Showing posts with label Opportunities. Show all posts
Showing posts with label Opportunities. Show all posts

Opportunities in Petroleum (3)

Discovering New Uses for Petroleum
By 1929, oil production in the United States had tripled from 1918
levels. It was during that year that American companies produced

one billion barrels of oil for the first time in the short history of the
petroleum industry.
By the spring of 2007, the United States was producing 5.2 million
barrels per day of crude oil—one million barrels fewer than
the decade before. Instead, we now import about 60 percent of our
crude oil.
This oil is moved through more than two hundred thousand
miles of pipelines that crisscross the continental United States, providing
America with a stable and reliable source of fuel. This massive
infrastructure, as critical to our way of life as highways, electric
power lines, and cellular telephone towers, has been built underground
not only for aesthetic considerations but also for environmental,
cost, and security reasons, according to the American
Petroleum Institute.
Another 180,000 miles of pipelines carry natural gas quietly,
reliably, and efficiently throughout North America for heating,
cooking, and other uses, according to the Interstate Natural Gas
Association of America (www.ingaa.org).
Drake and Lucas had paved the way for the wholesale extraction
of petroleum from the ground. Now inventors began to develop
products that opened up a whole new market for crude oil and its
products.
One of the first uses was in the internal combustion engine built
in 1885–1886 by Karl Benz. The concept was improved on by Gottlieb
Daimler, who developed an engine that used a lighter gasoline
vapor. By 1894 Rudolf Diesel had designed the engine that bears
his name today, an internal combustion engine ignited by the heat
of compression rather than by a spark.
However, probably the most significant invention that changed
the way Americans lived came in 1893 with the development of the
first American car by Charles and Frank Duryea in Springfield,
Massachusetts. In 1908 Henry Ford introduced his Model T. He
subsequently perfected the mass production of automobiles, and
America’s love affair with the car had begun. This meant a completely
new market for crude oil. Until the development and widespread
use of the automobile, gasoline was considered a waste
product. But as the number of automobiles grew, so did the number
of gasoline stations across the country.
API’s historical files note that the first “filling” station was
opened in Seattle in 1907 by Standard Oil of California, which is
now Chevron Company USA. The filling station included a hose
that dispensed gasoline directly into the vehicle from an elevated
tank. The first “drive-in” service station opened on December 1,
1913, in Pittsburgh, Pennsylvania.
According to the U.S. Department of Energy, there are now
about 169,000 gasoline stations in the United States. Petroleum and
its products, however, are used in many more ways. These include
heating and cooling homes and factories, manufacturing goods, and
fueling commercial and military aircraft, tractors, and railroads.
New refining processes have led to the creation of thousands of new
products, including bicycles, propane grills, crayons, plastic bottles,
and laundry detergents. One can only imagine how different our
lives would be today without these products, which have made
many things so much easier.

Seven Sisters: Now There Are Four
U.S. entrepreneurs of the twentieth century realized the importance
of petroleum and began to create companies to support this
new form of energy. A study of the petroleum industry parallels

the history and development of the United States and its emergence
as a world leader in industry and technology.
From the industry’s humble beginning grew seven oil companies
that became known as the “seven sisters.” Today, because of mergers
and acquisitions, only four of the original seven remain.
No other name is as associated with those early years as that of
John D. Rockefeller, who founded the Standard Oil Company of
Ohio in 1870. This wealthy young man turned his few years of
experience in the oil field into $1 million in cash and organized
what was to be the first major oil company in the United States.
Rockefeller quickly realized the importance of petroleum and, as
the industry spread to other oil-producing states, so did his expansion
into refineries and pipelines, as well as into overseas markets.
However, public and government outcry over his monopoly of
the petroleum industry led, in part, to the passage of the Sherman
Antitrust Act in 1890. A lawsuit was filed against the company
under the new antitrust laws, but it was not until May 1911 that
the United States Supreme Court ruled that Standard Oil must
totally divest itself of its thirty-eight subsidiaries.
The largest of the subsidiaries was Standard Oil Company of
New Jersey, which Rockefeller formed as a holding company to
escape the tentacles of the antitrust laws. It later became known as
Exxon, the largest oil company in the world. A second Rockefeller
company was the Standard Oil Company of New York, which
bought a Texas producing company called Magnolia. It merged
with another firm called Vacuum and later became Mobil Oil. In
November 1999 the two companies merged and are now known
as ExxonMobil.
Eleven years before Rockefeller was ordered to dissolve his vast
oil empire, he purchased a company and called it Standard Oil of

California, the forerunner of today’s Chevron, USA. Another member
of the early oil family was Gulf Oil Corporation, which was
incorporated in New Jersey through the acquisition of the J. M.
Guffey Petroleum Company and the Gulf Refining Company of
Texas. These two companies were instrumental in the development
of the prolific Spindletop field in Texas. Gulf Oil was acquired by
Chevron in 1984.
The Texas Company—which later became Texaco—was another
one of the sisters that had roots in the Texas oil patch but was
founded by a Pennsylvania merchant. In 2001 Chevron and Texaco
merged and became ChevronTexaco. In 2005 the name was
changed to Chevron.
The last two sisters in the family were Shell Oil and British
Petroleum, and both of these companies were founded in England.
Even today they remain significant players in the worldwide energy
business.
These seven companies, with the ability and finances to get
petroleum out of the ground and get it to market, were to dominate
the petroleum industry for decades to come. They, including
other companies like ConocoPhillips (created in 2002 with the
merger of Conoco and Phillips Petroleum Company) as well as
many other smaller independent companies, are still active in the
day-to-day search for petroleum.
By the mid-1970s, however, it was evident that the destinies of
these large oil concerns were beginning to be inevitably shaped by
a series of uncontrollable occurrences throughout the world, particularly
in Middle Eastern countries—a scenario that hasn’t
changed much even well into the first decade of the twenty-first
century.

