Encyclopedia of Global Resources part 94 pdf

Speight, James G. The Chemistry and Technology of Petro - leum. 4th ed. Boca Raton, Fla.: CRC Press/Taylor & Francis, 2007. _______. Handbook of Petroleum Product Analysis.Ho- boken, N.J.: Wiley-Interscience, 2002. Web Sites OTS Heavy Oil Science Centre The Chemistry of Petroleum http://www.lloydminsterheavyoil.com/ petrochem01.htm#Introduction U.S. Geological Survey Organic Origins of Petroleum http://energy.er.usgs.gov/gg/research/ petroleum_origins.html See also: Gasoline and other petroleum fuels; Meth- ane; Oil and natural gas distribution; Oil and natural gas drilling andwells; Oil and naturalgas exploration; Oil and natural gas formation;Oilindustry;Propane. Oil and natural gas distribution Category: Energy resources The majority of the world’s reserves of crude oil and natural gas are concentrated in a few regions. About two-thirds of the world’s reserves are in Middle East nations. Saudi Arabia has larger oil reserves than any other country at about 260 billion barrels; Iraq, the United Arab Emirates, Kuwait, and Iran eachhavere- serves of about 100 billion barrels. The United States has less than 2 percent of the world’s reserves. Background Petroleum (crude oil and natural gas) is a mixture of many kinds of hydrocarbon compounds—organic molecules made largely of hydrogen and carbon. Crude oil is refined to produce a variety of fluid fuels which, with natural gas, provide most of the energy that powers the world’s industrialized societies. Petro- leum also provides raw materials for the manufacture of plastics, synthetic fabrics, many medicines, fertiliz - ers, insecticides, road pavement, floor coverings, roof - ing materials, and hundreds of other products. History of Production Large-volume production of petroleum began in the United States, and until 1974, the United States was the world’s leading petroleum producer. The United States, however, was endowed with only about 11 per- cent of the world’s original producible oil, so the country was soon ahead of the rest of the world in de- pletion of petroleum resources. In 1974, the Soviet Union replaced the United States as the world’s leading oil-producing country, but oil production declined precipitously in the for- mer Soviet Union from 1988 to 1995. Saudi Arabia then became the leading oil producer. As of 2008, the former Soviet Union was second, and the United States was third in oil production. Distribution of Reserves Reserves of a natural resource are the economically producible deposits that have been discovered but not yet consumed. About two-thirds of the world’s ap- proximately 1.25 trillion barrels of oil reserves are in the Middle East nations near the Persian Gulf. Saudi Arabia has larger oil reserves than any other country in the world. About 260 billion barrels of oil, about 20 percent of the entire world’s oil reserves, are in Saudi Arabia. Iraq, the United Arab Emirates, Kuwait, and Iran each have reserves of about 100 billion barrels of oil. Most of the remaining global reserves are in Can- ada, Venezuela, the countries of the former Soviet Union, and Mexico, which have 60 billion to 90 bil- lion barrels each, and in Kazakhstan, Libya, Nigeria, the United States, and China, which have 16 billion to 41 billion barrels each. The United States, which has produced more oil than any other nation in the world and is the world’s leading oil consumer, has oil re- serves of only about 21 billion barrels, which is less than 2 percent of the global total. The world hasabout 175 trillion cubicmeters of nat- ural gas reserves, about two-thirdsof which is inthe for- mer Soviet Union and the Middle East. The leading producers of natural gas are the former Soviet Union and the United States. The United States, in 2008, pro- duced approximately one-fourth of the globalnatural gas output. Nevertheless, the United States’natural gas consumption rate is great enough that its natural gas production cannot satisfy domestic demand. For this reason, the United States importedmore than 20 per- cent of the natural gas that it consumed in 2008. U.S. reserves of natural gas reached their maxi - mum of 8.2 trillion cubic meters in 1968 and had di - 858 • Oil and natural gas distribution Global Resources minished to 4.5 trillion cubic meters by 1995. This 45- percent decline reflects increasing consumption rates as well as progressively less success in domestic explo- ration for natural gas. Discovery of new reserves and improved technology boosted the U.S. reserves to 6.8 trillion cubic meters in 2009. Future Production and Consumption Global consumption ofnatural gas was approximately 3.05 trillion cubic meters in 2007. At this consump- tion rate, the global reserve of natural gas would pro - vide about fifty-eight years of supply. The average esti - mate of undiscovered producible natural gas is about 141.6 trillion cubic meters, or an additional sixty- three years of supply.Thus,gas reserves plus the mean estimate of undiscovered producible gas sum to more than one hundred years of supply at the 2007 con- sumption rate. However,thenatural gas consumption rate, like that of oil, does not remain