Petroleum–Oil and Natural Gas

Oil and natural gas together make Petroleum which is Latin for “rock oil,” is a fossil fuel, meaning it was made naturally from decaying prehistoric plant and animal remains. It is a mixture of hundreds of different hydrocarbons molecules containing hydrogen and carbon that exist sometimes as a liquid (crude oil) and sometimes as a vapor (natural gas).

 How is Petroleum Formed?

Oil and natural gas were formed from the remains of prehistoric plants and animals—that’s why they’re called “fossil fuels!” Hundreds of millions of years ago, prehistoric plant and animal remains settled into the seas along with sand, silt and rocks. As the rocks and silt settled, layer upon layer piled up in rivers, along coastlines and on the sea bottom trapping the organic material. Without air, the organic layers could not rot away. Over time, increasing pressure and temperature changed the mud, sand and silt into rock (known as source rock) and slowly “cooked” the organic matter into Petroleum Over millions of years, the oil and gas that formed in the source rock deep within the Earth moved upward through tiny, connected pore spaces in the rocks. Some seeped out at the Earth’s surface, but most of the Petroleum hydrocarbons were trapped by nonporous rocks or other barriers. These underground traps of oil and gas are called reservoirs. Reservoirs are not underground “lakes” of oil; they are made up of porous and permeable rocks that can hold significant amounts of oil and gas within their pore spaces. Some reservoirs are hundreds of feet below the surface, while others are thousands of feet underground.

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Natural Gas: Oil Byproduct, Valuable Resource

Natural-gas use is growing across all economic sectors. Natural gas burns cleaner than oil or coal, and this environmental benefit has encouraged its use. While decades ago natural gas was seen as an unwanted byproduct of oil and may have been wasted, its value has been recognized today. Most natural gas is distributed by pipelines, which is a limiting factor for remote resources that are not near the major consuming markets. But there is considerable development of technology to convert natural gas to liquids to enable more widespread transportation.For more information on shale gas and horizontal drilling, see Modern Sha le Gas: A Primer from the U.S. Department of Energy.


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Drilling Costs

Once a company identifies where the oil or gas may be located, it then begins planning to drill an exploratory well. Drilling a well is expensive: Shallow offshore wells or deep onshore wells can cost more than $15 million each to drill!

Getting the Oil Out

Locating a suitable site for drilling is just the first step in extracting oil. Before drilling can begin, companies must make sure that they have the legal right to drill, and that the impact of drilling on the environment is acceptable. This can take years. Once they finally have the go ahead, drilling begins. The exact procedure varies, but the idea is first to drill down to just above where the oil is located. Then they insert a casing of concrete into the newly drilled hole to make it stronger. Next, they make little holes in the casing near the bottom, which will let oil in, and top the well with a special assembly of control and safety valves called a “Christmas tree.” Finally, they may send down acid or pressurized sand to break through the last layer of rock and start the oil flowing into the well. (Source: Oil and Natural Gas Society of Petroleum Engineers, Richardson, TX.)

In the Petroleum industry, production is the phase of operation that deals with bringing well fluids to the surface and preparing them for their trip to the refinery or processing plant. Production begins after drilling is finished.

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History of Petroleum

280 to 345 million years ago – Carboniferous period; fossil fuel formation begins.

Around 3 million years ago – Stone Age; Vast underground oil reserves seep to the surface in sticky black pools and lumps, called bitumen. Hunters use bitumen (also called pitch or tar) to attach flint arrowheads to their arrows.

70,000 years ago – Prehistoric people discover that oil burns with a bright, steady flame. The first oil lamps are made by hollowing out a stone, filling it with moss or plant fibers and setting the moss on fire. Oil lamps remained the main source of lighting until the gas lamp invention in Victorian times. The Greeks improved lamps by putting a lid on the bowl.

6,500 years ago – People living in marshes added bitumen to bricks and cement to waterproof their houses from floods. They soon learned that it could be used to seal water tanks, waterproof boats (now known as caulking) and glue broken pots.

7th century BCE – A magnifying glass is used to concentrate the sun’s rays on a fuel and light a fire for light, warmth and cooking.

6th century BCE – Persians discover that a thinner form of bitumen, called naft, could be lethal in battle. Persian archers put it on their arrows to fire flaming missiles at their enemies.


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