Opportunities in Petroleum (2)

Petroleum: A Chemical “Black Gold”
So, what is petroleum and where does it come from? By definition,
petroleum, in the strictest sense of the word, is crude oil as it comes
out of the ground. It is a mixture of several chemical compounds,
primarily hydrogen and carbon. In a broader sense, and for the purposes
of this book, petroleum also is defined as all hydrocarbons,
including oil, natural gas, natural gas liquids, and all related products.
Petroleum also can exist as a solid, such as the tar sands found
in some parts of Canada and the oil shale beds located in some
western states.
Even after two hundred years, the origin of black gold, as it is
sometimes called, remains the subject of debate. Since the midnineteenth
century, scientists have variously believed that petroleum
comes from coal, decayed animals and vegetables, and even
volcanic matter. Today, the debate still continues in some scientific
circles as to whether oil is organic (plant or vegetable matter) or
inorganic (not living).
The general consensus among the majority of the earth’s scientists,
however, is that the petroleum produced today was formed

over a period of millions of years when plant and animal matter was
compressed as it settled at the bottom of prehistoric seabeds. This
matter, covered with layers and layers of sediment, was changed
into hydrocarbons through a combination of factors, including bacteria,
heat, and pressure.
Oil was first believed to flow under the earth much like an
underground stream of water. Further study throughout the years
led scientists to learn that oil actually exists between geological
structures in areas called reservoirs. The Society of Petroleum Engineers
(SPE), one of the industry’s largest professional organizations,
compares a reservoir rock to a tray of marbles, with oil occupying
the open spaces between the grains of rock.
Oil reservoirs may be a few thousand or many thousands of feet
below the surface. How permeable—or how easily the oil or gas
flows through connecting pore spaces—determines how easy it is
to remove the petroleum from the ground. How petroleum is
found and removed from these reservoirs will be discussed later.
Petroleum First Used to Light Fires
Scientists believe that the earliest use of petroleum occurred when
natural seepages of both crude oil and natural gas were used by
primitive tribes to light their fires. According to several versions of
the story of the Great Flood, Noah used pitch—a form of natural
asphaltic petroleum—as a caulking material to waterproof his ark.
Indian tribes are said to have used asphalt from the seeps at Santa
Barbara, California, as a sealant for their canoes, as well as for war
paints and medicines. And archaeologists believe the ancient Egyptians
used the same substance as a lubricant on chariot wheels. The
Greeks are said to have used petroleum to set the sea on fire to
destroy a fleet of ships belonging to an enemy that was threatening
invasion.
It is thought that by the Middle Ages, Sicilians were gathering
oil off their coast to use as fuel for lamps. Europeans, in the meantime,
skimmed the natural springs for oil that they used for medicinal
purposes, as well as for fuel.
It was the Chinese, however, who first drilled for petroleum.
Using primitive drilling tools, they bored eight hundred feet into
the earth in 347 A.D.—fifteen centuries before the birth of the
modern-day petroleum industry!

Opportunities in Petroleum (1)

How We Use Petroleum
Products Every Day

The petroleum extracted from the earth touches our lives in
ways most of us can only imagine. This natural resource keeps our
economic engine running, provides the foundation for products
that make our lives easier, and allows us to live longer, quality lives.
In addition to fueling our cars, heating our homes, and cooking
our foods, did you know that petroleum products are the basis for
the heart valve replacements that may someday save our lives, the
DVDs we watch our favorite movies on, and even the shampoos
we use to wash our hair?
These petroleum products—primarily oil and natural gas—supply
65 percent of our nation’s energy as well as help generate the
electricity that powers our daily lives.

The United States is the third-largest oil producing country in
the world, with more than five hundred thousand producing wells
and approximately four thousand oil and natural gas platforms
operating in U.S. waters. Canada is the world’s third-largest producer
of natural gas and seventh-largest producer of crude oil.
Combined, the two countries produce about seven million barrels
of crude oil a day.
The United States also is one of the largest consumers of petroleum
products, though there is growing demand coming from
emerging economies such as China and India. In the United States
alone, about twenty million barrels are used each day—about three
gallons per person—according to the American Petroleum Institute
(API). The API is a national trade association that represents
all aspects of America’s oil and natural gas industry, and there is a
wealth of information on its website at www.api.org and related
sites at www.energytomorrow.org, www.adventuresinenergy.org,
and www.classroom-energy.org.
Oil provides about 40 percent of the energy Americans consume
and 97 percent of our transportation fuels. Natural gas provides 25
percent of our energy needs. Oil and natural gas are found all over
the world in varying concentrations. The United States imports
approximately 60 percent of its oil, with the majority coming from
Canada and Mexico, while 84 percent of our natural gas is domestically
produced.
The Energy Information Agency, the U.S. government’s independent
statistical and analytical agency within the U.S. Department
of Energy (www.eia.doe.gov), projects that the demand for
energy will grow at an average annual rate of 1.1 percent. Natural
gas demand is expected to continue to increase to thirty trillion
cubic feet (Tcf ) by the year 2020.

With the demand for petroleum increasing, the good news is
that there is an abundance of domestic oil and gas resources in the
United States. The latest estimates reveal that there are more than
131 billion barrels of oil and more than a thousand Tcf of natural
gas remaining to be discovered in the United States.
The amount here is enough oil to power 55 million cars for 30
years and heat 24 million homes for 30 years. And there is enough
natural gas to heat 60 million homes that use natural gas for 120
years.