Oil Energy Explained: All You Need to Know

Oil Energy Explained: All You Need to Know

Grace Smoot

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Oil is the transportation industry’s primary source of energy, and it is one of the biggest industries in the world. But it is also a significant source of carbon dioxide (CO2) emissions, which degrades our environment. So, we had to ask: What is oil energy really, and how does it contribute to climate change?

Oil energy is created via the combustion of petroleum. Per kWh produced, oil energy emits 970 grams of CO2 on a life-cycle basis. It directly contributes to climate change and produces toxic waste products that degrade the planet.

Keep reading to find out all about what oil energy is, its global capacity, its carbon footprint, its environmental benefits and drawbacks, and how it can contribute to climate change.

The Big Picture of Oil Energy

Oil is the world’s primary fuel source for transportation.But it also contributes to climate change via the release of greenhouse gas emissions (GHGs) upon combustion. 

How Is Oil Energy Defined

Oil energy comes from the combustion of petroleum, a fossil field also known as crude oil. Crude oil was formed millions of years ago when plant and animal remains gradually built up on the earth’s surface and the ocean floor, mixing with sand, silt, and calcium carbonate. Under immense heat and pressure, some of these remains were converted into oil depending on the combination of organic matter present, how long it was buried, and pressure conditions. 

Oil: petroleum (= the black oil obtained from under the earth’s surface from which gasoline comes)”

Cambridge Dictionary

Oil is referred to as crude oil when it is first extracted and then as petroleum products after it has been refined and processed. Petroleum products made from crude oil include gasoline, distillates (diesel fuel and heating oil), jet fuel, waxes, lubricating oils, and asphalt. 

Oil is the world’s primary fuel source for transportation. But it also contributes directly to climate change. So let’s have a closer look at it next.

What oil energy isOil energy is produced via the combustion of petroleum, which contains energy stored by plants that lived in swampy forests over a hundred million years ago.
How oil energy worksOil energy works by combusting oil in oil-fired power plants to produce steam which turns a turbine and spins a generator to produce electricity.
The global capacity of oil energyOil is a finite resource, and if we continue to use it at our current rate we can expect to run out of coal in approximately 50 years.
The carbon footprint of oil energyOn a life-cycle basis, oil emits 970 grams of carbon dioxide (CO2) equivalent per kWh of electricity produced.
The environmental benefits of oil energyAlthough oil does not benefit the environment, improving technology and drilling methods plus reducing CH4 leaks could possibly mitigate its environmental impact.
The environmental drawbacks of oil energyBurning oil adds to the total level of CO2 in our atmosphere and expedites global warming. It also causes air pollution, oil spills, and contamination of water via fracking.
Oil energy and climate changeOil energy contributes to climate change by exacerbating temperature rise, sea-level rise, ice melting, and ocean acidification.

How Does Oil Energy Work

In general, oil energy works by combusting oil in oil-fired power plants to produce steam which turns a turbine and spins a generator to produce electricity.

How Does Oil Energy Actually Produce Energy

The process of generating oil energy begins with extracting the oil, constructing the power plant, and transporting the oil from the wells to the power plant or consumers. 

Oil and natural gas (NG) are often found within the same reservoir, so they are often extracted in the same manner. Drilling or fracking exposes oil reservoirs for extraction. 

Extracting oil involves seven main steps:

  1. Preparing the rig site
  2. Drilling
  3. Cementing and testing
  4. Well completion
  5. Fracking
  6. Production and fracking fluid recycling
  7. Well abandonment and land restoration

Once the oil is extracted and separated from the NG, it is transported via pipeline to refineries where it is broken down into various components and reconfigured into new products. These new products include fuel for transportation, heating, paving roads, electricity, and feedstocks for making chemicals.

Oil refinement occurs via the following steps:

  • Distilling: Crude oil is heated until it becomes a vapor. The vapor is lifted upwards in a distilling column and collects at different levels in trays, separating the liquids. Lighter products (butane) rise to the top of the column whereas gasoline, naphtha, kerosene, diesel, and heavy gas oil collect in trays going from top to bottom in the column.
  • Cracking: Because there is a demand for lighter distilled products like gasoline, refineries convert heavy liquids into lighter liquids via cracking. Cracking breaks up long hydrocarbon chains into smaller ones, converting heavy oil into gasoline. Cat cracking, catalyst-driven cracking, is the most common form of cracking. 
  • Reforming: Refineries again use a catalyst to increase the quality and volume of gasoline. Reforming increases the octane number by rearranging the naphtha hydrocarbons to create gas molecules. A high octane number is more beneficial because it can withstand more compression before detonating. And the higher the octane number, the more stable the fuel. 
  • Treating: Crude oil contains pollutants including sulfur, nitrogen, and heavy metals that must be removed. The treating process removes these pollutants either by binding them to hydrogen, absorbing them in columns, or adding acid to them.  
  • Blending: Finished petroleum products are a blend of various streams of hydrocarbons that are then mixed into motor fuels. Refineries can also mix additives such as octane enhancers, metal deactivators, anti-oxidants, anti-knock agents, rust inhibitors, or detergents. 

