadian commodity, The CCI provides a fixed price reference for canadian crude oil and provides an accessible and transparent index to serve as a benchmark to build investable products upon and could ultimately increase its demand to global markets.
The first futures contracts on crude oil were traded in 1983 with the chicago board of trade ( CBOT ) and the new york mercantile exchange
( Nymex ) both attempting to take advantage of the government's de-regulation of crude oil, CBOT's initial contracts had delivery problems, So customers abandoned it for Nymex.
Crude oil became the world's most actively traded commodity and the NYMEX division light sweet crude oil futures contract becoming the world's most liquid form for crude oil trading, As well as the world's largest volume futures contract trading on a physical commodity, Additional risk management and trading opportunities are offered through options on the futures contract, Calendar spread options, Crack spread options on the pricing differential of heating oil futures and crude oil futures and gasoline futures and crude oil futures and average price options.
The contract trades in units of 1,000 barrels and the delivery point is Cushing, Oklahoma, Which is also accessible to the international spot markets via pipelines, The contract provides for delivery of several grades of domestic and internationally traded foreign crudes and serves the diverse needs of the physical market.
Benchmarks are used because there are many different varieties and grades of crude oil, Using benchmarks makes referencing types of oil easier for sellers and buyers.
There is always a spread between West Texas Intermediate ( WTI ), Brent and other blends due to the relative volatility ( High API gravity is more valuable ), Sweetness/Sourness ( Low sulfur is more valuable ) and transportation cost, This is the price that controls world oil market price.
- West Texas Intermediate ( WTI )
- Brent Blend
- Dubai and Oman
For many years, Most of the oil producers in the middle east have taken the monthly spot price average of dubai and oman as the benchmark for sales to the far east ( West Texas Intermediate ( WTI ) and Brent futures prices are used for exports to the atlantic basin ), In July 2007, A potential new mechanism arose in the form of the dubai mercantile exchange, Which offers futures contracts in omani crude, Whether the DME will be successful and whether omani futures prices will be adopted by producers and buyers as a benchmark, Remain to be seen.
- Canadian Crude
The canadian crude Index ( CCI ) serves as a benchmark for oil produced in canada, It allows investors to track the price, Risk and volatility of the canadian commodity, The CCI provides a fixed price reference for canadian crude oil and provides an accessible and transparent index to serve as a benchmark to build investable products upon and could ultimately increase its demand to global markets.
- Contracts
The first futures contracts on crude oil were traded in 1983 with the chicago board of trade ( CBOT ) and the new york mercantile exchange
( Nymex ) both attempting to take advantage of the government's de-regulation of crude oil, CBOT's initial contracts had delivery problems, So customers abandoned it for Nymex.
Crude oil became the world's most actively traded commodity and the NYMEX division light sweet crude oil futures contract becoming the world's most liquid form for crude oil trading, As well as the world's largest volume futures contract trading on a physical commodity, Additional risk management and trading opportunities are offered through options on the futures contract, Calendar spread options, Crack spread options on the pricing differential of heating oil futures and crude oil futures and gasoline futures and crude oil futures and average price options.
The contract trades in units of 1,000 barrels and the delivery point is Cushing, Oklahoma, Which is also accessible to the international spot markets via pipelines, The contract provides for delivery of several grades of domestic and internationally traded foreign crudes and serves the diverse needs of the physical market.
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Petroleum Primary Energy
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- Benchmarks
- Argus Sour
The ASCI methodology creates a single daily volume weighted average price index of aggregate deals done for three component crude grades as if they were one grade of crude oil.
The three crude oil grade components are Mars, Poseidon, and Southern Green Canyon.
Thus the daily ASCI price published by argus media ltd represents the value of US gulf coast medium sour crude oil.
- Bonny Light
- Brent
The brent crude oil marker is also known as brent blend, London brent and brent petroleum, This grade is described as light because of its relatively low density, and sweet because of its low sulphur content.
