Petroleum industry
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The '''petroleum industry''' includes the global processes of [[Hydrocarbon exploration|exploration]], [[Extraction of petroleum|extraction]], [[Oil refinery|refining]], transporting (often by [[oil tanker]]s and [[Pipeline transport|pipelines]]), and marketing [[petroleum]] products. The largest volume products of the industry are [[fuel oil]] and [[gasoline]] (petrol). Petroleum is also the raw material for many [[Petrochemical|chemical products]], including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into three major components: [[Upstream (oil industry)|upstream]], [[midstream]] and [[Downstream (oil industry)|downstream]]. Midstream operations are usually included in the downstream category.
Petroleum is vital to many [[industries]], and is of importance to the maintenance of industrialized [[civilization]] itself, and thus is a critical concern to many nations. Oil accounts for a large percentage of the world’s energy consumption, ranging from a low of 32% for [[Europe]] and Asia, up to a high of 53% for the [[Middle East]]. Other geographic regions’ consumption patterns are as follows: South and [[Central America]] (44%), [[Africa]] (41%), and [[North America]] (40%). The world at large consumes 30 billion [[Barrel (unit)|barrels]] (4.8 km³) of oil per year, and the top oil consumers largely consist of developed nations. In fact, 24% of the oil consumed in 2004 went to the [[United States]] alone.<ref>"International Energy Annual 2004". '''Energy Information Administration'''. 14 Jul. 2006. Found at http://www.eia.doe.gov/pub/international/iealf/tablee2.xls</ref> The production, distribution, refining, and retailing of petroleum taken as a whole represent the single largest industry in terms of dollar value on earth.
==History==
===Natural history===
Petroleum is a naturally occurring liquid found in rock formations. It consists of a complex mixture of hydrocarbons of various molecular weights, plus other organic compounds. It is generally accepted that oil, like other [[fossil fuel]]s, formed from the fossilized remains of dead plants and animals by exposure to heat and pressure in the Earth's crust over hundreds of millions of years. Over time, the decayed residue was covered by layers of mud and silt, sinking further down into the Earth’s crust and preserved there between hot and pressured layers, gradually transforming into oil reservoirs.
===Early history===
Oil in general has been used since early [[human history]] to keep fires ablaze, and also for [[war]]fare.{{Fact|date=April 2008}} Its importance in the [[world economy]] evolved slowly, with [[wood]] and [[coal]] used for heating and [[cooking]], and [[whale oil]] used for [[lighting]] well into the 19th Century.
An early petroleum industry was established in the 8th century, when the [[street]]s of [[Baghdad]] were paved with [[tar]], derived from [[petroleum]] through [[destructive distillation]].{{Fact|date=March 2008}} In the 9th century, [[oil field]]s were exploited in the area around modern [[Baku]], [[Azerbaijan]], to produce [[naphtha]]. These fields were described by [[al-Masudi]] in the 10th century, and by [[Marco Polo]] in the 13th century, who described the output of those [[oil well]]s as hundreds of shiploads.<ref>K. Ajram (1992). ''Miracle of Islamic Science'', Appendix B. Knowledge House Publishers. ISBN 0911119434.</ref> Petroleum was [[Distillation|distilled]] by [[al-Razi]] in the 9th century, producing chemicals such as [[kerosene]] in the [[alembic]], which he used to invent [[kerosene lamp]]s for use in the [[oil lamp]] industry.<ref>Zayn Bilkadi ([[University of California, Berkeley]]), "The Oil Weapons", ''[[Saudi Aramco World]]'', January-February 1995, p. 20-27.</ref>
The [[Industrial Revolution]] generated an increasing need for energy which was fuelled mainly by [[coal]]. However, it was discovered that kerosene could be extracted from [[crude oil]] and used as a light and heating fuel. Petroleum was in great demand, and by the twentieth century had become the most valuable commodity traded on the world market.<ref name="Halliday">Halliday, Fred. The Middle East in International Relations: Power, Politics and Ideology. Cambridge University Pres: USA, 270</ref>
===Modern history===
{{seealso|Baku oil boom}}
[[Image:Galicja1881.jpg|thumb|right|250px|Galician oil wells]]
[[Imperial Russia]] produced 3,500 tons of oil in 1825 and doubled its output by the mid-century.<ref>N.Y. Krylov, A.A. Bokserman, E.R.Stavrovsky. ''The Oil Industry of the Former Soviet Union''. CRC Press, 1998. Page 187.</ref> After the oil drilling began in what is now [[Azerbaijan]] in 1848, two large pipelines were built in the [[Russian Empire]]: the 833 km long pipeline to transport oil from the Caspian to the [[Black Sea]] port of [[Batumi]] ([[Baku-Batumi pipeline]]) and the 162 km long pipeline to carry oil from [[Chechnya]] to the Caspian.
