Fossil Energy Facts  

Canadian Insight

Last update, Monday, January 25, 2021

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Any organic compound composed of carbon and hydrogen is classified as a hydrocarbon. One of the simplest hydrocarbons is methane and one of the most complex is crude oil. There are well over 200 different types of hydrocarbons.

Crude Oil Factoids

 There are 159 liters (42 US gallons) in a barrel of oil. Once refined a barrel of oil yields about 72 liters (19 US gallons) of gasoline.

Current World Crude Oil consumption is 87.6 million barrels of crude per day. During the past five years oil consumption has increased by 2% per year.

Forecast estimate that daily consumption will go up to 118 million barrels per day in 2030. China and India will account for 43 percent of the total increase in world oil use over the projection period.

Crude oil is a naturally occurring mixture of hundreds of different hydrocarbon compounds trapped in underground rock. Millions of years ago ancient marine life and vegetation died and settled at the bottom of streams, lakes, seas and oceans, forming a thick layer of organic material. Over millions of years sediment covered this layer. Pressures from all the sediment and glacial formations of rock and soil caused heat, which cooked the organic material. This change resulted in the petroleum that we extract from the ground today.

All crude oil is not the same. Crude oil is called sweet when it contains only a small amount of sulphur and sour if it contains a lot of sulphur. Non-conventional oils include heavy oil found in tar sands and kerogen found in shale deposits. Crude color may vary from black, dark brown, milky to clear. Red, green and brown hues are not uncommon. Crude oil can vary in consistency from a light volatile fluid to a semi-solid.

The crude oil refining process separates oil into different hydrocarbons and removes impurities such as sulfur, nitrogen, and heavy metals. The first step proceeds in distilling hydrocarbons to a boil. This array of different hydrocarbons has different boiling point temperatures. A fractionating column boils crude oil until it vaporizes. Each hydrocarbon rises to a tray at a temperature just below its own boiling point. There, it cools and turns back into a liquid.

The lightest fractured hydrocarbons are liquefied into propane and butane and the petrochemicals used to make plastics, fabrics, and a wide variety of consumer products. Next come gasoline, kerosene, and diesel fuel. Heavier fractions make home heating oil and fuel for ships and factories. Still heavier fractions are made into lubricants and waxes. The remains include asphalt.

The refining process continues, with heavy fractions converted into lighter fractions. In most cases, "cracking" processes are used to transform heavy hydrocarbons into lighter derivatives such as gasoline and jet fuel. Refining technologies have made it possible to produce over 21 gallons of gasoline from a 42 gallon barrel of crude oil a remarkable advance over the industry's early days, when a barrel of oil yielded just 11 gallons of gasoline.

Natural gas is a gas component of coal and oil formation. It is used in industrial and commercial heating and it is a common fuel used for generation of electricity. Natural gas is usually found mixed in with oil. Methane a form of natural gas is found within layers of coal.

There are about 3,000 "petroleum products" or products made from crude oil including gasoline, agricultural fertilizers, ink, synthetic fabrics, plastics, imitation wood, crayons, bubble gum, dishwashing liquids, deodorant, eyeglasses, tires, ammonia, and even heart valves.

World crude oil reserves of conventional oil are estimated at more than one trillion barrels, of which the 11 OPEC Member Countries hold about 68 per cent. The Members of OPEC currently produce around 28 million barrels per day of oil, or some 40 per cent of the world total output, which stands at about 86 million barrels per day. Non-conventional oil reserves are estimated to be well over 3 trillion barrels and are mostly found in North America. Synthetic fuels from coal are excluded from the estimates.

Oil Shale


Oil shale formation occurred during Cambrian to Tertiary period are shallow. Devonian deposits of oil shale are more deeply buried. Deposits range from small pockets to formations with billions of barrels of oil shale. This type of oil is also referred to as kerogen. Total world reserves of oil shale exceed 3 trillion barrels.

