Are the World's Oil Drying Up? Supplies
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Our Contributor Deals with. Some of the Ways and Means by Which Our Future World Supplies May be Maintained • or Augmented, and Mentions Possible Sources That Will Meet Needs of ,the United eKingdom
By
Major W. H. Goddard
N previous articles the writer has shown that, althOugh, there is no immediate cause for alarm as to our petroleum supplies, there is, neverthea less, a positive danger that, in the near future, consumption may seriously 'overtake production unless urgent and imperative steps be taken. Such a happening would, of course, mean that, in perhaps two or three decades, we should be visualizing the end of our petroleum supplies—a somewhat calamitous situation.
Quite apart from our normal peacetime world requirements, which are aboul 250,000,000 tons per year, or, say, about 62,500,000,000 gallons— a figure which was increasing at quite an alarming rate before the war—and not forgetting our present heavy requirements, there is the post-war period to consider. This is, obviously, going to create an enormous demand for every ciaes of petroleum product, from high-octane spirit right down the scale to the pitch or asphaltic residue, which is the last product resulting from complete distillation treatment in the refineries.
Just belore this war started there were some 30,000,000 motor vehicles in use. It is quite reasonable to assume that in the post-war period, that is so soon as regulations and general conditions permit, this hnge figure will be rapidly passed. Judging by all the signs, civil aviation promises to be an enormous business and will require huge quantities of high-octane spirit, The internal-combustion engine, in all its forms, will be increasingly employed.
New Demands ' Which Have.to be .110let Hundreds of miles of roads will have to be repaired and re-laid which, in addition to concrete, will require large supplies of asphaltic materials. For the • production of synthetic rubberenormous quantities of hydrocarbons, mostly from petroleum, will also be neecied.
The new and fast developing plastics industry will also absorb hydrocarbon products. This is a new drain on our petroleum resources and, judging by the rapid progress in oil chemistry, there will be many more of a similar nature. Exhausted stocks of petroleum, in the occupied territories, will have to be replaced, and so on. •
.Let -us now look at the present sources of supply and assess what hopes they give us. In 1940, the percentage production of petroleum, by countries, was as follows:—U.S.A., 63 per cent.; other countries, including Russia, S. America, Iran, Iraq, etc., 34 per cent.; 13ritish Empire, 3 per cent.
Thus, we see that the U.S.A. is still the major supplier in spite of the enorMous quantities that country has produced since the first well was drilled, at Pennsylvania, in 1859. In 1886 world prOduction Was. about 3,000,000 tons, and in 1938, 268,000,000 tons. Actual up-to-date figures are not, of course, available, but from various reports it is probable that to-day's figure would not vary much from that of 1938. As mentioned later in this article, experts in the U.S.A. take a serious view of the position with regard to the future. • .
The important thing is to examine what methods are available for greatly increasing the world's supply ofVetroleurn and, briefly, they are as-f011ow:— 1. An international scientific world research for completely new oilfields.
.2. A thorotigh investigation into the means for increasing the yield from known fields, by drilling deeper for lowea oil sands, reconditioning partly abandoned wells and many other ways known to the oildrilling experts and geologists.
a. By drilling, with technical advice, " wildcat " wells on an increasing scale.
4. To make the utmost use of existing wells by means of oil chemistry, Some Methods of Increasing Output
Some of the methods employed to increase production in old wells may she of interest. One authority quotes instructions as follow:—Increase . or restore the gas pressure in all wells by injecting compressed gas or air in a few carefully selected input wells: clean systemalically and heat the formation by the use of hot oil or steam; if the sandstone formation is below the casing ("free ") it should be " shot," i.e., a charge of explosive is fired in the bore, below the casing. The results are often sensational, . Some wells have shown increased production up to 5,000 per cent, by this method.
IL the foregoing fail to give results, deepen the well, under technical advice. .