Brent is the leading global price benchmark for atlantic basin crude oils, It is used to set the price of two thirds of the world's internationally traded crude oil supplies, It is one of the two main benchmark prices for purchases of oil worldwide, The other being west texas intermediate (WTI).
- Dubai
Dubai crude is generally used for pricing persian gulf crude oil exports to Asia, The dubai benchmark is also known as fateh used in the united arab emirates, Forward trade of dubai crude is limited to one or two months.
Dubai crude is a medium oil, It has a gravity of 31° API ( Specific gravity of 0.871 ) and a sulfur content of 2%/weight.
- Indian Basket
- Indonesian
- Minas
- Cinta
- Duri
- Arjuna
- Attaka
- Widuri
- Belida
- Senipah
- Isthmus - 34 Light
- PropertiesIsthmus
✅ API gravity33.74 °API
✅ Viscosity
- 60 °F (15.6 °C)65.6 Saybolt Universal Seconds ( SUS )
- 70 °F (21.1 °C)57.8 SUS
- 77 °F (25.0 °C)54.5 SUS
✅ Oils, Weight %89.2
✅ Alkanes, Weight %8.1
- Japan Cocktail
- Sample of Petroleum
- OPEC Reference Basket
Since January 1, 2017, The OPEC reference basket consists of a weighted average of the following crudes :
- Saharan Blend ( From Algeria )
- Girassol ( From Angola )
- Oriente ( From Ecuador )
- Rabi Light ( From Gabon )
- Iran Heavy ( From Iran )
- Basra Light ( From Iraq )
- Kuwait Export ( Fom Kuwait )
- Es Sider ( From Libya )
- Bonny Light ( From Nigeria )
- Qatar Marine ( From Qatar )
- Arab Light ( From Saudi Arabia )
- Murban ( From UAE )
- Merey ( From Venezuela )
- Tapis
The price of tapis in singapore is often considerably higher than the price of benchmark crude oils such as brent or west texas intermediate
( WTI ), The more commonly referenced in market commentaries, This is because its lightness ( I.e. higher ° API ) allows for greater production of higher value products such as petrol than from brent or west texas intermediate ( WTI ), Its high price is also due to the purity of the blend, Its extremely low sulfur content means it requires less refinery processing than sourer crude oils, and hence a lower processing cost.
The tapis field located off the coast of terengganu in the south china sea was discovered in 1969 with production starting in 1978, Exxon Mobil holds a 30% stake, The rest being held by state owned Petronas, As of 2018, Production is approximately 300,000 barrels per day.
- Urals
Urals brand oil is supplied through the baku-novorossiysk pipeline system and the druzhba pipeline, Urals oil futures trade on moscow exchange, There was also an effort to trade it on NYMEX under the name of REBCO ( Russian Export Blend Crude Oil ), However, Not a single trade was made.
Prices for urals grade oil are formed on the basis of the cost of brent grade oil, Since the quality of russian oil is lower, It costs less than the equivalent from the north sea, The cost of urals grade oil is 1 - 2 USD/barrel less than brent, But not always.
Urals grade oil was traded in north western europe on June 25, 2020 at a premium to brent of $2.35/bbl, A record in the entire history of monitoring since September 1994, Since the 2022 russian invasion of ukraine, The price of urals oil has dipped to $15 - 20 under the price of Brent.
- West Texas Intermediate ( WTI )
The price of West texas intermediate ( WTI ) is often included in news reports on oil prices alongside the price of brent crude from the north sea, Other important oil markers include the dubai crude, Oman crude, Urals oil and the OPEC reference basket, West texas intermediate ( WTI ) is lighter and sweeter containing less sulfur than brent and considerably lighter and sweeter than dubai or oman.
- Western Canadian Select
Western canadian select ( WCS ) is the benchmark price for canadian crude blends, The price of other canadian crude blends produced locally are also based on the price of the benchmark.
Benchmark Oils : Brent Crude, WTI and Dubai
In reality, There are different types of crude oil, The thick, Unprocessed liquid that drillers extract below the earth and some are more desirable than others, For instance, It’s easier for refiners to make gasoline and diesel fuel out of low sulfur or “Sweet” crude than oil with high sulfur concentrations, Low density or “Light” crude is generally favorable to the high density variety for the same reason.
