Petroleum industry

The petroleum industry, also known as the oil industry or the oil patch, includes the global processes of, , , (often by s and ), and marketing of. The largest volume products of the industry are and  (petrol). Petroleum (oil) is also the raw material for many, including , s, s, s, synthetic fragrances, and s. The extreme monetary value of oil and its products has led to it being known as "black gold". The industry is usually divided into three major components:, , and.

Petroleum is vital to many industries, and is necessary for the maintenance of industrial in its current configuration, making it a critical concern for many nations. Oil accounts for a large percentage of the world’s, ranging from a low of 32% for and , to a high of 53% for the.

Other geographic regions' consumption patterns are as follows: and  (44%),  (41%), and  (40%). The world consumes 30 billion (4.8 km³) of oil per year, with developed nations being the largest consumers. The consumed 25% of the oil produced in 2007. The production, distribution, refining, and retailing of petroleum taken as a whole represents the world's largest industry in terms of dollar value.

Governments such as the United States government provide a heavy public, with major tax breaks at virtually every stage of oil exploration and extraction, including the costs of oil field leases and drilling equipment.

In recent years, techniques — most notably multi-stage drilling and  ("fracking") — have moved to the forefront of the industry as this new technology plays a crucial and controversial role in new methods of oil extraction.

Prehistory
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 is formed mostly from the carbon rich remains of ancient plankton after exposure to heat and pressure in '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 Earth’s crust and preserved there between hot and pressured layers, gradually transforming into oil reservoirs.

Early history
According to, more than four thousand years ago natural asphalt was employed in the construction of the walls and towers of , great quantities of it were found on the banks of the river , one of the tributaries of the , and this fact confirmed by. mentioned pitch spring on (, Greece). Also, described a well for bitumen and oil near  in.

In China, petroleum was used more than 2000 years ago. In, one of the earliest Chinese writings cites the use of oil in its raw state without refining was first discovered, extracted, and used in China in the first century BCE. In addition, the Chinese were the first to use petroleum as fuel as early as the fourth century BCE.

The earliest known s were drilled in China in 347 AD or earlier. They had depths of up to about 800 ft and were drilled using attached to  poles. The oil was burned to evaporate and produce. By the 10th century, extensive pipelines connected oil wells with salt springs. The ancient records of China and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was known as burning water in Japan in the 7th century. In his book  written in 1088, the polymathic scientist and statesman of the  coined the word 石油 (Shíyóu, literally "rock oil") for petroleum, which remains the term used in contemporary Chinese and Japanese (Sekiyū).

The first streets of were paved with, derived from petroleum that became accessible from natural fields in the region. In the 9th century, s were exploited in the area around modern,. These fields were described by the  in the 10th century, and by  in the 13th century, who described the output of those wells as hundreds of shiploads. The of petroleum was described in detail by  such as  (Rhazes) in the 9th century. There was production of chemicals such as in the  (al-ambiq), which was mainly used for s.  also distilled crude oil in order to produce  products for military purposes. Through, distillation became available in by the 12th century. It has also been present in Romania since the 13th century, being recorded as păcură.

The earliest mention of petroleum in the Americas occurs in 's account of the  in 1595; while thirty-seven years later, the account of a visit of a Franciscan, Joseph de la Roche d'Allion, to the oil springs of New York was published in 's Histoire du Canada. A Finnish born Swede, scientist and student of, , in his work Travels into North America published first in 1753 showed on a map the oil springs of Pennsylvania.

In 1710 or 1711 (sources vary) the Russian-born Swiss physician and Greek teacher (also spelled as Eirini d'Eirinis) discovered asphaltum at,. He established a bitumen mine de la Presta there in 1719 that operated until 1986.

In 1745 under the Empress the first oil well and refinery were built in  by Fiodor Priadunov. Through the process of distillation of the "rock oil" he received a kerosene-like substance, which was used in oil lamps by Russian churches and monasteries (though households still relied on candles).

were mined from 1745 in, under the direction of , by special appointment of. The Pechelbronn oil field was active until 1970, and was the birthplace of companies like  and. The first modern refinery was built there in 1857.

