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Oil and Gas – Black Gold! Presenter notes: Oil and Gas are natural resources of enormous economic importance. Together they provide about 60% of all the.

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Presentation on theme: "Oil and Gas – Black Gold! Presenter notes: Oil and Gas are natural resources of enormous economic importance. Together they provide about 60% of all the."— Presentation transcript:

1 Oil and Gas – Black Gold! 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). NASA

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

3 Origin (1): Chemistry Hydrocarbon Oil and gas are made of a mixture of Hydrocarbon Questions for discussion: What is oil and gas? Where does it come from? Presenter notes: As we begin to think about the origin of oil and gas, a basic question we need to answer is what exactly are oil and gas? Oil and gas are complicated mixtures of different hydrocarbons. A hydrocarbon is a large organic molecule. As the name suggests it is composed of hydrogen atoms attached to a backbone, or chain, of carbon atoms. Short chain hydrocarbons like methane are gases. Medium chain hydrocarbons like paraffin are liquids. Long chain hydrocarbons like bitumen are solids. When crude oil is extracted from the earth it may be a mixture of hydrocarbons in solid, liquid and gas states. 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. Crude Oil

4 Origin (2): Plankton 10,000 of these bugs would fit on a pinhead! 10,000 of these bugs would fit on a pinhead! Plant plankton Animal plankton Presenter notes: It may come as a surprise but most of the world’s oil and gas is made up of the fossil remains of microscopic marine plants and animals. That’s why oil and gas are often referred to as a fossil fuel. One of the most important group of plankton involved in the formation of oil and gas are single-celled marine ‘plants’ called dinoflagellates, though many types of animal plankton are also important. Some oil and gas may have also originated from the remains of land plants, but we will not discuss these types of deposits in this talk. Most oil and gas starts life as microscopic plants and animals that live in the ocean.

5 Origin (3): Blooms Today, most plankton can be found where deep ocean 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 Presenter notes: In certain parts of the world’s oceans, plankton occurs in enormous quantities, or blooms. Exactly where those plankton blooms occur is controlled by ocean currents. The richest sites are where cold, nutrient rich waters rise to the surface from the deepest parts of the ocean. The nutrients found in these ‘upwelling zones’ feed plankton and allow them to reproduce quickly. A single litre of seawater may contain several million dinoflagellates. Where these plankton occurs in high numbers they may turn the water red. This phenomenon is known as red tide. © Miriam Godfrey Dinoflagellate bloom

6 Origin (4): On the sea bed When the plankton dies it rains down on sea bed to form an organic mush If there are any animals on the sea bed these will feed on the organic particles Presenter notes: When plankton dies it slowly settles to the sea bed where it forms an organic mush. Usually there are lots of animals living on the sea floor that feed on this material. One important group is the polychaete worms. These are detritivores, which means they eat the dead and decay remains of other organisms Sea bed

7 Origin (5): Black Shale However, if there is little or no 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 Presenter notes: However, under certain conditions there may be very little oxygen on the sea floor. This may be because the ocean is deep and stagnant and oxygen has not been mixed down from the surface waters. No animal life can survive where the sea bed is completely lacking oxygen. Without animals to eat the dead plankton, the organic mush builds up on the sea bed. Where ocean sediment contains more than 5% organic mush it eventually forms a rock known as a Black Shale. The black colour comes from the dark organic matter that it contains. As we will see, Black Shale is what makes oil and gas. © Earth Science World Image Bank

8 Origin (6): Cooking As Black Shale is buried, it is heated.
Organic matter is first changed by the increase in temperature into kerogen, which is a solid form of hydrocarbon Kerogen Around 90°C, it is changed into a liquid state, which we call oil Oil 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. Around 150°C, it is changed into a gas Gas A rock that has produced oil and gas in this way is known as a Source Rock

9 Origin (7): Migration 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 Presenter notes: The hot oil and gas does not stay in the Source Rock for long. As the hydrocarbons are less dense than the water in the source rocks that surround them, they gradually migrate upwards through the rock in much the same way that the less dense air bubbles of an underwater diver will rise through water. The migrating oil and gas may travel up through the spaces between the sand grains that make up the rock (called pores) or they may find their way up through cracks, fissures, and faults in the overlying rocks. As we will see when we look at oil exploration, eventually oil and gas get trapped in pockets of rock known as reservoirs. Rising oil The rising oil and gas eventually gets trapped in pockets in the rock called reservoirs

