| With all the publicity nowadays surrounding | | | | commodities: supply and demand. While this |
| the price of Crude Oil, I resolved to write | | | | may sound simple, the actual start to finish |
| an enlightening article on the backdrop of | | | | process can be a lot more complex subject. |
| the so-called "Black Gold." I'll briefly go | | | | References to oil prices are generally |
| over history, environmental effects, pricing | | | | related to the spot price of either WTI/Light |
| and the future of the thick black sludge that | | | | Crude as traded on New York Mercantile |
| is coveted by every major economy in the | | | | Exchange (NYMEX). Priced by the barrel, Crude |
| world. Hopefully you can reach a better point | | | | Oil is rapidly becoming the most costly |
| of view on the subject. | | | | commodity on the market (second only to |
| | | | Gold). |
| The history of Crude Oil is too immense to | | | | |
| discuss in this brief editorial so I will | | | | Oil pricing is extremely reliant on both its |
| limit it to a general overview. The first oil | | | | grade and location. The vast majority of oil |
| wells were drilled in China in the 4th | | | | will not be traded on an exchange but on an |
| century. They where as much as 243 meters | | | | over-the-counter basis, typically with |
| deep and were drilled utilizing drill bits | | | | reference to a standard crude oil grade that |
| attached to bamboo poles. The contemporary | | | | is quoted via a pricing agency such as Argus |
| history of crude began in 1846, with the | | | | Media Ltd or Platts. It is often claimed that |
| breakthrough of the process of refining | | | | OPEC arranges the oil price and the real |
| kerosene from coal by Atlantic Canada's | | | | monetary value of a barrel of oil is in the |
| Abraham Pineo Gesner. The first rock oil mine | | | | area of $2, which is equivalent to the cost |
| was built in Bobrka, Poland the following | | | | of extraction of a barrel in the Middle East. |
| year. These breakthroughs rapidly spread | | | | These appraisals of costs disregard the cost |
| around the world, and Meerzoeff built the | | | | of finding and developing oil reserves. |
| first Russian refinery in the mature oil | | | | |
| fields at Baku in 1861. | | | | You can't talk about the future of oil |
| | | | without talking about the "Hubbert Peak" oil |
| James Miller Williams in Oil Springs, | | | | theory. This hypothesis depicts the long-term |
| Ontario, Canada in 1858, excavated the first | | | | rate of production of conventional oil and |
| commercial oil well drilled in North America. | | | | other fuels. It assumes that oil reserves are |
| The American petroleum industry commenced | | | | not replenishable. It also predicts that |
| with Edwin Drake's discovery of oil in 1859, | | | | future world oil production must unavoidably |
| near Titusville, Pennsylvania. The industry | | | | reach a crest and then decline as these |
| matured slowly in the 1800s, driven by the | | | | reserves are exhausted. Like every other |
| demand for kerosene and oil lamps. It became | | | | theory of any importance it is highly |
| a major national business in the early part | | | | controversial. "When will the Oil actually |
| of the 20th century. With the introduction of | | | | start to run out?" is the big question. |
| the internal combustion engine came a need | | | | |
| that has largely sustained the industry to | | | | No matter how you look at it, our society |
| this day. | | | | needs to concentrate more efforts on either |
| | | | alternative fuels or more fuel-efficient |
| While we all need to get to work in some way | | | | modes of transportation. While I'm sure that |
| or another, rarely does anyone consider the | | | | the oil won't peter out in my life time I |
| environmental effects of the fuel that powers | | | | would like to think we can leave this world a |
| our mode of transportation. Yes we know that | | | | better place for future generations. |
| the emissions from are cars, buses and trains | | | | |
| have a green house effect on our delicate | | | | In closing, I hope this article has given you |
| environment; but what about the rest of our | | | | a better understanding of the topic and made |
| ecology? | | | | you a more informed consumer. So the next |
| | | | time your grumbling at the price of gas, at |
| Oil extraction is costly and occasionally | | | | least you'll understand what you're |
| environmentally detrimental, although Dr. | | | | complaining about. If you would like to read |
| John Hunt from the Woods Hole Oceanographic | | | | more on the topic of Crude Oil, you can |
| Institution revealed in a 1981 paper that | | | | vistit or read one of the books listed at |
| over 70% of the reserves in the world are | | | | the end of this article. |
| associated with visible macroseepages, and | | | | |
| numerous oil fields are found due to natural | | | | Books about the petroleum industry: |
| leaks. Offshore exploration and extraction of | | | | |
| oil agitates the encompassing marine | | | | James Howard Kunstler (2005). The Long |
| environment. Exploration could call for | | | | Emergency: Surviving the Converging |
| dredging, which stirs up the sea bottom, | | | | Catastrophes of the Twenty-first Century. |
| stamping out the ocean plants that nautical | | | | Atlantic Monthly Press. |
| creatures need to survive. Not to mention the | | | | |
| typical Crude Oil and refined fuel spills | | | | C.J. Campbell (2004). The Coming Oil Crisis. |
| from tanker ship accidents. All of these | | | | |
| factors have tainted frail ecosystems all | | | | Peter Odell (2004). Why Carbon Fuels Will |
| over the world. | | | | Dominate the 21st Century's Global Energy |
| | | | Economy. Multi Science. |
| Petroleum products are priced like most | | | | |