The Future of Oil

The dawn of the oil age was fairly recent. Although the stuff was used to waterproof boats in the Middle East 6,000 years ago, extracting it in earnest began only in 1859 after an oil strike in Pennsylvania. The first barrels of crude fetched $18 (around $450 at today’s prices). It was used to make kerosene, the main fuel for artificial lighting after overfishing led to a shortage of whale blubber. Other liquids produced in the refining process, too unstable or smoky for lamplight, were burned or dumped. But the unwanted petrol and diesel did not go to waste for long, thanks to the development of the internal-combustion engine a few years later, an invention that is just as (if not more) important than the magnificent rig floor display.

Since then demand for oil has, with a couple of blips in the 1970s and 1980s, risen steadily alongside ever-increasing travel by car, plane and ship. Three-fifths of it ends up in fuel tanks. With billions of Chinese and Indians growing richer and itching to get behind the wheel of a car, the big oil companies, the International Energy Agency (IEA) and America’s Energy Information Administration all predict that demand will keep on rising. One of the oil giants, Britain’s BP, reckons it will grow from 89m b/d now to 104m b/d by 2030.

Scraping the barrel

We believe that they are wrong, and that oil is close to a peak. This is not the “peak oil” widely discussed several years ago, when several theorists, who have since gone strangely quiet, reckoned that supply would flatten and then fall. We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world’s thirst for the black stuff.

The first revolution was led by a Texan who has just died. George Mitchell championed “fracking” as a way to release huge supplies of “unconventional” gas from shale beds. This, along with vast new discoveries of conventional gas, has recently helped increase the world’s reserves from 50 to 200 years. In America, where thanks to Mr Mitchell shale gas already billows from the ground, liquefied or compressed gas is finding its way into the tanks of lorries, buses and local-delivery vehicles. Gas could also replace oil in ships, power stations, petrochemical plants and domestic and industrial heating systems, and thus displace a few million barrels of oil a day by 2020. This doesn't mean that measurement while drilling will be obsolete by any stretch of the imagination. In fact, it will only become more necessary, as the extraction of gas, like oil, also requires measurement while drilling.

The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil’s dominance. Foremost is the efficiency of the internal-combustion engine itself. Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil. Analysts at Citi, a bank, calculate that if the fuel-efficiency of cars and trucks improves by an average of 2.5% a year it will be enough to constrain oil demand; they predict that a peak of less than 92m b/d will come in the next few years. Ricardo, a big automotive engineer, has come to a similar conclusion.

Not surprisingly, the oil “supermajors” and the IEA disagree. They point out that most of the emerging world has a long way to go before it owns as many cars, or drives as many miles per head, as America.

But it would be foolish to extrapolate from the rich world’s past to booming Asia’s future. The sort of environmental policies that are reducing the thirst for fuel in Europe and America by imposing ever-tougher fuel-efficiency standards on vehicles are also being adopted in the emerging economies. China recently introduced its own set of fuel-economy measures. If, as a result of its determination to reduce its dependence on imported oil, the regime imposes policies designed to “leapfrog” the country’s transport system to hybrids, oil demand will come under even more pressure.

A fit of peak

A couple of countervailing factors could kick in to increase consumption. First, the Saudis, who control 11% of output and have the most spare capacity, may decide to push out more, lowering prices and thus increasing demand. Then again, they might cut production to try to raise prices, thereby lowering demand further. Second, if declining demand pushes down the oil price, drivers may turn back to gas-guzzling cars, as they did when oil was cheap in the 1990s. But tightening emissions standards should make that harder in future.

If the demand for oil merely stabilizes, it will have important consequences. The environment should fare a little better. Gas vehicles emit less carbon dioxide than equivalent petrol-powered ones.

The corporate pecking order will change, too. Currently, Exxon Mobil vies with Apple as the world’s biggest listed company. Yet Exxon and the other oil supermajors are more vulnerable than they look (see article). Bernstein, a research firm, reckons that new barrels of oil from the Arctic or other technologically (or politically) demanding environments now cost $100 to extract. Big Oil can still have a decent future as Big Gas, but that will not prove as profitable.

