When did the US become a big oil producer?
Contrary to popular notions, only two of the world’s five largest oil producers are from West Asia. The US, Canada and Russia make up the Big 5 of petroleum producers and the US is expected to overtake both Russia and Saudi Arabia in oil production in 2018.
How did oil production suddenly shoot up in the US?
Wars in Iraq and Libya in late 2000s, and the West’s sanctions on Iran took away millions of barrels of crude from the market. That pushed its price to over $100 a barrel. The price shock came as a boon for US shale (tight oil). Unlike conventional production methods for oil wells, where break-even is much lower, shale oil companies require a certain threshold. This impetus came from the high crude prices, leading to US’s shale oil boom.
Which other countries have tight oil reserves?
Several. Oil extraction by fracking is highly controversial because of the adverse environmental impact, including ground- and surface-water contamination, and air and noise pollution. There is tremendous opposition to extraction of oil by this method in other countries. Critics point out that the environmental impact far outweighs economic benefits.
What is shale/tight oil and how is it extracted?
Tight or shale oil is crude contained in shale or tight sandstone. The extraction of oil from this kind of rock formation is by hydraulic fracturing, also known as fracking. In this, the surface is drilled both vertically and horizontally for thousands of feet and then ‘fracking fluid’ is pushed into the borewell at high pressure. This injection creates cracks in deep rock formation forcing the release of natural gas and petroleum that is then pumped up to extract oil. The US Energy Information Administration reports that petroleum from tight rock accounts for 51% of US’s production. Canada produces tight oil commercially and it is competing with its own oil sand industry — another unconventional source.
What is oil sand?
Also known as tar sands, these are a mixture of clay, sand, water and bitumen — a heavy, black, viscous oil. The oil in tar sands cannot be pumped. So, it is mined like other minerals and processed to extract oil. Canada has the world’s third-largest proven oil reserves (reserves from which oil can be extracted economically) and 95% of it is in Alberta’s oil sands. Unlike shale-oil wells, where production starts declining after the first 12 to 18 months, oil-sand plants can produce for a longer time. Despite this, shale oil has become popular because of the much lower investment cost — an oil sand factory needs a lot of money to set up.
Latest posts by Mozaffar EtezadiFar (see all)
- Exports slip 0.8% in December 2020; trade deficit widens to USD 15.71 billion - 2nd January 2021
- After NCLAT, NCLT now also dismisses appeal of Hindustan Oil Exploration Company - 29th December 2020
- Behind the scenes: What led to Cyrus Mistry ouster - 25th December 2020