After refinement, the oil is transported either directly to consumers or to a power plant (an oil-fired plant). At an oil-fired power plant, oil is converted into energy via the following process:

  • Oil is put into the combustion chamber of a boiler, where it is incinerated. 
  • The hot gasses and heat energy convert water into steam. 
  • The steam is then passed into a turbine where it rotates the blades at a high speed. 
  • The blades then turn a generator which generates the electricity. 
  • Once the steam passes through the turbine it is condensed back into water and returned to the boiler chamber to be reheated.

Oil wells can produce for anywhere from 20-40 years. When a well is done producing oil it is plugged to stop the flow of methane to the surface. However, over 3 million abandoned oil and gas wells are unplugged in the US alone, and these wells leak millions of metric tons of methane into our atmosphere every year. Simply plugging these wells could reduce methane emissions by 99%, which would help mitigate global warming. 

In some instances, the area surrounding the well can be restored. In offshore drilling, the program Rigs-to-Reefs topples old oil wells and leaves them on the seafloor, establishing an artificial reef that attracts barnacles, coral, clams, sponges, and other marine life. This method has virtually no carbon footprint because the existing well is not demolished.

What Is the Global Capacity of Oil Energy

Fossil fuel consumption began with the Industrial Revolution, and consumption has increased exponentially over the past 70 years. The type of fuel we consume has shifted from solely coal, to coal and oil, and lastly to coal, oil, and NG. 

The US and China alone account for over one third of global consumption

Illustration of oil consumption worldwide in 2021
Our World in Data: Oil Consumption 

The top 5 oil-consuming countries (million barrels per day (mb/d)) in the world are:

  1. United States – 18.87
  2. China – 15.27
  3. India – 4.65
  4. Russia – 3.61
  5. Japan – 3.43

Global oil demand fell 8.7 mb/d as a result of the COVID-19 pandemic but is expected to rise by 13.1 mb/d by 2026. By 2026, global oil consumption is projected to reach 104.1 mb/d. Experts predict that gasoline demand may never return to pre-pandemic levels, diesel demand will slow markedly, and jet fuel demand will remain low as travel restrictions and changing travel habits cap market recovery. 

The top 10 largest oil producers in the world account for 72% (68 mb/d) of global oil global production, which is approximately 95 mb/d total.

The top 5 oil-producing countries (mb/d) in the world are:

  1. United States – 18.88
  2. Saudi Arabia – 10.84
  3. Russia – 10.78
  4. Canada – 5.54
  5. China – 4.99

The Organization of the Petroleum Exporting Countries (OPEC) is an intergovernmental organization consisting of 13 member countries: Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, Venezuela, and the United Arab Emirates. OPEC regulates the supply of oil in order to set the price on the world market.

Opec nations dominate world oil production, producing approximately 30% of the world’s crude oil. Saudi Arabia is the biggest single oil producer within OPEC, responsible for more than 10 mb/d.

In 2016 Opec expanded to OPEC+ with the addition of 10 more countries: Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan, and Sudan. Together, these 23 countries produce approximately 40% of the world’s crude oil.

Although the exact date at which we will run out of oil is unknown, if we continue to use it at our current rate, we can expect to run out of oil in approximately 50 years. It is a finite resource, so finding an energy substitute will be necessary to sustain the global economy in the future. 

What Is the Carbon Footprint of Oil Energy

The carbon footprint is one of the ways we measure the effects of human-induced global climate change. It primarily focuses on the greenhouse gas (GHG) emissions associated with consumption, but also includes other emissions such as methane (CH4), nitrous oxide, and chlorofluorocarbons.

Carbon footprint: the amount of greenhouse gasses and specifically carbon dioxide emitted by something (such as a person’s activities or a product’s manufacture and transport) during a given period

Merriam Webster

Basically, it is the amount of carbon emitted by an activity or an organization. This includes GHG emissions from fuel that we burn directly (e.g., heating a home, driving a car) and GHG emissions from manufacturing the products that we use (e.g., power plants, factories, and landfills). 