The biggest impact of declining demand could be geopolitical. Oil underpins Vladimir Putin’s kleptocracy. The Kremlin will find it more difficult to impose its will on the country if its main source of patronage is diminished. The Saudi princes have relied on a high oil price to balance their budgets while paying for lavish social programmes to placate the restless young generation that has taken to the streets elsewhere. Their huge financial reserves can plug the gap for a while; but if the oil flows into the kingdom’s coffers less readily, buying off the opposition will be harder and the chances of upheaval greater. And if America is heading towards shale-powered energy self-sufficiency, it is unlikely to be as indulgent in future towards the Arab allies it propped up in the past. In its rise, oil has fuelled many conflicts. It may continue to do so as it falls. For all that, most people will welcome the change. What the future holds for us is still up in the air, but it looks like The Economist has done a great deal of homework on this subject matter. Their predictions definitely hold some value in the eyes of the politically and economically astute.

Understanding the Reservoir

A petroleum reservoir is a term that is used to describe the accumulation of crude oil in a defined location. Usually, the location where the crude oil may have formed is often underground or beneath the sea or ocean floor. These formations are the result of the decomposition of organic matter over the course of centuries, which is why the fuel or energy that is derived from such is known as a nonrenewable source of energy. This means any depletion of such a deposit cannot be replenished the same way in the foreseeable future, making it absolutely necessary for other sources of energy to be developed to take the pressure off the fast-depleting global petroleum reservoir that has been subjected to intense demand from consumers of energy. Laversab Oilfield Systems has developed a reputation in manufacturing some of the most reliable equipment in the oilfield industry. A surface system is just one of piece of equipment that a petroleum engineer utilizes to maximize productivity. The Zone 1 Computer is another. Laversab manufactures both of these, and they are among the most reliable and useful products in the market out there.

A petroleum reservoir may be discovered by accident, as has happened when the oil seeps to the surface or when the oil seeps into water supply, consequently revealing its presence in that location. Other times, it is often necessary to intentionally explore different regions through the application of scientific and geographic knowledge with the view of discovering other places that may contain petroleum reservoir. Some regions of the world have vast crude oil deposits or are blessed with the presence petroleum reservoir within their geographic territory. Where this is the case, such countries can expect to make a lot of money from the sale of the oil both in its crude and refined state.

Indeed, some oil companies dedicate a lot of resources in the form of manpower, economic and material resources to the discovery of any form of petroleum reservoir. Some of these oil companies have expensive oil rigs located on both onshore and offshore facilities where they are utilized in drilling holes that go down many feet into the ground as part of the process of extracting the crude oil from the reservoir. Even though the presence of a petroleum reservoir is considered a stroke of good fortune by the residents of that area due to the economic benefits, some members may not be quite as thrilled due to the negative environmental and adverse health consequences associated with the various processes of drilling for the petroleum. For example, the practice of gas flaring is one that releases noxious fumes into the environment, and the many cases of oil spills also contribute to the detrimental effects associated with petroleum reservoir exploration.

Why Be A Petroleum Engineer?

Why study petroleum engineering?

As a petroleum engineer you will be responsible for the identification and production of hydrocarbons, requiring a range of skills in engineering and geoscience disciplines. You may work on a drilling rig, as part of a multi-disciplinary team for an energy company or as one of a diverse range of service contractors who support the extraction of hydrocarbons.

This is an exciting and technically challenging program; a program that will equip you for a range of careers in the petroleum industry; a program that is as exciting as the work it takes to create a Laversab Rig Floor Computer or a Laversab Driller’s Display Unit. Ongoing growth in worldwide energy consumption means demand for petroleum engineers is high. Oil companies and service providers are actively recruiting graduates in this area, which remains buoyant despite the economic climate.

The journey it takes to become a petroleum engineer is open and welcoming, with low competition: most universities have great student ratios and an excellent reputation for high quality research. The discipline as a whole has exceptional links with the best part of the economy, which takes success to a whole different and higher plane. Major oil and gas companies are actively recruiting students from our all over the world, as well as offering internships and sponsorship for post-graduate study to exceptional students. Folks can move to the Middle East, get paid great money, with relatively low stress compared to other engineering jobs.

Petroleum Engineering is an interdisciplinary subject, so you will study a broad range of subjects including geology, fluid mechanics, thermodynamics, chemistry and mathematics. You will be taught how hydrocarbon is generated, stored and produced in the subsurface. On completion of the programme you will understand the life-cycle development of oil and gas fields, and how petroleum engineers operate them effectively.

Whatever career path you choose, our experts at Laversab will equip you with a range of technical and transferrable skills and knowledge.

As well as lectures, you will learn through:

• Problem-solving exercises that are based around real-world data and problems.
• Laboratory classes using subsurface rock and fluid data.
• Construction and flow simulation of geocellular models using industry-standard software (provided by Schlumberger).
• Fieldwork, to examine the geological heterogeneity encountered in hydrocarbon reservoirs.