Modern history
The of petroleum began in the 19th century with the refining of  from crude oil. The Scottish chemist in 1847 noticed a natural  seepage in the   at,  from which he distilled a light thin oil suitable for use as lamp oil, at the same time obtaining a thicker oil suitable for lubricating machinery. In 1846, Baku (settlement Bibi-Heybat) the first ever well drilled with percussion tools to a depth of 21 meters for oil exploration, based on data of Nicolay Voskoboynikov; it was 13 years before the Drake's well was drilled in Pennsylvania. The new oils were successful, but the supply of oil from the coal mine soon began to fail (eventually being exhausted in 1851). Young, noticing that the oil was dripping from the roof of the coal mine, theorized that it somehow originated from the action of heat on the coal seam and from this thought that it might be produced artificially.

Following up this idea, he tried many experiments and eventually succeeded, by distilling at a low heat, a fluid resembling, which when treated in the same way as the seep oil gave similar products. Young found that by slow distillation he could obtain a number of useful liquids from it, one of which he named "paraffine oil" because at low temperatures it congealed into a substance resembling paraffin wax.

The production of these oils and solid from coal formed the subject of his patent dated 17 October 1850. In 1850 Young & Meldrum and Edward William Binney entered into partnership under the title of E.W. Binney & Co. at in  and E. Meldrum & Co. at Glasgow; their works at Bathgate were completed in 1851 and became the first truly commercial oil-works and oil refinery in the world, using oil extracted from locally mined, shale, and bituminous coal to manufacture  and lubricating oils; paraffin for fuel use and solid paraffin were not sold till 1856.

, a Canadian geologist developed a process to refine a liquid fuel from coal, bitumen and oil shale. His new discovery, which he named kerosene, burned more cleanly and was less expensive than competing products, such as whale oil. In 1850, Gesner created the Kerosene Gaslight Company and began installing lighting in the streets in Halifax and other cities. By 1854, he had expanded to the United States where he created the North American Kerosene Gas Light Company at Long Island, New York. Demand grew to where his company’s capacity to produce became a problem, but the discovery of petroleum, from which kerosene could be more easily produced, solved the supply problem.

In 1846, what some consider the first modern oil well in the world was drilled in the South Caucasus region of Russian Empire, on the Aspheron Peninsula north-east of Baku (in settlement Bibi-Heybat), by Russian Major Alekseev based on data of Russian scientist N. Voskoboynikov.

improved Gesner's method to develop a means of refining kerosene from the more readily available "rock oil" ("petr-oleum") s, in 1852, and the first rock oil mine was built in, near in   in 1854. These discoveries rapidly spread around the world, and built the first modern Russian  in the mature oil fields at  in 1861. At that time Baku produced about 90% of the world's oil.

The question of what constituted the first commercial oil well is a difficult one to answer. The following summary draws from that in Vassiliou (2018). 's 1859 well near, discussed more fully below, is popularly considered the first modern well. Drake's well is probably singled out because it was drilled, not dug; because it used a steam engine; because there was a company associated with it; and because it touched off a major boom. However, the first well ever drilled anywhere in the world, which produced oil, was drilled in 1857 to a depth of 280 feet by the American Merrimac Company in La Brea (Spanish for “Pitch”) in southeast Trinidad in the Caribbean. Additionally, there was considerable activity before Drake in various parts of the world in the mid-19th century. A group directed by Major Alexeyev of the Bakinskii Corps of Mining Engineers hand-drilled a well in the Baku region in 1846. There were engine-drilled wells in West Virginia in the same year as Drake's well. An early commercial well was hand dug in in 1853, and another in nearby  in 1857. At around the same time the world's first, but small, oil refineries were opened at, in Poland, with a larger one being opened at , in Romania. PLOIESTI, Romania -- Built in 1856 and inaugurated in 1857 by the brothers Teodor and Marin Mehedinţeanu, the Rafov Refinery, a refinery built at Ploiesti, on 174 Buna Vestire Street, had a surface of 4 hectares, and the daily production reached over 7 tons, obtained in cylindrical iron and iron casts that were heated by fire from wood; it was then called "the world's first systematic oil distillery," setting the record for being the World's First Oil Refinery, according to the Academy Of World Records. This refinery obtained, on the basis of a contract concluded in October 1856 between Teodor Mehedinţeanu and the City Hall of Bucharest, the exclusive right to supply the illumination of the Wallachian capital with oil lamp.

The contract began to be executed on April 1, 1857, when, by replacing the kidnapped oil with the products supplied by the Rafov refinery, "Bucharest became the first city in the world illuminated entirely with distilled crude oil."