constant. Rather, it has grown historically. From 2004 to 2008, annual world consumption of natural gas increased approxi- mately 10 percent. A century of supply at the 2009 consumption rate is only fifty-five years of supply if the consumption rate grows 2 percent per year. It is only forty-six years of supply if the consumption rate grows 3 percent per year. Global Resources Oil and natural gas distribution • 859 U.S. Energy Information Administration, .Source: International Energy Annual, 2005 4,139 3,609 3,334 2,698 2,627 2,565 2,535 2,529 2,369 Thousands of Barrels per Day 75,00060,00045,00030,00015,000 Kuwait Nigeria Norway Mexico China Iran Venezuela United Arab Emirates Canada 73,807 9,550 9,043 5,178United States Russia Saudi Arabia World Crude Oil: Leading Producers, 2005 Moreover, the consumption rate cannot continue to increase until the resource is depleted. Rather, the unrestricted production rate of a finite natural re- source reaches its maximum and begins to decline when about one-half of the total producible resource has been consumed. This is why the U.S. oil produc- tion rate began declining in 1970 in spite of improved exploration and drilling technology and in spite of record high rates of exploration for oil during the early 1980’s. The United States is now dependent on foreign sources for approximately two-thirds ofthe oil it consumes. Since the drilling of the first commercial oil well in 1858, the world oil production rate hasgrowntremen- dously. From 1858 to 1973, global oil consumption grew at an average rate of about 7 percent per year, with a consequent doubling of the oil consumption rate every decade. As a result, the world consumed more oil from 1960 to 1973 than it had consumed throughout its entire pre-1960 history. Since 1973, this rate of growth has diminished considerably. Nevertheless, the world has consumed more than twice as much oil since 1973 as through- out its entire pre-1973 history. As is the case for natu- ral gas, the oil consumption rate cannot continue to grow indefinitely. The 1.25 trillion barrels of global oil reserves added to the 550 billion barrel average estimate of producible oil yet to be discovered plus the more than 1.125 trillion barrels of oil already consumed total 2.925 trillion barrels of ultimate oil consumption. At the 2008 global oil consumption rate of 31 billion barrels per year, the world will have consumed one-half of all the producible oil it ever had by the year 2018. World oil production rate will reach its maximum and begin its permanent de- cline within a decade of that year. This is a serious prospect for governments to contemplate, because the industrialized world’s history of unprecedented economic growth during the twentieth century has been based largely on increasing availability of cheap petroleum. Oil-producing nations will not all pass their peaks in oil production rate at the same time. The United States, as stated, passed this point in 1970 and has since seen its crudeoil production drop from a record high of 9.6 million barrels per day in 1970 to about 8.5 million barrels per day for 2008. The former Soviet Union also has passed its maximum in oil production rate. As oil production in the rest of the world de - clines, only the Middle East nations will have the ex - cess oil production capacity necessary to compensate for increasing production rates. However, the Middle East countries as a whole will reach the midpoint of their ultimate oil production well before the year 2020. As they pass their maximumoilproductionrate, they will not be able to delay the beginning of perma- nent decline in world oil production beyond the sec- ond decade of the twenty-first century. The economic and social implications of this coming event demand serious planning by the world’s governments. Major discoveries of new oil sources in 2009 in a number of countries proved to be the largest increase in oil reserves since 2000.New drilling technology has made it possible toextract oil previously thought to be unavailable. Reserves were found in the Kurdish re- gion of Iraq, Australia, Israel, Iran, Brazil, Norway, Ghana, and Russia. The year 2009 was also a banner year for natural gas, with the discovery of a large field in Venezuela. Whilecause for optimism,if the priceof oil falls, exploration will again decline and total re- serves will again begin a rapid decline. Craig Bond Hatfield Further Reading Ahlbrandt, Thomas S., et al. Global Resource Estimates from Total Petroleum Systems. Tulsa, Okla.: American Association of Petroleum Geologists, 2005. Aubrecht, Gordon J., II. Energy: Physical, Environmen- tal, and Social Impact. 3d ed. Upper Saddle River, N.J.: Pearson Prentice Hall, 2006. Campbell, C. J. The Golden Century of Oil, 1950-2050: The Depletion of a Resource. Boston: Kluwer Aca- demic, 1991. Cordesman, Anthony H., and Khalid R. Al-Rodhan. The Global Oil Market: Risks and Uncertainties. Wash- ington, D.C.: Center for Strategic and Interna- tional Studies Press, 2006. Falola, Toyin,andAnn Genova. The Politicsof the Global Oil Industry: An Introduction. Westport, Conn.: Praeger, 2005. Hirsch, Robert L., Roger Bezdek, and Robert Wend- ling. Peaking of World Oil Production: Impacts, Mitiga- tion, and Risk Management. New York: Novinka Books, 2007. Klare, Michael T. Rising Powers, Shrinking Planet: The New Geopolitics of Energy. New York: Metropolitan Books, 2008. Mills, Robin M. The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warm - ing. Westport, Conn.: Praeger, 2008. 