Petroleum engineers are involved in the discovery, recovery and maintenance of the world’s oil and gas supplies. The activities are important because safe, affordable and clean energy is a requirement for future generations.

As a result the necessity for improved production from mature fields, alongside exploration for hydrocarbon reserves in increasingly challenging environments means that petroleum engineers with specific skills sets are in great demand across the petroleum industry.

Job opportunities for petroleum engineers are very diverse and occur along the entire value chain of hydrocarbon exploration and production. You can get your hands dirty on a drill rig, perform sophisticated analyses in the laboratory, or work with advanced computer software to create reservoir models. As a petroleum engineer you could work out in the field and travel the globe - or enjoy the relative comfort of an office job.

Latest Oil Field Technology

Laversab, Inc. is a prime supplier of hazardous location computers, terminals and displays to the extremely demanding oilfield service industry. The cutting-edge technology that Laversab has created is among the most sophisticated and innovative technology in existence. Their innovative computers are Class 1, Div 1 and Div 2 certified by UL, certified for Zone 1 and 2 locations by ATEX as well as IECEx certified. The devices are built to survive in the most rugged and extreme of oilfield environments. Laversab Oilfield systems are in use in every corner of the world and under every possible climactic condition.

In the oilfield domain, new advances have appeared on the horizon. Here are six innovative ways experts hope will make the next oil spill less tragic.

1. A clay sponge to draw out oil and leave water behind

We reach for a sponge to clean up spills in our kitchens, so imagine what a giant one could do for a spill. While it seems like science fiction, researchers at Case Western Reserve University have developed a super-lightweight clay sponge to draw out oil from contaminated water. The extracted oil could then be recycled. The substance, which experts are calling an aerogel, is a freeze-dried mixture of clay with a polymer and air. It works in freshwater, salt water and on plain surfaces. Researchers are developing the sponge for further tests. You can learn more about aerogel here.

2. One boat to out-skim them all

Booms and skimmers are popular cleanup devices currently used in oil spills, but skimming cannot be done in rough, windy seas, nor is it effective at night when visibility is low. However, the company Extreme Spill Technology has developed a high-speed skimming vessel that the company claims can solve these issues. While traditional skimmers cannot successfully operate in waves higher than 1.5 meters, EST’s boat can skim in waves higher than 3 meters. The lightweight vehicles can operate faster than traditional skimmers, and the machines do not clog as easily. The boat has been successfully tested by the Canadian Coast Guard. As CEO David Prior shared with MNN, the company plans to sell the boats worldwide.

3. Magnetic soap may clean tainted water

One of the main “cleaners” on the Deepwater Horizon oil spill were dispersants. As we previously reported, almost 3 million liters of dispersants and soaps were used in the cleanup. However, dispersants are problematic because they do not easily break down in the environment. Scientists from the University of Bristol have developed a new, iron-rich salty soap that reacts to magnetic forces once it is in the water. The salts form a magnetic core when placed in a solution. When a magnetic force is applied, the core — with the oil — rises to the surface of the water. The research is still theoretical, but experts hope that it's the first step toward a new, important cleaning formula.

4. A special skimmer with groove technology

After the 2010 spill, Wendy Schmidt, president of the Schmidt Family Foundation, which works to create clean energy solutions, launched the Wendy Schmidt Oil Cleanup X CHALLENGE. The $1.4 million competition encouraged the best and brightest in the field of oil cleanup to present their solutions. The winner was Elastec/American Marine, an Illinois-based company that developed a kind of barrel skimmer than can separate oil from water, even in waves. The skimmer met the contest’s minimum requirement of an efficiency rate of 70 percent, skimming as much as 2,500 gallons per minute.

5. Kevin Costner’s oil filtration machine

When you think of Kevin Costner and water, you might picture the Oscar-winning actor sporting gills and swimming around an underwater ski lift. (See the actor’s 1995 watery post-apocalyptic film, "Waterworld.") However, it was the Gulf oil spill that revealed Costner’s greener side. Alongside his scientist brother Dan, Costner debuted an oil-filtration device that had been in development for more than a decade. As we previously reported, Costner has invested $26 million of his own money into a device that works on a centrifuge principle, separating and jettisoning clean water from oil. In 2011, it was revealed that British Petroleum had spent $16 million on the devices, even though they were shown to have failed initial field tests. While the devices show some promise, they became easily clogged with the heavier, sticker oils once in the field.

