Geology And Geophysics

A History of the Petroleum Industry and the Origins of Crude Oil



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There are a lot of rich trivia and facts relating to the history of fossil fuels and petroleum.

Dinosaurs died out too late to become part of the oil and fossil fuel reserves that we have on earth.

In 400 B.C., an oil well was made on an island in the Ionian Sea to supply oil lamps.

Petroleum is mentioned in the Christian Bible in Genesis 14:10, Deuteronomy 32:13, and Exodus 2:3.

In the eleventh century, successful oil wells were drilled by the Burmese.

As early as the year 1013, Wells were drilled in China for natural gas, which flowed through bamboo pipes. The gas was to be used perhaps in porcelain manufacture, if not cooking and heating.

Coal was mined at Liege, Belgium, in 1202. Coal was also imported into Burges from England.

The year 1619 marks the first use in a blast furnace of coke instead of charcoal.

In the year 1640, an oil well was completed in Italy. Kerosene from the oil was used for lighting.

The year 1688 marks the first distillation of gas from coal.

Oil was produced in England by retorting oil shale and canned oil in 1694.

In 1767, Philadelphia, PA, used whale-oil lamps to light its streets.

Streets of Genoa and Parma were lighted by kerosene from an oil well at Modena in 1803.

In the year 1813, London Bridge was lighted by gas.

The year 1815 marked the start of commercial oil-shale retorting in New Brunswick.

The streets of Prague were lighted by kerosene in the year 1820.

In 1821, houses in Fredonia, New York, were heated with natural gas. Also, lighting by coal-gas was successfully introduced into America at Baltimore.

In 1829, a successful oil well was drilled in Kentucky.

In 1850, James Young started to produce "coal-oil [ kerosene ]," from coal.

In the year 1857, oil was discovered in Romania and Ontario.

The period of 1859 - 1900 is known as the Kerosene Age. In 1859, the first "important" discovery of oil occurred in the USA. When oil was first drilled, it was used only for oil lamps. Oil was first discovered when a homemade rig drilled down about 70 feet and came up coated with oil. This rig was near Titusville (in northwestern Pennsylvania) and was owned by "Colonel" Edwin L. Drake. Thus, the first commercial well hit oil and natural gas at 69 to 70 feet below the surface of the earth. A two-inch diameter pipeline was built, running 5 and one-half miles from the well to Titusville. This well is associated with the creation of a natural gas industry in the United States.

In the year 1912, offshore oil wells were drilled in Southern California. The President of the United States, by Executive Order, established the Naval Petroleum and Oil Shale Reserves (NPOSR). Naval Petroleum Reserve No. 1 (NPR-1, also called "Elk Hills," a Federally-owned oil and gas production field in Kern County, California, was created by an Executive Order issued by President Taft on September 2, 1912. The need for secure supplies and the potential for oil shale to contribute to that need were formally recognized as early as 1912, with the establishment of the Office of Naval Petroleum and Oil Shale Reserves (NPOSR). The original intent for establishing this office was to assure a secure supply of petroleum for America's naval fleet. Fittingly, NPOSR is currently part of the Office of Strategic Petroleum Reserves in the U.S. Department of Energy.

In 1923, President Warren G. Harding formed the US Naval Petroleum Reserve Number 4 (PET-4). The PET-4 was subsequently renamed to the National Petroleum Reserve-Alaska (NPRA).

In 1932, Standard Oil Company of California (SOCAL) discovered oil in commercial quantities in Bahrain.

In 1933, Beverley Nichols' book, "Cry Havoc!," is published by Doubleday, Doran & Company, Inc., of Garden City, New York. Nichols quotes Sir Arthur Salter's position on maintaining peace under capitalism:

"One vital condition for example is that no section of the capitalist system shall be allowed to get into a position in which it can dictate public policy. This danger exists in the case of the armaments business ...

"... I believe the only solution is that the private manufacture of arms should be prohibited ..."

SIR ARTHUR SALTER'S CASE [ Oil or Armaments ]

"S. I won't answer you directly. I want to suggest that there are four possible systems, two of them capitalist and two of them socialist. Under two of these four (one capitalist, one socialist) I believe that peace can be preserved. Under the other two I believe that it cannot be preserved.

"Here is my first system. It is a capitalist system in which the relations between government and private interests are firmly established on a proper basis. Internally in each country the political situation is such that no private interest (such as oil or armaments) can prevail over the public interest and dominate public policy. Externally the different governments agree upon the limits to their respective action in helping or hindering the competition of their nations for world trade."

In 1938, Standard Oil Company of California (SOCAL) discovered oil in commercial quantities in Saudi Arabia.

In 1947, the first modern offshore oil well was drilled off the coast of Louisiana.

By 1953, Kuwait had established itself as the largest oil producer in the Persian Gulf.

In 1957, the first Alaskan oil was discovered at Swanson River in Kenai.

In 1959, Lower 48 U.S. crude oil reserves peaked at 31,719 million barrels. In the same year, Alaska produced its first 1,000 barrels per day of crude oil, and Lake Charles, Louisiana, shipped liquefied natural gas in a cryogenic tanker to London, England.

In September of 1960, the Organisation of Petroleum Exporting Countries (OPEC) was formed in response to the low price of USA domestic oil.

In the winter of 1961 - 1962, construction began on the first oil well to be drilled in the Canadian Arctic Islands.

The Santa Barbara oil spill occurred in 1969.

In 1970, Lower 48 production of crude oil peaked. Oil production then began to decline in the United States. In the summer of 1970, The Trans Alaskan Pipeline System (TAPS) became the Alyeska Pipeline.

