MODULE 14: OIL AND NATURAL GAS
Oil and Natural Gas Learning Outcomes 14
At the end of this module, you will know:
How fossil fuels are formed and why they are considered nonrenewable.
What proven reserves and peak oil refer to.
What conventional and unconventional oil and natural gas reserves are and how they are extracted, refined, and used.
The environmental, economic, and social trade-offs of pursuing conventional and unconventional sources of oil and natural gas.
Importance of Oil and Natural Gas
Modern society is heavily dependent on oil and natural gas as essential fuels and raw materials for product manufacturing.
Conventional supplies of these resources are diminishing.
A significant shift towards tapping unconventional sources is currently underway, raising critical questions regarding their safety and sustainability.
The development of oil and gas resources contributes to substantial environmental damage.
The trade-offs associated with utilizing oil and gas resources require careful consideration as society attempts to meet future energy demands.
Formation of Fossil Fuels
Definition: Fossil fuels are hydrocarbons that originate from the remains of ancient organisms, primarily marine creatures, which died millions of years ago.
Types of Fossil Fuels: Coal, oil, and natural gas.
Formation Process:
Fossil fuels form over millions of years through the following process:
Organisms die and are buried in sediment before they can decompose.
Under anaerobic (lack of oxygen) conditions, the decomposition of biomass slows down.
The partially decomposed organic matter is subjected to heat and pressure over millions of years, transforming it into coal, oil, or natural gas.
Oil and natural gas migrate upwards through porous rock layers until halted by denser rock formations.
Extraction is accomplished through drilling to access deposits.
Characteristics of Fossil Fuels
Oil: Liquid fossil fuel utilized both as fuel and as a raw material in industrial processes.
Natural Gas: Gaseous fossil fuel primarily composed of simpler hydrocarbons, predominantly methane.
All fossil fuels are classified as non-renewable resources, formed at a much slower rate than their consumption, resulting in a finite supply.
Extraction Processes of Crude Oil
Crude Oil:
Consists of hydrocarbons (hydrogen and carbon compounds) in liquid form, typically found at depths ranging from 0.2 to 5.5 miles below the Earth's surface.
Exists not as large pools but as tiny droplets trapped in minuscule spaces between permeable rocks.
Primary Oil Production:
Occurs when natural pressure naturally pushes oil upward; about 5–15% of the oil can be retrieved during this phase.
Secondary Oil Production:
As underground pressure decreases, injection wells are drilled to introduce water, enhancing pressure to extract an additional 20-40% of the oil reserve.
Tertiary Oil Production:
Considered expensive, this method can extract an additional 15% of remaining oil by injecting steam or carbon dioxide into oil reservoirs.
Conventional vs. Unconventional Oil Reserves
Conventional Oil Reservoirs:
Refers to oil that can be extracted using traditional techniques. Currently, these reservoirs are estimated to last approximately 50 years at existing extraction rates; however, this estimate is debated due to nations' secretive reserve calculations.
Refining Crude Oil:
Upon extraction, crude oil contains numerous impurities.
Distillation is required to separate crude oil into various components, utilizing the concept that different-sized carbon compounds vaporize at different temperatures.
Proven Reserves and Peak Oil:
Proven Reserves: Refers to the quantities of oil that are recoverable under existing economic and technological conditions.
Peak Oil: The term signifies the point in time when oil production reaches its maximum rate and begins to decline. It is anticipated that the global oil production for conventional reserves will soon reach its peak.
Current Oil Consumption Context
As of 2024:
The United States consumes approximately 19.7 million barrels of oil per day, with China following at 16.4 million barrels.
Historically, the U.S. produced enough oil to meet domestic demand until the early 1970s.
Post-1970s, there has been a rising importation of oil from countries such as Venezuela, Canada, and Saudi Arabia to fulfill U.S. demand.
In 2013, the U.S. had estimated proven reserves of 33.4 billion barrels of oil according to the Energy Information Administration.
However, only 12.4% of the world's oil was produced by the U.S., while accounting for 20.6% of global consumption, largely from unconventional extraction methods.
The exploration of unconventional deposits may lessen reliance on foreign oil.
Understanding Unconventional Reserves
Definition of Unconventional Reserves:
Fossil fuels obtained through extraction methods distinct from conventional oil welling, often yielding greater quantities.
