Where is all that oil?

For over five decades The Arabian Peninsula has fueled the global economy. Saudi Arabia became the top oil producer in the world by drilling and extracting easy to get, high quality, light oil. But now that light oil is drying up. Some estimates show that the Gulf region has pumped more than half of its oil already.

With the days of easy to drill oil ending the next step for major oil producing counties is to drill deeper. Saudi Arabia has potentially billions of barrels of oil trapped deep beneath the desert; however, extracting this deep and heavy oil is a much longer and complicated process. Since the oil at greater depths it is thicker and so the oil harder to pump to the surface.

Chevron is leading a new project in Saudi Arabia to pump steam into the thicker oil in the Wafra oil field. The idea is that the hot stream will thin the deep heavy oil and make that oil pump-able. This is a very risky and time consuming procedure but if it works it could help provide access to a rich new source of oil in the Gulf area.

Besides the risk and time factors the Chevron plan is very expensive—so expensive it would be hard for the company to turn a profit using the steam system to extract the oil. With increased production costs comes a more expensive product.  Thus, this would mean that the price of oil would increase and oil itself would be seen as a more precious resource.

The U.S. Geological Survey estimates there are three trillion barrels of heavy deep oil in the world, enough to last humanity another 100 years. That is of course if we can get that oil, but also that estimate is based on the global current consumption of oil. It is important to note that with the rise of China and India global consumption of oil increased by 2.8 percent last year alone marking the second largest increase in oil consumption globally for the past 30 years. And if Saudi Arabia gets its way, oil will get even cheaper, in order to cutoff development of alternative forms of fuel. 100 years of oil left? Not bloody likely.

Source: WSJ

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail.

 

Andrew Meggison

Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor's Degree in Government and International Relations from Clark University and a Master's Degree in Political Science from Northeastern University. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail. You can follow Andrew on Twitter @AndrewMeggison