James Laxer - Oil: A Groundwork Guide

Slavery Today

Kevin Bales & Becky Cornell

The Betrayal of Africa

Gerald Caplan

Sex for Guys

Manne Forssberg

Technology

Wayne Grady

Hip Hop World

Dalton Higgins

Democracy

James Laxer

Empire

James Laxer

Oil

James Laxer

Cities

John Lorinc

Pornography

Debbie Nathan

Being Muslim

Haroon Siddiqui

Genocide

Jane Springer

The News

Peter Steven

Gangs

Richard Swift

Climate Change

Shelley Tanaka

The Force of Law

Mariana Valverde

Series Editor

Jane Springer

Copyright 2008 by James Laxer

Published in Canada and the USA in 2008 by Groundwood Books

Second paperback printing 2010

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, without the prior written consent of the publisher or a license from The Canadian Copyright Licensing Agency (Access Copyright). For an Access Copyright license, visit www.accesscopyright.ca or call toll free to 1-800-893-5777.

Groundwood Books / House of Anansi Press

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or c/o Publishers Group West

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We acknowledge for their nancial support of our publishing program the Canada Council for the Arts, the Government of Canada through the Canada Book Fund (CBF) and the Ontario Arts Council.

Library and Archives Canada Cataloguing in Publication

Laxer, James

Oil / by James Laxer.

(Groundwork guides)

Includes bibliographical references and index.

ISBN 978-0-88899-815-6 (bound).

ISBN 978-0-88899-816-3 (pbk.)

1. Petroleum industry and trade Political aspects. 2. Petroleum industry and trade Economic aspects. 3. Petroleum reserves Political aspects. 4. Energy consumption Environmental aspects.

5. World politics 21st century. I. Title. II. Series.

HD9560.5L39 2008 333.8232 C2007.905780-2

Design by Michael Solomon

To Robert

I am delighted to be involved again with a title in this important series of books, conceived by my good friend Patsy Aldana.

Thanks to Jane Springer, who did a ne job helping conceptualize this book and editing it. I am grateful to my literary agent, Jackie Kaiser, who offered encouragement and support.

My partner, Sandy, is always there with advice and companionship.

The team at Groundwood, Nan Froman, Michael Solomon and Leon Grek, deserve praise for the job they have done with this book and the entire series. And thanks to Deborah Viets, for her careful copyediting, and Lloyd Davis, for the index.

Chapter 1

In the early years of the twenty-rst century, the world runs on petroleum. Take oil and natural gas out of the equation and transportation systems, home heating, agricultural and industrial production, and much of electric power generation would stall and grind to a halt. World oil production now totals about 75 million barrels a day (there are 35 gallons in a barrel). With only 5 percent of the worlds population, the United States consumes 20 million barrels of oil a day, over a quarter of global consumption. Rounding out the top ve oil-consuming countries are China (6.4 million barrels a day), Japan (5.8 million barrels), Russia (2.8 million barrels) and Germany (2.7 million barrels).

Hydrocarbons are the chemical compounds (of hydrogen and carbon atoms) from which all petroleum products are produced. Hydrocarbons are encountered in nature in liquid, gaseous and solid forms.

Crude oil (the liquid form of petroleum) is used to produce gasoline, diesel oil, heating oil and kerosene, and serves as feedstock for the production of a wide range of chemical products, plastics and medicines. It is also used to drive turbines for the production of electricity.

Natural gas (the gaseous form of petroleum) is used as a fuel to heat homes and other buildings, to drive turbines for the production of electricity, and as feedstock for the production of chemical products, plastics and medicines. It is used to produce electricity as well. Natural gas can be liquefied (to facilitate transportation or storage) and is used to provide fuel for vehicles, especially buses.

Petroleum comes in solid form as oil sands or oil shales. Through an expensive process the oil (bitumen) can be separated from the sands or shales and the oil (synthetic crude) can then be used in the ways crude oil is used.

Ethylene is produced from crude oil or natural gas through a process known as steam cracking. Ethylene is used widely in the production of polyethylene to produce plastics and vinyl, and was used in the past as an anesthetic. (It has since been replaced by more efficacious anesthetics.) From ethylene and its derivatives come garbage bags, milk jugs, piping, automotive parts and film, among other products.

Oil is the fuel used to provide 90 percent of the energy consumed to propel automobiles, trains, airplanes and ships. About 40 percent of the energy consumed in the United States is provided by petroleum, oil and natural gas. Meanwhile the US produces less than half the oil it consumes, leaving the worlds most powerful country increasingly dependent on imported oil. As China and India rapidly industrialize, the global demand for oil is rising and is projected to continue to do so.

Increasing global demand for petroleum sets alarm bells ringing for governments, industries, farmers, consumers and environmentalists. Can oil production rise to meet the higher levels of demand? Since there is a nite amount of petroleum in the world and we are quickly consuming it, how long will there be enough oil to keep our societies running? As the price of petroleum rises sharply due to higher demand and limits on supply, what effect will this have on the standard of living and the way of life of people in the advanced countries and in the developing world? Can new sources of energy replace petroleum as oil supplies run out? On top of all of this, there is the urgent environmental challenge. The consumption of oil and natural gas (both hydrocarbons), and of other carbons such as coal, releases greenhouse gases into the atmosphere and contributes to the evermore acute problem of global warming and climate change. Can the worlds leaders reach agreements, along the lines of the Kyoto environmental accord (which the US opposes) and subsequent accords, to prevent emissions from the consumption of carbon-based fuels from threatening the planet?

Considering how dependent the world now is on petroleum consumption, it may come as a surprise to learn that in historical terms the large-scale use of oil is a recent phenomenon. The modern oil industry had its origins in Canada and the United States on the eve of the American Civil War. In 1858, the rst oil well in North America was drilled in Petrolia, Ontario, and the following year, an oil well drilled in Titusville, Pennsylvania, ushered in the petroleum age in the US. A decade prior to the drilling of these pioneer wells, Canadian geologist Dr. Abraham Gesner discovered the technique for rening kerosene from coal. A few years later a Pole, Ignacy Lukasiewicz, gured out how to distill kerosene from oil. That discovery quickly created a huge international market for kerosene.