In 1971, United States gas well productivity peaked at 435 thousand cubic feet per well per day.

In 1972, oil well productivity for the United States reached a high of 18.6 barrels per day per well.

In 1973, U.S. natural gas production reached a record-high of 21.7 trillion cubic feet before starting a long period of decline. Also, when OPEC invoked a six-month oil embargo against the United States, prices quadrupled and the United States economy suffered a recession. The Arab oil embargo created a massive price rise and economic dislocation, from Tokyo to Paris to Chicago. The explosion in oil prices ushered in a decade of "stagflation" in which inflation soared while economies stagnated.

Arab OPEC nations added South Africa, Rhodesia, and Portugal to the list of countries that were embargoed. Arab OPEC production was cut by 25 percent, which caused some temporary shortages and helped oil prices to triple. Some filling stations ran out of gasoline and cars had to wait in long lines for gasoline. On July 13th, The U.S. Federal Trade Commission sued EXXON, ARCO, Mobil, Texaco, Gulf, Standard Oil California, Standard Oil Indiana, and Shell, charging them with anticompetitive practices and monopoly of the world market.

In 1974, the Middle Eastern oil embargo was lifted, but prices were raised significantly.

In 1975, the United States Strategic Petroleum Reserve was officially established in December under the Energy Policy and Conservation Act (EPCA), which created a reserve of up to 1 billion barrels. To store the reserve oil, the U.S. government acquired several salt caverns along the Gulf of Mexico coastline. Congress passed the Energy Policy and Conservation Act aimed at increasing oil production by giving price incentives. This act also created the Strategic Petroleum Reserve (SPR), and required an increase in the fuel efficiency (miles per gallon) of automobiles.

In 1976, Unocal begins planning a commercial-scale plant at Parachute Creek to be built when investment is economic. Imported oil prices reach $41/bbl, or USD 41 per barrel.

In 1977, Superior Oil abandons a plan for the Meeker oil shale plant envisioned from 1972. The first crude oil was delivered to the Strategic Petroleum Reserve and stored at the West Hackberry storage site.

In 1978, probably the last major oil field was discovered in Mexico. A revolution took place in Iran, and oil workers cut off oil exports to the USA. OPEC announced in December that oil prices would rise by 14.5 percent over the next several months - thus widening the gap between US-domestic and world prices. Inflation was a continuing problem.

In 1979, during the revolution in Iran and the beginning of the Iran-Iraq War, oil prices more than doubled. The United States suffered recessions in early 1980 and in 1981. On March 28th, the worst accident in the history of nuclear power occurred at Three Mile Island, a nuclear reactor for producing electricity located near Harrisburg, PA. It was operated by Metropolitan Edison Company.

In 1984, there were 265 world-scale giant oil fields.

In 1988, Alaska's oil production at Prudhoe Bay peaked at 2.0 million barrels per day.

In 1989, the famous Exxon Valdez oil spill occurred. On March 24th, this supertanker struck Bligh Reef in Prince William Sound, Alaska, and released over 11 million gallons of crude oil into the water, about one fifth of its total capacity. It immediately became infamous for being the largest spill in U.S. history and for the threats it posed to wildlife, marine life, and to the commercial fishing industry. This accident also vigorously tested Alaskan and federal emergency response plans.

In 1990 - 1991, the Iraqi invasion of Kuwait disrupted 4.6 million barrels of supply per day for three months. Prices more than doubled notwithstanding the release of oil from the nation's Strategic Petroleum Reserve.

In 1997, Shell tests in-situ heating on Mahogany property; defers further work on economic basis. Also, the U.S. Department of Energy ceded oil shale lands to the U.S. Department of the Interior's Bureau of Land Management.

In 1998 and 1999, the crude oil price increase was solely responsible for the increase in pump prices between the driving season of 1998 and the driving season of 1999.

In 1999, Alaska's production at Prudhoe Bay fell to 1.0 million barrels per day. By then, U.S. total output had dropped to 7.8 million barrels per day, 31 percent below its peak.

In 2000, the Bureau of Land Management (U.S. Department of the Interior) seeks public comment on management of oil shale lands. Shell returns to Mahogany with expanded in-situ heating technology research plan (ongoing). At 23 quadrillion Btu in 2000, coal accounted for nearly a third of all energy produced in the country. Natural gas consumption peaked at 23.3 trillion cubic feet.

In 2001, Our nation's petroleum production measured an average of 11.0 barrels of oil per day per well, 41 percent below the 1972 peak. U.S. petroleum consumption reached 19.7 million barrels per day, an all-time high. Of every 10 barrels of petroleum consumed in the United States, more than 4 barrels were consumed in the form of motor gasoline. The transportation sector alone accounted for two-thirds of all petroleum used in the United States. To meet demand, crude oil and petroleum products were imported at the rate of 11.9 million barrels per day, while exports measured 1.0 million barrels per day. Net imports (imports minus exports) of crude oil and petroleum products more than doubled from the 4.3 million barrels per day in 1985 to 10.9 million barrels per day. The five leading suppliers of petroleum to the United States that year were Canada, Saudi Arabia, Venezuela, Mexico, and Nigeria.

In September of 2003, China's monthly crude-oil imports grew almost 60 percent as compared to September of 2002. Year-to-year imports are up about 30 percent as the economy of China expands.

In 2004, the U.S. Department of Energy Office of Naval Petroleum and Oil Shale Reserves (NPOSR) initiated a study of the strategic significance of America's oil shale resources.

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