Where the oil comes from also makes a difference if you’re a buyer, The less expensive it is to deliver the product, the cheaper it is for the consumer, From a transportation standpoint, Oil extracted at sea has certain advantages over land-based supplies, Which depend on the capacity of pipelines.
Because of these factors, Buyers of crude oil along with speculators need an easy way to value the commodity based on its quality and location, Benchmarks such as Brent, West Texas Intermediate ( WTI ) and Dubai/Oman serve this important purpose, When refiners purchase a Brent contract, They have a strong idea of how good the oil will be and where it will come from, Today, Much of the global trading takes place on the futures market with each contract tied to a certain category of oil.
Because of the dynamic nature of supply and demand, The value of each benchmark is continually changing, Over the long term, A marker that sold at a premium to another index may suddenly become available at a discount.
Where the oil comes from also makes a difference if you’re a buyer, The less expensive it is to deliver the product, the cheaper it is for the consumer, From a transportation standpoint, Oil extracted at sea has certain advantages over land-based supplies, Which depend on the capacity of pipelines.
Because of these factors, Buyers of crude oil along with speculators need an easy way to value the commodity based on its quality and location, Benchmarks such as Brent, West Texas Intermediate ( WTI ) and Dubai/Oman serve this important purpose, When refiners purchase a Brent contract, They have a strong idea of how good the oil will be and where it will come from, Today, Much of the global trading takes place on the futures market with each contract tied to a certain category of oil.
Because of the dynamic nature of supply and demand, The value of each benchmark is continually changing, Over the long term, A marker that sold at a premium to another index may suddenly become available at a discount.
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Understanding Benchmark Oils
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- The Main Benchmarks
- Brent Crude
- West Texas Intermediate ( WTI )
continues to be the main benchmark for oil consumed in the United States.
- Dubai/Oman
- Figure 1
Brent Crude vs. West Texas Intermediate ( WTI ) : The Differences
Oil benchmarks describe where the commodity originates, Which determines its use and allows investors to track the price of a specific oil type.
Brent crude is the benchmark used for the light oil market in europe, Africa and the middle east, originating from oil fields in the north sea between the shetland islands and norway, West texas intermediate ( WTI ) is the benchmark for the united state light oil market and is sourced from united state oil fields.
Both brent crude and west texas intermediate ( WTI ) are light and sweet making them ideal for refining into gasoline.
✅ OPEC, A group of 13 of the most powerful oil exporting countries use brent as their pricing benchmark, They are considered an extremely powerful group as oil prices dictate the budgets and policies of many countries.
✅ The shale revolution of the early 2000s skyrocketed production in north america leading to an over supply in oil during that period and relevant low pricing.
✅ Brent crude is produced near the sea so transportation costs are significantly lower, In contrast, West texas intermediate ( WTI ) is produced in landlocked areas making transportation costs more onerous.
The Organization of the petroleum exporting countries ( OPEC ) controls most of the oil production and distribution often dictating costs for not only oil suppliers but countries as well.
Most nations factor oil prices into their budgets, So OPEC has been considered a leading geopolitical force.
Important : A surge of west texas intermediate ( WTI ) production has led many traders to consider it an important pricing benchmark vs Brent, If not even close to the total production of the latter.
This has been dubbed the american shale revolution and the increased production led oil prices to fall from above $100 to below $50 from 2014 to 2015.
The price of oil is a major factor in the overall health of the energy sector and is one of the most heavily traded commodities as it is influenced by almost every global, Macro event.
Another factor that can lead to significant differences between brent crude and west texas intermediate ( WTI ) is geopolitical trouble.
During times of crisis, The spread blows out as political uncertainty leads to surges in brent crude prices, West texas intermediate ( WTI ) is less affected because it is based in land locked areas in the United States.