At the turn of the 20th century, Imperial Russia's output of oil, almost entirely from the [[Apsheron Peninsula]], accounted for half of the world's production and dominated international markets.<ref name = "Shirin">Shirin Akiner, Anne
Aldis. ''The Caspian: Politics, Energy and Security''. Routledge, 2004. Page 5.</ref> Nearly 200 small refineries operated in the suburbs of Baku by 1884.<ref>United States Congress, Joint Economic Committee. ''The Former Soviet Union in Transition''. M.E. Sharpe, 1993. Page 463.</ref> As a side effect of these early developments, the Apsheron Peninsula emerged as the world's "oldest legacy of oil pollution and environmental negligence"<ref>Quoted from: Tatyana Saiko. ''Environmental Crises''. Pearson Education, 2000. Page 223.</ref> In 1878 [[Ludvig Nobel]] and his [[Branobel]] company "revolutionized oil transport" by commissioning the first [[oil tanker]] and launching it on the [[Caspian Sea]].<ref name = "Shirin"/>
The first modern oil refineries were set up by [[Ignacy Łukasiewicz]] near [[Jasło]], Poland in the years 1854-56..<ref>{{cite book|author=Frank, Alison Fleig|title=Oil Empire: Visions of Prosperity in Austrian Galicia (Harvard Historical Studies)|edition=|publisher=Harvard University Press|year=2005|id=ISBN 0-674-01887-7}}</ref> They were initially small as there was limited demand for refined fuel. They produced oil for artificial asphalt, machine oil and lubricants, in addition to Łukasiewicz's kerosene lamp. As kerosene lamps gained popularity, the refining industry grew in the area. The first large oil refinery opened at [[Ploieşti]], Romania in 1856.
The first oil drilling in the United States began in 1859, when oil was successfully drilled in [[Titusville, Pennsylvania]]. In the first quarter of the 20th century the United States overtook Russia as the world's largest oil producer. By the 1920s, oil fields had been established in many countries including Canada, Poland, Sweden, the Ukraine, the United States, and Venezuela.
In 1938, the Superior Oil company constructed the first offshore [[oil platform]] off the Gulf Coast of Louisiana.
===Corporations===
During the 1960s, multinationals such as Mobil, BP, and Shell had access to more than 80 percent of global oil and natural gas reserves. Western multinationals control just 10 percent of the world's oil, while state-run firms exercise exclusive control over roughly 77 percent, according to a November 2007 paper from Rice University's [[James Baker Institute]].<ref>[http://www.motherjones.com/news/feature/2008/05/put-a-tyrant-in-your-tank.html Put a Tyrant in Your Tank]</ref>
==Industry Structure==
The [[American Petroleum Institute]] divides the petroleum industry into five sectors:
* [[Upstream (oil industry)|Upstream]] ([[oil exploration|exploration]], development and production of crude oil or natural gas),
* [[Downstream (oil industry)|Downstream]] ([[Tanker (ship)|oil tankers]], [[oil refinery|refiners]], retailers, and consumers),
* [[Pipeline transport|Pipeline]],
* Marine, and
* Service and Supply.<ref> American Petroleum Institute. "Industry Sectors." http://www.api.org/aboutoilgas/sectors/ Retrieved 12 May 2008</ref>
[[Oil companies]] can also be categorized as ''"[[Supermajor]]s"'' ([[BP]], [[Chevron Corporation|Chevron]], [[ExxonMobil]], [[ConocoPhillips]], [[Royal Dutch Shell|Shell]] and [[Total S.A.]]), ''"majors,"'' and ''"independents" or "jobbers."'' Most upstream work in the [[oil field]] or on an [[oil well]] is [[contract]]ed out to drilling contractors and oil field service companies.{{Fact|date=March 2008}}
==Environmental impact and future shortages==
Some Petroleum industry operations have been responsible for [[water pollution]], through byproducts of refining, and [[oil spill]]s.
