Humans have been using unrefined oil for more than 5,000 years. However, once we discovered kerosene could be extracted from it and used as lighting and heating fuel, we really never looked back.
By the early 20th century, petroleum had become the world’s most valuable trade commodity.
Given the sheer massiveness of the industry, the American Petroleum Institute has divided it into five sectors. The main two are upstream, which encompasses exploration and production of crude oil, and downstream, which includes oil tankers, refineries, retailers and consumers. The remaining three are marine, pipeline transport, and service and supply.
That said, here are 10 things you should know about the oil industry:
1. Modern civilization would collapse within a few months if oil stopped flowing.
The world economy has developed with oil as its blood for more than 100 years, and now, oil is directly responsible for 2.5 percent of world GDP. Oil and gasoline power 100 percent of all transportation facilities, and running a modern economy and military would be impossible without a constant, substantial oil flow.
2. The oil industry is big. Like, B-I-G, big. Bigger then you’ve ever imagined.
The natural gas distribution pipelines in the United States alone could stretch from Earth to the moon almost eight times. Roughly 40 percent of all seaborne cargo is oil, and there is more seaborne cargo at any given time — by weight — than there are fish in the sea. Yeah, fish, get out the way.
3. This might scare you a bit, but it’s reality. Please excuse our forwardness.
Not only are oil and gas critical now, but, according to Forbes magazine, there are no viable replacements in our lifetime. Wind and solar power are growing, but any feasible amount of renewable energy growth wouldn’t even make a dent. The use of renewable energy as a percentage of total world energy consumption only increased by 0.07 percent from 1973 to 2009.
4. Looking for a job?
The oil and gas industry is adding roughly 10,000 jobs a month, which makes sense seeing as the top five oil and gas companies netted, or drilled more than $93 billion in profits in 2013. Although a bit slower than 2012, Exxon Mobil’s CEO still went home with a cool $40.9 million. How’s that for a payday? Not executive material? In 2011, the average salary for an oil rig worker was almost $100,000.
5. The United States is catching up!
For the first time since 1995, the United States is exporting more oil than it’s importing thanks to the growing and sometimes controversial practice of hydraulic fracturing. In October, we averaged exports of 7.7 million barrels per day while receiving just 7.6 million. In fact, between January and May, the United States managed to satisfy 86 percent of its own needs. Phew!
6. North Dakota is just givin’ er.
These guys are in the midst of an economic heyday, mainly due to an oil boom that has helped the state maintain the lowest unemployment rates in the country since 2008. A sudden influx of oil workers has created something of a housing crisis.
Enter the concept of man-camps. Tioga Lodge, North Dakota’s largest man-camp provides housing for roughly 1,238 workers. Not only that, the facility offers meals, including pork roast, fried chicken and spicy shrimp (yes, please) — and transportation to oil fields or construction sites.
7. Where do these mass amounts of oil come from?
Russia is the world’s leading oil producer and currently pumps roughly 3 million barrels a day more than the United States. Saudi Arabia is close behind. The United States entered 2013 sitting in third while producing 9.3 percent of the world’s crude oil. Not withstanding, the U.S. has climbed 1 million barrels per year the past two years and is projected to overtake the lead this year and maintain it through at least 2030.
8. Don't get too excited just yet. That is, unless you drive a Prius. Or a bicycle.
Yeah, we might be stepping up our game when it comes to producing crude oil, but we still consume more than anyone else. Way more. Like, more than 6 million more barrels per day than the entire European Union combined — that's 28 sovereign countries. The United States consumes 18.8 million barrels of refined petroleum products each day. The European Union uses 12.8 million; China, 9.7 million; and Japan, 4.4 million.
9. Nobody used to care about gasoline — except the fish.
Before cars became popular gasoline was a byproduct of kerosene and didn't have much demand. It was cheap, and used to treat lice or as a solvent to remove grease stains from clothing. Believe it or not, gasoline was so worthless oil companies such as Standard Oil used to dump it into rivers just get it off their hands.
10. Oh, you thought American petroleum companies were profitable?
Saudi Aramco, the state-owned national oil company of Saudi Arabia and world’s largest oil producer, nets roughly $200 billion a year on revenue in excess of $350 billion. The company’s value is estimated at $10 trillion in the Financial Times, making it easily the world’s most valuable company. Yes, trillion with a T.
You might be wondering how turning that kind of revenue is even possible. Saudi oil minister Ali Al-Naimi told reporters the average barrel of Saudi oil costs only $2 dollars to produce, and — wait for it — sells for $130. And they produce 12 million each day.
Consider this my resignation. I’m going to make friends with the Saudi aristocrats in Dhahran.
