Where It Came From
Plankton and algae settle to the bottom of the sea. This organic matter, mixed with the mud, may become buried under layers of sediment. If the pressure and temperature becomes high enough, the organic matter is chemically changed and, with the compressed mud, forms oil shale. Eventually, the oil seeps out and makes its way towards the surface.
The vast majority of the oil reaches the surface where it lies in oil sands. This oil is eventually biodegraded by bacteria.
On rare occasions, the oil may become trapped in porous rocks under impermeable rocks, in an oil field.
If the temperature is high enough, the trapped oil will be converted to natural gas.
Where Is It Now
“Proven oil reserves” refers to oil known to be in oil fields that can economically recovered with current technology and prices. According to the US Geological Survey, the world’s proven oil reserves are about 1,100 billion barrels (36 years supply at current rates).
“Recoverable reserves” can be recovered but not economically at current prices. Recoverable reserves plus proven reserves total about 2,270 billion barrels (75 years supply).
Much more oil is in oil sands. Recovery costs are about $10 to $20 per barrel more than conventional oil. Mining is becoming economical with extensive mining being done in Canada. The Athabasca Oil Sands in Canada and the Orinoco Oil Belt in Venezuela each contain at least 1,700 billion barrels. (Another 110 years supply in just these two fields).
Even more oil is in oil shale but this is generally not economically recoverable because it is deep underground. Surface oil shale, which may be recoverable, is estimated at 2,600 billion barrels. (Another 85 years supply.)
Oil availability as a function of price
(Public domain – US Energy Information Administration data)
Where It’s Going
The world is currently using about 80 million barrels a day or about 30 billion barrels a year.
Almost half of this oil is used for motor vehicle gasoline. About 22% is used for distillate which includes diesel fuel, kerosene and heating oil. Distillates are also used for making waxes which are turned into candles, crayons, water repellent coatings, sealants, insulators and many other products. A further 8% of the oil is used for jet fuel.
4% is used for petroleum coke for specialty carbon products like electrodes. Another 4% is used for lubricants and about 3% is used as asphalt, tar or pitch in road making and for sealing and protecting wood.
Just 2% becomes the feedstock for the petrochemicals which include many products which have become an essential part of our lives. These include fertilizers, plastics, synthetic fibres like nylon and polyester, explosives, solvents and detergents, paints, varnishes and dyes, synthetic rubber, industrial resins and anti-freeze.
A number of gases are given off during refining. These include natural gas which is used for heating and cooking, propane which is used as a fuel (for example, for gas barbecues) and butane which is used as a refrigerant. Another biproduct of the distillation process is sulphur which is used has a vast range of uses including in fertilizers, detergents, fungicides, dyes, rubber, artificial fabrics and medicines.