860 • Oil and natural gas distribution Global Resources Renton, John J.Physical Geology.Minneapolis/St. Paul, Minn.: West, 1994. Yergin, Daniel. The Prize: The Epic Quest for Oil, Money, and Power.Newed.NewYork:TheFreePress, 2008. Web Site Central Region Energy Resources Team, U.S. Geological Survey Ranking of the World’s Oil and Gas Provinces by Known Petroleum Volumes http://pubs.usgs.gov/of/1997/ofr-97-463/ 97463.html#methods See also: Athabasca oil sands; Energy politics;Oiland natural gas chemistry;Oiland natural gas drillingand wells; Oil and natural gas exploration; Oil and natural gas formation; Oil and natural gas reservoirs; Oil in- dustry; Organization of Arab Petroleum Exporting Countries; Organization of Petroleum Exporting Countries; Peak oil; Russia; Saudi Arabia; United States; Venezuela. Oil and natural gas drilling and wells Categories: Energy resources; obtaining and using resources Wells drilled to produce oil and natural gas are de- signed to pump oil as long as the source is economically viable; they often provide many years of service. Drilling procedures are rigorous and exacting and are intended to avoid hazards such as blowouts. Background Oil and natural gas are recovered through drilled wells that are designed and constructed to ensure many years of service. These wells may vary from a few hun- dred meters to more than 6,000 meters in depth.They must recover oil and gas from their reservoirs in the subsurface. The location of the well is determined by an exploration team, which produces maps of the subsurface showing possible accumulation of oil and gas. A team oflandagents investigates the ownership of the drill location andprovides informationsothatthe right to produce the oil and gas can be secured from the landowner—be it an individual, a state, the federal government, or a foreign nation. After the right to drill is secured, the drilling plan is converted into action. Drilling Procedures A suitable drilling rig is selected through the solicita- tion of information from drilling companies. After selection and transportation to the drilling site, the rig is positioned over the marked location, which has been accurately determined by surveying instru- ments. A drill bit is connected to drill pipe and drill collars. Drill collars are thick-walled cylinders about 9 meters in length used immediately above the drill bit to prevent the bit from wandering as it cuts through rock formations of varying strength and inclination. The drill pipe and collars are rotated by a rotary table at the surface, causing the drill bit to rotate. The weight of the drill string, as the downhole assembly is called, along with its rotation, causes the rock under- neath the bit to be crushed. This crushedrockis circu- lated to the surface by drilling fluid. This fluid, called “mud,” is a mix of chemicals suited to the downhole environment. It is pumped down the well through the drill string, through the bit nozzles, and then back up to the surface in the annular space between the drill string and the wall of the drilled hole. The drill bit eventually becomes dull and must be replaced. When this happens, the drill string must be unscrewed so that the bit can be brought to the sur- face. This process is called “tripping the bit.” The drilled hole must be lined with steel casing to prevent slumping of the borehole wall and unwanted migra- tion and mixing of subsurface fluids. Casing is similar to the steel pipe seen inpipelinesonthesurface,butit is designed for the pressures and temperatures en- countered in the subsurface. Casing setting depths are either predetermined or selected while drilling to control a hazardous condition such as a blowout or lost circulation. After the first casing “string” is run, it is secured in the borehole by circulating a thin cement slurry down- ward through the casing, then up the annular space between the casing wall and the borehole wall. Two casing strings are necessary in the simplest well, while several strings may be necessary for deep wells. As ad- ditional casing strings are run, each succeeding string must be smaller in diameter than its predecessor. In this way, an oil and gas well becomes smaller in diame- ter as its depth increases. For example, it is common to begin at the surface with a drill bit one-third meter in diameter, while the final well diameter at total depth may be as small as one-tenth meter. This con - cept is simple to understand by noting that as each casing string is secured in the wellbore, the succeed - Global Resources Oil and natural gas drilling and wells • 861 ing bit size must be reduced in order to enter the newly secured casing. When the borehole penetrates the rock formation containing oil and gas, the depths of interest are eval- uated using electrical, acoustic, and