Everything Everywhere Daily: History, Science, Geography & More - Everything You Need to Know About Petroleum (Encore)

Starting point is 00:00:00 The following is an encore presentation of Everything Everywhere Daily. Thousands of years ago, humans discovered a black, yellowish liquid that came from the ground and could burn when it was set on fire. Today, that fluid that seeped from the rocks is responsible for much of our modern world. But how does that fluid become a usable fuel, and how exactly do you get it out of the rocks? Learn more about petroleum, aka crude oil, and how it gets from the ground to your vehicle on this episode of Everything Everywhere Daily. What if your perceptions about the past were wrong?

Starting point is 00:00:49 ThruLine is a podcast that takes you back in time to uncover the parts of the story that may have gone unnoticed. It effectively turned day into night. And how it shaped the world now. Time travel with us every week on the ThruLine podcast from NPR. Even though the use and harnessing of petroleum is relatively modern, knowledge of petroleum is actually quite ancient. The word petroleum is derived from the Latin words Petra, which means rock, and oleum, which means oil. So, petroleum literally means rock oil. The word was coined in 1546 by the German geologist Georg Bauer. Today, petroleum is synonymous with the term crude oil. They both refer to the

Starting point is 00:01:35 liquid substance that is pumped directly from the ground. The substance we know as petroleum has been around for at least 6,000 years, and probably well before that, whenever humans found it near the surface. There were ancient Greek texts which told of petroleum being used in the construction of the hanging gardens of Babylon. Ancient Persian texts spoke of the use of petroleum for lighting lamps by the upper levels of society. Pools of petroleum were reported on the surface in various places in the Middle East. Petroleum was documented being used as a fuel in the early first century BC in China, and the first oil well was built using bamboo in the year 347. Native people in what is today Western Pennsylvania were using petroleum in their religious ceremonies and as a healing

Starting point is 00:02:17 lotion in the early 15th century. In the Middle Ages, Islamic scientists conducted experiments on this fluid and they were the first people to discover the secrets of petroleum distillation. Marco Polo noted the production of petroleum in China such that it could fill hundreds of ships. So for a very long time, people knew about and used petroleum, if they happened to live in a place where it was easily accessible and near the surface. The problem was, there were weren't many places where that happened. Before I go much further into how petroleum is used, I think I should probably talk about exactly what it is. The textbook definition of petroleum is that it is a naturally occurring organic fluid that comes from the earth. It is a blackish

Starting point is 00:02:58 color with yellow tints, which becomes evident if you pour it or smear it onto something. The overwhelming consensus view is that petroleum comes from the remnants of organic matter, which were buried millions of years ago. The pressure and temperatures beneath the surface of the earth gradually transformed it into the liquid we know as petroleum. I say overwhelming consensus because there are a few renegade geologists who believe in what is called the abiogenic theory of petroleum. This holds that petroleum is actually created by inorganic processes and that it doesn't come from former organic matter from the surface. They think that it comes from organic molecules which were inside the earth when it was first

Starting point is 00:03:35 formed. Petroleum isn't a single substance like iron. Petroleum is more like a soup that contains hundreds of different hydrocarbons, organic compounds, and even tiny bits of metal. Hence, the chemical profile of petroleum taken from one place is going to be different from petroleum extracted from another place. So, petroleum is actually more of a category like wheat or rice, where there are different strains that differ slightly from each other. Petroleum is categorized by two criteria, sulfur content, and its American Petroleum Institute or API Gravity. Petroleum with little to no sulfur is called sweet, and petroleum with lots of sulfur, anywhere from 2.5 to 4%, might be called sour.

Starting point is 00:04:17 The API gravity of petroleum is a measure of its density. Petroleum with a low density is called light, and if it has a high density, it's called heavy. If you've ever heard of light, sweet crude oil, this would be referring to petroleum with low sulfur content and low density. I'll explain it a bit why this matters, and why someone might want to buy one type of oil over another. There are categorizations of oil based on where it's from. For example, West Texas Intermediate Crude is a grade of crude oil based on the type that's found in West Texas. It is a light sweet petroleum. Any petroleum which fits into this category can be called West Texas Intermediate,

Starting point is 00:04:54 even if it doesn't technically come from Texas. Other categories include Brent Blend from the North Sea, Western Canadian Select, and Dubai crude. Even though we often speak generically about the price of oil, There are technically different markets for each petroleum grade, although they're usually never that far apart from each other. Crude oil is bought and sold in units known as barrels. One barrel is equal to 42 U.S. gallons, or almost exactly 159 liters. If the use of barrels as a unit of measurement seems rather antiquated, that's because it is. It actually dates back to the very first industrial petroleum wells which were developed in Pennsylvania in the 19th century. They needed a way to transport this liquid to other places.

