Liquid fuels are dened by the Energy Information Agency as 95% con-
ventional liquids or oil and 5% unconventional liquids. e latter includes
extra-heavy oil, bitumen, coal to liquids, gas to liquid, shale oil, and bio-
fuels. Bitumen occurs naturally or is obtained by distillation from coal
or petroleum and is used for surfacing roads and for waterproong. e
conventional liquids category includes conventional crude oil, lease con-
densate, natural gas plant liquids (NGPL), and renery gain.
FORMATION AND DISCOVERY
“e end of the coal age began on the morning of January 10, 1901, just
outside Beaumont, Texas, on a small hill called Spindletop.”
is well and
Paul Roberts, e End of Oil (New York: Houghton Miin Co., 2005), 31.
Overlay: e availability of oil is critical to the economies of the
world. It is an essential ingredient for maintaining or increasing the
standards of living of not only the new 3 billion persons coming in
the next decades but the existing 6 billion as well. e concern is the
supply constraint that exists and the rate of depletion of the world’s
supply that may cause serious price increases.
SWOT Analysis -
Chapter 16 outline.
208 • Triple Constraints for Sustainable Projects, Programs, and Portfolios
many more discovered shortly thereaer in Texas and Oklahoma ushered
in the age of oil—of cheap energy—and the dramatic increase in stan-
dards of living that occurred over the next 110 years and is still occurring.
Oil, like coal and natural gas, is an ancient substance. While coal is
formed largely from dead plant matter, oil was formed over 50 million
years ago from millions of algae and plankton dying and accumulat-
ing along with sediment on ocean oors, especially in anoxic (dissolved
oxygen-free) environments. Animals contain more fats than plants and
contain more hydrogen, which under great pressure forms liquid hydro-
carbons and gases. Within the pressure cooker of the hydrocarbons, the
gases expand and crack the source rock and the combination slowly moves
or oats upward toward the surface. Because of the dierent density, the
gases usually separate as they rise through the microscopic pores of the
rock above. Some continue to the surface and others are blocked by imper-
vious layers of rock or other material. In the case of Spindletop, the block-
ing layer was a super-hard layer of limestone and the petroleum formed a
reservoir under the limestone. New technology of the time in the form of
a rotary drill enabled the drillers to penetrate the limestone not only there
in Texas, but subsequently in Oklahoma, Mexico, and Venezuela.
When oil became available in large quantities, prices fell and many coal
users switched to oil. Of course Henry Ford introduced the gasoline engine
in his Model A in 1903. is was the true beginning of the golden age of oil.
Worldwide demand for oil moved from 500,000 barrels a day in the
early 1900s to 1.25 million in 1915, to 4 million by 1929, and to 85million
barrels a day today. Of this the United States consumes approximately
20million barrels per day, or about ten supertanker loads.
PRODUCTION AND FORECAST
Overlay: Demand for worldwide production of conventional oil is
expected to increase by almost 20% by 2035. Meeting this demand
is dependent upon potential supply constraints. Some experts are
forecasting a decrease of supply of the same amount in the same