Oil Industry

Much of the world runs on oil, most from land, but some from ocean drilling. Given the locations of the remaining oil, the costs have been far higher, though technology has made it more accessible. Canada’s tar sands are becoming a serious issue, and with the Arctic ice melting, oil companies are racing to drill there with serious environmental issues involved.
The Earth has been accumulating oil and natural gas for about a billion years or so. Humans have been drilling and burning crude and gas in significant amounts for only the last 158 years, since the 1859 birth of the oil industry in Pennsylvania. Since 1980, the world has burned nearly 40 trillion gallons. Since 1980, the amount found, but not yet produced, has more than doubled. The world’s proven reserves are now 71 trillion gallons, up from 683 billion barrels in 1980. That’s part of what worries climate scientists so much. Burning the oil and gas that we’ve already found, never mind what we haven’t yet, will lead to dangerous and possibly catastrophic changes in the earth’s climate.



  • Oil companies under attack globally.
  • The case against oil drilling off-shore.
  • Some of the dangers with drilling
  • Drilling in the Arctic
  • BP’s Deepwater Horizon spill & Gulf news
  • Alberta’s tar sands oil
  • Oil reserves
  • Subsidies to oil industry
 Oil companies under attack globally

June 2018: Why California lawsuit against big oil lost. U.S. District Court Judge William Alsup, who famously convened a climate tutorial in court, had seemed sympathetic to the argument that oil companies have done real harm. Alsup sees a danger that worries him more than climate change – the danger of a single unelected judge deciding that countries around the world are better off without oil. Alsup wrote that a ruling against Big Oil would trigger a cascade of other lawsuits, and eventually put petroleum producers out of business, which he argued, would trample on the policies of countries that are actively encouraging oil production. If any branch of government is going to do something as big as shutting down global oil production, he reasons, it needs to be done by elected representatives, not one judge and jury making a decision for the entire world. link

February 2018: Demand for crude to grow and not peak until late 2030s. BP said it expects the global hunger for crude to grow for years and not peak until the late 2030sSingle use plastics were only about 15% of all non-combusted oil, which is used for petrochemicals, an industry that BP expects to be a big driver of global growth in crude demand. The report forecasts demand peaking at about 110m barrels per day between 2035 and 2040, up from around 97mb/d today. Much of the growth comes from rising prosperity in the developing world. link

November 2016: Obama halts Arctic oil leases: undoing it will not be simple. No new offshore oil and gas leases will be offered in the Alaskan Arctic through 2022, according to a new five-year plan for offshore drilling released by the Obama administration. President-elect Donald Trump could overturn the ban, but that could take years and may not draw much industry interest if oil prices stay low. link

August 2016Is the oil industry dying? Humanity has been extracting oil on an industrial scale for 150 years now. At first, all it took was identifying places where petroleum was seeping to the ground surface, then digging a shallow well. Today, globally, millions of old conventional oil wells lie depleted and abandoned. The primary remaining prospects for production include heavy oil (which requires expensive processing); bitumen (which must be mined or steam-extracted); tight oil (produced from low-permeability source rocks, which requires hydrofracturing and horizontal drilling, with typical wells showing a rapid decline in output); deepwater oil (which entails high drilling and infrastructure costs); or arctic oil (which has so far mostly proved cost-prohibitive). link

June 2018: Shipping industry to clean up its dirty fuels. By 2020, the global shipping fleet will be required to slash the noxious emissions from thick, sulfur-laden “bunker” fuel, a move that is expected to sharply reduce air pollution and prevent millions of cases of childhood asthma and other respiratory ailments. Pitch black and thick as molasses, “bunker” fuel is made from the dregs of the refining process. It’s also loaded with sulfur, the chemical that, when burned, produces noxious gases and fine particles that can harm human health and the environment, especially along highly trafficked areas. link