10 Origin (8): Ancient Earth
© Ron Blakey, Arizona Flagstaff During mid-Mesozoic times around 150 million years ago, conditions were just right to build up huge thicknesses of Black Shale source rocks The world’s main oil deposits all formed in warm shallow seas where plankton bloomed but bottom waters were deoxygenated Presenter notes: Most of the Source Rocks that gave rise to our present day oil and gas fields were formed in the middle of the Mesozoic Era about 150 million years ago. At that time conditions were just right to build up huge thicknesses of Black Shale. On the one hand, the oceans were unusually warm, promoting vast plankton blooms. On the other hand, oxygen was mostly absent on the ocean floors so most of the plankton that settled on the bottom accumulated. There were no animals around to eat it up. The map on the left hand side shows what the Earth looked like 150 million years ago. The red circles show where the world’s main oil deposits were formed in warm, shallow, deoxygenated seas. Ancient Earth

11 Origin (9): Source of North Sea Oil
© Ian and Tonya West Black Shale Presenter notes: A real example of a Black Shale that has formed a major oil deposit is the Jurassic Kimmeridge Clay. This is a 150 million year old shale that contains up to 50% organic matter. It stretches from Dorset in southern England right across to Norway. It was this Black Shale which was the main Source Rock for the North Sea oil and gas province. 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

12 Practical Exercise 1 Renewable versus Non-Renewable Energy
Presenter notes: The Kimmeridge Clay of Dorset took an enormous amount of geological time to form (perhaps as long as 5-10 million years). After that it took still many more million years before it was sufficiently cooked to start producing oil and gas. In the first Practical Exercise we will try and calculate exactly how much time it takes to form a watt of energy from oil and gas by biological and geological processes. We will compare our figures with other energy sources like solar power and think about the meaning of Non-renewable and Renewable Energy.

13 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 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 click on Earth-related Activities, and look under the Resource and Environment section. Dome Trap Permeable

14 Exploration and Production (2): Reservoir Rocks
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 As oil migrates it fills up the pores (oil-filled pores shown in black) Presenter notes: The permeable rocks than contain oil and gas within the oil trap are known as the Reservoir Rock. Reservoir rocks have lots of interconnected holes called pores. These allow them to absorb the oil and gas like a sponge. The picture on the left shows a good reservoir rock with lots of pore spaces filled with water shown in blue. As we advance the slide, we see the pores gradually fill with oil. This rock can soak up a large amount of oil. This is a highly magnified picture of a sandy reservoir rock (water-filled pores are shown in blue) Earth Science World Image Bank Image #h5innl

15 Exploration and Production (3): Seismic Surveys
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!) Earth Science World Image Bank Image #h5inor Earth Science World Image Bank Image #h5inpj 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

16 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 Presenter notes: A potential oil trap is called a Prospect. Once a prospect has been identified, the next stage is to drill a hole into the top of the trap to see if it contains oil and gas. It is incredibly expensive to a drill hole. On an offshore rig is may cost $10,000 for every metre drilled. So if you are going to drill a hole 5000 metres underground it’s going to cost you 20 million pounds/ 25 million dollars! Consequently geologists have to be pretty confident that they going to hit oil. If they drill too many ‘dry holes’ they will soon lose their jobs!

17 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. Presenter: If the geologist is lucky, he or she will strike oil and gas. A hole which contains oil and gas is called a well. The oil and gas is under considerable pressure in the Earth’s crust so once a well is drilled into the reservoir rock, the oil and gas rapidly rises to the surface. However, as more and more oil and gas comes out of the well, eventually the pressure drops and flow slows down. To get the remainder of the oil and gas out of the reservoir rock, a second hole is drilled adjacent to the first. Hot water or steam are pumped down the hole and this forces the oil and gas still trapped in the rock up the original well. This technique is known as enhanced recovery. © California Department of Conservation

18 Exploration and Production (6): Transport
Trans-Alaskan Pipeline 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 Presenter notes: Once the oil and gas has been extracted from the ground, it must be safely transported from the well to the refinery where it will be processed. Oil is usually transported from the well to the refinery using pipelines. These may stretch over land or be laid over the sea bed. A spectacular example of an oil pipeline is the Trans-Alaskan pipeline which carries oil and gas for 1300 kilometres across Arctic permafrost. Another way that oil and gas are transported is by means of massive oil tankers. These gigantic vessels can carry up to half a million tonnes of oil. United States Geological Survey

19 Exploration and Production (7): At the Refinery
Distillation Plant Oil refinery Car fuel Jet fuel Presenter notes: At the refinery, the crude oil, which also contains a lot of gas, is processed. This involves separating out all the different hydrocarbons in the crude oil. To do this, the crude oil is heated in a furnace and then passed through a cooling tower. The method relies on the fact that different hydrocarbons have different boiling points. Consequently the heavy hydrocarbons like bitumen with high boiling points accumulate at the bottom of the cooling tower. Light hydrocarbons like paraffin with low boiling points accumulate near the top of the top. This process is known as fractional distillation. The different hydrocarbons have different uses. For example, bitumen is used to surface roads while paraffin is mostly used as aviation fuel. Road tar 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

20 Exploration and Production (8): Early History
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. Abraham Gesner ( ) Presenter notes: People have been using oil and gas for four thousand years. However, the modern era of oil and gas exploration and production didn’t begin until That year, Abraham Gesner, a geologist based in New Brunswick, Canada figured out how to distill paraffin from crude oil. This made crude oil far more useful and triggered a global boom is exploration and production. California became an early centre of oil prospecting and was famous for its gushers. These were pressurized oil reservoirs, which when drilled, spurted massive fountains of oil into the air! Californian oil gusher

21 Exploration and Production (9): The Situation Today
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)? USGS Global oil and gas occurrences are now well understood (provinces shown in green). Only Antarctica and the Arctic remain unexplored.