Oilfield development may be divided into two categories—orderly and sys
tematic development as practised by the large oil companies, and " wildcatting." The big companies allot large sums of money every year for research work. With a big staff of geologists, using all the latest methods such as geophysics, geochemistry, stratigraphic and seismic crews, surface analysis, etc., they find a -promising field. Test wells are then drilled and, with all the results correlated, a final programme of development, on a big scale, is formulated. Powerful drilling rigs, with derricks reaching up to 140 ft. and over, boilers, engines, pumps, thousands of feet of drill pipe Of various sizes are laid out alongside the well and, with highly' experienced driller's in. attendance, the Work proceeds.
As the oil is. struck it is led to specially prepared receiving tanks, from these to lie connected by pipe line, perhaps some hundreds of miles long, to the nearest refinery. An oilfield, with a few hundred huge derrickg and the attendant gear, is not a pretty sight in the country, but oil must be found to keep the wheels turning, and this is the only way to do it.
Having described the orthodox, large-scale method of oilfield development, it may be of interest to describe what is known in the U.S.A. as " wildcatting." This is carried out by small or independent 'operators, or contractors, who are willing to take certain risks with their capital, always in the -hope that eventually they will strike lucky and-reap a rich reward,. A toad producing well, will certainly recompense them for quite a few dry holes.
"Wildcatting" Shows Some Fair Results
Generally, results seem to indicate that the chances of striking a producing well are about one in six or sewn. For example,, in 1942 3,219 wildcat wells were drilled and 493 were successful—i.e., about 15 per 'cent. In some cases the operator goes to the eXpense of obtaining geological or geophysical advice, and this appears to be well worth while. In one district, out of 1,047 wildcat wells drilled under technical advice about 460 were successful —i.e., about 43 per cent.
Again, the qualit•y of the oil, and the quantity, produced per day, are of importance, as is the probable life of the well. It may, of course, be a small " trap " which may peter out in a few months, or even weeks, or it may be a " flowing " well, good for years. It appears to be an interesting gamble.. One useful result of wildcatting is that, in all cales, valuable geological information of the strata is obtained, and this may come -in useful,' later on, for those 'who are researching in the neighbourhood. Fortunes have beeb made by wildcatting, but one may suppose that much money has also been lost by the unlucky ones.
The petroleum authorities' in the U.S.A. encourage wildcatting, but the wildcatters say that, for this, the price of crude oil must be raised considerably, as they cannot make itpay at present prices. The price to-day appears to be about $1.18 to $1.20 per barrel of 42 gallons, and they ask for a rise of 50 cents per barrel, .
Up to about 1914, all petrol (gasoline in the U.S.A.) was " straight run " from the crude oil—i.e., it was evaporated off the crude oil by the application of heat to a common still or retort at atmospheric pressure and then condensed into liquid petrol. The. averaage yield by this method, however, was only about 20 per cent., and there remained 80 per -cent. of heavy-oil fractions for. which there was no market, or, at least, only a small
market,
The demand for aviation and motor spirit then became so great that it was quite impossible to meet it with only a 20 per cent, yield, and the oil chemists came to the rescue with 'a new method Which was v.ery 'aptly named
" cracking." .
It was nothing less than the breaking-down of the heavy oils into lighter fractions byligh temperature and highpressitre distillation and: most fortunately, it was highly successful, the Yields' being of the order of 60 per cent. of :gasoline and a consequent reduction in the heavy oils for which there was then little demand. To-day, very' little " straight run " petrol is used, and the cracking industry has progressed enormously and producing whole series of new and unexpected
• products._ •
The Economy of Improved Quality It is estimated that, with the Improvement in the quality of petrol and the higher compression ratios employed • in internal-combustion engines, a gallon ,of spirit will now do twice as much work as it did 20 years ago. Up to 30 per cent, increase of power, alone, is possible by employing 100 octane: rating spirit instead of 87 octane rating. Thus; one serious and difficult problem was solved without increasing the demands on. crude-oil output.