Types of Unconventional Reserves:
Shale Gas: Natural gas trapped within shale formations often found alongside traditional oil reserves.
Tight Oil/Shale Oil: Low-density oil situated in impermeable shale rock. Cannot be obtained via conventional extraction techniques.
Such deposits are typically spread out and buried thousands of feet underground.
Bitumen: A heavy black oil trapped in dense, sticky sands or clay formations known as tar sands or oil sands. Alberta, Canada is noted for having the largest tar sand reserves globally, estimated at 170 billion barrels, which makes it the third-largest proven oil reserve in the world.
Kerogen Shale: Contains oil deposits within compressed sedimentary rock that holds kerogen. Kerogen, an organic compound, undergoes chemical transformation into hydrocarbons and can be converted into an oil-like liquid upon heating. Though massive reserves exist, estimated at 1.23 trillion barrels, extracting kerogen is not economically viable at present.
The Hydraulic Fracturing (Fracking) Process
Technology: The introduction of hydraulic fracturing (fracking) has enabled more efficient extraction of tight oil.
Process:
Drilling extends thousands of feet vertically, followed by horizontal drilling up to one mile in various directions.
Steel pipes are placed within the drilled wells and encased in concrete.
Explosives are detonated in horizontal wells, generating fractures in the rock to facilitate oil flow.
Water mixed with sand and chemicals (15-20 million liters) is injected at high pressure to sustain the fractures and aid in extracting oil or natural gas.
The extract, comprising both oil and gas, returns to the surface, with the water used in the process.
Economic and Environmental Trade-offs of Fracking
Economic Benefits: Significant economic advantages for local communities and supporting industries have been observed due to fracking.
Costs: However, multiple significant costs incurred include:
Increased housing shortages in local areas.
Strain on existing infrastructures, including roads and sewage systems.
Issues pertaining to air and water pollution.
Higher instances of earthquakes observed in certain regions, attributed to fracking activities.
Environmental Costs:
Large volumes of water and sand necessary for fracking.
Wastewater generated tends to be significantly saltier than seawater and classified as hazardous waste.
Methane contamination of groundwater wells frequently occurs near fracking sites.
The extraction of tar sands generates 3 to 4 times more greenhouse gases than conventional oil production.
Toxic compounds have been detected in bodies of water downstream from fracking locations.
Evaluating the Future of Oil and Gas Extraction
While fracking offers additional energy independence for the U.S., the accompanying environmental and social ramifications make its practice controversial.
Potential trade-offs must be assessed when deliberating the future direction of oil and gas extraction technologies.
Discovery Process: Not limited to hydraulic fracturing, the environmental costs also arise from oil discovery processes, particularly through seismic surveys that can be detrimental in marine settings. Notably, an incident occurred when 100 whales washed up on the coast of Madagascar due to seismic exploration activities.
Construction Activity: The Arctic National Wildlife Refuge (ANWR), a protected area established in 1980, is estimated to contain approximately 5 to 16 billion barrels of oil. Development in these sensitive environments poses significant environmental risks.
Spill Risks: The unintentional oil spills, although infrequent, can lead to substantial ecological damage. The Deepwater Horizon spill is a historic example, covering 360 square miles and leading to declines in Gulf Coast fisheries and coastal wetlands, as well as resulting in fatalities among personnel.
Air Pollution: The combustion of fossil fuels contributes significantly to air pollution, posing health risks such as higher cancer and birth defect rates among populations living near petrochemical facilities.
Energy Security and Future Considerations
The Trans-Alaska Pipeline, spanning 807 miles, transports oil from North Slope, Alaska, to Valdez, Alaska.
The proposed Keystone XL pipeline aimed to carry tar sands oil from Alberta, Canada, to Eagle Ford, Texas, was left abandoned.
Definition of Energy Security: The assurance of having enough reliable and reasonably priced energy to fulfill one’s needs.
As conventional oil supplies continue to decline and global demand rises, the availability of easily accessible oil is diminishing. This situation compels companies to deploy more costly and potentially hazardous extraction technologies.
While accessing unconventional oil and natural gas reserves may provide temporary solutions, it is unlikely to solve long-term energy requirements; it could, however, extend the timeframe for transitioning to renewable energy sources.