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Oil and Gas – Black Gold!

http://upload.wikimedia.org/wikipedia/commons/c/ce/Oil_well.jpg

http://en.wikipedia.org/wiki/Image:Moscow_traffic_congestion.JPG

NASA

en.wikipedia.org/wiki/Image:Oil_platform.jpg

en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg

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.

Additional background notes for the presenter: It would be useful if the presenter brought along some rock samples as props. These could include an organic rich mudstone (black shale) to illustrate a source rock such as the Kimmeridge Clay (see slide 11), an impermeable rock to illustrate the cap such as halite (see slide 13) and a porous sandstone to illustrate a reservoir rock such as the Penrith Sandstone (see slide 13-14).

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Talk outline

Part 1: Origin – How do oil and gas form?

Practical: Non-Renewable Energy

Part 2: Exploration and Production –

How do we find oil and gas and how is it produced?

Practical: Prospector Game

Part 3: Politics – Why are oil and gas important?

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.

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Origin (1): Chemistry

Crude Oil

Hydrocarbon

en.wikipedia.org/wiki/Image:Octane_molecule_3D_model.png

en.wikipedia.org/wiki/Image:Petroleum.JPG

Oil and gas are made of a mixture of

different hydrocarbons.

As the name suggests these are large

molecules made up of hydrogen atoms

attached to a backbone of carbon.

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Origin (2): Plankton

cache.eb.com/eb/image?id=93510

en.wikipedia.org/wiki/Image:Copepod.

en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg

Most oil and gas starts life as microscopic plants and animals

that live in the ocean.

Plant plankton

Animal plankton

10,000 of these bugs

would fit on a pinhead!

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Origin (3): Blooms

serc.carleton.edu/images/microbelife/topics/red_tide_genera.v3.jpg

Today, most plankton can be

found where deep ocean

currents rise to the surface

This upwelling water is rich in

nutrients and causes the

plankton to bloom

Blooms of certain plankton

called dinoflagellates may

give the water a red tinge

Dinoflagellate bloom

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Origin (4): On the sea bed

upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg

When the plankton dies it rains

down on sea bed to form an

organic mush

Sea bed

en.wikipedia.org/wiki/Image:Nerr0328.jpg

If there are any animals on the

sea bed these will feed on the

organic particles

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Origin (5): Black Shale

upload.wikimedia.org/wikipedia/en/0/04/Plankton.jpg

However, if there is little or no

oxygen in the water then animals

can’t survive and the organic

mush accumulates

Where sediment contains

more than 5% organic matter,

it eventually forms a rock

known as a Black Shale

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Origin (6): Cooking

www.oilandgasgeology.com/oil_gas_window.jpg

As Black Shale is buried, it is heated.

Kerogen

Gas

Oil

Organic matter is first changed by the

increase in temperature into kerogen,

which is a solid form of hydrocarbon

Around 90°C, it is changed into a liquid

state, which we call oil

Around 150°C, it is changed into a gas

A rock that has produced oil and gas in

this way is known as a Source Rock

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 because of the geothermal gradient. 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 30°C, a solid, sticky bitumen is produced. Around 90°C liquid oil is formed. As temperatures reach 150°C, 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.

Background notes: This is natural chemical ‘cracking’ of the hydrocarbons – where the initially large molecules are broken into progressively smaller molecules by the increase in temperature – much the same as long chain hydrocarbons can be ‘cracked’ commercially.

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Origin (7): Migration

www.diveco.co.nz/img/gallery/2006/diver_bubbles.jpg

Hot oil and gas is less dense than

the source rock in which it occurs

Oil and gas migrate upwards up

through the rock in much the same

way that the air bubbles of an

underwater diver rise to the surface

The rising oil and gas eventually gets

trapped in pockets in the rock called

reservoirs

Rising oil

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Origin (8): Ancient Earth

During mid-Mesozoic times

around 150 million years ago,

conditions were just right

to build up huge thicknesses

of Black Shale source rocks

Ancient Earth

The world’s main oil deposits all formed in warm shallow seas

where plankton bloomed but bottom waters were deoxygenated

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Origin (9): Source of North Sea Oil

Ancient Earth

The Kimmeridge Clay is a Black Shale with up to 50% organic

matter. It is the main source rock for the North Sea Oil & Gas Province

Black Shale

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Practical Exercise 1

Renewable versus Non-Renewable Energy

en.wikipedia.org/wiki/Image:Oil_platform.jpg

en.wikipedia.org/wiki/Image:Windpark_Galicia.jpg

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Exploration and Production (1): Oil Traps

Some rocks are permeable

and allow oil and gas to freely

pass through them

Other rocks are impermeable

and block the upward passage

of oil and gas

Where oil and gas rises up

into a dome (or anticline)

capped by impermeable rocks

it can’t escape. This is one

type of an Oil Trap.