Most oil shales are contained in very fine-grained sedimentary rocks mixed with organic deposits. There may be a mix of natural gases in variable amounts. Oil shales were derived from accumulations of silt, plants, marine life, algae, and sediment. These occurred in fresh water, saline ponds, ancient swamps, and marine basins. This all took millions of years before oil shales were formed.

The use of shale oil dates back to ancient times. During the seventeenth century alum was extracted from oil shale. Roasting alum over fire further produced potassium aluminum sulphate. This salt was mainly used for tanning leather and fixing colours in fabrics. Production of alum from oil shale was discontinued during the Second World War and production ceased in 1966. It was in part due to availability of cheaper sources from common crude oil.

Oil shale was also used during the mid-1800s to produce kerosene, paraffin, fuel oil, lubricating oil, grease, and ammonium sulphate. As we entered the early 1900s oil shale was used for refining gasoline and other transportation fuels.

World's largest deposits of oil shale cover a vast area in the States of Colorado and Utah. During the mid-seventies several oil companies developed large surface mining of shale. Modified 'in situ' extraction was also experimented in one large project; this project closed in 1991. Economics proved that it was unprofitable to extract oil shale during low crude oil prices.

With crude prices reaching levels of over sixty dollars after 2000, there again renewed interest resulted. Royal Dutch Shell has developed a novel 'in situ' combined with patented 'bowl freeze' oil shale extraction project in the Green River Formation. This is viewed with a lot of interest and promise.

There are other oil shale extraction projects in China, Brazil, and Estonia. A small-scale project is under development in north-eastern Saskatchewan, Canada.

Natural Gas


Natural gas originated from plant and animal life that thrived millions of years ago in swamps and oceans. These organic materials were deposited with mud and silt from streams and rivers. The sediments eventually hardened to form sedimentary rock. Heat and pressure transformed the soft parts of the plants and animals into solid, liquid or gaseous hydrocarbons known as fossil fuels coal, crude oil and natural gas.

The ancient people of Greece, Persia, and India discovered natural gas many centuries ago. These people were mystified by the burning springs created when lightning ignited natural gas seeping from cracks in the ground. They sometimes built temples around these eternal flames so they could worship the fire.

About 2,500 years ago, the Chinese recognized that natural gas could be put to work. The Chinese piped the gas from shallow wells and burned it under large pans to evaporate seawater for salt. In the nineteenth century natural gas was used extensively in Europe and North America to light city streets, homes and businesses.

Natural gas is found mixed in oil or is released from coal. The main ingredient of natural gas is methane gas. Other gases that it may be mixed with are butane and propane. Energy in 6,000 cubic feet of natural gas is equivalent to one barrel of oil. World reserves of natural gas are greatest in Russia, Iran, Qatar, Saudi Arabia, United Arab Emirates, and the U.S.

A certain amount of natural gas occurs with oil deposits. Some wells yield natural gas only. Wells for natural gas are drilled in underground reservoirs of porous rock. When it is removed from a reservoir, natural gas can either be pumped to the processing station for removal of liquid hydrocarbons, sulphur, carbon dioxide, and other components, or stored in large caverns underground until it is needed. Pipelines are the main method of transporting natural gas. Natural gas can also be liquefied and shipped overseas, but this process is complex and expensive.

Natural gas contains valuable organic elements that are very important raw materials in the chemical industry. Natural gas is used for manufacturing agricultural fertilizers, various plastics, variety of chemicals and dyes.

Natural gas has become extremely popular as a major source of energy. Natural gas is an attractive fuel because it is clean burning and efficient. Natural gas is the gas component of coal and oil formation. It is used in industrial and commercial heating and cooking, and, increasingly, to fuel electricity generation. In a compressed form, natural gas can also be used as a transportation fuel.

Electrical generation by natural gas has been improved through development of combined-cycle systems. These systems put together a natural-gas-fuelled combustion turbine with a heat-recovery steam generator and steam turbine, to produce electricity in two ways rather than just one. As a result about 60 percent of the heat from the natural gas is harnessed to make electricity, creating a more energy-efficient system.

