Presenter notes: Oil and Gas are natural resources of enormous economic importance. Together they provide about 60% of all the energy used by society today. They provide fuel for transport and are vital for heating, lighting and cooking. In addition they are used in the manufacture of synthetic fabrics, plastics, fertilizers, detergent as well as for many other purposes. In short, it is hard to imagine how our society could function without oil and gas.
SLIDE 3. TALK OUTLINE
Presenter notes: In this talk we will examine oil and gas from three angles. In the first part we will think about the biological and geological processes responsible for the formation of oil and gas. In Practical Exercise 1 we investigate the rate at which oil and gas deposits form and consider the meaning of non‐renewable versus renewable energy. In the second part, we will look at the way geologists explore for new oil and gas deposits and consider the how oil and gas get from the well to the marketplace. In Practical Exercise 2, we will have a chance to explore for oil and gas fields ourselves in the ‘Prospector Game’. In the third part, we will examine the political importance of oil and gas. Specifically we will look at which countries control production, consider global supply and demand, and think about the likely future of oil and gas in our society.
PART 1: ORIGIN
SLIDE 4. CHEMISTRY
Presenter notes: As we begin to think about the origin of oil and gas, a basic question we need to answer is what exactly are oil and gas? Oil and gas are complicated mixtures of different hydrocarbons. A hydrocarbon is a large organic molecule. As the name suggests it is composed of hydrogen atoms attached to a backbone, or chain, of carbon atoms. Short chain hydrocarbons like methane are gases. Medium chain hydrocarbons like paraffin are liquids. Long chain hydrocarbons like bitumen are solids. When crude oil is extracted from the earth it may be a mixture of hydrocarbons in solid, liquid and gas states.
SLIDE 5. PLANKTON
Presenter notes: It may come as a surprise but most of the world’s oil and gas is made up of the fossil remains of microscopic marine plankton. That’s why oil and gas are often referred to as a fossil fuel. The most important group of plankton involved in the formation of oil and gas are single celled phytoplankton called dinoflagellates, though many types of zooplankton are equally important. Some oil and gas may have also originated from the remains of land plants, but we will not discuss these types of deposits in this talk.
SLIDE 6. BLOOMS
Presenter notes: In certain parts of the world’s oceans, plankton occurs in enormous quantities, or blooms. Exactly where those plankton blooms occur is controlled by ocean currents. The richest sites are where cold, nutrient rich waters rise to the surface from the deepest parts of the ocean. The nutrients found in these ‘upwelling zones’ feed plankton and allow them to reproduce quickly. A single litre of seawater may contain several million dinoflagellates. Where these plankton occurs in high numbers they may turn the water red. This phenomenon is known as red tide.
SLIDE 7. ON THE SEA BED
Presenter notes: When plankton dies it slowly settles to the sea bed where it forms an organic mush. Usually there are lots of animals living on the sea floor that feed on this material. One important group is the polychaete worms. These are detritivores, which means they eat the dead and decay remains of other organisms
SLIDE 8. BLACK SHALE
Presenter notes: However, under certain conditions there may be very little oxygen on the sea floor. This may be because the ocean is deep and stagnant and oxygen has not been mixed down from the surface waters. No animal life can survive where the sea bed is completely lacking oxygen. Without animals to eat the dead plankton, the organic mush builds up on the sea bed. Where ocean sediment contains more than 5% organic mush it is known as a Black Shale. The black colour comes from the dark organic matter that it contains. As we will see, Black Shale is what makes oil and gas.
SLIDE 9. COOKING
Presenter notes: As more sediment accumulates on top, layers of Black Shale become buried more and more deeply in the Earth’s crust. As they do so, they slowly heat up (a bit like being in pressure cooker). With progressive heating the organic material in the plankton undergoes chemical and physical changes. It gradually breaks down into smaller and smaller hydrocarbons. At temperatures of around 30C, a solid, sticky bitumen is produced. Around 90C liquid oil is formed. As temperatures reach 150C, natural gases like methane are given off. A Black Shale that is heated and gives off oil and gas is known in the oil industry as a Source Rock
SLIDE 10. MIGRATION
Presenter notes: The hot oil and gas does not stay in the Source Rock for long. As the hydrocarbons are less dense than the rocks that surround them, they gradually migrate upwards in much the same way that the less dense air bubbles of an underwater diver will rise through water. The migrating oil and gas may travel up between the sand grains that make up the rock or they may find their way up through cracks, fissures, and faults in the crust. As we will see when we look at oil exploration, eventually oil and gas get trapped in pockets in the crust known as reservoirs.