Impermeable

Permeable

Dome Trap

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 oil and gas fields. In this section, we will investigate how reservoirs of oil and gas are discovered 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 in overlying rocks. 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 rock is where it is rises into a structural dome capped by impermeable rocks. The cap rocks prevent the oil and gas escaping upwards. The buoyancy of the less dense hydrocarbons in the pore waters prevent them from sinking back down. This is an example of an Oil Trap.

Optional exercise: An excellent additional exercise to get students thinking further about how Oil Traps form go to http://earthlearningidea.com, click on Earth-related Activities, and look under the Resource and Environment section.

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Exploration and Production (2): Reservoir Rocks

Earth Science World Image Bank Image #h5innl

The permeable strata in an oil trap

is known as the Reservoir Rock

Reservoir rocks have lots of

interconnected holes called pores.

These absorb the oil and gas like a

sponge

This is a highly magnified picture of

a sandy reservoir rock (water-filled

pores are shown in blue)

As oil migrates it fills up the pores

(oil-filled pores shown in black)

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Exploration and Production (3): Seismic Surveys

Earth Science World Image Bank Image #h5inpj

Earth Science World Image Bank Image #h5inor

Seismic surveys are used to locate likely rock structures

underground in which oil and gas might be found

Shock waves are fired into the ground. These bounce off layers

of rock and reveal any structural domes that might contain oil

Drill here!

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 shock waves into the ground. The shock waves pass through some rock layers and bounce off others. By recording how long it takes for the shock 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.

Background notes: The term seismic is derived from the Greek for “shake” (think earthquakes!)

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Exploration and Production (4): Drilling the well

Once an oil or gas prospect has been identified, a hole is drilled to assess the potential

The cost of drilling is very great.

On an offshore rig, it may cost

$10,000 for each metre drilled.

A company incurs vast losses

for every “dry hole” drilled

en.wikipedia.org/wiki/Image:Oil_platform.jpg

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Exploration and Production (5): Enhanced Recovery

Although oil and gas are less

dense than water and naturally

rise up a well to the surface,

in reality only 40-50% of the

total will do so.

To enhance recovery, a hole

is drilled adjacent to the well

and steam is pumped down. The

hot water helps to push the oil out

of the rock and up into the well.

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Exploration and Production (6): Transport

United States Geological Survey

Once extracted oil and

gas must be sent to a

refinery for processing

Pipelines transport

most of the world’s oil

from well to refinery

Massive Oil Tankers

also play an important

role in distribution

Trans-Alaskan Pipeline

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Exploration and Production (7): �At the Refinery

Before it can be used crude oil must be refined.
Hydrocarbons can be separated using distillation, which

produces different fractions (or types) of oil and gas

Oil refinery

Distillation

Plant

en.wikipedia.org/wiki/Image:Anacortes_Refinery_31911.JPG

en.wikipedia.org/wiki/Image:Crude_Oil_Distillation.png

Jet fuel

Car fuel

Road tar

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Exploration and Production (8): Early History

en.wikipedia.org/wiki/Image:Abraham_Gesner.gif

en.wikipedia.org/wiki/Image:Oilfields_California.jpg

Abraham Gesner

(1797-1864)

Californian oil gusher

The modern era of oil

usage began in 1846 when

Gesner perfected the art

of paraffin distillation.

This triggered a massive

worldwide boom in oil

production.

California was centre of

activity in the early 1900s,

famous for its gushers.

en.wikipedia.org/wiki/Image:Lucas_gusher.jpg

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Exploration and Production (9): The Situation Today

USGS

Global oil and gas occurrences are now well understood (provinces

shown in green). Only Antarctica and the Arctic remain unexplored.

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 provinces of the world. Dark green provinces are the biggest field and the light green provinces 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 inhospitable environments make oil exploration and production too costly. However, as the climate of these regions changes with global warming and as technology advances, it may be only matter of time before these fields become ripe for exploitation. At present exploration in Antarctica is prohibited by the political Antarctic Treaty. Note: an oil province is the assemblage of numerous fields within a region; an oil field is a single accumulation.

Question: Can you think of any reasons, why we should not exploit oil provinces in the Arctic and Antarctica (even if the technology were to make it possible and cost-effective)?

