Biogenic theory

Most geologists view crude oil and natural gas as the product of compression and heating of ancient organic materials over geological time. Oil is formed from the preserved remains of prehistoric zooplankton and algae which have been settled to the sea (or lake) bottom in large quantities under anoxic conditions. Terrestrial plants, on the other hand, tend to form coal. Over geological time this organic matter, mixed with mud, is buried under heavy layers of sediment. The resulting high levels of heat and pressure cause the organic matter to chemically change during diagenesis, first into a waxy material known as kerogen which is found in various oil shales around the world, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis.

Geologists often refer to an “oil window” which is the temperature range that oil forms in—below the minimum temperature oil remains trapped in the form of kerogen, and above the maximum temperature the oil is converted to natural gas through the process of thermal cracking. Though this happens at different depths in different locations around the world, a ‘typical’ depth for the oil window might be 4–6 km. Note that even if oil is formed at extreme depths, it may be trapped at much shallower depths, even if it is not formed there (the Athabasca Oil Sands is one example).
Hydrocarbon trap.
Hydrocarbon trap.

Because most hydrocarbons are lighter than rock or water, these often migrate upward through adjacent rock layers until they either reach the surface or become trapped beneath impermeable rocks, within porous rocks called reservoirs. However, the process is not straightforward since it is influenced by underground water flows, and oil may migrate hundreds of kilometres horizontally or even short distances downward before becoming trapped in a reservoir. Concentration of hydrocarbons in a trap forms an oil field, from which the liquid can be extracted by drilling and pumping.

Three conditions must be present for oil reservoirs to form: first, a source rock rich in organic material buried deep enough for subterranean heat to cook it into oil; second, a porous and permeable reservoir rock for it to accumulate in; and last a cap rock (seal) or other mechanism that prevents it from escaping to the surface. Within these reservoirs fluids will typically organize themselves like a three-layer cake with a layer of water below the oil layer and a layer of gas above it, although the different layers vary in size between reservoirs.

The vast majority of oil that has been produced by the earth has long ago escaped to the surface and been biodegraded by oil-eating bacteria. Oil companies are looking for the small fraction that has been trapped by this rare combination of circumstances. Oil sands are reservoirs of partially biodegraded oil still in the process of escaping, but contain so much migrating oil that, although most of it has escaped, vast amounts are still present – more than can be found in conventional oil reservoirs. On the other hand, oil shales are source rocks that have never been buried deep enough to convert their trapped kerogen into oil.

The reactions that produce oil and natural gas are often modeled as first order breakdown reactions, where kerogen is broken down to oil and natural gas by a set of parallel reactions, and oil eventually breaks down to natural gas by another set of reactions. The first set was originally patented in 1694 under British Crown Patent No. 330 covering,

“a way to extract and make great quantityes of pitch, tarr, and oyle out of a sort of stone.”

The latter set is regularly used in petrochemical plants and oil refineries.

Bissonet Humble Petroleum

Bissonet Lease at Humble Salt Dome Field

History

Humble Salt Dome Field was discovered in the early 1900’s. Bubbles of oil were first observed seeping from the ground near the San Jacinto river in 1887. Humble became an oil boomtown in the early 1900’s when oil was first produced here. The first oil was produced a couple years earlier after the famous Spindletop discovery in Beaumont Texas.

In the fall of 1902, George Hart spudded a well in the field on evidence of escaping gas in the area. His operation was halted by a blowout, an unexpected volume of gas under pressure, that forced the drilling equipment out of the hole. Blowouts were encountered in several wells in the part of the field later called “the hill” and drilled in the summer of 1904 by C.E. Barrett of Houston. Despite the menace of blowouts, some success was found in the early field when Higgins Oil and Fuel Company brought in a large-volume gas well half a mile Southeast of Barrett wells in October 1904. By the end of the year, Humble field reported two sporadically-producing oil wells that had yielded 2,000 barrels of oil. Since none of the crude had been sold, it was stored in earthen tanks for use in the field. Even though blowouts hampered field development, their threat was minimized by the invention of a blowout preventer in 1905. D.R. Beatty used the blowout preventer on the #2 Fee Well which gave up the first gusher with a potential of 8,500 barrels of oil a day from a depth of 1,012 feet.