The need for more natural gas has increased interest in liquefied natural gas (LNG) as a way to help meet rising demand. LNG can help diversify supplies and allow us to tap into global supplies. Since it is one of the cleanest burning fossil fuels natural gas has a promising future.


The story about how oil was formed


Part One :


Millions of years ago when tiny organisms died, and sank to the bottom of the sea they became mixed with mud and silt. Over time, hundreds of feet of mud accumulated and covered the dead organisms. Bacteria removed most of the oxygen, nitrogen, phosphorus, and sulfur, leaving mainly hydrogen and carbon. Since there was no oxygen this kept the animals and plants from decaying completely.

The partially decomposed organisms created a slimy mass, which covered the layers of sediments. Sediments are tiny particles that come from the breakdown of larger rocks, usually by weathering. Over millions of years, layers of sediment accumulated on top of the dead organisms. The weight and pressure of the sediment compressed the mud into a fraction of its original thickness.

When the depth of burial reached approximately 3000 meters, heat, time and pressure turned the organisms into different types of petroleum.

High temperatures produced lighter petroleum. Lower temperatures created a heavy material resembling asphalt. The continued heat and pressure altered some of the substances and natural gas was produced. Sometimes gas is present alone, or it may be mixed with the oil. At times natural gas will be separate. If temperatures are above 260 degrees Celsius, the organic matter is destroyed. Neither gas nor oil is formed.

As accumulations of mud and silt increased, pressures turned these accumulations into a rock known as shale. When the mud and silt compressed into shale, the oil, gas, and saltwater was squeezed out. The oily fluids formed moved from the original rock to a new rock, called a reservoir rock.

A reservoir rock must have the porous properties to contain oil, gas, and water, which are the reservoir fluids. The pores in the reservoir rock were first filled with saltwater from the ancient seas. When oil and gas flowed into the rock, some of the water was displaced. Some of the water may still remain. Presently oil drillers may find water in high concentrations of oil and gas.

Oil and gas will travel through pores of the reservoir rock, and with the help of water, they reach an impermeable layer of rock through which they cannot pass. Shales are the most common impermeable rock.

Oil traps usually form when there are rock movements deep within the Earth's surface. Over millions of years, rock formations break and slide, causing spaces where petroleum gets trapped. The most common type of trap is an anticline, where rocks are pushed up to form a dome. Oil and gas may lie in reservoir rock just under the top of the dome capped by an impermeable layer of rock.

Another common type of trap is the fault trap, which is formed by a fault, or fracture, in the layers of rock. The rock on one side of the fault sometimes slips down so that a porous reservoir rock is next to a nonporous rock formation. This creates a seal, and the petroleum is trapped.

When parts of the reservoir rock itself are not permeable, oil may be trapped. This is known as a stratigraphic trap. This trap also includes side-by-side changes from one type of rock to another.

Through this very lengthy process involving millions of years, crude oil has been synthesized, moved, and trapped; it will stay there until rock formation movement causes a change in its surroundings, or until oil drillers strike that reservoir.

Part Two:


A long and interesting past, crude oil has been used even well before the Roman Empire. The ancient Sumerians, Assyrians and Babylonians used crude oil and asphalt collected from large seeps (a place on the ground where the oil leaks up from below ground) as a source of fuel and lubricant. The ancient Egyptians used liquid oil as a medicine for wounds, and oil was also used in lamps to provide light.

The Chinese use of oil has the most interesting past. They used oil from natural seeps as fuel to boil salt brine into salt. Initially bamboo was pounded vertically into oil containing seeps and removed by an elementary lift pump. With time this led to drilling for oil, as they needed to penetrate deeper and deeper into oil containing underground seeps. In 347 AD oil wells were drilled in China up to 800 feet deep using bits attached to bamboo poles. Connecting lengths of bamboo to carry oil to their salt brine work sites; they were the first to invent an elementary oil pipeline.

In North America, Native Americans used blankets to skim oil off the surface of streams and lakes. They used oil as medicine and to make canoes waterproof.