radioactive tech- niques to determine the presence of oil and gas. If the evaluation indicates that oil and gas are there in com- mercial quantities, “completion” of the well is begun. Completion involves installing the final casing string, perforating the casing wall adjacent to the rock for- mation containing oil and gas by using gas jets or me- chanical cutters, andinstalling production equipment. Depending on the initial success of the completion procedure, additional measures may be necessary to increase the rate of oil and gas produced. These mea- sures include using reactive chemicals to dissolve the rock formation near the wellbore or using hydraulic pressure to fracture the rock formation. After the completion procedure, the well is tested to determine the rate of oil and gas being produced. Depending on the rate of production, a small string of pipe called tubing is placed inside the casing to provide a flow conduit for the produced fluids. Most oil and gas wells are drilled as near to vertical as possible. The reason is that most regulatory agen- cies closely monitor the surface and bottomhole loca- tions of wells in order to protect mineral property rights. In many situations, however, it is impossible to locate the drilling rig over the desired bottomhole lo- cation. A river, lake, or building, for example, on the surfacemaynecessitatethe drilling of a welldirection- ally to the desired bottomhole location. The progress of drilling is monitored by noting the azimuth (devia- tion from true north) and dip (deviation from verti- cal) of the well on a continual basis. Specialized direc- tional drilling consultants oversee this complicated task. Sometimes wells are started vertically at the sur- face, then forced to dip all the way to the horizontal, then kept horizontal in the subsurface. Horizontal wells are much more expensive to drill than vertical wells, but good ones yield production rates far in ex- cess of vertical wells. A unique situation for well deviation exists off- shore. A seriesof wells isdrilled from an offshore loca- tion. The pattern of these wells, called a template, in- cludes the deviation of all but the well immediately underlying the platform or floating rig. The proper locating of many wells from the same surface location ensures the broadest distribution of bottomhole loca- tions and involves highly specialized technical knowl- edge. Hazards During the drilling of a well, potential hazards must be recognized by the drilling personnel. These in- clude blowouts and lost circulation. A blowout is the uncontrolled escape of subsurface fluids to the sur- face. These spectacular events have been identified with the oil and gas industry since its beginnings, and they remain as one of its most newsworthy subjects. A properly drilled well should not encounter a blowout if adequate diagnosis and detection are made. The weight of the drilling fluid may be increased to con - trol abnormal pressures in the subsurface. Blowout preventers, a type of valving used with the drilling rig, 862 • Oil and natural gas drilling and wells Global Resources An engineer guides a directional-drilling motor at a natural gas drilling facility in Fort Worth, Texas. (Getty Images) are designed to protect against blowouts until the well can be controlled and drilling resumed without spoil- ing the surface area adjacent to the well. Lost circulation involves drilling fluid that is lost because it seeps into the pore space or fractures in the subsurface rock formations. If enough drilling fluid escapes downhole, well control can be lost anda blow- out can occur. Lost circulation is controlled by de- creasing the weight of the drilling fluid or using plug- ging agents circulated into the subsurfaceleakzones. Oil and Gas Pumping and Production When the well has been completed and production is assured, a wellhead is installed to replace the blowout preventers. The wellhead, nicknamed the “Christmas tree,” is a series ofvalves designed to seal the casing,its annular space, and the tubing to prevent leaks. Crudeoilis processed at the site only toremove un- wanted foreign matter. Surface equipment used to process oil and gas includes dehydrators to remove water and water vapor, and separators to remove for- eign matter, including rock particles, paraffin, and other debris prohibited by the buyer of the oil and gas. Large tanks are used to store oil prior to delivery. Oil is transported by pipeline, truck, and train to the refinery for further breakdown into gasolines, motor oils, and other products and chemicals. Natu- ral gas is odorized by placing a distinctive odorant in it, and its pressure is elevated by compression for de- livery to the customer through a series of pipelines. An ideal oil and gas well will flow to the surface us- ing its internal energy. Oil wells eventually reach the point where their flowing energy is depleted and they must be pumped in order to continue producing. A variety of pumps have been used in the oil and gas in- dustry; among them is the familiarbeampump, some- times called a “horse’s head” or “nodding donkey,” that is seen in oil-producing areas around the