Starting point is 00:05:36 and the industry, which had already mastered the art of transporting liquids, was the alcohol and spirits industry. In the United States, the whiskey industry had standardized on 40-gallon wooden barrels. The oil industry tacked on two extra gallons to compensate for spillage and loss in transit, and the 42-gallon barrel was adopted as a standard in 1866. If you see prices for oil listed, the units will sometimes be abbreviated as BBL, which stands for blue barrels. There is a persistent urban legend that the term comes from the barrels used by John D. Rockefeller's

Starting point is 00:06:09 standard oil company. In his desire to make his business ever more efficient, he grew his own lumber and made his own barrels, which were painted blue. However, a subsequent research has found that the abbreviation BBL was used for barrels well before the creation of the petroleum business. As the original Latin name indicates, petroleum comes from the ground. The extraction of it comes from oil wells. While there is a global market for crude oil which tends to make the price uniform, the costs associated with petroleum extraction can vary dramatically. Many of the places which traditionally have been associated with crude oil production, like in the Middle East, don't just sit on large pools of crude oil. They sit on very easily accessible pools of crude oil.

Starting point is 00:06:51 Just to give you an idea, the United States produces about the same amount of crude oil as Saudi Arabia. However, to do that, the United States needs about a million-scentrales. separate oil wells, the vast majority of which only produce between one to 10 barrels of oil per day. Saudi Arabia, however, has only a tiny fraction of the number of oil wells, because each well is incredibly productive. There are wells in Saudi Arabia that can produce over 10,000 barrels per day. There are many petroleum reserves in the world that can be tapped, but it is only economical to do so if the price of oil is very high. That is why many of the world's largest crude oil producers have an incentive to keep prices high, but

Starting point is 00:07:31 not too high. Once prices get beyond a certain point, it becomes cost-effective for competitors to start extracting petroleum from sources such as shale oil and oil sands. There are billions of dollars spent every year by oil companies searching for new oil reserves. Some of the things that they search for are sedimentary rock, and especially sedimentary rock with what is known as antichlines. An antichline is just a bend in the rock formation, which is in the shape of a capital A. The opposite of an antichline would be a sincline, which looks like the letter V. Because oil and gas are fluids, they tend to get trapped under these antichlines. If you can identify where an anticline is underground, you can probably identify a good place to drill.

Starting point is 00:08:13 Getting crude oil from where it is produced to where it's consumed is usually done one of two ways. Either an oil pipeline or an oil tanker. There are pipelines that can move crude oil over 4,000 kilometers, and there are supertankers that can ship over two million barrels of crude oil at once. Supertankers are the largest ships that have ever been built, and the largest supertankers can supply a country like the United Kingdom enough petroleum for a single day's consumption. Crude oil, in its raw form, is of little use to anybody. The real value in it is from what other chemicals and hydrocarbon fuels can be extracted from it. The process by which fuels come from crude oil is known as fractional distillation.

Starting point is 00:08:54 As I mentioned before, petroleum is actually a mixture of many different types of hydrocarbons. Very light hydrocarbons, such as methane, propane, and butane are gases at room temperature, and these are often captured during the extraction process and are handled separately from crude oil. The other hydrocarbons in petroleum have different boiling points. To separate them, crude oil is slowly heated. As it's heated, various hydrocarbons will turn to a gas at different temperatures. The vapor is then cooled to capture whatever the particular hydrocarbon is. One of the lightest and first compounds that is captured in the fractional distillation process is gasoline. I mentioned before the different grades of crude oil. The lighter a crude oil is, the more gasoline can be

Starting point is 00:09:36 extracted from it. And this is why there can be different prices in crude oil types, because refiners need to know what the end products are going to be based on the makeup of the raw crude. As the petroleum is heated, other substances are distilled away. These include naphtha or white gas, kerosene, jet fuel, diesel fuel, heating oil, and fuel oil. At the very end, the very end, you are left with Coke or other carbon compounds which can be used in the manufacturing of plastics. Approximately 46% of a typical barrel of crude oil will be converted into gasoline. 26% is diesel fuel and other fuel oils. 9% is jet fuel, 3% is asphalt, 1% are lubricants such as motor oil, and the remaining 15% are the bottom of the barrel products which have

Starting point is 00:10:17 industrial non-fuel usages. Gasoline, because it's one of the lightest liquids that can be extracted actually can evaporate. As such, it's usually refined and then sold within a few weeks or months after it leaves a refinery. The largest producer of crude oil in the world, as of the time I am recording this, is the United States, followed by Russia, Saudi Arabia, and Canada. As of 2021, there were 88 million barrels of oil produced globally every single day. In addition to the use of barrels as a unit, one of the other unique features of the petroleum industry is that prices are always listed globally and purchased in U.S. dollars. This system known as the Petro-dollar system was established in 1974, and most definitely will be the subject of a future episode,

Starting point is 00:11:03 as it is fascinating, extremely important, and most people have no idea how it works. For better or worse, for over a hundred years, petroleum has been the world's most important commodity. It's been the focus of diplomacy, intrigue, and wars. And despite efforts to the contrary, its importance as a commodity will probably continue into the foreseeable future. The executive producer of Everything Everywhere Daily is Charles Daniel. The associate producers are Peter Bennett and Cameron Kiever. I wanted to give a big thanks to everyone who supports the show on Patreon. Your support helps me put out a new show every day.

Starting point is 00:11:41 And if you're interested in Everything Everywhere Daily merchandise, Patreon is currently the only place where it's available. And if you'd like to talk to other listeners of the show and get notified to future episodes and projects, please join my Facebook group or Discord server. Links to everything are in the show notes.

Everything Everywhere Daily: History, Science, Geography & More - Everything You Need to Know About Petroleum (Encore)

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