Brent crude is the benchmark used for the light oil market in europe, Africa and the middle east, originating from oil fields in the north sea between the shetland islands and norway, West texas intermediate ( WTI ) is the benchmark for the united state light oil market and is sourced from united state oil fields.
Both brent crude and west texas intermediate ( WTI ) are light and sweet making them ideal for refining into gasoline.
- Key Takeaways
✅ OPEC, A group of 13 of the most powerful oil exporting countries use brent as their pricing benchmark, They are considered an extremely powerful group as oil prices dictate the budgets and policies of many countries.
✅ The shale revolution of the early 2000s skyrocketed production in north america leading to an over supply in oil during that period and relevant low pricing.
- Brent Crude
✅ Brent crude is produced near the sea so transportation costs are significantly lower, In contrast, West texas intermediate ( WTI ) is produced in landlocked areas making transportation costs more onerous.
The Organization of the petroleum exporting countries ( OPEC ) controls most of the oil production and distribution often dictating costs for not only oil suppliers but countries as well.
Most nations factor oil prices into their budgets, So OPEC has been considered a leading geopolitical force.
Important : A surge of west texas intermediate ( WTI ) production has led many traders to consider it an important pricing benchmark vs Brent, If not even close to the total production of the latter.
- West Texas Intermediate ( WTI )
- West texas intermediate ( WTI ) vs. Brent crude
This has been dubbed the american shale revolution and the increased production led oil prices to fall from above $100 to below $50 from 2014 to 2015.
The price of oil is a major factor in the overall health of the energy sector and is one of the most heavily traded commodities as it is influenced by almost every global, Macro event.
Another factor that can lead to significant differences between brent crude and west texas intermediate ( WTI ) is geopolitical trouble.
During times of crisis, The spread blows out as political uncertainty leads to surges in brent crude prices, West texas intermediate ( WTI ) is less affected because it is based in land locked areas in the United States.
Crude Oil vs. Petroleum
Petroleum, A name that comes from the Latin words “petra” meaning rock and “oleum” meaning oil, Is often used interchangeably with crude oil, Essentially, Petroleum is a more general word that refers to crude oil, The raw, Unprocessed oil that is extracted out of the ground and other petroleum products formed from refined crude oil.
Petroleum products cover everything that a refinery produces from crude oil or natural gas, These products include diesel, Gasoline, Fuel oil and more.
Petroleum products cover everything that a refinery produces from crude oil or natural gas, These products include diesel, Gasoline, Fuel oil and more.
What are the oil sands?
Canada’s oil sands are the largest deposit of crude oil on the planet, The oil sands or tar sands as they are sometimes inaccurately referred to are a mixture of sand, Water, Clay and a type of oil called bitumen, Thanks to innovation and technology we can recover oil from the oil sands providing energy security for the future.
Oil sands are a mixture of sand, Water and bitumen ( Oil that is too heavy or thick to flow on its own ), Bitumen is so thick that at room temperature it acts much like cold molasses, For that reason, This resource is sometimes called “Tar sands” but that term is incorrect because bitumen and tar ( Asphalt ) are different compounds, “Oil sands” correctly identifies the end product derived from bitumen : Crude oil.
Only about 3% or 4,800 km2 of that land could ever be impacted by mining and all area is reclaimed after use.
About 20% of Canada’s oil sands deposits are within 70 metres ( 200 feet ) of the surface and can be recovered with surface mining but most oil sands reservoirs are deeper and require drilling and production methods called “In situ” which creates much less surface land disturbance and mining.
Oil sands are a mixture of sand, Water and bitumen ( Oil that is too heavy or thick to flow on its own ), Bitumen is so thick that at room temperature it acts much like cold molasses, For that reason, This resource is sometimes called “Tar sands” but that term is incorrect because bitumen and tar ( Asphalt ) are different compounds, “Oil sands” correctly identifies the end product derived from bitumen : Crude oil.
- Alberta Oil Sands
- Where Are Canada’s Oil Sands?
Only about 3% or 4,800 km2 of that land could ever be impacted by mining and all area is reclaimed after use.