During the late 1700s sperm whale oil was popular for lamp oils and candles because it burned with less odor and smoke than most fuels. At that time there were no fuels refined from crude oil. Sperm oil became very expensive. A gallon in the early 1800s cost about $2.00, which in modern values equates slightly over $200 a gallon.

The invention of the kerosene lamp had an immediate impact on the whale industry. Kerosene was easy to produce, cheap, smelled better than animal-based fuels when burned, and did not spoil on the shelf as whale oil did. Most people could afford kerosene; it sold for less than 7 cents a gallon.

(continued in column two)










Fundamentals of oil and gas drilling


The initial task of finding oil is assigned to geologists who may be employed directly by an oil company or possibly under contract from a private firm. A geologist’s primary task is to find a prospective land location with the right conditions for an oil or natural gas trap.


The geologist’s role plays an important part in a successful oil and gas company. He makes professional recommendations in securing prospective area at a lease sale and follows up with further geological data such as shallow drilling and a 2-D seismic survey. After evaluating the initial seismic survey, the geologist may recommend a 3-D seismic survey to identify a possible reservoir.


Once the drill site is selected, it must be surveyed to determine its boundaries, and environmental impact studies may be done. Lease agreements, titles and right of way accesses for the land must be obtained. Provincial or state drilling applications are made to proceed with drilling.


The prospective land may have to be cleared and leveled, and access roads may have to be built. Once the land has been prepared, several holes must be dug to make way for the rig to drill the main hole. A rectangular pit, called a cellar, is dug around the location of the actual drilling hole. The cellar serves as a work space for roughnecks to work around the hole below the rigs platform.


Often, a small drill truck, rather than the main rig, drills the first part of the hole. It is larger than the final hole and serves to seal subsurface water reservoirs from being contaminated. A large diameter conductor pipe is set and cemented in place. 


Additional holes around the main well bore are dug to temporarily store equipment. Finally a drilling rig is brought in and set in place. The crew sets up the rig and starts the drilling operations. Initially, a starter hole is drilled down to a pre-set depth, which is somewhere above where they think the oil trap is located.


Once the hole reaches a predetermined depth, casing pipe sections are lowered into the hole and cement poured down the hole. The drill bit is once again inserted and pressure from the drill mud forces the cement slurry to move through the casing. The casing prevents the hole from collapsing.


Cement is allowed to set and then tested for hardness, casing alignment and a proper seal. Following inspection, drilling once again continues. The geologist keeps a very close eye on the rock cuttings and clues for the presence of hydrocarbons.


Once the well reaches a predetermined depth, drilling may be suspended. The drill bit is pulled out and electrical and gas sensors are lowered into the hole to take measurements of the rock formations.  This may be followed by drill stem testing. In this procedure, a device is lowered into the hole to measure the pressures. Tests may reveal whether reservoir rock has been reached.


Well completion may follow pending the results whether full depth has been reached, or hydrocarbons discovery made. The drilling rig is removed from site and is replaced by a service rig. A perforating gun is lowered into the well to the production zone.


A perforating gun is used to set off explosive charges and create holes in the casing through which oil can flow. After the casing has been perforated, a small-diameter pipe, or tubing is set into the hole as a conduit for oil and gas to flow up the surface of the well.


This is followed by inserting a packer down the outside of the tubing to form a seal around the outside of the tubing. Following, a multi-valve pipe structure called a Christmas tree is attached to the top of the tubing and cemented to the top of the casing. The Christmas tree valve controls the flow of oil from the well.


The world renown jack, or jerk pump is set up beside the well head. This device is powered by an electric motor turning a gear box with a balanced crankshaft attached to the reciprocating beam.  A sucker rod connects the jack on upper end and the polishing rod of the piston pump down below. The piston must be immersed in the oil bearing, or production zone. 


The jack’s up and down movement actuates the piston pump and pulls the crude oil up through the wellhead and into an oil pipeline. If a pipeline is not available, crude oil is pumped directly into containment tanks.


