A. Crude oil is a thick, gooey liquid consisting of hundreds of combustible hydrocarbons mixed with small amounts of sulfur, oxygen, and nitrogen impurities.
1. Three geological events led to the presence of oil.
a. Sediments buried organic material faster than it could decay.
b. Sea floors with these sediments were subjected to the right pressure and heat to convert organic material to oil.
c. Oil collected in porous limestone or sandstone and was capped by shale or silt to keep it from escaping.
2. Oil and natural gas provide us with food grown with the help of hydrocarbon-based fertilizers and pesticides. This type of oil is known as conventional oil or light oil.
3. The oil industry today is a marvel of high tech events to extract, refine, market, and distribute to the world’s populations.
4. Oil and natural gas are often found together under a dome. On average, only about 40–50% of the oil in the deposit is recovered.
5. The remaining heavy crude oil is too difficult or expensive to extract.
6. Drilling causes only moderate environmental damage, but transportation around the world results in oil spills on land and in aquatic systems. Harmful effects are also associated with extraction, processing, and use of any nonrenewable resource from the earth’s crust.
7. Improved extraction technologies should cause less environmental damage.
8. Crude oil is transported to a refinery where it is broken down into components with different boiling points. This process accounts for about 8% of all U.S. energy consumption. (Refining crude oil)
9. Petrochemicals are oil distillation products that are used as raw materials in manufacturing pesticides, plastics, synthetic fibers, paints, medicines, and other products.
B. Eleven OPEC countries have 78% of the world’s proven oil reserves.
1. The control of current and future oil reserves is the single greatest source of global economic and political power.
2. Saudi Arabia has the largest supply of oil reserves with 25%. The OPEC nations are almost all in the Middle East. It is thought that their production of global oil will increase from 30% at present to 50% in the future.
3. Oil is the most widely used resource in the world. It is of concern that the oil producing areas are politically stable. This area is often very volatile and may be subject to terrorist attacks.
C. The U.S. has only 2.9% of the world’s proven oil reserves and about one-fourth of that comes from offshore drilling and from Alaska’s North Slope. (Locations of North American major known deposits of oil, natural gas and coal and potential areas for exploration)
1. The U.S. uses about 26% of crude oil extracted worldwide each year.
2. U.S. oil extraction has declined since 1985. Most of the oil extracted costs $7.50–8.00/barrel compared to about $2.50/barrel from Saudi Arabia.
3. In 2003, the U.S. imported about 55% of the oil it used. By 2020, the U.S. could be importing 64–70% of the oil it will use.
4. Some analysts feel that importing oil is not all bad, that U.S. oil reserves should be held in reserve.
D. Known and projected global reserves should last 42–93 years, and U.S. reserves for 10–48 years depending on how rapidly we use oil.
1. Oil production is expected to peak sometime between 2010 and 2030.
2. Oil will become increasingly more expensive.
E. Use of conventional oil at current rates means we need to discover oil reserves equal to a new Saudi Arabian supply every 10 years.
1. We ignore the exponential growth in use of oil.
2. If oil is continued to be used at current rates:
a. Saudi Arabia could supply world oil needs for about 10 years.
b. Estimated Alaskan North Slope oil reserves would meet current demands for 6 months or U.S. demands for 3 years.
c. Alaska’s Artic National Wildlife Refuge would meet demands for 1–5 months or U.S. oil demand for 7–24 months.
3. Many developing countries, such as China and India, are rapidly expanding their use of oil. (Oil consumption in developed and developing countries)
4. If everyone in the world used as much oil as the average American, the world’s proven reserves would be gone in a decade.
F. The Arctic National Wildlife Refuge (ANWR) is a very fragile ecosystem. A diverse community of species call this tundra biome home. It is the only stretch of Alaska’s arctic coastline not open to oil and gas development.
1. U.S. oil companies have been trying to explore this area for oil and gas. They are supported by Alaska’s elected officials, so they can use the revenue obtained to finance the state budget and give dividends to its citizens.
2. Environmentalists feel that the potential risks to the environment are not justified by the 20% chance of finding enough oil to meet the needs for only 7–24 months.
3. Improving fuel efficiency for vehicles would save more oil than might ever be obtained from ANWR.
Advantages/Disadvantages of Drilling for Oil/Natural Gas in ANWR
G. There are advantages and disadvantages to the use of conventional crude oil as an energy source.
1. CO2 released into the atmosphere helps promote climate change through global warming.
2. The CEO of ARCO Oil stated in 1999 that “we are embarked on the beginning of the last days of the AGE of Oil.”
H. Oil sand or tar sand is a mixture of clay, sand, water, and organic material called bitumen – thick, sticky heavy oil with a high sulfur content.
1. Bitumen was created by bacterial degradation and groundwater at work on oil that had escaped from its origin.
2. The extraction and processing of this material uses a great deal of energy, so it reduces net energy yield for the oil.
3. Northeastern Alberta, Canada, has about three-fourths of the world’s oil sand reserves, and about one-tenth is close enough to be recovered.
4. Use of these oil sands could reduce U.S. dependence on imports from the Middle East.
5. This extraction process has severe environmental impacts on land and produces more water pollution, air pollution, and more CO2/unit energy than conventional crude oil. (CO2 emissions per unit of energy produced by various fuels)
6. Oil shale deposits may be another potential source of oil. The material in this shale is kerogen. It is estimated that there are 240 times more global supplies than for conventional oil. At present, it costs more to produce than the fuel is worth. (Trade offs of using heavy oils from oil shale and tar sand as energy resources)