On August 27, 1859, Edwin Drake struck oil sixty-nine feet below the surface of the earth near Titusville, Pennsylvania. This was the first successful modern oil well, which ushered in the "Age of Petroleum." Not only did petroleum help meet the growing demand for new and better fuels for heating and lighting, but it also proved to be an excellent fuel for the internal combustion eng…
While crude oil is usually dark when it comes from the ground, it may also be green, red, yellow, or colorless, depending on its chemical composition and the amount of sulfur, oxygen, nitrogen, and trace minerals present. Its viscosity (thickness, or resistance to flow) can range from as thin as water to as thick as tar. Crude oil is refined, or chemically processed, into finished petroleum produc…
Many of the uses for petroleum are well known: gasoline, diesel fuel, jet fuel, and lubricants for transportation; heating oil, residual oil, and kerosene for heat; and heavy residuals for paving and roofing. Petroleum by-products are also vital to the chemical industry, ending up in many different foams, plastics, synthetic fabrics, paints, dyes, inks, and even pharmaceutical drugs. Many chemical…
Before oil can be used by consumers, crude oil, lease condensate, and natural gas plant liquids must be processed into finished products. The first step in refining is distillation, in which crude oil molecules are separated according to size and weight. During distillation, crude oil is heated until it turns to vapor. (See Figure 2.3.) The vaporized crude enters the bottom of a distillation colum…
In 2003, 149 refineries were operating in the United States, a drop from 336 in 1949 and 324 in 1981. (See Table 2.1.) Refinery capacity in 2003 was about 16.8 million barrels per day, below the 1981 peak of 18.6 million barrels. As of 2003 U.S. refineries were operating near full capacity. Utilization rates generally increased from a low of 68.6% in 1981—a period of low demand because FIGU…
As mergers in the oil industry restructure companies and make combined operations more efficient, not only are there fewer refineries, there are fewer jobs. From 1982 to 1992, for example, there was a loss of 28% of petroleum refining jobs. In 1996, after a decade of low oil prices, drilling slowed and the demand for rigs collapsed. New rig construction stopped altogether. Thousands of rigs were l…
U.S. production of petroleum reached its highest level in 1970 at 11.3 million barrels per day total. (See Table 2.2.) Of that amount, 9.6 million barrels per day were crude oil. (See Figure 2.4.) After 1970 domestic production of petroleum declined. By 2003 U.S. domestic production averaged about 7.5 million barrels per day. (See Table 2.2.) Of that amount, 5.7 million barrels per day were crude …
In 2003 most petroleum was used for transportation (66%), followed by industrial use (25%), residential use (4%), electric utilities (3%), and commercial use (2%). (See Figure 2.8.) Most petroleum used in the transportation sector is for motor gasoline. In the residential and commercial sectors, distillate fuel oil (refined fuels used for space heaters, diesel engines, and electric power generatio…
Total world petroleum production has increased somewhat steadily, reaching 69.5 million barrels per day in 2003, after a downturn in the early 1980s. (See Table 2.3.) The major producers in 2003 were, from most to least, Saudi Arabia, Russia, the United States, Iran, China, Mexico, Norway, United Arab Emirates, Venezuela and Canada, and Nigeria and Kuwait. (See Figure 2.9.) Together, Saudi Arabia,…
Around the world there are inequities between those countries that use petroleum and those that possess it. Countries with surpluses (Saudi Arabia, for example) sell their excess to others that need more than they can produce (the United States, China, Japan, and western European countries). Petroleum is sold as crude oil or as refined products. World trade has been moving toward refined products,…
In the 1970s the United States and its leaders were very concerned that so much of the U.S. economic structure, based heavily on oil, was dependent upon the decisions of OPEC countries. Oil resources became an issue of national FIGURE 2.8 security, and OPEC countries, especially the Arab members, were often portrayed as potentially strangling the U.S. economy. The decisions of the Ronald Reag…
The EIA, in its Annual Energy Outlook 2004, projected that domestic crude oil production in the lower forty-eight states would increase from 4.6 million barrels per day in 2002 to 5.2 million barrels per day in 2008, then decline to 4.1 million barrels per day in 2025. The projected peak in production in 2008 is attributed to offshore production. The EIA projects that total offshore oil production…
In 1923 the Warren G. Harding administration set up the Petroleum Reserve to ensure that the U.S. Navy would have adequate fuel in the event of war. In 1975, in response to the growing concern over America's energy dependence, Congress turned the Strategic Petroleum Reserve (SPR) over to the Department of the Interior under the Energy Policy and Conservation Act (PL 94–163). An addit…
The law of supply and demand usually explains oil price changes; the price of goods reflects a relationship TABLE 2.4 FIGURE 2.10 FIGURE 2.11 between the supply (availability) and the demand (need). Higher prices increase production, as it becomes profitable to operate more expensive wells, and reduce demand, as consumers lower usage and increase conservation FIGURE 2.12 e…
Transporting oil carries significant environmental risks. According to the U.S. Department of the Interior, the cause of most transportation spills is oil tanker accidents, such as the grounding of the Exxon Valdez in 1989. A number of events have influenced American attitudes toward oil production and use. One of the most notable occurred in March 1989, when the Exxon Valdez oil tanker hit a reef…
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