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Unlock This CourseOil is one of the world's most important energy sources, powering everything from cars to heating systems. As a fossil fuel, oil took millions of years to form and cannot be replaced once used up, making it a non-renewable resource. Understanding oil's role in energy security is crucial as countries depend on it for economic growth and daily life.
Key Definitions:
Oil formed from tiny sea creatures and plants that died millions of years ago. These organisms settled on ocean floors and were buried under layers of sediment. Heat and pressure slowly transformed this organic matter into crude oil over geological time scales.
Oil is not evenly distributed around the world. Most reserves are concentrated in specific regions, creating an uneven global supply that affects international relations and economics.
The world's largest oil reserves are found in the Middle East, which contains about 60% of global proven reserves. Other significant regions include North America, Russia and parts of Africa and South America.
Saudi Arabia, Iran, Iraq and Kuwait hold the world's largest reserves. The region's oil is often easier and cheaper to extract than elsewhere.
USA, Canada and Mexico have significant reserves. The US has increased production through fracking and offshore drilling.
Russia, Venezuela, Nigeria and Norway are major producers. Each region faces different extraction challenges and costs.
The North Sea, between the UK and Norway, became a major oil province in the 1960s. UK production peaked in 1999 but continues to provide energy security and economic benefits. The harsh marine environment requires advanced technology and significant investment, making extraction costs higher than in many other regions.
Getting oil from underground reservoirs to usable products involves complex processes that vary depending on location and oil type.
Oil extraction depends on where the oil is located and how deep it lies. Different methods are used for different situations, each with varying costs and environmental impacts.
Traditional method using drilling rigs on land. Wells can be vertical or horizontal to reach oil deposits. Relatively cheaper but may face local opposition due to environmental concerns.
Extraction from beneath the seabed using oil platforms. More expensive and technically challenging but accesses large reserves under continental shelves.
Crude oil must be refined to create useful products. Refineries use heat and chemical processes to separate oil into different components like petrol, diesel and heating oil.
Distillation towers heat crude oil to separate it into fractions based on boiling points. Lighter products like petrol rise to the top, while heavier products like bitumen settle at the bottom. Additional processes improve quality and create specialised products.
Oil is incredibly versatile, used far beyond just fuel. Its products are essential to modern life, from transportation to manufacturing.
Petrol and diesel fuel cars, trucks, ships and aeroplanes. About 60% of oil consumption goes to transport, making it crucial for global mobility and trade.
Heating oil warms homes and buildings. Some power stations burn oil to generate electricity, though this is becoming less common due to cost and environmental concerns.
Petrochemicals from oil make plastics, synthetic fibres, medicines and fertilisers. These products are essential to modern industry and agriculture.
Oil extraction, transport and use create significant environmental challenges that affect both local ecosystems and global climate.
The oil industry impacts the environment at every stage, from exploration to consumption. Understanding these impacts is crucial for sustainable energy planning.
Burning oil releases carbon dioxide, contributing to global warming. Oil accounts for about 32% of global CO2 emissions from fossil fuels, making it a major climate concern.
Oil spills damage marine and terrestrial ecosystems. Air pollution from refineries and vehicle emissions affects human health and local environments.
The Deepwater Horizon disaster in the Gulf of Mexico released 4.9 million barrels of oil over 87 days. It killed 11 workers, devastated marine life and cost BP over $60 billion in cleanup and compensation. The disaster highlighted risks of deepwater drilling and led to stricter safety regulations.
Oil plays a massive role in the global economy, affecting everything from national budgets to international relations. Countries with large oil reserves often build their entire economies around this resource.
Oil revenues can transform countries, providing funds for development and infrastructure. However, dependence on oil can also create economic vulnerability when prices fluctuate.
Oil-rich countries like Saudi Arabia and Norway have used oil revenues to fund development projects, education and healthcare. However, countries overly dependent on oil face challenges when prices fall or reserves decline.
The oil industry faces significant challenges including declining reserves, environmental concerns and competition from renewable energy sources.
Some experts believe global oil production will peak and then decline as reserves are exhausted. This could lead to higher prices and increased competition for remaining supplies.
Growing environmental concerns and improving renewable technology are reducing oil demand in some sectors. Electric vehicles and renewable electricity are beginning to challenge oil's dominance.
Norway created the world's largest sovereign wealth fund using oil revenues, now worth over $1.4 trillion. The fund invests globally to provide income for future generations when oil runs out. This shows how countries can use oil wealth sustainably rather than just consuming the profits.