- The Process - Getting the Oil Out
About 20% of Canada’s oil sands deposits are within 70 metres ( 200 feet ) of the surface and can be recovered with surface mining but most oil sands reservoirs are deeper and require drilling and production methods called “In situ” which creates much less surface land disturbance and mining.
- The Process - From Oil Extraction to Consumer
- The Process - Refining Bitumen
- The Process - Oil Sands Contribute to Canada’s Economy
Oil Extraction
Oil is produced ( Extracted ) using different methods depending on geology and location, After recovering the oil, It is sent to refineries to create refined products we use every day such as gasoline.
The first efforts to tap the oil sands resource began in the mid 20th century using hot water to separate bitumen from sand, Since then the process has evolved into the sophisticated methods we use to extract oil today.
Oil is classified as light, Medium, Heavy or extra heavy, Light and medium oil can flow naturally to the earth’s surface and is generally extracted from the ground using vertical drilling and pumping, This includes canada’s offshore oil, Some light oil is trapped in “Light” ( Non-porous ) rock formations, Usually shale, This “Light tight oil” can be recovered using horizontal drilling and hydraulic fracturing, Heavy oil has a thick consistency that does not flow easily often requiring advanced technology to extract.
The canadian regions with tight oil reservoirs include the bakken, Which is found primarily in saskatchewan, Several fields in alberta including cardium and viking and the montney and duvernay in alberta and B.C.
Surface mining is used when oil sands deposits lie within 70 meters ( 200 feet ) of the earth’s surface, Twenty per cent of oil sands reserves are close enough to the surface to be mined, Large shovels scoop oil sand into haul trucks that transport it to crushers where large clumps are broken down, The oil sand is then mixed with hot water and pumped by pipeline to a plant called an upgrader, Where the bitumen ( Oil ) is separated from the other components such as sand, Clay and water.
Once a tailings pond is no longer needed, It is reclaimed, Oil sands companies that have mining operations are researching many techniques to solidify the tailings faster so the ponds can be dried out, Re-surfaced with soil and planted with local tree and shrub species.
There are several ways to heat bitumen below ground, Both of the commonly used methods, SAGD and CSS use large volumes of water and burn natural gas to create steam that is injected into the oil sands deposit, New research is leading to technologies that reduce or eliminate the need for water and natural gas.
The injection well is drilled vertically into the deposit, Then turned 90 degrees and drilled horizontally, A second well known as the production well is drilled deeper than the first paralleling the horizontal portion of the first well, Steam is injected into the deposit through the upper well, Heated bitumen begins to move by gravity down toward the second well, Pumps in the second well draw the bitumen into the well and up to the surface, Multiple wells ( Sometimes more than 20 ) can be drilled from a single surface location, Further reducing surface disturbance.
Next, Seismic surveys are completed to map geological structures under the seabed, If an analysis of seismic data shows a geological structure that could contain oil and natural gas resources, A company may decide to drill an exploration well as precise information is needed before investing in drilling an exploratory well given because of the high cost of drilling in the offshore.
Before drilling and offshore oil extraction can begin, Companies must apply for the appropriate approvals from the relevant regulatory body in atlantic canada.
During the development phase, The company develops a series of plans which outline exactly how it will produce the oil and natural gas in a particular reservoir, The environmental protection measures that will be put in place to minimize any environmental impact, The safety measures that will be used on the project and the benefits of the project to the relevant communities and province as a whole ( Including employment, Revenues, Contracts, etc. ).
Upgrading uses temperature, Pressure and chemical catalysts to crack bitumen’s big, Complex molecules into smaller ones, Adding hydrogen or removing carbon from the oil creates hydrocarbon molecules like those in light oil, Upgraded synthetic oil is then refined just like conventional crude oil to make gasoline, Diesel, Jet fuel and heating oil.
More than 30% of canadian oil production is refined in canada, The rest is exported to refineries in the united state, Canada is seeking new overseas markets for our oil but more pipeline capacity is needed to make this a reality.