June 2016: The US has an oil train problem. From the Bakken crude derailment in July 2013 in Lac-Megantic, Quebec, creating an explosive blaze that left 47 dead and destroyed the center of town, to the recent derailment near the small town of Mosier, Oregon, that spilled 42,000 gallons of Bakken crude into the soil, wastewater system, and Columbia Rivertransporting oil by train can be devastating to the environment. For oil companies, Pacific ports and refineries offered a place to send massive amounts of domestic crude oil unleashed during the fracking boom. The United States did not have the infrastructure or capacity to move that oil from North Dakota to a place where it could be refined so companies looked to railroads. link

June 2016: Accident timeline of 13 oil train cashes from Lac-Megantic in June 2013 to June 2016 read


June 2016: Nigeria’s massive oil cleanup could take decades and cost $1 billion – link

May 2016: Exxon scrambles to contain climate crusade. ExxonMobil dispatched its top lobbyists to Capitol Hill on an urgent mission, tamping down an escalating campaign aimed at making the country’s largest oil company pay a legal and political price for its role in warming the planet. The meeting marked a striking shift in Exxon’s handling of the controversy. The notion of holding oil companies responsible for global warming, in the same way tobacco companies had to pay billions of dollars in damages over the health effects of cigarettes, had long been seen as a quixotic quest led by scruffy, oil-hating extremists. The legal crusade now poses the biggest existential threat the company has faced in decades. link

May 2016: Big oil companies return to renewable options. The big oil companies’ on-off affair with renewable energies seems to be back on track. Shell plans to invest $1.7 billion in forming a new company division aimed specifically at developing renewable energy and low carbon power. Total, another of the oil giants, is stepping up its investments in clean energy, spending more than $1 billion on solar and battery concerns. On the face of it, this is all good news though as a proportion of their overall spending, the oil giants’ investments in renewables are still very low, and are dwarfed by their spending on fossil fuel-related activities. link

November 2012: BP & Chevron singled out as risky oil companies for investment. A New York-based investment research firm rated 30 of the world’s largest oil and gas companies on their investment attractiveness based on their history of spills and environmental management, as well as the riskiness of the areas they are exploring. BP and Chevron were singled out as companies that are poorly positioned in this area. The report said that environmental incidents have become the biggest factor in determining a company’s investment risk, overshadowing other factors like its relationship with its employees or its partnership with host governments. Spill records and safety cultures will become even more important in the future, because of what the report describes as the industry’s “increased appetite for complex and challenging unconventional oil and gas projects.” link

May 2016: Philippines to take 50 fossil fuel companies to trial. Lawyers for the petitioners met with the Commission on Human Rights of the Philippines (CHR), a constitutional body tasked with investigating human rights violations. Their goal was to identify expert witnesses for a hearing into the liability of 50 of the biggest fossil fuel companies for violating the human rights of Filipinos as a result of catastrophic climate change. link
(November 2015) ExxonMobil and Peabody Energy, the world’s biggest private coal company are under investigation for having misled the public and investors about the dangers and potential business risks of climate change – link   October 2017: Any findings of human rights abuses in the Philippine case could also form the legal basis for lawsuits and set an example for other countries to follow. link 

May 2016: Mobil’s CEO warned of oil sands emissions in 1982. The CEO of Mobil Corporation warned in 1982 that burning Canadian oil sands fuels could lead to a buildup of carbon dioxide in the atmosphere with calamitous effects. His concerns provide further evidence that oil industry executives were aware of the climate impact of their products decades ago, and of the dangers of exploiting unconventional reserves with a higher carbon footprint. link

 The case against oil drilling off-shore

March 2016: Oil drilling along Atlantic seaboard banned. The Obama administration has abandoned its plan for oil and gas drilling in Atlantic waters after strong opposition from the Pentagon and coastal communities. The announcement reverses Obama’s decision just a year ago to open up the east coast to oil and gas exploration, and consolidates his record for environmental protection. Virginia, North Carolina, South Carolina, Georgia and Florida would remain off-limits for drilling until 2022 because of coastal communities’ concerns about risks to fishing and tourist industries from an oil and gas spill, and warnings from the navy about interference with its systems. link

A steady stream of pollution from offshore rigs causes a wide range of health and reproductive problems for fish and other marine life. Offshore drilling exposes wildlife to the threat of oil spills that would devastate their populations. Offshore drilling activities destroy kelp beds, reefs and coastal wetlands.