6. Peat moss mixture cleans up

Nature may soon mop up after our spills. Scientists in Norway have discovered that simple peat moss is an extremely good at absorbing oil. The company Kallak Torvstrøfabrikk is developing a product called Kallak Absorbent, which can be placed directly into the oil-soaked water. Ragnar Kallak, the company's founder, explained it to Science Daily: “[Peat moss] absorbs the oil on contact and encapsulates it. Water does not penetrate the peat moss, so the encapsulated oil is trapped in a non-sticky crust which is easily removed from the surface of the water.” Kallak Absorbent was deemed a success against a 2009 oil spill off the coast of Norway.

Oilfield Terminology (Part 3)

This is part three in our series on oilfield terminology. So far, in part 1, we've covered the following basic terms and concepts: petroleum engineering, natural gas, hydrocarbon, gasoline, reservoir and drilling rig. In part 2, we shifted gears a bit and introduced a panoply of totally new concepts; those being: blowout, tool pusher, pig, moon pool. The following article is hopefully going to further expand our oilfield ken.

Petroleum Play

Petroleum Play (sometimes simply just "play") is a group of oil prospects or oil fields located in the same region that are controlled by an identical set of geological circumstances. Its most common use is in the realm of the exploitation and extraction of hydrocarbon-based resources.

The typical steps in the actual play cycle are as follows:

1. Initial observations of potential reserves
2. Testing & adjustments made to the opening estimates of extraction
3. High degree of success in identifying and extracting oil from reserves
4. Lower degree of success as the reserves begin to get depleted
5. Gradual decrease in further exploration of the region

Oil Depot

An oil depot, which is at times also called an oil terminal, is an industrial facility for the storing of oil & petrochemical products. These products are generally sent out to end users or further storage facilities. Oil depots are typically located near refineries, but some are actually attached to pipelines from which they draw their supplies.

Roughneck

A roughneck is a term used to describe the hard-manual labor workers in the oilfield industry. Although the term is used to describe a bevy of different hard-manual workers across different industries, it is most commonly used to describe oil rig workers. The term has been around for quite some time now. It became popular in the 1930s. The physically demanding work helped the workers develop thick, strong, burly necks, making them easily distinguishable from the rest of the crowd. And so, for this reason, the term caught on like wildfire. People seem to use the term with a badge of honor; there is no derogatory connotation to the term whatsoever.

Petrochemicals

Petrochemicals are chemical products that are derived from petroleum. A great deal of chemical compounds made from petroleum are also obtained from other fossil fuels, such as coal or natural gas, or even renewable sources like corn or sugar cane. The 2 most common petrochemical classes are olefins (which includes ethylene and propylene) and aromatics (which includes benzene, toluene & xylene isomers). Oil refineries make olefins and aromatics by fluid catalytic cracking of petroleum fractions. Chemical plants produce olefins through the steam cracking of natural gas liquids such as ethane and propane.

Oilfield Terminology (Part 2)

We are continuing our series on oil field terminology. Below we have listed another handful of terms and concepts that are key to getting a better grip of the oil industry.

Blowout

Here is one of the terms you hope you never have to hear again. Talk about a catastrophe, both in terms of financial and environmental. A blowout is basically the uncontrolled release of crude oil and/or natural gas from an oil well or gas well. This occurs after the pressure control systems have failed.

Before the advent of pressure control equipment in 1921, the uncontrolled release of oil and gas from a well while drilling was super common. People called it oil gusher back then, or even gusher or wild well. The minutest spark can lead to an incredibly catastrophic oil or gas fire.

Tool Pusher

A tool pusher (also spelled toolpusher) is a job within the oil drilling industry. It is sometimes also called a pusher for short. On a land drilling rig, the pusher can also be the rig manager, making him responsible for each of the operations on deck. On drillships, however, or on offshore oil rigs, pushers are basically department heads that are in charge of the drilling department and reporting to the OIM (or the Offshore Installation Manager). This all depends on the company, of course. The majority of the time, companies like to do it where there is an Offshore Installation Manager who the toolpusher reports to.

Pig

No, we are not talking about those pink creatures with the voracious appetites. In the oil field domain, the term pig, is actually a a nound and a verb. In the context of piplines, pigging refers to the practice of using devices called pigs that perform various maintenance operations on a pipeline.