world. Depletion and Economic Limit When a well’s energy is depleted, an enhanced oil recovery (EOR) project may be started. EOR tech- niques are used to produce additional oil from an oil and gas formation that has depleted its primary en- ergy source. Variousfluidsrangingfromfreshwaterto exotic liquids, gases, and even steam are injected into oil-producing rocks to force more oil from them. Of- ten EOR projects can produce an amount of oil equiv - alent to that recovered during the well’s primary op - erating life. All oil and gas wells eventually reach their “eco - nomic limit,” at which point economic production ceases. The economic limit is an arbitrary production rate that depends on the expenses associated with producing the well, the percentage of ownership of the well’s operator, and the price of the oil and gas. This limit may be reached in a short period after pro- duction begins for poorly performing wells, or it may exceed fifty years. Once the production rate falls below the economic limit, the well is either plugged and abandoned (cement plugs are used to seal the wellbore) or converted into a liquid disposal or EOR injection well. After the well’s operators have plugged the wellbore to the satisfaction of regulatory authori- ties, the surface location in the vicinity of the well is restored in an environmentally acceptable manner. Little or no trace of the well itself should be left. Charles D. Haynes Further Reading Beggs, H. Dale. GasProduction Operations. Tulsa, Okla.: OGCI, 1984. Boomer, Paul M. A Primer of Oilwell Drilling. 7th ed. Austin, Tex.:PetroleumExtension Service, Univer- sity of Texas, 2008. Devereux, Steve. Drilling Technology in Nontechnical Language. Tulsa, Okla.: PennWell, 1999. Economides, Michael J., A. Daniel Hill, and Christine Ehlig-Economides. Petroleum Production Systems.En- glewood Cliffs, N.J.: PTR Prentice Hall, 1994. Hyne, Norman J. Nontechnical Guide to Petroleum Geol- ogy, Exploration, Drilling, and Production. 2d ed. Tulsa, Okla.: PennWell, 2001. Miesner, Thomas O., and William L. Leffler. Oil and Gas Pipelines in Nontechnical Language. Tulsa, Okla.: PennWell, 2006. Moore, Preston L. Drilling Practices Manual.2ded. Tulsa, Okla.: PennWell, 1986. Nind, T. E. W. Principles of Oil Well Production. 2d ed. New York: McGraw-Hill, 1981. Web Site How Stuff Works How Oil Drilling Works http://science.howstuffworks.com/oil-drilling5.htm See also: Gasoline and other petroleum fuels; Oil and natural gas distribution; Oil and natural gas ex - ploration; Oil industry; Propane. Global Resources Oil and natural gas drilling and wells • 863 Oil and natural gas exploration Categories: Energy resources; obtaining and using resources Drilling for oil is the last step in oil exploration. Surface mapping, the use of seismic technology to study sedimen- tary rock sequences, and other geological and geophysi- cal studies all precededrilling.Oilandgasexploration is also driven bymarket forces that lead companies tobe more or less likely to look for new sources of petroleum depending on the price of oil and natural gas. Background Petroleum (crude oil and natural gas) is a mixture of hydrocarbons, which are organic compounds made largely of hydrogen and carbon. Exploration for pe- troleum accelerated during the early 1900’s as de- mand for fluid fuels increased following the develop- ment of the internal combustion engine. By the early twenty-first century, oil companies were looking for traditional sources of oil and gas as well as new sources, such as oil shale and oil sands. Throughout the his- tory of oil and gas exploration, the price of oil and gas has influenced oil companies’ decisions to explore for new resources. Technology has also influenced exploration both from the technical ability of compa- nies to find new sources and the drilling capabilities of oil companies. As demand for oil and natural gas has increased, companies have explored new, often more challenging areas for supplies. Origin of Petroleum Oil and naturalgas are formedover immense spans of time from microscopic floating marine organisms that live by the billions in the world’s oceans. As these die and sink to the seafloor, they may be buried in ar- eas where there is rapid influx of sediment from ero- sion of adjacent land. When buried by mud, and thus removed from contact with oxygen dissolved inseawa- ter, theorganic matter cannot completely decompose to gases, as it otherwise would. If sediment continues to accumulate, the high con- fining pressure and high temperature at depth can change the organic matter to liquid or gaseous hydro- carbons—crude oil or natural gas. As compaction changes the sediment to rock, the fluid hydrocarbons are squeezed out of the sediment originally contain - ing them and move upward through the compacting sedimentary accumulation. The petroleum may mi - grate upward into a coarser sediment, such as sand. Sand can be very permeable to fluid migration be- cause of the large interconnected pore spaces be- tween adjacent sand grains. The petroleumcontinues to rise through such a sand layer because most of the pore space in marine sediments and sedimentary rocks is