In 1857, the total production of Romania was amounted to 275 tons of crude oil. With this figure, Romania was registered as the first country in world oil production statistics, before other large oil producing states such as the United States of America (1860), Russia (1863), Mexico (1901) or Persia (1913 ). In 1875, crude oil was discovered by at his home in. This led to the opening of the Bradford oil field, which, by the 1880s, produced 77 percent of the global oil supply. However, by the end of the 19th century, the Russian Empire, particularly the company in, had taken the lead in production.

established America's first oil refinery in Pittsburgh on Seventh avenue near Grant Street, in 1853. In addition to the activity in West Virginia and Pennsylvania, an in North America was in, Canada in 1858, dug by. The discovery at Oil Springs touched off an oil boom which brought hundreds of speculators and workers to the area. New oil fields were discovered nearby throughout the late 19th century and the area developed into a large petrochemical refining centre and exchange. The modern US petroleum is considered to have begun with 's drilling of a 69 ft oil well in 1859, on  near, for the Seneca Oil Company (originally yielding 25 oilbbl/d, by the end of the year output was at the rate of 15 oilbbl/d). The industry grew through the 1800s, driven by the demand for and s. It became a major al concern in the early part of the 20th century; the introduction of the  provided a demand that has largely sustained the industry to this day. Early "local" finds like those in and  were quickly outpaced by demand, leading to "oil booms" in, , , and.


 * {| class="wikitable" style="float:left; margin:1em;" border="1"

!Year !! Volume
 * + Early crude production in the U.S.
 * 1859|| align=right | 2000 barrels
 * 1869|| align=right | 4215000 barrels
 * 1879 || align=right | 19914146 barrels
 * 1889 || align=right | 35163513 barrels
 * 1899 || align=right | 57084428 barrels
 * 1906 || align=right | 126493936 barrels
 * }
 * 1889 || align=right | 35163513 barrels
 * 1899 || align=right | 57084428 barrels
 * 1906 || align=right | 126493936 barrels
 * }
 * 1906 || align=right | 126493936 barrels
 * }

By 1910, significant oil fields had been discovered in the (1885, in ),  (1908, in ),  (1863, in ),  (1914, in ), and Mexico, and were being developed at an industrial level. Significant oil fields were exploited in (Canada) from 1947. First offshore oil drilling at Oil Rocks (Neft Dashlari) in the Caspian Sea off Azerbaijan eventually resulted in a city built on pylons in 1949. Availability of oil and access to it, became of "cardinal importance" in military power before and after World War I, particularly for navies as they changed from coal, but also with the introduction of motor transport, tanks and airplanes. Such thinking would continue in later conflicts of the twentieth century, including World War II, during which oil facilities were a major strategic asset and were. In 1938, vast reserves of oil were discovered in the region along the coast of the Persian Gulf.

Until the mid-1950s was still the world's foremost fuel, but after this time oil quickly took over. Later, following the and  energy crises, there was significant  coverage on the subject of oil supply levels. This brought to light the concern that oil is a limited resource that will, at least as an economically viable energy source. Although at the time the most common and popular predictions were quite dire, a period of increased production and reduced demand in the following years caused an. This was not to last, however, and by the first decade of the 21st century discussions about had returned to the news.

Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world's most important.

The top three oil producing countries are, Russia, and the United States. About 80% of the world's readily accessible reserves are located in the Middle East, with 62.5% coming from the Arab 5: (12.5%),, ,  and. However, with high oil prices (above $100/barrel), Venezuela has larger reserves than Saudi Arabia due to its crude reserves derived from.

Structure
The divides the petroleum industry into five sectors:


 * (, development and production of crude oil or natural gas)
 * (,, retailers and consumers)
 * marine
 * service and supply
 * service and supply

Upstream
used to be classified by sales as "s" (,, , , , and ), "majors", and "independents" or "jobbers". In recent years however, National Oil Companies (NOC, as opposed to IOC, International Oil Companies) have come to control the rights over the largest oil reserves; by this measure the top ten companies all are NOC. The following table shows the ten largest national oil companies ranked by reserves and by production in 2012.

Most upstream work in the or on an  is ed out to drilling contractors and oil field service companies.