The included operations consist of cleaning and inspecting the pipeline. This is accomplished by inserting the pit into what is known as a "pig launcher". A pig launcher, or a launching station, is an oversized section in the pipeline. The launcher is closed and the flow of the product in the pipeline is actually used to push it along in the pipe. This continues on until it reaches the receiving trap, known as the pig catcher.

Moon Pool

A moon pool is a feature of marine drilling-platforms, drill-ships & diving support vessels. It is also called a wet porch in underwater habitats. A moon pool is an opening in the floor or base of the hull, chamber, or platform giving access to the water beneath it, which allows the technical staff or even the researchers to lower tools and instruments into the sea. In the oilfield systems domain, a moon pools are used in just the same way, only that the degree to which they are depended on varies. Today's drilling-platforms use the most sophisticated moon pools. They are integral to the success of the operation.

Oilfield Terminology (Part 1)

So we are making an effort to give the general population a better understanding of what value Laversab brings to society. And it'd make sense to start by listing and defining some basic terms - to familiarize everyone with the oilfield terminology. The oil industry is an incredibly demanding and exciting industry which employs among the most sophisticated technology around. Who would have thought that the oil industry would get so technologically advanced? If you weren't cognizant of this, no worries, you are not in the minority. Most likely, the technological advances in the oil industry wouldn't be all that you weren't cognizant of, and so, it is our goal to make the discipline much easier to apprehend. We will try and meet that goal by going over some of the core concepts that those in the oil industry must have a firm understanding of.

Let us start by making explicit what we mean by oilfield terminology. Oilfield terminology encompasses those jargon terms which are used by folks working in the upstream segment of the petroleum industry. It includes terms describing equipent, professions, and procedures specific to the industry. Some of these terms are formal terms with formal definitions - made official by leaders in the industry. Others are slang terms that have become popular over time - many of them used by oilfield workers long before being considered terms worth referencing.

Petroleum Engineering

Petroleum Engineering is a field of engineering dealing with the development and exploitation of crude oil and natural gas fields. It also includes the technical analysis and forecasting of their future performance. A petroleum engineer aims to extract gaseous and liquid hydrocarbon products from the earth. Everything from dilling, to producing, to processing, and to transporting these products falls under the petroleum engineer's job responsibility.

Natural gas

Natural gas is a fossil fuel that is formed when layers of buried plants, animals, and gases are exposed to intense heat and pressure over thousands and thousands of years. Plants obtain energy from the sun, and that energy is stored in the form of chemical bonds in natural gas. Because natural gas cannot be replenished on a human time frame, it is a nonrenewable resource. It is a hydrocarbon gas mixture consisting mostly of methane. Natural gas is an energy source that is very valuable when it comes to electricity generation. Also, when it comes to fueling vehicles, natural gas is by far one of the most efficient energy sources. Natural gas is most often found deep into the ground - in underground rock formations.

Hydrocarbon

A hydrocarbon is any of a class of organic compounds consisting entirely of both hydrogen and carbon. Most hydrocarbons that are found on earth naturally occur in crude oil. Decomposed organic matter provides a great deal of carbon and hydrogen, which can lead to an endless chain of when bonded.

Petroleum

Petroleum is a naturally occurring, oily, thick, typically dark-colored liquid that is a mixture of various hydrocarbons, occurring naturally in many different places in the world. It is commonly obtained by drilling and it is used either in a natural state or a refined state as fuel. It is most commonly separated by distillation into gasoline, and in lesser cases, benzene, kerosene, naphtha and paraffin. The term petroleum covers both naturally occurring unprocessed crude oil and petroleum products that are made up of refined crude oil. Petroleum is recovered mainly via oil drilling.

Gasoline

Gasoline is a clear liquid derived from petroleum. It is mainly used as a fuel in internal combustion engines. Gasoline consists mostly of organic compounds that are obtained by the fractional distillation of petroluem. Fractional distillation is the separation of a mixture into its component parts. Without it, gasoline could not be produced.

Reservoir

A reservoir is a subsurface rock formation that contains one or more than one individual and and separate natural accumulations of moveable petroleum, confined by rock that is impermeable and characterized by a single pressure system.

Drilling Rig

A drilling rig is a machine that is used to create large holes in the ground. They can be massive structures - used not just for oil wells or natural gas extraction wells, but for water wells as well. In the case of an oil or natural gas drilling rig, the sizes vary, but they are mostly very large in size. They are used to identify geologic reservoirs, as well as to create holes that allow the extraction of oil or natural gas from those reservoirs.