From 1905 through 1913, development of the field concentrated on the caprock of the salt dome, producing at depths of 1,100 – 1,200 ft. When deep production was found on the dome flanks at Sour Lake Field, operators in Humble field drilled into zones below 2,500 ft., hoping to emulate the success at Sour Lake. In November 1913 the effort was rewarded when Producers Oil #11 Carroll cam in with a potential 10,000 barrels of oil per day at a total depth of 2,700 ft. Forty-six wells were completed before the end of the year, and production reached nearly 2.8 million barrels of oil. In 1935 the Wilson Oil House Well #1 came in at 1500 bopd from the 2,500 ft. sand on the north flank of the field.

Geological estimation of total reserves: 50,000,000 barrels of oil.

Estimated Payout: somewhere between 100 – 300 barrels of crude oil per day.

Bissonet Humble Petroleum

Bissonet Lease at Humble Salt Dome Field

History

Humble Salt Dome Field was discovered in the early 1900’s. Bubbles of oil were first observed seeping from the ground near the San Jacinto river in 1887. Humble became an oil boomtown in the early 1900’s when oil was first produced here. The first oil was produced a couple years earlier after the famous Spindletop discovery in Beaumont Texas.

In the fall of 1902, George Hart spudded a well in the field on evidence of escaping gas in the area. His operation was halted by a blowout, an unexpected volume of gas under pressure, that forced the drilling equipment out of the hole. Blowouts were encountered in several wells in the part of the field later called “the hill” and drilled in the summer of 1904 by C.E. Barrett of Houston. Despite the menace of blowouts, some success was found in the early field when Higgins Oil and Fuel Company brought in a large-volume gas well half a mile Southeast of Barrett wells in October 1904. By the end of the year, Humble field reported two sporadically-producing oil wells that had yielded 2,000 barrels of oil. Since none of the crude had been sold, it was stored in earthen tanks for use in the field. Even though blowouts hampered field development, their threat was minimized by the invention of a blowout preventer in 1905. D.R. Beatty used the blowout preventer on the #2 Fee Well which gave up the first gusher with a potential of 8,500 barrels of oil a day from a depth of 1,012 feet.

From 1905 through 1913, development of the field concentrated on the caprock of the salt dome, producing at depths of 1,100 – 1,200 ft. When deep production was found on the dome flanks at Sour Lake Field, operators in Humble field drilled into zones below 2,500 ft., hoping to emulate the success at Sour Lake. In November 1913 the effort was rewarded when Producers Oil #11 Carroll cam in with a potential 10,000 barrels of oil per day at a total depth of 2,700 ft. Forty-six wells were completed before the end of the year, and production reached nearly 2.8 million barrels of oil. In 1935 the Wilson Oil House Well #1 came in at 1500 bopd from the 2,500 ft. sand on the north flank of the field.

Geological estimation of total reserves: 50,000,000 barrels of oil.

Estimated Payout: somewhere between 100 – 300 barrels of crude oil per day.

Recent Outlook Industry of Petroleum

Energy Information Administration
Official Energy Statistics from the U.S. Government

Trends in energy supply and demand are affected by many factors that are difficult to predict, such as energy prices, U.S. economic growth, advances in technologies, changes in weather patterns, and future public policy decisions. It is clear, however, that energy markets are changing gradually in response to such readily observable factors as the higher energy prices that have been experienced since 2000, the greater influence of developing countries on worldwide energy requirements, recently enacted legislation and regulations in the United States, and changing public perceptions of issues related to the use of alternative fuels, emissions of air pollutants and greenhouse gases, and the acceptability of various energy technologies, among others The Energy Information Administration projects increased consumption of biofuels (both ethanol and biodiesel), growth in coal-to-liquids (CTL) capacity and production, growing demand for unconventional transportation technologies (such as flex-fuel, hybrid, and diesel vehicles), growth in nuclear power capacity and generation, and accelerated improvements in energy efficiency throughout the economy.