SLIDE 11. ANCIENT EARTH
Presenter notes: Most of the Source Rocks that gave rise to our present day oilfields were formed in the middle of the Mesozoic Era about 150 million years ago. At that time conditions were just right to build up huge thicknesses of Black Shale. On the one hand, the oceans were unusually warm, promoting vast plankton blooms. On the other hand, oxygen was mostly absent on the ocean floors so most of the plankton that settled on the bottom accumulated. There were no animals around to eat it up. The map on the left hand side shows what the Earth looked like 150 million years ago. The red circles show where the world’s main oil deposits were formed in warm, shallow, deoxygenated seas.
SLIDE 12. SOURCE OF NORTH SEA OIL
Presenter notes: A real example of a Black Shale that has formed a major oil deposit is the Jurassic Kimmeridge Clay. This is a 150 million year old shale that contains up to 50% organic matter. It stretches from Dorset in southern England right across to Norway. It was this Black Shale which was the Source Rock for the North Sea oilfield.
SLIDE 13. PRACTICAL EXERCISE 1
Presenter notes: The Kimmeridge Clay of Dorset took an enormous amount of geological time to form. After that it took still many more million years before it was sufficiently cooked to start producing oil and gas. In the first Practical Exercise we will try and calculate exactly how much time it takes to form a watt of energy from oil and gas by biological and geological processes. We will compare our figures with other energy sources like wind power and solar power and think about the meaning of Non‐renewal and Renewal Energy.
PART 2: EXPLORATION AND PRODUCTION
SLIDE 14. OIL TRAPS
Presenter notes: In the first practical we thought about the immense amount of time it takes to form oil and gas. Consequently, it is an extremely valuable resource and huge amounts of money are poured into trying to locate new oilfields. In this section, we will investigate how oil and gas is discovered in the crust and how it eventually reaches the marketplace. As we have already seen, once produced, oil and gas migrates out of its Source Rock and accumulates at another site in the Earth’s crust. Some rocks like sandstone or limestone are permeable to oil and gas, which means that they can pass freely through them. Other rocks like clay or salt are impermeable, which means they block the upward passage of hydrocarbons. One of the most common ways that oil and gas becomes trapped in pockets in the crust is where it is rises into a structural dome capped by impermeable rocks. The cap rocks prevent the oil and gas escaping upwards and the buoyancy of the hydrocarbons prevent them from sinking back down. This is called an Oil Trap.
SLIDE 15. RESERVOIR ROCK
Presenter notes: The permeable rocks than contain oil and gas within the oil trap are known as the Reservoir Rock. The best kind of reservoir rocks have lots of interconnected holes called pores. These allow them to absorb the oil and gas like a sponge. The picture on the left shows a good reservoir rock with lots of pore spaces shown in blue. As we advance the slide, we see the pores gradually fill with oil. This rock can absorb large amounts of oil.
SLIDE 16. SEISMIC SURVEY
Presenter notes: We’ve just established what kind of structures tend to trap oil and gas in the Earth’s crust, but how do we locate potential traps underground? One technique is to use seismic surveys. In this technique, a Vibrator Truck fires sound waves into the ground. The sound waves pass through some rock layers and bounce of others. By recording how long it takes for the sound waves to arrive back at the surface allows geologist to build a picture of the internal structure of the rocks beneath their feet. An example of a seismic survey is shown in the diagram on the right. It reveals a large underground dome in the rocks. As we have seen domes often trap oil and gas so this may be a potential site to drill.
SLIDE 17. DRILLING THE WELL
Presenter notes: A potential oil trap is called a Prospect. Once a prospect has been identified, the next stage is to drill a hole into the top of the trap to see if it contains oil and gas. It is incredibly expensive to a drill hole. On an offshore rig is may cost .1 million for every metre drilled. So if you are going to drill a hole 500 metres underground its going to cost you half a billion pounds! Consequently geologists have to be pretty confident that they going to hit oil. If they drill too many ‘dry holes’ they will soon lose their job!