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Practical Exercise 2

The Oil Prospector Game

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Politics (1): Fuel source

84% of crude oil is refined

into fuel, principally for cars

and planes

Demand is ever increasing,

especially due to growth of

Chinese economy

http://en.wikipedia.org/wiki/Image:Shellgasstationlosthills.jpg

blogs.sun.com/richb/resource/NBC_at_the_Pump.jpg

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 presentation.

As we mentioned at the start, 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!

Question for discussion: Apart from a fuel source, what other uses does oil and gas have?

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Politics (2): Other uses

The remaining 16% of crude oil is used for a range of purposes

shown above as well as synthetic fibres, dyes and detergents

Fertilizers and

Pesticides

Food additives

Plastic

en.wikipedia.org/wiki/Image:CD-R.jpg

CDs and DVDs

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en.wikipedia.org/wiki/Image:Konservering.jpg

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Politics (3): Main Producers - OPEC

en.wikipedia.org/wiki/Image:Opec_Organization_of_the_Petroleum_Exporting_Countries_countries.PNG

Organization of the Petroleum Exporting Countries (OPEC) is a

group of 13 countries that produce 36% of the world’s oil, or

32 million barrels of oil per day.

The biggest producer is Saudi Arabia, but Iran, United Arab

Emirates, Kuwait and Venezuela are also major suppliers

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Politics (4): Other Producers

Organization for Economic Co-operation and Development

(OECD) produces 24% of all oil, or 21 million barrels per day.

The USA is the biggest single producer in OECD but Mexico,

Canada and the UK are also major suppliers

Outside OECD, the states of the former Soviet Union are also

major producers supplying a further 15% of global output

en.wikipedia.org/wiki/Image:OECD-memberstates.png

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Politics (5): Supply and Demand

In 2007, global consumption grew by 1.2 million barrels per day.

OPEC and OECD nations can only raise production by a further

2.5 million barrels per day so a squeeze is on the cards

en.wikipedia.org/wiki/Image:OilConsumptionpercapita.png

USA uses 24% of global supply but China shows the biggest year-to-year increase in usage

Oil consumption per person

(darker reds indicate higher usage)

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Politics (6): Peak Oil

en.wikipedia.org/wiki/Image:Hubbert_peak_oil_plot.svg

en.wikipedia.org/wiki/Image:Hubbert.jpg

Hubbert (1903-1989)

Era of

energy

crisis

In 1956, Hubbert predicted that global oil production would peak

around the Year 2000 and trigger an Energy Crisis with power

blackouts and rising costs of energy and fuel

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Politics (7): Rising Oil Prices

en.wikipedia.org/wiki/Image:Oil_Prices_Medium_Term.png

$139 by June 2008

Oil prices have been steadily rising for

several years and in June 2008 stand

at a record high of $139 per barrel.

Is the rise due to a squeeze in availability

(peak oil) or are other political or

economic factors to blame?

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Politics (8): Canada’s Tar Sands

Higher oil prices and new technology mean unconventional

oil deposits are now economically viable (e.g. tar sands)

The Athabasca Deposit in Alberta contains 1.75 trillion barrels,

or about half of the world’s proven oil reserves!

i.treehugger.com/files/canada-tar-sands-01.jpg

NASA

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! However, it is very expensive to extract oil from tar sands, so if this source is used extensively, prices are unlikely to fall.

Nevertheless, 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.

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Politics (9): Global Warming

Oil and Gas emit 15-30% less CO₂ than coal per watt of energy

produced. Renewable energy is clean but not yet viable as fuel.

en.wikipedia.org/wiki/Image:Coal_anthracite.jpg

en.wikipedia.org/wiki/Image:Windpark_Galicia.jpg

en.wikipedia.org/wiki/Image:Bluebbl.gif

OIL

Presenter notes: Although there probably won’t be an “Oil Crisis” in the short-term, 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, renewable energy sources like solar, wind and nuclear power are far less polluting. That said, renewable energy has not yet been sufficiently developed to replace fossil fuels as the world’s energy source. In particular it is difficult to develop renewable energy as a source of fuel for transportation. As a result, we will have to live with the environmental consequences of oil and gas for centuries to come – unless we change our habits quickly.

Question for discussion after the practical: Apart from fossil fuels what other sources of energy are available? Why are these sources not used more widely?

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Oil and Gas

http://upload.wikimedia.org/wikipedia/commons/c/ce/Oil_well.jpg

http://en.wikipedia.org/wiki/Image:Moscow_traffic_congestion.JPG

NASA

en.wikipedia.org/wiki/Image:Oil_platform.jpg

en.wikipedia.org/wiki/Image:Ceratium_hirundinella.jpg