Despite the rapid growth projected for biofuels and other nonhydroelectric renewable energy sources and the expectation that orders will be placed for new nuclear power plants for the first time in more than 25 years, oil, coal, and natural gas still are projected to provide roughly the same 86-percent share of the total U.S. primary energy supply in 2030 that they did in 2005 (assuming no changes in existing laws and regulations). The expected rapid growth in the use of biofuels and other nonhydropower renewable energy sources begins from a very low current share oftotal energy use; hydroelectric power production, which accounts for the bulk of current renewable electricity supply, is nearly stagnant; and the share of total electricity supplied from nuclear power falls despite the projected new plant builds, which more than offset retirements, because the overall market for electricity continues to expand rapidly in the projection.

Science of Petroleum Holdings Oil

Most geologists view crude oil, like coal and natural gas, as the product of compression and heating of ancient organic materials over geological time scales. According to this theory, it is formed from the decayed remains of prehistoric small marine animals and algae. (Terrestrial plants tend to form coal.) Over millennia this organic matter, mixed with mud, is buried under thick sedimentary layers of material. The resulting high levels of heat and pressure cause the remains to metamorphose, first into a waxy material known as kerogen, and then into liquid and gaseous hydrocarbons in a process known as catagenesis. Because hydrocarbons are less dense than the surrounding rock, these migrate upward through adjacent rock layers until they become trapped beneath impermeable rocks, within porous rocks called reservoirs. Concentration of hydrocarbons in a trap forms an oil field, from which the liquid can be extracted by drilling and pumping.

Geologists also refer to the “oil window”. This is the temperature range that oil forms in-below the minimum temperature oil does not form, and above the maximum temperature natural gas forms instead. Though this corresponds to different depths for different locations around the world, a ‘typical’ depth for the oil window might be 4 – 6 km. Note that oil may be trapped at much shallower depths, even if it is not formed there. Three conditions must be present for oil reservoirs to form: a rich source rock, a migration conduit, and a trap (seal) that concentrates the hydrocarbons.

The reactions that produce oil and natural gas are often modeled as first order breakdown reactions, where kerogen breaks down to oil and natural gas by a large set of parallel reactions, and oil eventually breaks down to natural gas by another set of reactions.

Invest in oil or in gas

ome of the world’s wealthiest individuals and companies made their fortunes in oil and natural gas. Investments in this area have the potential to be very profitable, sometimes generating multiple returns on investment. Oil and gas is also an investment that is particularly timely right now, for some of the following reasons:

 

1. U.S. domestic oil production increased throughout the 1950’s and 1960’s. Writing in the 1950’s, American geologist M. King Hubbert predicted that the production of U.S. oil fields would peak in the early 1970’s. It happened that U.S. production began to decline in 1970. Hubbert’s key insight was that production peaks once half the oil in any field has been extracted. Far more oil is extracted in the early stages of production than later on. In 1970, the U.S. satisfied about 70% of its needs from domestic oil production. Now, however, the picture is much bleaker, as the U.S. satisfies about 35% of its needs from domestic production and imports the rest.
2. Since 1969, the North Sea utilizing advanced technology has produced about 15 billion barrels of oil, helping Norway become rich, and Britain to shed its status as a third rate economy. Production in the British sector, however, has already started to decline and Norway close to peak production. The North Sea has shown that technology is a double-edged sword by extracting more oil up front, but hastening the day of reckoning when production starts to decline.
3. Princeton professor Kenneth S. Deffeyes, a colleague of Hubbert, sought to apply Hubbert’s geological precepts on a worldwide basis. Other geologists have made the same effort, and while they do not all agree on the same year, the general conclusion is that world oil production is now close to peaking!
4. The reserves of the OPEC countries are overstated. Quotas for the members are determined by production capacity, and production capacity is directly related to reserves. In 1988 for example, Iraq announced that their reserves had more than doubled to 100 billion barrels. This was a miraculous feat, despite continued production and the total absence of exploration. The Saudis, Iraq, and Iran have all engaged in overstating reserves.
5. China’s economy is growing by leaps and bounds, and has an insatiable thirst for energy. If China’s per capita energy consumption comes anywhere close to that of the U.S., their need for oil will surpass that of the U.S.
6. Present world oil production is around 77 million barrels per day, and the International Energy Agency projects that world oil production will peak at around 80 million barrels per day.
7. Oil from new exploration, including any efforts to open up the Arctic National Wildlife Refuge, will barely make a dent in our growing need for energy.