The combustion of fossil fuels produces [[greenhouse gases]] and other air pollutants as byproducts. Pollutants include [[nitrogen oxide]]s, [[sulfur dioxide]], [[volatile organic compound]]s and [[heavy metal]]s.
As petroleum is a non-renewable [[natural resource]] the industry is faced with an inevitable eventual depletion of the world's oil supply. The BP Statistical Review of World Energy 2007 predicted the reserve/production ratio for proven resources worldwide. The study placed the prospective life span of reserves in the Middle East at 79.5 years, Latin America at 41.2 years and North America at only 12 years. The global reserve/production ratio estimates that at current production levels, the world's oil reserves will be depleted in 40.5 years. <ref> BP Global. "Reports and Publications: Oil Reserves." http://www.bp.com/sectiongenericarticle.do?categoryId=9017902&contentId=7033474 Retrieved 26 Feb 2008</ref>
The [[Hubbert peak]] theory, also known as peak oil, is an influential theory concerning the long-term rate of conventional oil production and depletion.
According to research by IBISWorld, Biofuels (primarily ethanol, but also biodiesel) will continue to supplement petroleum, however output levels are low and these fuels will not displace local oil production. Ethanol is viewed as offering a lower environmental impact, and will play a small role in reducing dependence on imported crude oil. Most of the ethanol used in the US (over 90%) is blended with gasoline to produce fuel containing 10% ethanol in order to lift the oxygen content of the fuel. <ref> IBISWorld. "US Oil Drilling Industry Market Research Report." http://www.ibisworld.com/industry/retail.aspx?indid=103&chid=10 Retrieved 14 May 2008</ref>
==See also ==
{{EnergyPortal}}
* [[Abiogenic petroleum origin]]
* [[Berito Kuwaru'wa]]
* [[Chronology of world oil market events (1970-2005)]]
* [[Energy crisis]]: [[1973 energy crisis]], [[1979 energy crisis]]
* [[Energy development]]
* [[Fossil fuel]]
* [[Greenhouse gas]]es
* [[History of the petroleum industry in Canada]]
* [[List of oil fields]]
* [[List of oil-producing states]]
* [[List of petroleum companies]]
* [[Oil depot]]
* [[Oil imperialism]]
* [[Oil industry in Azerbaijan]]
* [[Oilpatch]], the petroleum industry of [[Alberta]], [[Canada]]
* [[Oil Megaprojects]]
* [[Oil price increases since 2003]]
* [[Oil refinery]]
* [[Oil supplies]]
* [[Oil well]]
* [[Olduvai theory]] (not strictly about oil, but it basically assumes that oil and gas are the only significant energy sources)
* [[OPEC]]
* [[Peak oil]]
* [[Petrobras]]
* [[Petróleos de Venezuela S.A.]]
* [[Petroleum disaster]]s
* [[Renewable energy]]
* [[Thermal depolymerization]]
==References==
{{reflist}}
{{refbegin}}
*[[Robert Sobel]] ''The Money Manias: The Eras of Great Speculation in America, 1770-1970'' (1973) reprinted (2000).
*[[Daniel Yergin]], ''[[The Prize: The Epic Quest for Oil, Money, and Power]]'', (Simon and Schuster 1991; paperback, 1993), ISBN 0-671-79932-0.
*Matthew R. Simmons, ''Twilight in the Desert The Coming Saudi Oil Shock and the World Economy'', John Wiley & Sons, 2005, ISBN 0-471-73876-X.
*Matthew Yeomans, ''Oil: Anatomy of an Industry'' (New Press, 2004), ISBN 1-56584-885-3.
*Smith, GO (1920): Where the World Gets Its Oil: National Geographic, February 1920, pp 181-202
{{refend}}
==External links==
* [http://www.petrostrategies.org/Learning%20Center/Learning_Center.htm PetroStrategies Oil and Gas Learning Center]
* [http://www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html Energy Information Administration's Petroleum website]
* [http://www.offshore-technology.com/ Oil and Gas Industry Information]
* [http://globalpublicmedia.com/bp_is_now_the_world_s_largest_oil_producer BP is now the world’s largest oil producer]
* [http://www.reportbuyer.com/energy_utilities/oil_gas/index.html Oil Industry Market Research]
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[[Category:Petroleum economics and industry]]
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