  • Dump more than 90,000 metric tons of drilling fluid and metal cuttings into the ocean.
  • Drill between 50-100 wells, each dumping 25,000 pounds of toxic metals, such as lead, chromium and mercury, and potent carcinogens like toluene, benzene, and xylene into the ocean.
  • Pollute the air as much as 7,000 cars driving 50 miles a day.
  • (Compiled by Rainforest Action Network, courtesy Mendocino Environmental Center)

For more on the case against off-shore drilling see Committee Against Oil Exploration

For general information on all aspects of oil production I recommend Dick Gibson’s site – http://www.gravmag.com/oil.html                           

 Some of the dangers with drilling

July 2011: Is oil drilling inherently flawed? Documents released under freedom of information legislation, reveal there are oil and gas spills in North Sea every week. Deepwater Horizon showed that even the most up-to-date, cutting-edge safety technology can go wrong if it is not maintained properly and not operated by competent people. Some operators don’t give a damn, because of the high price of oil they are cutting corners.  (More than 100 potentially lethal oil and gas spills took place on rigs in the North Sea in 2009 and 2010) link

The Montara spill
November 2009: Timor Sea oil rig blaze caused serious ecosystem damage. For ten weeks since August 21 2009, engineers struggled to stop a well-head accident which resulted an uncontrolled discharge of oil and gas at an estimated 400 barrels (17,000 gallons) a day being released into waters north of Australia causing an ecological disaster to marine life. link PIers Verstegen, from the Conservation Council of Western Australia, says the spill is an ecological disaster. “Humpback whales, an endangered species, go to that area and that region to calf and give birth and this oil spill is happening just off the Kimberley coast.” Conservationists believe that, in its rush to exploit abundant natural resources, Australia risks inflicting irreparable damage on its fragile environment. link
October  2009 – photo gallery of marine damage – link

 Arctic drilling

June 2012: Arctic drilling given green lightPresident Obama, 18 days before the PB Gulf disaster, said “Oil rigs today generally don’t cause spills.” link
(News update November 2016 – leases halted through 2022 – link)
December 2017: Republicans vote to allow drilling in Arctic National Wildlife refuge – link

July 2012: Clean-up from an oil spill in the Arctic semantics. Interior Secretary Ken Salazar said he believed Shell’s claims that it could collect at least 90% of any oil spilled in the event of a well blowout. Experts however say it is impossible to recover more than a small fraction of a major marine oil spill. Retired Coast Guard Admiral Roger Rufe said “…once oil is in the water, it’s a mess. And we’ve never proven anywhere in the world, let alone in the ice, that we’re very good at picking up more than 3 or 5 or 10 percent of the oil once it’s in the water.” Shell’s superintendent for emergency response in Alaska, says the oil company’s plan is to confront 95% of the oil out in the open water, before it comes ashore. That doesn’t mean responders can collect what they encounter. link  (Pictured: An oil rig off Greenland’s coast in the Arctic waters. Photograph: Greenpeace.)
November 2013: Leading scientist says Arctic oil spill is certain if drilling goes ahead – link

September 2015: The race for oil in the Arctic. The Arctic, which is believed to contain as much as one-quarter of the world’s undiscovered oil is part of a massive territorial dispute. The United States, Russia, Canada, Denmark, Norway and Iceland are all laying claim to the area, with each country eager to tap into the oil, 30% of the earth’s natural gas, and resources such as diamonds, gold and iron. Vanishing at 13% a decade, the melting ice is expected to make drilling, mining and shipping easier. link

September 2011 – Unlocked by melting ice-caps, the great polar oil rush has begun – link