Aside from the NOCs which dominate the Upstream sector, there are many international companies that have a market share. For example:

Midstream
operations are sometimes classified within the downstream sector, but these operations compose a separate and discrete sector of the petroleum industry. Midstream operations and processes include the following:
 * Gathering: The gathering process employs narrow, low-pressure pipelines to connect oil- and gas-producing wells to larger, long-haul pipelines or processing facilities.
 * Processing/refining: Processing and refining operations turn crude oil and gas into marketable products. In the case of crude oil, these products include, for use in vehicles, , and .  include distillation, , , , ,  and .  includes ; ; ; separating the product into pipeline-quality natural gas and a stream of mixed natural gas liquids; and fractionation, which separates the stream of mixed natural gas liquids into its components. The fractionation process yields , , , , and.
 * Transportation: Oil and gas are transported to processing facilities, and from there to end users, by, , , and . Pipelines are the most economical transportation method and are most suited to movement across longer distances, for example, across continents. Tankers and barges are also employed for long-distance, often international transport. Rail and truck can also be used for longer distances but are most cost-effective for shorter routes.
 * Storage: Midstream service providers provide storage facilities at throughout the oil and gas distribution systems. These facilities are most often located near refining and processing facilities and are connected to pipeline systems to facilitate shipment when product demand must be met. While petroleum products are held in storage tanks, natural gas tends to be stored in underground facilities, such as salt dome caverns and depleted reservoirs.
 * Technological applications: Midstream service providers apply technological solutions to improve efficiency during midstream processes. Technology can be used during compression of fuels to ease flow through pipelines; to better detect ; and to automate communications for better pipeline and equipment monitoring.

While some upstream companies carry out certain midstream operations, the midstream sector is dominated by a number of companies that specialize in these services. Midstream companies include:

Water pollution
Some petroleum industry operations have been responsible for through by-products of refining and s. Though hydraulic fracturing has significantly increased natural gas extraction, there is some belief and evidence to support that consumable water has seen increased in methane contamination due to this gas extraction. Leaks from underground tanks and abandoned refineries may also contaminate groundwater in surrounding areas. Hydrocarbons that comprise refined petroleum are resistant to biodegradation and have been found to remain present in contaminated soils for years. To hasten this process, of petroleum hydrocarbon pollutants is often employed by means of aerobic degradation. More recently, other bioremediative methods have been explored such as and thermal remediation.

Air pollution
The industry is the largest industrial source of emissions of volatile organic compounds (VOCs), a group of chemicals that contribute to the formation of ground-level. The combustion of fossil fuels produces and other air pollutants as by-products. Pollutants include s,, s and.

Researchers have discovered that the can produce ground-level ozone pollution at higher amounts in winter than in summer..

Climate change
The due to s drive. Already in 1959, at a symposium organised by the for the centennial of the, the   warned then of the danger of global. Edward Teller explained that carbon dioxide "in the atmosphere causes a " and that burning more could "melt the icecap and submerge New York".

The, founded by the in 1988, concludes that   are  for most of the  since the middle of the twentieth century.

As a result of climate change concerns, many alternative energy enthusiasts have begun using other methods of energy such as solar and wind, among others. This recent view has some petroleum enthusiasts skeptic about the true future of the industry.

Future shortages
As petroleum is a the industry is faced with an inevitable eventual depletion of the world's oil supply. The BP Statistical Review of World Energy 2007 listed the for proven resources worldwide. This study indicated a ratio of proven reserves to production in the Middle East at 79.5 years, Latin America at 41.2 years and North America at 12 years. A misguided interpretation of the ratio has led to many false predictions of imminent world oil shortages since the early years of the oil industry in the 1800s. This has been especially true in the United States, where the ratio of proved reserves-to-production has been between 8 years and 17 years since 1920. Many have mistakenly interpreted the result as the number of years before the. Such analyses do not take into account future.

The, which introduced the concept of , questions the sustainability of oil production. It suggests that after a peak in oil production rates, a period of will ensue. Since virtually all economic sectors rely heavily on petroleum, peak oil could lead to a partial or complete failure of markets.

According to market research by IBISWorld, s (primarily ethanol, but also biodiesel) will continue to supplement petroleum. However output levels are low, and these fuels will not displace local oil production. More than 90% of the ethanol used in the US is blended with gasoline to produce a 10% ethanol mix, lifting the oxygen content of the fuel.