filled with water, and petroleum is less dense than water. During this upward migration, if the pe- troleum encounters a fine-grained sedimentary layer that will not permit fluids tomovethrough it, then the petroleum can be restricted to a particular porous zone, such as a sandstone layer beneath the fine- grained barrier. In some regions, the petroleum-bearing sedimen- tary rocks may be folded or otherwise deformed so that they are no longer a sequence of horizontal lay- ers. In this way, the petroleum can be concentrated in commercial quantities. Commonly, petroleum is con- centrated in the highest parts of the deformed or folded layer containing it, because all the pore space beneath is filled with seawater. Thus, exploration for oil and natural gas requires study of sedimentary rock sequences that extend hundreds of meters or even several kilometers into the subsurface. The settings in which these sequences accumulated and the geo- graphic distributions and thickness variations of the sedimentary layers must be understood. Some liquid petroleum is compressed into what are known as oilsands.Oil sands were probably formed when conventional oil was trapped in shallow reser- voirs. Over time, the water and lighter hydrocarbons were washed away or consumed by bacteria, leaving dense compounds that are often contaminated by high levels of sulfur and some heavy metals. Because oil can be extracted from oil sands, these formations have become a potential source of oil. Searching for Petroleum Most sedimentary rocks were not deposited in set- tings in which large quantities of organic matter were preserved. Even if the sedimentary rocks are rich in petroleum-forming hydrocarbons, subsequent defor- mation of the rocks most commonly has not produced a potential trap to concentrate the petroleum in com- mercial quantities. Deep drilling is very expensive, and most wells do not find commercial concentra- tions of petroleum. In order to know where to locate exploratory wells, various kinds of geological studies must precede drilling. 864 • Oil and natural gas exploration Global Resources The search for petroleum includesthestudy of sed - imentary rocks atdepth using geophysical techniques such as seismicstudies. Seismic studies generate, com- monly via explosions, sound waves that are reflected and refracted (bent) by the sedimentary layers in the subsurface. The sound returning to the surface is re- corded by sensitive receivers, and reflections from lay- ers of particular rock types can be recognized. The time required for the sound to travel to a particular sedimentary rock layer and be reflected from it back to the surface is used to determine the depth of the sedimentary layer. The velocity of sound through a given layer is a function of the rock density, which in turn is an indication of rock type. After surface map- ping, seismic examination of the subsurface, and other geological and geophysical studies have re- vealed sufficientinformation, it is possible to placeex- ploratory wells in locations where there is higher probability of petroleum discovery. Initially, most oil exploration was done in the United States, especially in Texas, Louisiana, Califor- nia, and Oklahoma. By the early twentieth century, geologists were finding large oil deposits in the Cas- pian Sea region and Mexico. The discovery of large oil deposits occurredsubsequently in the Middle East, especially in Saudi Arabia. In the early twenty-first century, geologists continued to find oil and natural gas fields in these areas, but also in Indonesia, Libya, Nigeria, Sudan, China, Kazakhstan, and Russia. Off- shore oil and gas deposits were first located in shallow water in the Gulf of Mexico in the early twentieth cen- tury. Offshore oil continues to be found in shallow water but also in water depths of more than 3,000 me- ters in the Gulf of Mexico as well as in the North Sea off the coast of Norway, off the Brazilian coast, along the east coast of Africa, and in Southeast Asia, near In- donesia. Greatly improved technology has made pos- sible both the discovery of these fields and the ability to drill for oil and gas. The last two major un- explored regions of the world in terms of oil and natural gas deposits are the Arctic Ocean and Antarctica. Petroleum Supply Problems In spite of improving technology, the search for petroleum became less successful by the 1990’s. However, late in that decade, explora- tion efforts increased. Petroleum explora- tion and large-scale petroleum production began in the United States earlier than in any other country, and for many decades prior to 1974, the United States was the world’s lead- ing oil producer. Partly for these reasons, U.S. petroleum resources are being depleted earlier than those of the rest of the world. The oil fields closest to the Earth’s surface were the easiest to find and therefore were the first to be discovered. As exploration and exploitation of petroleum resources contin- ued and grew, oil fields became increasingly difficult to find. In the United States, where exploration for petroleum began, oil compa- nies have nearly run out of places to look for large, new oil