Coalbed Methane


Through millions of years, ancient plant life that was deposited in swamps or swampy lakes underwent bacterial and chemical changes and formed peat deposits. With time, covering sediment, and pressures caused by additional layers of sand and mud changed peat deposits into brown coal. Through added time and more deposits the added pressure changed it to bituminous coal. The final transition was with added time and pressures transformed bituminous coal into hard anthracite coal.

While the coal was being formed organic matter produced methane, nitrogen and carbon dioxide gases. The further burial process caused higher pressures on coal formations and as a result retained the formed gases.

Coalbed methane is a natural gas that is contained in coal. This is the gas, which has killed many underground coalminers. It is sometimes referred to as CBM. This type of natural gas is an 'unconventional' form because it is primarily stored in the pore spaces of coal rather then pore spaces of rock. This is where 'conventional' natural gas is trapped.

When there is a drop in coal pressure, methane is released. Such is the case when coal is mined. If coal is saturated with water there is also a release of methane as coal pressures are lowered. Substantial sources of methane are now produced by drilling wells into coal formation rich in methane. Addition of water releases methane, increase in pressure surfaces the gas in the wellheads, and it is then added to pipeline production.

Coalbed methane has a variety of uses. It is a very clean burning fuel that makes it very attractive in lowering CO2 emissions. It may be used domestically, commercially, and industrial uses are primarily for production of electricity. This fuel has been used in fuel cells and in conventional piston engines without expensive modifications.



Coal is the world's most abundant fossil fuel. Over 2,000 years ago, coal was commonly used in China and parts of the Roman Empire. Records indicate that people burned coal over 4,000 years ago in Wales. Coal is second only to oil as an energy source in the world.

It has been estimated that there are over 909 billion tonnes of proven coal reserves worldwide. This means that there is enough coal to last over 155 years. Coal is located worldwide - it can be found on every continent in over 70 countries. China, India, Russia, Ukraine, Germany, Poland, South Africa, the United States, and Australia have largest coal deposits in the world.

All fossil fuels will eventually run out and it is essential that we use them as efficiently as possible. The use of coal can provide us with wider sources energy.

While it is estimated that there is enough coal to last us 155 years, this could extend still further through a number of developments including the discovery of new reserves through ongoing and improved exploration activities advances in mining techniques, which will allow previously inaccessible reserves to be reached.

The Sasol technology is a third generation Fischer Tropsch technology, which was originally developed by Germany in World War II. It is the world-leading technology for the commercial production of synthetic fuels and chemicals from low-grade coal, as well as the conversion of natural gas to environment-friendly GTL Fuel.

While coal isn't expected to replace crude oil and natural gas it will have an important role in the future. Countries with limited crude oil supplies will be less dependant on crude oil imports.


The story about how oil was formed

(continued from column one)


The public abandoned whale oil lamps almost overnight. If it had not been for the invention of the kerosene lamp and abundance of cheap kerosene the whales would soon have become extinct.

In 1878 Thomas Edison invented the first electric light bulb. This single invention proved to be so popular that it caused a major recession in the oil industry. Since 1856 kerosene lamps were used in homes and street lamps. Historians state that the introduction of kerosene initiated the oil industry. Sales and production of kerosene trickled to a standstill as electricity and the electric light bulbs caught on quickly.

In 1908 Henry Ford's mass produced automobile started a demand for gasoline and initiated an oil boom. Oil Pipelines were built from oilfields in Texas to refineries in the eastern US. With the introduction and public acceptance of mass-produced automobiles the Modern Era of Petroleum began.

Part Three:


In 1924, the discovery of an oil field beneath the Nash salt dome in Brazoria County, Texas, was the first to be based on single-fold seismic data. Before that, oilfield exploration was very much a guessing game based on surface signs. Stakes were high, and rewards could be tremendous, but losses from dry holes could be devastating. Then, engineers and geoscientists discovered that they could use low-frequency sound waves to map subsurface geological structures and locate possible hydrocarbon traps.

