Many of us take gasoline for granted. We may complain about paying more at the pump for a gallon of gas, but we know gasoline is going to be available when we need it. It’s important to understand the complexities of the industry and the role oil and gas plays in today’s world. Understanding the power petroleum and gas production has will help explain why oil and gas is not the industry you think it is and why it is so important for the modern world.
The role of oil and gas in today’s world
Oil provides one-third of the world’s energy supply. Natural gas brings it up to over 50 percent. Modern economy would collapse without ongoing production to keep up with the demand.
Petroleum and gas production and use is fundamental to economic growth and the quality of life in today’s world. The birth of the internal combustion engine and its many uses in transportation has revolutionized the way people and products move from place to place.
Petroleum products and natural gas account for 99.99 percent of powered transportation around the globe. This powered transportation includes cars, trucks, planes, trains, ships and even motor scooters. Our entire transportation industry relies completely on these natural resources.
Natural gas pipelines in the U.S. alone could stretch to the moon and back at least four times. All the oil and gas pipelines around the planet reach well into the millions of miles.
Four out of every ten cargo ships on any given day are transporting petroleum products. Thousands of shipments of petroleum and gas reach every port in every country around the world each year.
The power of oil production
In 2010, world petroleum production reached 82 million barrels per day. That equates to over 29.3 billion barrels of petroleum that year. Production levels are increasing as new oil fields are being opened up with shale fields.
Wind and solar power production cannot compare with petroleum production. In 2010, petroleum produced over 5.7 terawatts of power; or about 5,700 gigawatts. In comparison, the same year, wind produced 34 gigawatts, while solar produced 3.4.
The oil industry is not what you think it is
Despite rumors to the contrary, it is actually safe to work on oil rigs. In decades past, many workers were injured or killed in rig accidents. OSHA regulations and changes in the industry have altered that dramatically. The number of injuries on an oil rig platform is now lower than the injury rate of people working in the real estate industry or as teachers.
Petroleum companies work on low profit margins, especially when crude prices are low. The costs of oil exploration and oil or gas well production are steadily rising around the world. Over half of all oil or gas exploration wells fail. Each well can cost upwards of $100 million to develop, while the price of a gallon of crude oil will fluctuate like a yo-yo. When oil prices decrease, the petroleum industry reacts with layoffs and less capital expenditures.
Instead of petroleum profits lining the pockets of the international oil refiners and distributors, most of it goes into the pockets of the nationalized oil companies involved with OPEC. Each of the nations in OPEC own the oil infrastructure within their borders. These nations sell their oil to the highest bidder, pocketing the petroleum profits.
The oil and gas industry faces a difficult time when it comes to public relations and regulations, yet it plays a critical role in the modern world. If you have any questions on any of our fuel products and services, or give Kendrick Oil a call at (800) 299-3991. You can also connect with us via email through our Contact Us page