fields. Even for the world as a whole, petroleum has become progressively more difficult or, at least, more expensive to find, so that the search for it has extended into hostile climatic environments and unsta - ble political situations. In some cases, oil com - Global Resources Oil and natural gas exploration • 865 A Texas oil well spouts “black gold” in the 1920’s. (Library of Congress) panies are also reevaluating old oil fields because new technologies allow extraction of oil that was previ- ously unobtainable. In the history of any oil-producing region, the oil discovery rate reaches its maximum several years be- fore the maximum in oil production rate. For exam- ple, in the United States (exclusive of Alaska), the oil discovery rate reached its peak in the late 1950’s and diminished greatly afterward. However, the U.S. oil production rate reached itsmaximum in 1970 and de- clined afterward. The global oil discovery rate was at its maximum in the 1960’s and diminished afterward in spite of record-high ratesofexploration in the early 1980’s. The global oil-production rate, however, as the end of the twentieth century, had not yet reached its maximum. Some geologists indicate that the world oil peak could occur early in the twenty-first century. Other scholars, particularly economists, indicate that as prices rise there will be an increased incentive to discover more oil and natural gas. There continues to be extensive debate concerning when oil and gas pro- duction will peak. Global Oil Reserves The reserves of a natural resource are that amount which has been discovered but not yet consumed. There is an ongoing debate about how to estimate re- serves, and some countries and oil companies either over- or underestimate reserves for their own ends. By the late twentieth century, consumption rates were such that global reserves of conventional oil were ex- pected to last for forty years. The consumption rate, however, does not remain constant; rather, it has grown historically. In 1996,theworldoilconsumption rate was growing more than 2 percent annually. A forty-year supply at the 1996 consumption rate be- comes a thirty-year supply with a 2 percent growth in consumption per year. After some debate and the dis- covery of new oil deposits, published oil reserves in 2007 were more than 1.2 trillion barrels for conven- tional oil, extending the consumption time horizon. Although additional reserves were discovered in the early twenty-first century, consumption rates have in- creased, due in part to the rapid industrialization oc- curring in countries such as China and India. Global natural gas reserves plus estimates of undiscovered producible gas resources are a few decades larger than those for oil as measured in terms of remaining consumption time. Discovery of oil from 1985 to 1995 averaged less than 9 billion barrels annually, while consumption rates averaged more than 23 billion barrels annually. In other words, most of the oil burned during this in- terval had been discovered during earlier decades. By the early twenty-first century, the discovery rate had increased to about 11 billion barrels per year. Using these data, Saudi Arabia has the world’s largest oil re- serves, followed by Iran. These reserve figures are based on conventional oil and gas supplies. If uncon- ventional sources, such as oil sands, are taken into ac- count, Canada’s potential oil reserves rival those of Saudi Arabia. If global oil consumption continues to grow at the 2 percent rate, and if oil discovery rates continue to decline, global reserves of oil will dwin- dle. Scientists agree that oil and natural gas are in lim- ited supply, but increased exploration and drilling and recovery technologies implemented in the early twenty-first century are pushing back the date at which demand for oil and gas will exceed supply. Some com- mentators indicate that market forces are once again driving oil companies to explore all opportunities for oil and gas extraction. Exploration for and Production of New Sources As world demand for oil and natural gas has in- creased, oil companies have turned to alternative ar- eas and techniques in the search for petroleum re- sources. High pricesfor oil and natural gas have made feasible drilling for oil in increasingly harsh environ- ments or turning to unconventional oil such as oil sands. In addition to seeking out new sources for liquid petroleum, oil companies have also turned to two other strategies. One is to return to old oil fields and re-explore them in order to evaluate how much oil re- mains in the ground. Earlier drilling did not extract all of the oil in a reservoir; often nearly one-half of the reservoir remained. New technologies such as saltwa- ter infusion and side drilling make exploiting old oil fields possible. Another approach that some of the oil companies have used is to mine oil sands, especially in Alberta, Canada. Once the overburden has been stripped away from the oil sands, these oil sands are heated and compressed so as to extract the oil. Be- cause this process is expensive and requires a good deal of energy to remove the oil from the other mate- rial, oil