Lecture 20 - The Oil Industry PDF

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Lecture 20: The Oil and Gas Industry

Oil wells drilled in China (4C)  Baghdad streets (8C)  Baku oil fields (9C)  Betton’s British Oil (1786)  Kier’s Rock Oil (1848) (Samuel Kier)  Senneca Oil Company (1858) (Edwin Drake)  Standard Oil Company (1870) (John D. Rockerfeller.)

8. Global Primary Energy Consumption:  

Most of the world’s energy comes from fossil fuels (oil, gas, coal.) World energy consumption continues to rise (as population grows.)

10. OPEC: The Organisation of the Petroleum Exporting Countries. OPEC mostly Middle East, West Africa, Venezuela. Major gas sources tend to be there too. World’s Production & Consumption  

Main ‘economic engines’ of the world are significant net importers of oil/gas. (eg. USA, Western Europe, Japan.) Most of the world’s remaining oil/gas reserves lie in politically relatively unstable regions. (eg. Middle East, West Africa.)

12. CRUDE OIL PRICES SINCE 1861:

FACTORS CONTROLLING OIL PRICE INCLUDE: • Wars and invasions • Economic conditions • Threats of shortage • Reserves and competing alternative forms of energy

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Early days  complicated technique, not well understood ∴ price higher. Technological innovation starts to make it cheaper. Spikes  wars, economic downturns. 1973  OPEC threatened to reduce supply unless world paid more ∴ price increased from $10 to $50. Controlled world oil supply and could charge as much as world market could bear. If price goes too high, cause global economic recession ∴ demand falls and price has to fall also. Recently $100 down to $40 today, coinciding with global recession.

13. IRISH ENERGY CONSUMPTION AND IMPORT DEPENDENCY SEAI: Sustainable Energy Association of Ireland. Renewables: in Ireland mostly wind turbines & some hydroelectricity (eg. Ardnacrusha.) Ireland, until very recently, imports between 80-90% of its energy. Particularly exposed/vulnerable compared to the EU average (50 %.) 2nd most oil-dependent country in the EU. Corrib Gas Field recently started, reduces the precarious position.

15. IRISH OFFSHORE SEDIMENTARY BASINS    

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3 Irish producing gas fields (Kinsale Head, Ballycotton & Seven Heads) in the North Celtic Sea Basin. One gas field: Corrib, started production end 2015. Formation of these basins represented a time when crust extended. Early indication of opening of Atlantic Ocean. Continental crust pulling apart, thinning the crust. Around us, places where continental crust pulled apart, becoming thinner. Sediment from Ireland and other landmasses accumulated in these depressions and gradually matured to become oil & gas. Compared to eg. The North Sea, these areas have not been explored very much. Water here very deep  expensive and challenging to explore.

17. Middle East, though declined proportionally since 1994, still by far the world’s largest producer. Followed by South & Central America, North America, and Europe & Eurasia.

18. Most Oil Reserves: Saudi Arabia, FSU (Former Soviet Union (Eastern Europe)), USA, Iran, Iraq.

21. Oil and gas are finite resources. Timing of peak oil production is not quite agreed on but soon.

22. Exploiting Unconventional Oil and Gas Tar sands, oil and gas shales have reserves comparable to conventional oil. (Problems: environmental challenges, fracking, open pit mining.) Coalbed methane (Problem: low permeability makes this hard to extract.) Methane hydrates on sea and ocean floors (Problem: abundant but difficult to produce.)

23. Lignite: Coal that’s not quite made. Q: How much fossil fuel can we afford to burn? A: You cannot burn all the known oil, gas & coal reserves and stay within the limit.

Summary:      

Virtually all the world’s oil and gas occurs in sedimentary basins, mostly in politically unstable regions. Oil and gas are very important as a fuel for economic growth. Ireland, dependent upon imported oil and gas, is extremely vulnerable in terms of security of energy supply. The Irish offshore contains a number of large and lightly explored sedimentary basins, similar in age and structure to other petroliferous basins (ie. In the North Sea.) Oil and gas are likely to remain the major energy sources for at least the next decade but prices may fluctuate wildly as supply and demand vary. The global environmental cost of burning all reserves of oil and gas may be too high, unless a large proportion of the emitted CO2 can be kept out of the atmosphere....