Life is Good, Life is Crude

The world consumes about 88 million barrels each day,  petroleum is used mostly  by volume for producing fuel oil and petrol,  both important primary energy sources.  84% by volume of the hydrocarbons present in petroleum is converted into energy-rich fuels (petroleum-based fuels), including petrol, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas.  The lighter grades (Light Sweet Crude) of crude oil produce the best yields of these products, but as the world’s reserves of light and medium oil are depleted, oil refineries are increasingly having to process heavy oil and bitumen, and use more complex and expensive methods to produce the products required.

Because heavier crude oils have too much carbon and not enough hydrogen, these processes generally involve removing carbon from or adding hydrogen to the molecules, and using fluid catalytic cracking to convert the longer, more complex molecules in the oil to the shorter, simpler ones in the fuels.

In Canada, bitumen is considered a sticky, black, tar-like form of crude oil which is so thick and heavy that it must be heated or diluted before it will flow.  Venezuela also has large amounts of oil in the Orinoco oil sands, although the hydrocarbons trapped in them are more fluid than in Canada and are usually called extra heavy oil.  These oil sands resources are called unconventional oil to distinguish them from oil which can be extracted using traditional oil well methods. Between them, Canada and Venezuela contain an estimated 3.6 trillion barrels of bitumen and extra-heavy oil, about twice the volume of the world’s reserves of conventional oil.

Let’s take a look at all of this and see how it is going,  in your neck of the woods.

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After the collapse of the OPEC-administered pricing system in 1985, and a short-lived experiment with netback pricing, oil-exporting countries adopted a market-linked pricing mechanism.  First adopted by PEMEX in 1986, market-linked pricing was widely accepted, and by 1988 became and still is the main method for pricing crude oil in international trade.  The current reference, or pricing markers, are Brent, WTI, and Dubai/Oman.

This is one of the largest ecological disasters in the world.  As a bitter dispute over who is at fault rages, this report takes a powerful grassroots look at 50 years of devastation in the Niger Delta.

Aerial shots show vast black islands surrounded by shimmering slicks of oil. This is what much of the Niger Delta looks like after what environmentalists say is “the equivalent of one Exxon Valdez every year”.

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Peak Oil

Peak Oil is the scientific projection that future petroleum production (whether for individual oil wells, entire oil fields, whole countries, or worldwide production) will eventually peak and then decline at a similar rate to the rate of increase before the peak as these reserves are exhausted.  The peak of oil discoveries was in 1965, and oil production per year has surpassed oil discoveries every year since 1980.

The International Energy Agency (IEA) says production of conventional crude oil peaked in 2006.  Since virtually all economic sectors rely heavily on petroleum, peak oil could lead to a partial or complete failure of markets or, simply an orderly transition to 100% renewable energy, within as short as a decade.

In an effort to hold oil companies to a higher standard in the Arctic Ocean, a coalition of conservation groups announced Monday (7/9/12) that  they are suing to challenge the federal government’s approval of oil spill cleanup plans for Shell Alaska’s upcoming operations in the Beaufort and Chukchi seas.

The last broken-ice cleanup drills in the Alaskan Arctic using skimmers and booms were conducted in 2000 in advance of another company’s drilling operations and were largely considered a failure.

We’re going deeper for Sweet Crude the best,  but oops!

Update on the Gulf.

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Heavy fuel

Petroleum products, in general, whether diesel oil, lubricating oil, light fuel oil or heavy fuel oil, are composed of two major elements, carbon and hydrogen.  The combination of these two elements is called a hydrocarbon.  Its ultimate source is crude oil as found in its natural states in various geological formations throughout the world.

The US military has made an extraordinary effort to convert all of its gas-powered equipment to operate on one fuel.  It’s an initiative termed as “One Fuel Foreword”.  There are a few different types of fuels that fall in the category of “Heavy Fuel”.  The largely Kerosene based JP8 is one of the primary fuels used for this initiative.  The reason for using this fuel over gasoline is the fact that it is very hard to ignite and it can sit in storage containers for a very long time without degrading.  This makes it relatively safe and reduces the risk of fire on a ship or base.

Heavy fuel is typically used in compression ignition engines because it is more likely to ignite under high pressures.  A compression ignition engine is commonly called a Diesel engine and strapped with a turbo,  well you got something.

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