Page 8 - Oil and Gas Production Handbook An Introduction to Oil and Gas Production

a day in October 1861 and the Woodford well on the left came in at 1500
barrels a day in July, 1862.

The oil was collected in the wooden tank pictured, in the foreground. As you
will no doubt notice, there are many different sized barrels in the background
of the picture. At this time, barrel size had not been standardized, which
made terms like "Oil is selling at $5 per barrel" very confusing (today a barrel
is 159 liters, see units at the back). But even in those days, overproduction
was something to be avoided. When the "Empire well" was completed in
September 1861, it gave 3,000 barrels per day, flooding the market, and the
price of oil plummeted to 10 cents a barrel.

Soon, oil had replaced most other fuels for motorized transport. The
th
automobile industry developed at the end of the 19 century, and quickly
adopted oil as fuel. Gasoline engines were essential for designing successful
aircraft. Ships driven by oil could move up to twice as fast as their coal
powered counterparts, a vital military advantage. Gas was burned off or left
in the ground.

Despite attempts at gas transportation as far back as 1821, it was not until
after the World War II that welding techniques, pipe rolling, and metallurgical
advances allowed for the construction of reliable long distance pipelines,
resulting in a natural gas industry boom. At the same time the petrochemical
industry with its new plastic materials quickly increased production. Even
now gas production is gaining market share as LNG provides an economical
way of transporting the gas from even the remotest sites.

With oil prices of 50 dollars a barrel or more, even more difficult to access
sources have become economically viable. Such sources include tar sands
in Venezuela and Canada as well as oil shales. Synthetic diesel (syndiesel)
from natural gas and biological sources (biodiesel, ethanol) has also become
commercially viable. These sources may eventually more than triple the
potential reserves of hydrocarbon fuels.

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