 Deepwater Horizon spill / Gulf news

December 2016: Thousands of invisible oil spills are destroying the Gulf. Hurricane Ivan in 2004 stirred up a massive mud slide on the sea floor which created leaks in 25 undersea oil wells, snarled the pipelines leading from the wells to a nearby oil platform, and brought the platform down on top of all of it. Twelve years later, the mess is still leaking, and will continue to leak for the next century, according to the Department of the Interior. Since the storm, its oil slick stretches over eight square miles on an average day. Every year thousands of oil and chemical spills occur in waters around the country, but the Coast Guard classifies many spills – up to 100,000 gallons – as minor or moderate, and small spills get less of everything: less media attention, less regulation, less environmental impact assessment, and most critically, less funding to clean them up. link

January 2018: BP Deepwater Horizon costs balloon to $65 billion. BP said it would take a new charge over the 2010 Deepwater Horizon spill after again raising estimates for outstanding claims, lifting total costs to around $65 billion. BP paid around $63.4 billion by the end of September 2017 to cover clean-up costs and legal fees linked to the largest environmental disaster in U.S. history where 11 rig workers were killed. link  (Photo – AP)  Guardian timeline of events

Gulf of Mexico news: Since 2001 there have been 69 offshore deaths, 1,349 injuries and 858 fires and explosions in the Gulf, according to the federal Minerals Management Service. link  [Roughly 70% of offshore oil and gas leases in the Gulf of Mexico and more than half of onshore leases on federal lands remain idle, neither producing nor under active exploration and development by companies who hold those leases link]  More on the BP Deepwater Horizon disaster below.

September 2010: The BP Deepwater Horizon spill – largest marine oil disaster ever – link  

Gulf of Mexico has a long history of spills. Federal records show that between 1964 and 2009, prior to the BP spill, 517,847 barrels of petroleum had been dumped into the Gulf, twice the amount of the Exxon Valdez spill. While spills have been decreasing, the history of spills in the Gulf have largely been unreported, and frequently understated by the companies themselves. link  [According to NOAA, there are 3,858 oil and gas platforms operating in the Gulf of Mexico.] September 2010: The U.S. Interior Department requires oil and gas companies to plug nearly 3,500 non-producing wells in the Gulf permanently and dismantle 650 platforms no longer being used. link

April 2011: 3,200 wells in Gulf still unplugged – link

July 2010: Now is the time to count the ecological cost with the spill seemingly under control. In the 85 days of the leak, nearly 184 million gallons of crude oil gushed into the Gulf of Mexico, equal to the amount of oil Americans burn every 5 hours 10 minutes. The damage yet to be revealed will be far worse, however, than a few dead birds and tar balls along 500 miles of coast. link  Research shows up to 40% of gulf oil spill was potent methane gas. link

On the second anniversary of BP’s Gulf of Mexico Deepwater Horizon spill,
it is also important to recognize it was not the only one that happened
in recent years, even in the U.S
.  More


Other Gulf oil spills:
Katrina oil spill – 2005. Until the 2010 BP Gulf oil disaster, Katrina was the second worst oil spill in US history after Exxon Valdez. The oil pollution in the wake of Hurricane Katrina could be among the worst recorded in North America, officials trying to coordinate the clean-up say. The US coastguard, which is responsible for the marine environment, said more than 6.5 million gallons of crude oil had been spilt in at least seven major incidents. The previous worst spill in US waters was the 11m gallons in Alaskan waters from the Exxon Valdez in 1989.  The Katrina figure does not include petrol and oil spilt from up to 250,000 cars which have been submerged, or that spilt from hundreds of petrol stations. The coastguard says it has received almost 400 reports of spills, the vast majority of which have not been assessed. link

Hurricane Ike – 2008. According to Lars Herbst, regional director for the Minerals Management Service, Hurricane Ike “appears to have destroyed a number of oil production platforms and damaged some of the pipelines in the Gulf of Mexico. Federal officials agreed at least 10 production platforms have been destroyed by the storm, and possibly many more. link

