History of Oil and Gas Industry

In the mid-1800s, oil was primarily used for lubrication and other mechanical purposes, and kerosene for lamps and limited engine applications.

Gasoline, a byproduct of kerosene refining, was initially considered waste due to instability and lack of clear use.

Karl and Bertha Benz pioneered the internal combustion engine vehicle, paving the way for gasoline's adoption as a fuel.

William Knox Darcy, a British businessman, exploited oil reserves in Persia, establishing a British Petroleum (BP) monopoly on extraction and sales.

John D. Rockefeller founded Standard Oil, innovating gasoline use and aiming to control oil from extraction to sale, dominating refining.

Henry Ford's Model T assembly line drastically reduced car production costs, creating affordable cars and demand for gasoline.

The automobile revolution enabled suburbanization as workers could commute by car, leading to a surge in demand for roads and gas stations.

Stabilizing gasoline made it usable for internal combustion engines, transforming it from discarded waste into a vital energy source.

Petroleum offers advantages such as being a stable energy source, easily extracted, versatile for various applications, efficient in power output, and easily transportable.

Petroleum's use comes with environmental drawbacks like carbon emissions, transportation damage, and harmful extraction processes.

Petroleum is categorized based on where it was drilled, its sulfur content, and its density (API gravity).

Geologists use seismic reflection to locate underground structures holding petroleum. The amount of extractable oil in a reservoir is known as oil reserves.

As of 2022, Venezuela, Saudi Arabia, and Canada hold the largest proven oil reserves globally.

Developmental drilling targets known oil reserves to extract them.

Exploratory drilling searches for new oil reserves in unexplored areas.

Directional drilling allows wells to be drilled vertically to reach known oil sources.

Investors in the energy sector speculate on oil and fossil fuel demand. Funds like VGENX and FSNGX invest in energy companies and offer dividends.

Exchange-traded funds (ETFs) provide direct access to the volatile energy market. Examples include PXE, FCG, and IEO.

Petroleum is formed over millions of years from dead organisms that undergo transformation under high pressure and heat.

Petroleum is a non-renewable fossil fuel with limited reserves.

Wind, solar, and biofuels offer alternatives to petroleum.

Unrefined petroleum includes asphalt, bitumen, crude oil, and natural gas.

Petroleum is refined into various products like gasoline, kerosene, plastics, and others used in daily life.

Control over oil resources is crucial for military operations, impacting countries' abilities to conduct war.

Organization of Petroleum Exporting Countries; aims to manage oil prices and production.

OPEC's action to reduce oil production, raising prices and triggering economic issues in the West.

Canadian government-owned oil company, aiming for Canadian control of the oil industry.

Oil refineries produce harmful emissions contributing to air pollution and greenhouse gases.

Accidental releases from tankers, pipelines, or rail causing environmental damage.

Oil price changes significantly effect global economies leading to recessions or booms.

Oil is extracted from beneath the earth's surface and refined into various fuels and products.

Petroleum is used as a source of energy for vehicles, heating, and machinery.

Conflicts frequently arise due to the control of oil resources, affecting global politics.

Petroleum is a finite resource, unlike renewable energy, highlighting the need to conserve it.

Petroleum in its natural, unrefined form.

Countries heavily reliant on oil for their economy and daily activities.

Transforming crude oil into useful products, such as gasoline and plastics.

Infrastructure projects, such as oil pipelines, often face challenges from opposition, causing conflicts with indigenous rights.

The price difference between types of oil is influenced by oil quality (how easy it is to refine), location (how close to refineries and markets), and market access (how easy it is to transport).

Brent oil is considered high quality due to its low sulfur content, making it easier and cheaper to refine. It's also easily transported through pipelines and large tankers.

WCS is heavy and viscous, making it more difficult and expensive to refine. It's also produced far from global markets, leading to higher transportation costs.

Diluted bitumen (Dilbit) is a mixture of raw bitumen, a very heavy oil, and lighter hydrocarbons to make it flow through pipelines.

Bitumen netback is the actual profit producers get from selling heavy oil after deducting transportation and diluent costs.

Limited pipeline capacity in Alberta means it's difficult to transport oil efficiently, leading to lower prices for Canadian oil compared to Brent.

Alberta's oil resources are primarily heavy and sour, which requires more refining and adds to transportation costs. Limited access to global markets also impacts prices.

Alberta's oil industry can improve its competitiveness by developing new pipelines, improving infrastructure, and adapting to global market shifts.

Royalties, paid by oil companies to governments, are calculated based on the value of oil after deducting production and transportation costs. Lower oil prices mean less for Alberta.

Alberta heavily relies on oil sands products, making its economy highly sensitive to global oil price changes.