Oil and natural gas drilling

Summary: The biophysical characteristics of oil and natural gas define the ways in which these fossil fuels are extracted, as well as how they are distributed and commodified.

Petroleum and natural gas are hydrocarbons, organic compounds that consist entirely of hydrogen and carbon in various combinations. Like coal and many other substances, these hydrocarbons are extracted from the earth following a series of physical and chemical transformations that continues in their commodification process. In his work on the global production network of oil, Gavin Bridge conceptualizes this processes as a linear production chain (consisting of exploration, extraction/production, refining, and distribution) with materials transformation and product flow at the center of analysis. These sequential processes are better known as the hydrocarbon commodity chain.

The process starts by determining the location, quantity, and condition of oil and natural gas in order to extract them from the environment. This initial phase is known as the upstream phase; it includes exploration, production, and extraction processes. After extraction, oil and natural gas enter the midstream stage, which is characterized by the processing and transportation of these resources in a petrochemical facility. Once in the petrochemical industry, oil and natural gas undergo their downstream transformations into a wide variety of refined final products, such as fertilizers, plastics, lubricants, and textiles, which are incorporated into the global economy.

Two key characteristics make hydrocarbons extremely important to our civilization, throughout many industries, and to countries at every range of industrial development across the globe. First, hydrocarbons contain immense amounts of stored energy. Second, hydrocarbons can take on many different forms. However, hydrocarbons in their crude form have limited uses. In order to be refined into functional products such as gasoline, heating gas, and petrochemical feedstock, both oil and gas must be manipulated and transformed physically and chemically. One problem with crude oil is that it contains hundreds of different types of hydrocarbons all mixed together. That is one of the reasons petroleum needs to be refined: to separate the different types of hydrocarbons, each with different molecular structures, characteristics, and uses. Unraveling the geographical complexities of the hydrocarbon sector in the context of local and global economies has pivotal concerns in different disciplines. Many scholars, engineers, and economists have studied the geographic, social, economic, and environmental impacts associated with the extraction of oil and natural gas.

Oil Exploration and Drilling

In the early stages of oil exploration and extraction, oil companies invest time and capital in exploration tours to find where the major oil deposits are located. Once the geologists in charge of exploration activities find a prospective oil strike, oil companies begin perforation activities after legal issues are settled. Oil companies need to secure concessions, lease agreements, titles, and rights of way before drilling the land. For offshore sites, legal jurisdiction must be determined. Oil drilling is an extremely energy-intensive activity. It requires specialized knowledge and highly specialized equipment to drill through the rock strata and connect the reservoir to the oil platform.

The majority of wells are drilled using rotary drilling rigs. In his book on petroleum geology, Norman Hyne describes this system as follows: “The rotary drilling rig rotates a long length of steel pipe with a bit on the end of it to cut the hole called the wellbore. The rotary rig consists of four major systems. These include the power, hoisting, rotating, and circulating systems.” The drilling rig goes through a casing, a large-diameter concrete pipe that lines the drill hole, preventing it from collapsing, and allowing mud to circulate. A circulation system pumps drilling fluids through the casing, generally a mixture of water, clay, weighting material, and salt (sodium hydroxide or sodium bromide) that lifts rock cuttings from the drill bit to the surface under pressure. Caustic soda is used in alkaline flooding of oil and gas fields to enhance the recovery of these fossil fuels, and to prevent widening of boreholes in rock-salt strata, which in turn inhibits fermentation and increases mud density.

Another drilling function applies muriatic acid, an aqueous solution of hydrogen chloride, in a process known as stimulation. This removes rust, scale, and undesirable carbonate deposits in oil wells in order to encourage the flow of crude oil or natural gas to the well. Stimulation is used in carbonate or limestone formations, whereby hydrochloric acid is injected into the formation to dissolve a portion of the rock, creating a larger pore structure in the formation. This process increases the permeability and the flow of oil and natural gas in the well, which in turn maximizes the recovery of these fossil fuels.