companies have only recently begun to en - gage in full-scale exploration for oil sands as the price of conventional oil increased to more than one hun - 866 • Oil and natural gas exploration Global Resources dred dollars per barrel. Exploration of potential oil sands is ongoing in several areas of the world in addi- tion to Canada, including Venezuela. Oil companies are also exploring regions that have traditionally been ignored, such as East Africa. Most of the exploration for new sources of oil and natural gas has been concentrated on the ocean floor, espe- cially offthewestcoastofAfrica,off the coast of Brazil, and in areas bordering Indonesia. Some scientists also contend that oil and natural gas is available in the South China Sea, but the disputes between the bor- dering countries have made exploration unfeasible. Another area under consideration is the seabed of the Arctic Ocean. Drilling technology exists to drill through 3,660 meters of water and another 3,000 me- ters of rock. Thus, companies are now engaged in looking for oil and natural gas in deepwater sites that would have been impossible to exploit a few years ago. Oil and gas exploration continue to be driven by what seems to be an insatiable world demand for pe- troleum for energy and other uses, such as for the chemical industry. Improvements in technology have increased the ability of geologists and geophysicists to explore for oil and gas in new places. Improved tech- nology also means that wells can be drilled in places that were impossible a few years ago. Therefore, com- panies are willing to explore for oil in challenging places. Craig Bond Hatfield, updated by John M. Theilmann Further Reading Blanchard, Roger D. The Futureof Global Oil Production: Facts, Figures,Trends and Projections, by Region. Jeffer- son, N.C.: McFarland, 2005. Deffeyes, Kenneth. Hubbert’s Peak: The Impending World Oil Shortage. Rev. ed. Princeton, N.J.: Prince- ton University Press, 2003. Downey, Marlan W., Jack C. Threet, and William A. Morgan, eds. Petroleum Provinces of the Twenty-first Century. Tulsa, Okla.: American Association of Pe- troleum Geologists, 2001. Funk, McKenzie. “Arctic Landgrab: As the Ice Shrinks, Nations Vie for Oil That May Lie Be- neath.” National Geographic 215,no.5(2009):104. Howard, Roger. The Oil Hunters: Exploration and Espio- nage in the Middle East, 1880-1939. New York: Hambledon Continuum, 2008. Hunt, John M. Petroleum Geochemistry and Geology.2d ed. New York: W. H. Freeman, 1996. Hyne, Norman J. Nontechnical Guide to Petroleum Geol - ogy, Exploration, Drilling, and Production.2ded. Tulsa, Okla.: PennWell, 2001. Kunzig, Robert. “The Canadian Oil Boom: Tar Sands Yield Millions of Barrels—But at What Cost?” Na- tional Geographic 215, no. 3 (2009): 34. Leffler, William L., Richard Pattarozzi, and Gordon Sterling. Deepwater Petroleum Exploration and Produc- tion: A Nontechnical Guide. Tulsa, Okla.: PennWell, 2003. Mills, Robin M. The Myth of the Oil Crisis: Overcoming the Challenges of Depletion, Geopolitics, and Global Warm- ing. Westport, Conn.: Praeger, 2008. Stoneley, Robert. Introduction to Petroleum Exploration for Non-Geologists. New York: Oxford University Press, 1995. See also: Athabasca oil sands; Integrated Ocean Drilling Program; Landsat satellites and satellite tech- nologies; Oil and natural gas chemistry; Oil and natu- ral gas distribution; Oil and natural gas drilling and wells; Oil and natural gas formation; Oil industry; Re- sources as a medium of economic exchange; Re- sources as a source of international conflict; Seismo- graphic technology and resource exploitation. Oil and natural gas formation Categories: Energy resources; geological processes and formations The formation of usable oil and gas deposits involves the deposition, transformation, and migration of vari- ous types of organic material; these processes take place over huge expanses of time. Background Oil, or petroleum, is not a single chemical compound but a variety of liquid hydrocarbon compounds—that is, compounds made up of different proportions of the elements carbon and hydrogen. There are also gaseous hydrocarbons—natural gas—of which the compound methane (CH 4 ) is the most common. The relative amount of oil and gas produced from any source rock depends principally on the ratio of hydro- gen to carbon. The formation of any fossil fuel re- quires a large initial accumulation of biomass rich in carbon and hydrogen. Another requirement is that the organicdebris be buried quickly to protect it from Global Resources Oil and natural gas formation • 867 . also in water depths of more than 3,000 me- ters in the Gulf of Mexico as well as in the North Sea off the coast of Norway, off the Brazilian coast, along the east coast of Africa, and in Southeast. as East Africa. Most of the exploration for new sources of oil and natural gas has been concentrated on the ocean floor, espe- cially offthewestcoastofAfrica,off the coast of Brazil, and in areas. re- serves of only about 21 billion barrels, which is less than 2 percent of the global total. The world hasabout 175 trillion cubicmeters of nat- ural gas reserves, about two-thirdsof which is