An increase in world production of crude oil is the important and even vital question to-day and the following extracts from various expert reports in the U.S.A. will enable us to judge hOw serious the matter actually is. In April, 1943, one report reads:—" If the war demand for oil continues to accelerate there will probably be a shortage by the end of 1943 and, if the war -carries on, the possibility of a serious situation in 1944 and 1945 for the discovery rate Is not keeping pace with production. Last' year, according to official estimates, the oil discovered in new fields amounted to 260,054,000 barrels, whilst the production was 1,385,479,000 barrels, There are approximately seven barrels to a ton of oil. •
Yet another report states that: " The, present decline in the discovery rate may be due to the approaching o.chaustion of ultimate reserves, or to insuffi
cient discovery effort. Most of the effort is being expended on searching for extensions, for deeper oil sands, or in working and re-working new 'oil provinces. Attenticin must be directed to new oil provinces." " There are approximately • 400,000 oil-producing wells in the U.S.A., but only 27 per cent, of these are capable of good yields, the rerbainder being what is called "stripper welli," yielding only 15 per cent, of the total production.
As a whole, the U.S.A. oilfields have a normal annual decline . of 400,000 barrels per day in productive Capacity, calling for new fields and wells in order to maintain output. One estimate of the total reserve capacity gives the figure of' 20,000,000,000 barrels—i.e., rciughly a little less than 14* years' supply if no new discoveries be made and the present rate 'of demand does not increase. This is definitely a serious outlook. • Price Increase to Control 'Consumption One American writer suggests that an increase in the price of oil is urgently needed if the present reserve situation is fo be corrected at any time in the near future. In the war of 1914-1918 there. was a similar critical situation; but the price of crude oil was allowed to rise to three dollars per barrel, and so at the end Of the war and shortly after,there was an abundant supply.
From the foregoing one cannot avoid gaining the impression that after being, for over 80 years, the main world supplier of petroleum the day is not far off when the U.S.A. will not be able to export oil, and, may even have to impOrt from other countries.
If we form the conclusion—as I think we muit-that the U.S.A. will gradually, but definitely, fade out as the world's No.. 1 supplier, we must .naturally look "at the list of the other20-odd oil-producing countries, to' see which of them may be able to fill the gap which will inevitably occur in the not-distant future. Second on the list Of producers, with about ll per cent. world production, is Russia, • but, taking into consideration all, that has happened in that country since .1941, it is quite evident that Rlissia will require fox itself all the oil, it can produce, at least, fcir some years to come.
Next oil the list is Venezuela, with about 9 per cent, of the world's production, and a promising oil-producing future. Furthermore, its own require ments , are small,. and, therefore, .Venezuela will surely be of great help in the maintenance of the world's oil supply.
Fourth on the list is Iran (Persia), with, at the moment, only about 4i per cent., but with a wonderful future. We Britons are specially interested here because our own Anglo-Iranian (ante Ang,lo-Persian) Oil -Company owns a concession until 1993 over a vast area .of highly promising oil territory. This poWerful company owns a large fleet of oil tankers, large refineries, both here and in Iran, and has many powerful subsidiaries. The oil is of high quality and the wells are good
producers. • .
" Charity begins at home," and we may be thankful that, in the near future, Iran will surely be able to keep the United Kingdom well supplied with all the petroleum products we require. Now that Iran ...hai a • ino're stable GoVernnient, and our relations with that country are on a sound and friendly basis, the fact that the oil comes from a foreign country need
cause no anxiety. , •
So far as world requirements are concerned, the gap to *bo filled, if and when the U.S.A.-can no longer export "petro.: leurnr is a very Serious one and, although to repeat that charity begins at home and that our own needs may be assured, it is very much to our export and commercial iriterests,' generally, that every civilized country has all the oil it requires.
Vast Possibilities in Shale Oil
If an intensive and world-wide international search for new oilfields fails to give the ,,hoped-for results, then we -shall be obliged to turn to shale oil, of which it was officially estimated tome years ago in the U.S.A. that some 92,000,000,600 barrels could, be extracted from the shale 'deposits in the U.S.A. alone.
As a final summing up, the writer is Of the opinion that the .greatest hope for ample, future oil stipplies-lies, first. in the Middle East, 'more especially
Iran, and, secondly, in Venezuela and . .
adjacent countries. 4; The new oilfields in northern Canada are promising, btit Canada will, for Many years to come, . absorb all, the oil it can produce within its own borders.