SLIDE 18. ENHANCED RECOVERY
Presenter: If the geologist is lucky, he or she will strike oil and gas. A hole that contains oil and gas is called a well. The oil and gas is under considerable pressure in the Earth’s crust so once a well is drilled into the reservoir rock, the oil and gas rapidly rises to the surface. However, as more and more oil and gas comes out of the well, eventually the pressure drops and flow slows down. To get the remainder of the oil and gas out of the reservoir rock, a second hole is drilled adjacent to the first. Hot water or steam are pumped down the hole and this forces the oil and gas still trapped in the rock up the original well. This technique is known as enhanced recovery.
SLIDE 19. TRANSPORT
Presenter notes: Once the oil and gas has been extracted from the ground, it must be safely transported from the well to the refinery where it will be processed. Oil is usually transported from the well to the refinery using pipelines. These may stretch over land or be laid over the sea bed. A spectacular example of an oil pipeline is the Trans‐Alaskan pipeline which carries oil and gas for 800 miles across Arctic permafrost. Another way that oil and gas are transported is by means of massive oil tankers. These gigantic vessels can carry up to half a million tonnes of oil.
SLIDE 20. AT THE REFINERY
Presenter notes: At the refinery, the crude oil, which also contains a lot of gas, is processed. This involves separating out all the different hydrocarbons in the crude oil. To do this, the crude oil is heated in a furnace and then passed through a cooling tower. The method relies on the fact that different hydrocarbons have different boiling points. Consequently the heavy hydrocarbons like bitumen with high boiling points accumulate at the bottom of the cooling tower. Light hydrocarbon like paraffin with low boiling points accumulate near the top of the top. This process is known as fractional distillation. The different hydrocarbons have different uses. For example, bitumen is used to surface roads while paraffin is mostly used as aviation fuel.
SLIDE 21. EARLY HISTORY
Presenter notes: People have been using oil and gas for four thousand years. However, the modern era of oil and gas exploration and production didn’t begin until 1846. That year, Abraham Gesner, a geologist based in New Brunswick, Canada figured out how to distill paraffin from crude oil. This made crude oil far more useful and triggered a global boom is exploration and production. California became an early centre of oil prospecting and was famous for its gushers. These were pressurized oil reservoirs, which when drilled, spurted massive fountains of oil into the air!
SLIDE 22. THE SITUATION TODAY
Presenter notes: Following a hundred and fifty years of oil and gas exploration, most geologists think that we have now found most of the oil that lies in the Earth’s crust. The map shows the major oil and gas fields of the world. Dark green fields are the biggest field and the light green fields are smaller. Only two regions of the planet have not yet been fully explored for oil and gas. These are the Arctic and Antarctica. These cold in hospitable environments make oil exploration and production too costly. However, as the climate of these regions changes with global warming and as technology advances, it is only a matter of time before their fossil fuel resources are exploited.
SLIDE 23. PRACTICAL EXERCISE 2
Presenter notes: Now you know about the geological factors that control the distribution of oil and gas in the Earth’s crust, you should be able to locate oil and gas fields yourself! In Practical Exercise 2, you will try your hand as an exploration geologist as you play the ‘Prospector Game’. Will you make your fortune or will you get the sack?
PART 3: POLITICS
SLIDE 24. FUEL SOURCE
Presenter notes: So far we have thought about how oil and gas forms, how geologists find it, and how it is brought to the marketplace. However, this talk would not be complete without a look at the politics of oil and why it is so significant. That will be the topic of the final part of this talk. As we mentioned at the start of this talk, its hard to imagine how modern society could function without oil and gas. The biggest single use of oil and gas is a fuel source. Fuel accounts for about 84% of all oil and gas consumed. Without oil and gas there would be no cars or planes and we would be more limited in the way we heat and light our homes, or cook meals. We can’t simply turn to electricity instead because much of our electricity is produced by power stations that burn oil and gas!
SLIDE 25. OTHER USES
Presenter notes: Less well known is the fact that many household items are also made from oil and gas. Did you know that CDs and DVDs, plastic containers, fertilizers, pesticides, food additives, synthetic clothing, dyes, and detergents, all to a large degree, contain byproducts of oil and gas? In fact 16% of all oil and gas is used to make these and many other products. As a society we totally rely on oil and gas in our day to day lives.
