What is Petroleum?
Petroleum, also termed as crude oil, is a naturally occurring liquid found beneath the Earth’s surface. This versatile resource can be refined into various forms of fuel that power vehicles, heating units, and machines, and can be converted into plastics.
Due to its integral role in modern life, the petroleum industry significantly influences global politics and economies.
Key Highlights
- Petroleum is a naturally occurring liquid beneath the Earth’s surface, refutable into fuel.
- It powers vehicles, heating units, and machinery, and can be transformed into plastics.
- The extraction and processing of petroleum drive global economy and politics.
- As a non-renewable energy source, the rise of alternative energy like solar and wind power gains prominence.
Understanding Petroleum
The extraction and processing-availabilities of petroleum heavily influence the world’s economy and geopolitics. Some of the largest companies globally are involved in petro-related activities, including extracting petroleum, refining it, and creating products from it. These products range from plastics and fertilizers to automobiles and airplanes.
Petroleum is retrieved via oil drilling and subsequently refines into various types of fuels. With different hydrocarbons-present in petroleum, its molecular weight determines its ease in processing and the resultant value.
Instead of direct petroleum investment, one can invest through oil futures or exchange-traded funds (ETFs) that hold stakes in energy sector companies. Companies within petroleum industry usually break into three groups: upstream, midstream, and downstream. Upstream maps, extract or produce the raw materials, midstream handles storage and transportation, and downstream undertakes post-production processing of crude oil.
Pros and Cons of Petroleum
Advantages:
- Provides transportation, heat, lighting, and plastic-derived products globally.
- Easier extraction relative to alternative energy sources with high power ratios and effortless transportation.
Disadvantages:
- Toxic carbon emissions impacting the environment.
- Transportation hazards of petroleum risking ecosystems.
- Extraction practices harm ecosystems.
The Petroleum Industry: An Analysis
Classification
Oil is classified recognizing geographic drill location, sulfur content, and API gravity—a measure defining its density.
Reservoirs
Expert geologists, chemists, and engineers unearth petroleum reservoirs using seismic reflection methods. Notably, Venezuela, Saudi Arabia, and Canada lead global reserves with billions of extracted barrels.
Extracting
Petroleum extraction employs developmental drilling for pre-identified reserves, exploratory drilling to discover new reserves, and directional drilling to geometrically access known sources.
Investing In Petroleum
The energy sector endowers prospective investors to speculate upon demand trends of oil and fossil fuels. Funds like the Vanguard Energy Fund (VGENX) and Fidelity Select Natural Gas Fund (FSNGX) consolidate holdings in significant petroleum companies while also offering dividends.
Combine direct accessibility and diversification with top oil and gas ETFs such as Invesco Dynamic Energy Exploration & Production ETF (PXE), First Trust Natural Gas ETF (FCG), and iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
How Is Petroleum Formed?
Petroleum, a fossil fuel, was formed over millions of years from ancient deceased microorganisms subjected to heated and pressurized rock environments.
Is Petroleum Renewable?
Petroleum remains a non-renewable shrine of finite fossil fuels. As a result, resource exhaustion is humanity’s immediate challenge.
What Are Alternatives to Petroleum?
Emerging alternatives treasure wind, solar, and biofuels. These renewables draw from ecological sources like wind turbines, solar panelling, and organic biomass.
Classifications of Petroleum Unveiled
Unrefined petroleum sub-categorizes itself into asphalt, bitumen, crude oil, and natural gas.
Concluding Thoughts
Petroleum powers and influences our everyday livelihoods through its widespread use in gasoline, kerosene, plastics, among other applications. A valuable yet finite non-renewable energy source, petroleum still poses significant environmental hazards. However, the world increasingly pivots to eco-friendly renewable energy sources tempering these challenges.
Related Terms: Oil Drilling, Refining Petroleum, Oil Futures, Environmental Impact of Petroleum, Renewable Energy Alternatives.
References
- National Geographic Society. “Petroleum”.
- World Population Review. “Oil Reserves By Country”.
- Vanguard. “Vanguard Energy Fund Investor Shares”.