A combination of increasing demand pressures and continual technological advances has made the successful tapping of more and more remote oil deposits practical, from a financial viewpoint, and made it possible, from a technical standpoint. For example, in the 1960s, nautical drilling rigs first came into their own. The North Sea and the Gulf of Mexico were among the handful of geographic backdrops to the early evolution of offshore hydrocarbon capture on an industrial scale. New international legal measures were adopted in the 1960s, clarifying ownership rights and claims to many of the known continental shelf hydrocarbon deposits and spurring the methodical search for new such fields by a variety of bodies, whether individual private corporations, national ministries, or international consortia of companies and government agencies.

The Arab Oil Embargo of 1973 and the Iranian Revolution-ignited 1979 oil price crisis together drove an acceleration of the technology, the know-how, and the willingness of capital sources to fund new offshore ventures around the world. This gave fresh impetus to exploring and drilling into ever deeper offshore fields. The infrastructure value of the whole installed deepwater drilling segment of the industry was estimated at $145 billion worldwide in 2011. Deepwater drilling as a component of the offshore industry has advanced to where it is feasible for a wellhead to be emplaced as much as a mile or more below the ocean surface, and with its wellbore extending as much as another mile or more beneath the seafloor itself. Wells of this type are referred to in the industry and by regulatory bodies as “ultra deepwater” rigs.

Several decades later, some of the world’s largest and most reliable onshore and offshore producing fields have been depleted past the point where hydrocarbon recovery is relatively easily profitable. However, there are numerous cases where such depleted reservoirs are regenerated or revived to a practical degree of economic feasibility by the use of enhanced oil recovery (EOR) technologies. One such EOR extraction technique is water injection. Whether using seawater, aquifer sources, or river sources, the water medium must be de-oxygenated, it must be filtered, and it must be pumped at high pressure into the heart of the oil or gas field over a considerable stretch of time for optimum results. Careful economic modeling must be done prior to such an investment, especially in desert environments or other locations where additional equipment must be built and to connect the hydrocarbon to a sizable and useful source of water.

Other types of EOR include chemical injection and gas injection—which is the form in broadest use. Ironically, the greenhouse gases methane and carbon dioxide are among the most widely used gases for this process. The application of EOR techniques can raise recovery of hydrocarbons from reservoirs from the usual 25 percent to 40 percent of a deposit to a range of 30 percent to 55 percent or more of the deposit.

Once oil (and natural gas) is extracted, it is transported to refineries or petrochemical facilities. At this stage, refineries produce pure chemicals, called feedstock, from crude oil or natural gas, which is sold to petrochemical industries. This moment in the material flow of oil and natural gas is referred to as the downstream stage of the hydrocarbon commodity chain.

Natural Gas Production

The normal production of petroleum by extraction brings with it a certain amount of natural gas per oil well in the process. The gas is found entrapped in the Earth’s crust at varying depths beneath rigid strata, such as limestone. When raw natural gas is found together with oil deposits, it often contains water vapor, hydrogen sulfide, carbon dioxide, helium, and nitrogen, among other components, and it is referred to as “wet” gas or associated gas. Like oil, natural gas needs to be processed and refined. These processes consist of separating all of the existent hydrocarbons and fluids from the pure natural gas to produce pipeline-quality “dry” natural gas that can be marketed as a commodity.

In the past, the appropriate infrastructure to take gas to a market did not exist; natural gas was initially considered an undesirable by-product of oil production. Unwanted natural gas thereby became a disposal problem at the well site. On one hand, if there were no market for natural gas closer to the wellhead it would need to be piped to the end user, decreasing its exchange value closer to the well site. On the other hand, much of the gas produced as a by-product of oil extraction became unwanted, or stranded, gas, and it was either burned off (“flared”) at the extraction site or pumped back into the reservoir with an injection well for disposal because of the difficulties of handling it on site. As a result, immense amounts of capital were invested in research and technology allowing industries to maximize the production of natural gas. The use of gas injection became widespread, and the appreciation of the versatility and importance of natural gas, both as a source of energy and as a petrochemical feedstock, increased. This, in turn, reduced the wasteful practice of flaring.