The first efforts to tap the oil sands resource began in the mid 20th century using hot water to separate bitumen from sand, Since then the process has evolved into the sophisticated methods we use to extract oil today.
- What is Oil
Oil is classified as light, Medium, Heavy or extra heavy, Light and medium oil can flow naturally to the earth’s surface and is generally extracted from the ground using vertical drilling and pumping, This includes canada’s offshore oil, Some light oil is trapped in “Light” ( Non-porous ) rock formations, Usually shale, This “Light tight oil” can be recovered using horizontal drilling and hydraulic fracturing, Heavy oil has a thick consistency that does not flow easily often requiring advanced technology to extract.
The canadian regions with tight oil reservoirs include the bakken, Which is found primarily in saskatchewan, Several fields in alberta including cardium and viking and the montney and duvernay in alberta and B.C.
- How is Oil Extracted?
- Conventional Oil
- Unconventional Oil
- Surface Mining
Surface mining is used when oil sands deposits lie within 70 meters ( 200 feet ) of the earth’s surface, Twenty per cent of oil sands reserves are close enough to the surface to be mined, Large shovels scoop oil sand into haul trucks that transport it to crushers where large clumps are broken down, The oil sand is then mixed with hot water and pumped by pipeline to a plant called an upgrader, Where the bitumen ( Oil ) is separated from the other components such as sand, Clay and water.
- Oil Sands Tailings
Once a tailings pond is no longer needed, It is reclaimed, Oil sands companies that have mining operations are researching many techniques to solidify the tailings faster so the ponds can be dried out, Re-surfaced with soil and planted with local tree and shrub species.
- Low Impact Development
- In Situ Recovery
There are several ways to heat bitumen below ground, Both of the commonly used methods, SAGD and CSS use large volumes of water and burn natural gas to create steam that is injected into the oil sands deposit, New research is leading to technologies that reduce or eliminate the need for water and natural gas.
- Steam-Assisted Gravity Drainage ( SAGD )
The injection well is drilled vertically into the deposit, Then turned 90 degrees and drilled horizontally, A second well known as the production well is drilled deeper than the first paralleling the horizontal portion of the first well, Steam is injected into the deposit through the upper well, Heated bitumen begins to move by gravity down toward the second well, Pumps in the second well draw the bitumen into the well and up to the surface, Multiple wells ( Sometimes more than 20 ) can be drilled from a single surface location, Further reducing surface disturbance.
- Cyclic Steam Stimulation ( CSS )
- Offshore Oil Extraction
Next, Seismic surveys are completed to map geological structures under the seabed, If an analysis of seismic data shows a geological structure that could contain oil and natural gas resources, A company may decide to drill an exploration well as precise information is needed before investing in drilling an exploratory well given because of the high cost of drilling in the offshore.
Before drilling and offshore oil extraction can begin, Companies must apply for the appropriate approvals from the relevant regulatory body in atlantic canada.
- Offshore Development
During the development phase, The company develops a series of plans which outline exactly how it will produce the oil and natural gas in a particular reservoir, The environmental protection measures that will be put in place to minimize any environmental impact, The safety measures that will be used on the project and the benefits of the project to the relevant communities and province as a whole ( Including employment, Revenues, Contracts, etc. ).
- Offshore Oil Production
- Upgrading and Refining
- Upgrading is usually a two-stage process :
- ✅ Coking or hydrocracking used to break up the molecules, Coking removes the carbon, While hydrocracking adds hydrogen.
- ✅ Hydrotreating used to stabilize the oil and remove impurities such as sulphur.
Upgrading uses temperature, Pressure and chemical catalysts to crack bitumen’s big, Complex molecules into smaller ones, Adding hydrogen or removing carbon from the oil creates hydrocarbon molecules like those in light oil, Upgraded synthetic oil is then refined just like conventional crude oil to make gasoline, Diesel, Jet fuel and heating oil.
More than 30% of canadian oil production is refined in canada, The rest is exported to refineries in the united state, Canada is seeking new overseas markets for our oil but more pipeline capacity is needed to make this a reality.