written 14 January 2024
published 21 January 2024
Crude oil, or petroleum, now supplies about 1/3 of all the energy on the planet. A complex and versatile organic material, oil consists of different length chains of hydrogen and carbon atoms, ranging from pentane (5 carbon atoms) to asphalt (35 carbon atoms), with hydrogen/carbon ratios between 2.1 and 2.4. Of the 100 million barrels consumed each day, 1/7 becomes asphalt or is used as feedstock for over 6,000 other kinds of materials and chemicals, and the rest is burned for transportation and heating. Combustion releases carbon dioxide, an atmospheric pollutant, now pushing the climate crisis to the point of rapid exponential change.
Petroleum has been used for thousands of years, for medicinal or ceremonial purposes, as waterproofing material, or as flammable weapons of war. The first industrial uses began in the mid 1800's, as distilled kerosene displaced whale oil for lighting. In the 1900's, the rise of internal combustion motive power, in all the various forms, became the primary use for oil.
Compared to coal, the previous dominant fossil fuel, oil has more energy density, and is much easier to store, ship, and utilize. With abundant domestic oil reserves, US oil production grew rapidly, giving the US control of the expanding global oil market throughout most of the 1900's, especially after WW2.
Early oil resources were relatively shallow, and were accessed by simple techniques, such as just punching a hole in the right place, and controlling the flow that gushed out. As these first resources depleted, better drilling techniques accessed deeper reserves, and improved pumps brought oil to the surface. Oil geology advanced, and the entire planet was surveyed for oil reserves. By the 1960's, discovery of new reserves peaked and declined.
In 1972, domestic US oil production peaked, and the US, almost bankrupt from the war in Vietnam, cut the dollar loose from gold. This ended a period of post war global economic stability. The US lost control of the oil market, replaced by OPEC, dominated by Russia and Saudi Arabia with their vast oil reserves, and the price of oil tripled, initiating a decade of extreme inflation. Eventually, the global economy stabilized, Saudi Arabia agreed to make all oil purchases in US dollars, and the international oil companies became more powerful. With annual revenues of $6 trillion, 14 companies, out of 200, now control half the industry.
This has brought out the worst in corporate capitalism. Massive foreign investment in one section of an economy causing the rest of the economy to suffer. Add in the total lack of concern for the adverse environmental impact of oil production, and you find wastelands wherever oil development occurs, and the physical health of people living near oil development deteriorates. Nothing gets in the way of increased profits.
As major reserves continued to reach peak production and decline over time, the industry pushed development into more difficult and expensive areas, such as the north slope of Alaska and the deep ocean. In addition, oil recovery techniques improved. Once the first pressure of a new reserve declines, constant pumping is required, raising costs. A secondary recovery method is to pump water into the reserve, which raises costs further, but floats the last bit of oil to the surface to be recovered. Saudi Arabia state owned oil reserves are secret, with unknown quantities left. However, they have been pumping massive amounts of water into their fields for over 20 years.
Tertiary recovery methods include developing tar sands, and fracking. Tar sand recovery is more like mining: very expensive, very water intensive, with massive environmental impact. Fracking harvests thin layers of oil trapped within rock layers: also expensive, with a large environmental impact. Despite this, fracking now produces 1/2 of US oil. However, the produced oil is light, which can't be refined into diesel fuel, explaining why diesel prices are so high. Since 2005, fracking has lost billions, while depleting the most promising fields, and polluting the ground water in the areas being developed.
The global resource is finite. Global production of conventional oil peaked in 2005, contributing to the financial crash a few years later. Global production from all sources peaked in 2018, but the impact has been masked by the economic decline from the COVID pandemic.
The climate is rapidly getting worse, and oil, a significant cause, gets more expensive as supplies tighten. It's time for a change, if we want to survive much longer.