SLIDE 26. MAIN PRODUCERS – OPEC
Presenter notes: So, if oil and gas is of such importance to society, it’s important to understand who controls its production. Today, oil production is governed by three major groups who together produce 75% of the global supply. The single largest oil producer is the Organization of Petroleum Exporting Countries, also known as OPEC. Together these 13 countries produce 36% of the world’s oil, or to put it another way, some 32 million barrels of oil per day (based 2008 figures). The largest producers in OPEC are four Arab states, namely Saudi Arabia, Iran, the United Arab Emirates, and Kuwait, although Venezuela is also a major producer.
SLIDE 27. OTHER PRODUCERS
Presenter notes: The other two major producers are the Organization for Economic Co‐operation and Development, also known as OECD, and the states of the former Soviet Union.
OECD produces 24% of the world’s oil supply, or 21 million barrels per day. Within OCED, the biggest single producer is the USA, but other major players include Mexico, Canada, and the UK. The states of the former Soviet Union supply
a further 15% of the global production.
SLIDE 28. SUPPLY AND DEMAND
Presenter notes: In 2007, the global consumption of oil was about 80 million barrels per days. Every year, this rate of consumption is rising by about 1.2 million barrels per day. The single largest consumer of oil is the USA, which sucks up 24% of the total oil produced. However, the oil consumption of the USA is slightly declining at the moment. The annual growth in global oil consumption is mostly being driven by China, who shows big year‐on‐year increases in usage. Geologists believe that the nations of OPEC and OECD cannot indefinitely increase the rate of oil production. At most production rate can only be increased by another 2.5 million barrels per day. Consequently there may be a big squeeze in the availability of oil in the coming decade.
SLIDE 29. PEAK OIL
Presenter notes: This global squeeze in oil supply was predicted more than fifty years ago by a geologist called M. K. Hubbert. In 1956, Hubbert predicted that the world would reach peak rates of oil supply about the Year 2000. Thereafter oil would become increasingly scarce. This would trigger an energy crisis, result in widespread power blackouts, and see the cost of fuel rise astronomically. Hubbert’s idea of ‘Peak Oil’ is controversial but supported by some scientists and politicians.
SLIDE 30. RISING OIL PRICES
Presenter notes: One piece of evidence that suggests that Hubbert may have been right is rising cost of oil. For the past few years, oil prices have rapidly increased. In 1999, oil was priced at less than $10 per barrel but since then the price has sky‐rocketed to $135 per barrel by June 2008. Is this due to a squeeze in availability, as Hubbert suggested, or are other political or economic factors to blame?
SLIDE 31. CANADA’S TAR SANDS
Presenter notes: Whatever the cause of the current rises in oil prices, there is good reason to believe we have not yet reached Hubbert’s era of “peak oil” production. One of the effects of higher prices is that oil deposits that were once considered uneconomic to exploit have now become viable. The largest of the these unconventional oil deposits is the Athabasca tar sands of Albert, Canada. Amazingly this deposit contains over half the world’s oil reserves, equal to 1.75 trillion barrels. The oil is mixed together with sand near the surface and is extracted by opencast mining using giant dumper trucks! The Athabasca tar sands together with other probable large oilfields in the Arctic and Antarctica will probably stave of oil shortages for several decades to come.
SLIDE 32. GLOBAL WARMING
Presenter notes: Although there probably won’t be an “Oil Crisis” in the shortterm, there are other good reasons for investing in alternative sources of power now. The main reason is that oil and gas are a major source of greenhouse gases like carbon dioxide and methane. Together they contribute to global warming which is one of the biggest headaches for modern society to deal with. Oil and gas produce far fewer greenhouse gases than coal per watt of energy produced. However, renewal energy sources like solar, wind and nuclear power are far less polluting. That said, renewal energy has not yet been sufficiently developed to replace fossil fuels as the world’s energy source. As a result, we will have to live with the environmental consequences of oil and gas for centuries to come – unless we act quickly.
SLIDE 33. OIL AND GAS
Presenter notes: In this talk we have discussed how oil and gas are formed, how geologists find and produce it, and why it is of such political importance in modern society. I hope you have learned just how much we rely on this precious non‐renewable resource and how pressing is the need to swiftly find alternative sources of energy. Oil and gas has been fundamental for the growth of society for the past fifty years, but in a further fifty years we will need to have weaned ourselves off this hydrocarbon slime!