Oil is considered dirty energy because of its carbon footprint. On a life-cycle basis, oil emits 970 grams of carbon dioxide (CO2) equivalent per kWh of electricity produced. Which is the highest carbon footprint of all energy types.

Have a look at the illustration below to see the average life-cycle CO2 equivalent emissions of different energy sources and how they compare to oil.

Illustration of CO2 equivalent per energy source
World Nuclear Association: Average life-cycle CO2 equivalent emissions

When discussing the carbon footprint of oil energy, we must take into account carbon emissions across the energy’s building, operating, and building back phases.

The life-cycle stages of oil energyEach stage’s carbon footprint
Building of oil energyCO2 emissions from:oil extraction and refinement;construction of oil-fired plants;transportation of oil to refineries and plants
Operating of oil energyCO2 emissions from:oil combustion;operation of mechanical equipment at plants
Building back of oil energyCO2 emissions from plugging wells and decommissioning power plants.CH4 seepage from unplugged wells

The world collectively emitted 11.07 billion tons of CO2 from oil in 2020, second only to coal.

Illustration of CO2 emissions by fuel line
Our World in Data: CO2 emissions by fuel type, World

Because oil has been one of the most in-demand global fuel sources since the 1920s, it is important to understand what its carbon footprint is and how its carbon emissions affect the global climate change process.

Related: Are you interested in more about the carbon footprint of oil energy? Check it out in this article here: “What Is the Carbon Footprint of Oil Energy?

How Environmentally Friendly Is Oil Energy

Oil is not environmentally friendly. It is considered a dirty fuel source because of its high rate of CO2 emissions, toxic heavy metals, and other chemicals that contribute to global climate change.

Environmentally friendly: (of products) not harming the environment.”

Cambridge Dictionary

Oil is (still) our primary energy source for transportation, but its combustion produces over 11 bt of CO2 emissions annually, contributing significantly to global climate change. Although there are ways to minimize its environmental impact, there are still many environmental drawbacks. 

What Are Environmental Drawbacks of Oil Energy

The main disadvantage of oil energy is its significant contribution to climate change and global warming.

  • Atmospheric CO2: Levels of CO2 in our atmosphere have increased as a result of human emissions since the beginning of the Industrial Revolution in 1750. Emissions increased steadily to 5 bt per year in the mid-20th century before increasing exponentially to more than 35 bt per year at the end of the 20th century. The global average amount of CO2 in the atmosphere was about 280 parts per million (ppm) in 1750 but today registers at over 400 ppm. By the end of the 21st century, this number is expected to exceed 900 ppm. Burning fossil fuels adds to this total, which in turn amplifies the greenhouse effect and causes global warming. 
  • Global warming: This phenomenon occurs when CO2 and other air pollutants absorb sunlight and solar radiation in the atmosphere, trapping the heat and acting as an insulator for the planet. Since the Industrial Revolution, Earth’s temperature has risen a little more than 1 degree Celsius (C), or 2 degrees Fahrenheit (F). Between 1880-1980 the global temperature rose by 0.07C every 10 years. This rate has more than doubled since 1981, with a current global annual temperature rise of 0.18C, or 0.32F, for every 10 years. Experts claim that to avoid a future plagued by rising sea levels, acidified oceans, loss of biodiversity, more frequent and severe weather events, and other environmental disasters brought on by the hotter temperatures, we must limit global warming to 1.5C by 2040

Other environmental drawbacks include:

  • Air pollution: The oil industry contributes significant amounts of CH4, volatile organic compounds (VOCs), and air toxics into the environment which can cause respiratory problems and even premature death. Methane has a global warming potential of more than 25 times that of CO2. VOCs are a group of chemicals that lead to the formation of ground-level ozone (smog). Air toxics are suspected carcinogens and include benzene, ethylbenzene, and n-hexane. 
  • Oil spills: Small oil spills occur when refueling a ship, and large oil spills occur when pipelines break, oil tankers sink, or drilling operations go wrong. Oil spills, in general, cause serious environmental harm by contaminating water and soil, causing explosions and fires, harming wildlife, and contaminating seafood. When oil enters the environment it is difficult and expensive to remediate. 
  • Fracking: Large amounts of water and potentially hazardous chemicals are required when fracking, which can decrease water availability for people and aquatic life and can result in leaks and spills of fracking fluids. Fracking also produces large amounts of wastewater which require treatment before disposal, and injecting it back underground can cause earthquakes that are large enough to be felt.