Natural gas needs a different set of processes and technologies to be extracted and transported in comparison to those of oil. The biophysical characteristics of natural gas makes it extremely difficult to extract, commodify, and transport. In an editorial piece on natural gas, Bridge argued that producing gas as a commodity, as a substance to be exchanged on the market, takes a considerable amount of work; in particular, the expansive and unstable characteristics of natural gas require its chemical and physical transformation in order to be commodified. This metamorphic process involves the reconfiguration of space and technology when extracting its exchange value. However, the challenge with natural gas is not its availability, since it is most typically greater than the absorption capacity of local markets. Instead, the problem lies in its distribution to downstream and foreign markets in its original form.

New Developments

Drilling technologies have advanced to allow companies to extract a great deal of oil and natural gas that previously was unreachable or required a large investment. Horizontal drilling, for example, allows companies to access multiple oil or gas reserves in horizontal reservoirs from one well pad. This achieves cost reduction because additional well pads, access roads, pipeline routes, and other infrastructure is not needed. Companies are also working to automate the drilling process to reduce the number of workers on-site. This would result in cost savings and improve safety.

Conclusion

Both oil and natural gas are transported through extensive pipeline systems. However, oil has a geographical advantage over natural gas. This advantage is defined by biophysical differences of the two commodities. In this sense, it is easier and cheaper to move oil in a pipeline than to transport gas by pipeline. In his work on the political economy of natural gas, Ferdinand Banks argues that one of the reasons oil is generally called the highest-quality source of energy is the relative ease with which it can be transported. In this context, the distribution of natural gas through pipelines has a geographical limitation. That is, the pressure of gas decreases with distance, which requires investment in larger-diameter pipelines to allow the passage of larger quantities of gas and the installation of multiple compression stations along the way. This approach solves the problem when gas is transported at continental distances.

Extraction, commodification, and transportation of natural gas is challenging, and it can also be dangerous and volatile. To that extent, natural gas requires a multiscalar geographical reconfiguration of space, economy, and technology. The expansive characteristic of natural gas defines the technology needed for its extraction, refining, and distribution, thus creating a set of social and institutional organizations to accommodate those needs.

Oil and natural gas, therefore, have proven to be significant and contested fuels, both reconstituting nature during extraction activities and transforming local and global economies in their commodification processes. Even though the physical and chemical manipulations of these commodities happen at the molecular level, the effects of these transformations have a multiscalar impact beyond the commodities themselves, reconfiguring social, economic, and geographic spaces.

Bibliography

Banks, Ferdinand. The Political Economy of Natural Gas. New York: Croom Helm, 1987.

Bridge, Gavin. “Editorial: Gas and How to Get It.” Geoforum 35 (2004).

Bridge, Gavin. “Global Production Networks and the Extractive Sector: Governing Resource Based Development.” Journal of Economic Geography 8 (2008).

"Drilling--New Technologies, Innovations." Oil & Gas Portal, www.oil-gasportal.com/drilling/new-technologies-innovations/. Accessed 5 Aug. 2024.

Hyne, Norman. Dictionary of Petroleum Exploration, Drilling and Production. Tulsa, OK: PennWell, 1991.

Hyne, Norman. Nontechnical Guide to Petroleum Geology, Exploration, Drilling, and Production. 2nd ed. Tulsa, OK: PennWell, 2001.

Langenkamp, R. D. Handbook of Oil Industry Terms and Phrases. 5th ed. Tulsa, OK: PennWell, 1994.

Laszlo, Pierre. Salt: Grain of Life. New York: Columbia University Press, 2001.