I thought i'd post this as i'm sure some of you would be interested as i was.It's a small history of crude oil that's not very complex but
Oil has been known and used for a long time; the Bible even mentions it as a construction cement. But its uses changed with the invention of the
Early Uses for Oil
Oil has been known since ancient times and was chiefly used as a liniment or medicine, not as a fuel. The Bible, for example, refers to “pitch”
being used for building purposes in Babylon. Other common uses included caulking boats and dressing wounds. It wasn't until the refining process was
developed in the 1850's that oil was used as a fuel.
At first, black oil bubbled from natural springs in many localities such as Western Pennsylvania, but no one knew how to extract it until the
interesting if not persistant Edwin Drake constructed the first make-shift oil derrick in 1859 in that same area. His well was 70 feet deep and
produced a reported 15 barrels per day. The surrounding area quickly boomed, and the modern oil industry was born. But its original uses were not what
you might think; according to a Yale chemistry professor's report at the time, rock oil could be refined and employed for illumination (kerosene for
lanterns), lubrication, and other uses.
The "other uses" would have to wait another 30 years to be realized when the first combustion engine vehicle was built in Germany in 1889 by
Gottlieb Daimler and Wilhelm Maybach (prior to this, engines ran on steam). Powered by the first 1.5 hp two-cylinder gasoline engine, it had a
four-speed transmission and traveled at 10 mph. Despite this, the demand for oil as automobile fuel was not that high - yet.
The Modern Oil Industry
The idea of the gasoline-powered automobile didn't really catch on until the turn of the century, with only a handful of manufacturers in Europe and
the United States. It was Ford's implementation of the assembly line that really got the ball rolling for the future of the automobile, and soon
Texas and Oklahoma became the centers of U.S. oil production to help fill the growing demand for fuel. Following World War II, the Middle East became
a major supplier of oil for the U.S. as well.
Today, oil is used in the making of everything from curtains to many over-the-counter vitamins and pain relievers, from dish soaps to canned goods.
But what is oil. really?
According to the Canadian Association of Petroleum Producers online, crude oil is a natural liquid that is made up of mainly hydrogen and carbon
molecules and is usually discovered deep underground. The viscous substance is formed from the fossilization of plants and animals. Fossilized plant
and animal matter (dinosaurs reportedly providing much of this) holds many trapped hydrogen and carbon molecules, but the chemical breakdown of these
elements can take millions of years as they need to be heated and pressurized to create the substance we call oil.
And if you are a newly fossilized molecule, working your way to the center of the earth to be heated and pressurized, it isn’t exactly a brisk walk
in the park. Further, in a world that consumes 80 million barrels (according to msnbc online) of petroleum products per day this rather lengthy
process creates some supply problems.
Oil as Non-renewable Resource
The earth's ponderously and monumentally slow process of creating oil (supply), in turn, affects price (demand). As we track the price of oil through
the years (treating political events as peripheral) we can easily see supply and demand at work. According to WTRG Economics and their online article,
"Oil Price History and Analysis," in the post World War II era the median for the domestic and the adjusted world price of crude oil was $18.53 per
barrel (in 2006 prices). At the time this article was written, according to msnbc online, oil futures contracts through July 2009 are now trading well
above $70 a barrel, which is seemingly in line with what some scientists are predicting for the furture of oil supply.
Most think oil production will reach its decline sometime between the years of 2005 and 2010 because there simply won’t be any more of it - unless
new pockets are found. Even so, the overwhelming sentiment is that the resource is finite, at least in the sense that it won't be renewed for another
couple of million years or so. All of this, indeed, causes problems in such an oil-dependent society, so don’t expect prices at the pump to drop any
"History of Crude Oil" cited the MSNBC on-line report that oil trading was well above $70/barrel through summer 2009. The West Texas Intermediate
(WTI) crude oil prices/barrel actually shows this number to be lower in the their summary below.
2007 - $72.32/barrel
2008 - $99.57/barrel, a 37.7% hike
2009 - $60.35/barrel
Incidentally, the 2010 price is expected to hover around $70.00, which would imply a climb of about 20 percent. Broken down, what this means for most
of us is that we paid around $3.26/gallon at the pump in 2008, are paying around $2.36 now, and can expect to pay around $2.69 in 2010.
Oil Supply and Demand
What is troubling about all of this is that no matter what the cost, consumption has not fallen off in any meaningful or sustained way. According to
the Energy Information Administration, total consumption of oil products is projected to decrease 650,000 bbl/d by the end of this year but will rise
again 310,000 bbl/d in 2010 due to "anticipated modest economic recovery." While this may at first seem a net gain against fuel consumption by the
numbers alone it also shows a continued dependence on supplies that are all too quickly disappearing.
In a 1997 article by USA Today, Craig B. Hatfield, a University of Toledo (Ohio) geologist, issued this warning: "In 2011, we will have consumed half
of all the producible oil we have ever had if the oil consumption rate stops growing and holds constant at its current level. If the consumption rate
continues to grow, as it does every year, we will reach the midpoint of production during the first decade of the coming century."
Im sure that as the oil industry is highlighted atm with this terrible oil "disaster" in the gulf and some of you maybe dunno any history on the oil
It's good to know how this was possible in the first place and how it was done at the start.