The easiest way to mitigate the environmental impact of oil is to simply not rely on it in the first place. Oil combustion releases toxic chemicals, heavy metals, CO2, and contributes directly to global warming. 

What Are Ways to Make Oil Energy Less Environmentally Detrimental 

To minimize the negative environmental impacts of oil, technological advances in drilling, production, and transportation of oil as well as strict safety and environmental laws and regulations must be enforced.

  • Improved technology: Satellites, GPS, and remote sensing technology can detect oil reserves underground which negate the need to drill multiple exploratory wells.
  • Efficient drilling methods: Horizontal and directional drilling allows a single well to produce oil from a much larger area, reducing the overall number of wells needed. 
  • Controlling CH4 leaks: Detecting, fixing, and repairing CH4 leaks from well-pads, processing plants, compressor stations, and large distribution facilities is crucial. Doing this can reduce CH4 output by 1.70-1.80 million metric tons per year. Plugging abandoned oil wells also prevents the seepage of methane into the atmosphere. 
  • Recycle water and use efficient production practices: Fracking uses a large amount of water, so recycling water and avoiding utilizing freshwater sources can reduce water requirements. Constructing wells properly and maintaining them after drilling is complete is crucial for efficiency. 
  • Implement practices that reduce risk of induced seismicity: Fracking can cause seismic activity that leads to earthquakes. Avoiding water injection into active fault lines, limiting injection rates, installing seismic monitors, establishing a protocol for when seismic activity is induced, and abandoning wells with seismic activity are all ways to mitigate this threat. 

Following certain protocols and environmental mitigation practices can reduce some of the negative environmental effects.

How Does Oil Energy Contribute to Climate Change

Climate change is arguably the most severe, long-term, global impact of fossil fuel combustion. Every year, approximately 33 bt of CO2 are emitted from burning fossil fuels. 33% 11 bt) of this comes from oil. The carbon found in oil reacts with oxygen in the air to produce CO2 when burned. This warms the earth by acting as a heating blanket, and a warmer earth comes with a host of negative side effects. 

CO2 emissions associated with oil combustion contribute to climate change in the following ways:

  • Melting of sea ice: Since 1979 arctic sea ice has declined by 30%. Sea ice plays a major role in regulating the earth’s climate by reflecting sunlight into space and providing habitat for animal species. If all of the glaciers on Earth melted, sea levels would rise by approximately 70 feet, effectively flooding out every coastal city on the planet. 
  • Changing precipitation patterns: Extreme weather events (e.g., hurricanes, floods, droughts) are becoming more common and more intense. Storm-affected areas will experience increased precipitation and flooding whereas areas located further from storm tracks will experience decreased precipitation and droughts.
  • Ocean acidification: The ocean absorbs 30% of the CO2 released into the atmosphere, which decreases the pH (increases the acidity) of the ocean. In the past 200 years, the pH of oceans has decreased by 0.1 pH units, which translates to a 30% increase in acidity. Aquatic life unable to adjust to this rapid acidification will die off. A prime example of this is coral bleaching, where coral expel the algae (zooxanthellae) living in their tissues as a result of changes in temperature, light, or nutrients. 

The more we reduce CO2 emissions, the more we slow the rate of temperature rise, sea-level rise, ice melting, and ocean acidification. When these rates are slowed, the earth’s biodiversity does not have to struggle to adapt to temperature and pH changes. People will not be displaced due to the flooding of coastal areas. And icebergs will continue to provide climate regulation. 

To help keep global temperature rise below 1.5C, as outlined in the Paris Agreement, we must shift at least 80% of our electricity generation to low carbon sources. Over 120 countries have already stated their net-zero carbon emissions ambitions for 2050 or 2060. But only 12 countries have thus far proposed or enacted any legislation, indicating that there is more work to be done.

Final Thoughts

Oil energy is produced when the ancient remains of pressurized plants and animals (i.e. crude oil) is refined into petroleum and combusted in oil-fired power plants. The process creates steam which turns a turbine and spins a generator to produce electricity. We have relied on oil as a main source of energy in the transportation industry for decades, but if we continue to use this finite resource at current rates we can expect to deplete it in approximately 50 years.

The oil industry pollutes the air and water, adds to the total level of CO2 in our atmosphere, produces toxic waste products and expedites global warming. Our health and our planet’s health would be improved if we did not use coal as a source of energy.

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