In early oil exploration, drilling rigs were semi-permanent in nature often being built on site and left in place after the completion of the well. In more recent times drilling rigs are expensive custom built machines that are capable of being moved from well to well. Some light duty drilling rigs are similar in nature to a mobile crane though these are more usually used to drill water wells. Larger land rigs must be broken apart into multiple sections and loads in order to move to a new location, a process that can often take weeks. Some rigs weighed in excess of 100 tons. Present compact rigs occupy 80 percent less space than a vintage-1970s rig.

Two technologies developed in the 1950s let producers force more oil out of newly discovered and existing fields. In the first process, called hydraulic fracturing, powerful pumps at the surface inject a fluid, commonly with the consistency of a milkshake, into the oil-producing reservoir rocks. The pressure exerted by the fluid, is great enough to fracture the rocks around the well, and sand grains injected with the fluid keep the cracks propped open once the pumping stops. The newly opened fractures make the reservoir rocks more porous, and oil can flow more easily into the well.

In the second technique, called waterflooding, water is injected into the reservoir rocks to maintain reservoir pressure as the oil is withdrawn, and to sweep the oil out of the reservoir rocks and toward the well. In the most commonly used technique, the five-spot pattern, water is pumped into the reservoir rocks at four wells arranged around a central producing well in a fashion like the five dots on the face of a domino or die.

Hydraulic fracturing and waterflooding are two techniques that still play a very important role in oil recovery today.

Part Four:


The discovery of horizontal drilling is perhaps one of the single major improvements in oil recovery. Horizontal wells have become a preferred method of recovering oil. The production factor can be enhanced as much as 15 or 20 times over vertical wells.

The earliest American development toward horizontal drilling took place in 1929. Experimentation by Russians, and Chinese from 1940 to 1950s continued but was proven to be uneconomical.

From 1979 to 1982, the true horizontal-well development work occurred in North America. Horizontal drilling now represents about 20% of all drilling activity. Multilateral-well technology is where holes are drilled from the same starting point but in different directions and angles. They are a modified form of horizontal drilling.

Today, 3D-seismic technology is applied to solve problems and reduce uncertainties across the entire range of exploration, development, and production operations. Surveys are used to characterize and model reservoirs, to plan and execute enhanced-oil-recovery strategies, and to monitor fluid movement in reservoirs as they are developed and produced. These capabilities have been made possible by advancements in data acquisition, processing, and interpretation that have both improved accuracy and reduced turnaround time.

Part Five:


We have barely begun to exploit our non-conventional fossil fuel supplies. They are tar sands, oil shale and bitumen. These resources are estimated to contain three times as much oil as the remaining conventional oil resources but few are economically recoverable with current technology.

Recovery of oil from tar sands in Canada is now economically feasible, with billions of dollars being invested in new oil recovery plants. Oil sands production is over 1.5 million barrels per day; nearly double the output of four years ago. Current estimated reserves in Alberta and Saskatchewan may exceed the total reserves in all of the Arab nations.

The Green River Formation in Colorado, Utah, and Wyoming may be the largest discovery of shale oil. Some estimates are reserves of up to 2 trillion barrels of oil. This may be more than all the crude that has been produced worldwide since the petroleum age began.

Synthetic fuels are once again looked at as an alternative fuel. Coal, or bitumen is almost a forgotten fossil fuel but very abundant. The future looks quite bright, as refining costs are low compared to costs of developing new crude discoveries. A chemical process known as Fischer-Tropsch synthesis (Discovered in Nazi Germany) uses coal heated under pressure to make a paraffin wax. It is then refined into diesel fuel, kerosene, or other synthetic petroleum products. The US Energy Information Administration estimates that Fischer-Tropsch synthesis is economically viable with oil selling above $45 per barrel.

Our global consumption has been increasing at a rate of 2% per annum. Some analysts predict that conventional oil may reach its peak within this century. Estimates of non-conventional oil sources will make it possible to use this important non-renewable resource for many generations. The key is careful conservation.












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