 Alberta’s tar sands oil

Alberta’s oil sands are the world’s third-largest crude reserves after Saudi Arabia and Venezuela and Canada’s fastest-growing source of greenhouse gas emissions. In 2014, oil sands emissions were 66 megatonnes, or 24% of Alberta’s total emissions and 9% of Canada’s total emissions. link
See also Keystone XL pipeline page for more on this
For more on Alberta tar sands oil, see Alberta Tarsands page    

 Oil reserves

July 2018: Demand for oil could peak by 2027 or even earlier. The take-up of electric vehicles is crucial to the future of the oil industry because transportation takes up 50% of total oil demand. About half of the demand from transport is from light passenger vehicles, those that are most likely in the short term to switch to electricity. A new report says oil and gas companies have underestimated probable electric vehicle sales and the effect they will have on their own businesses and profits. link

January 2011: Traditional oil corporations under pressure. National governments and state-owned fossil fuel firms such as China National Petroleum Corporation produce 93% of the world’s oil. The formerly dominant supermajors (such as ExxonMobil, BP, Royal Dutch Shell, Total), are now seeking out riskier and riskier reserves, drilling in the ultra-deep waters of the Gulf of Mexico and mapping the Arctic Ocean floor. In their continuing struggle to appease investors, they’ve also become increasingly reliant on major oil sands expansions, suggests groundbreaking new research detailed later in this story. link  [84% of the world’s remaining oil reserves are either state-owned or controlled. Of the freely accessible leftovers, 62% reside in Canada’s oil sands according to BP’s latest review – Sept. 2012]

April 2010: How much oil is off the Atlantic Coast? We really have no idea. The entire East Coast has been off limits from all drilling-related activity since 1981. That’s the last time any data was collected on the area, using seismic equipment that’s outdated compared to today’s advanced methods. More accurate data is likely to lead to more accurate drilling and fewer “dry wells” that don’t produce oil. But it could also revise downward how much we think is out there. The Interior Department’s Minerals Management Service (MMS) estimates there could be as much as 10 billion barrels of oil and natural gas in the mid- and south Atlantic. But that’s only at a 5% level of confidence. Ask them what they’re 95% confident of, and the estimate drops to fewer than 2 billion barrels, or about 100 days of oil at our current rate. So, not much. “We really don’t know a lot about what’s down there,” Interior Secretary Ken Salazar admits. “It may be nothing, it may be a lot. link

 Oil subsidies / pollution

Oil companies are already sitting on 68 million acres of leases that they aren’t even drilling? Oil companies already have access to nearly 80% of all American offshore oil that is technically recoverable.  According to the US Energy Information Administration, “access to the Pacific, Atlantic and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.”

August 2016: Russia spills two Deepwater Horizons of oil each year. The Komi Republic in northern Russian is renowned for its many lakes, but sites contaminated by oil are almost just as easy to find in the Usinsk oilfields. The spills are relatively small and rarely garner media attention, but they add up quickly, threatening fish stocks, pasture land and drinking water. According to the natural resources and environment minister, 1.5m tonnes of oil are spilled in Russia each year. That’s more than twice the amount released by the record-breaking Deepwater Horizon oil spill in the Gulf of Mexico in 2010.  60% of Russia’s pipeline infrastructure is deteriorated. And with fines inexpensive and oversight lax, oil companies find it more profitable to patch up holes and pour sand on spills, or do nothing at all, than invest in quality infrastructure and comprehensive cleanups, according to activists. link

April 2011: Energy companies underpaying by millions, perhaps billions. By law, energy companies must pay one-sixth to one-eighth of the value of oil and gas obtained on public lands and in federal waters off the nation’s coasts. In practice, government auditors and Interior’s inspector general believe the industry is paying less than it legally should. Exactly how much less is anybody’s guess, but it is believed to be at least hundreds of millions, and possibly tens of billions of dollars. So flawed and complicated are Interior Department operations and records that even auditors from the Government Accountability Office, the watchdog arm of Congress, have been unable to figure out exactly how much has been lost to taxpayers. link