22 Practical Exercise 2 The Oil Prospector Game
Presenter notes: Now you know about the geological factors that control the distribution of oil and gas in the Earth, you should be able to locate oil and gas fields yourself! In Practical Exercise 2, you will try your hand as an exploration geologist as you play the ‘Prospector Game’. Will you make your fortune or will you get the sack?

23 Politics (1): Fuel source
84% of crude oil is refined into fuel, principally for cars and planes 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? Demand is ever increasing, especially due to growth of Chinese economy

24 Politics (2): Other uses Food additives CDs and DVDs Presenter notes: Less well known is the fact that many household items are also made from oil and/or gas. Did you know that CDs and DVDs, plastic containers, fertilizers, pesticides, food additives, synthetic clothing, dyes, and detergents, all to a large degree, contain byproducts of oil and gas? In fact 16% of all oil and gas is used to make these and many other products. As a society we totally rely on oil and gas in our day-to-day lives. Fertilizers and Pesticides Plastic The remaining 16% of crude oil is used for a range of purposes shown above as well as synthetic fibres, dyes and detergents

25 Politics (3): Main Producers - OPEC 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 Presenter notes: So, if oil and gas is of such importance to society, it’s important to understand who controls its production. Today, oil production is governed by three major groups who together produce 75% of the global supply. The single largest oil producer is the Organization of Petroleum Exporting Countries, also known as OPEC. Together these 13 countries produce 36% of the world’s oil, or to put it another way, some 32 million barrels of oil per day (based 2008 figures). The largest producers in OPEC are four Arab states, namely Saudi Arabia, Iran, the United Arab Emirates, and Kuwait, although Venezuela is also a major producer.

26 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 Presenter notes: The other two major producers are the Organization for Economic Co-operation and Development, also known as OECD, and the states of the former Soviet Union. OECD produces 24% of the world’s oil supply, or 21 million barrels per day. Within OCED, the biggest single producer is the USA, but other major players include Mexico, Canada, and the UK. The states of the former Soviet Union supply a further 15% of the global production.

27 Politics (5): Supply and Demand 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) Presenter notes: In 2007, the global consumption of oil was about 80 million barrels per days. Every year, this rate of consumption is rising by about 1.2 million barrels per day. The single largest consumers of oil is the USA, which sucks up 24% of the total oil produced. However, the oil consumption of the USA is slightly declining at the moment. The annual growth in global oil consumption is mostly being driven by China, who shows big year-on-year increases in usage. Geologists believe that the nations of OPEC and OECD cannot indefinitely increase the rate of oil production. At most, production rate can only be increased by another 2.5 million barrels per day. Consequently there may be a big squeeze in the availability of oil in the coming decade. 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

28 Politics (6): Peak Oil Era of energy crisis Hubbert (1903-1989) Era of energy crisis Presenter notes: This global squeeze in oil supply was predicted more than fifty years ago by a geologist called M. K. Hubbert. In 1956, Hubbert predicted that the world would reach peak rates of oil supply about the Year Thereafter oil would become increasingly scarce. This would trigger an energy crisis, result in widespread power blackouts, and see the cost of fuel rise astronomically. Hubbert’s idea of ‘Peak Oil’ is controversial but supported by some scientists and politicians. Hubbert ( ) 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

29 Politics (7): Rising Oil Prices
$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? Presenter notes: One piece of evidence that suggests that Hubbert may have been right is rising cost of oil. For the past few years, oil prices have rapidly increased. In 1999, oil was priced at less than $10 per barrel but since then the price has sky-rocketed to $139 per barrel by June 2008 and will probably go even higher. Is this due to a squeeze in availability, as Hubbert suggested, or are other political or economic factors to blame?

30 Politics (8): Canada’s Tar Sands
NASA 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! 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.

31 Politics (9): Global Warming 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? 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.

32 Oil and Gas Presenter notes: In this talk we have discussed how oil and gas are formed, how geologists find and produce it, and why it is of such political importance in modern society. I hope you have learned just how much we rely on this precious non-renewable resource and how pressing is the need to swiftly find alternative sources of energy. Oil and gas has been fundamental for the growth of society for the past fifty years, but in a further fifty years we will need to have weaned ourselves off our thirst for oil and gas. NASA

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