From the ground to the pump
Looking around Odessa and the Permian Basin, the all-too common see-saw motion of a pumpjack can be seen from all over.
Frosty Gilliam Jr, co-founder of Aghorn Energy, said his wife recently asked him if an oil rig was once stationed wherever a pumpjack was located.
“Yes, there did,” he said was the answer he gave his wife. “Everywhere you have a pumpjack, in its history, there used to be a rig there.”
As worldwide demand for crude oil continues to rise and gas prices don’t show any signs of slowing down, oil companies continue to look for new oil patches in hopes to continue to meet demands.
Besides gasoline and other types of fuels, crude oil is also used in products such as propane, heating oils, plastic bags and even clothing.
Unfortunately, finding oil isn’t as easy as Jed Clampett made it look.
Gilliam said there are several steps that take place before oil drilling can begin. The first step involves having geologists and geophysicists survey land, make a surface map and pinpoint a spot where they think oil might be.
“The oil company will…then get oil and gas leases from the mineral owners,” Gilliam said.
Mineral rights, as opposed to surface rights, are sought in negotiations before drilling begins. Because Texas is known to side more with mineral rights owners, oil companies look to lease the land to recover minerals below the surface.
Once contracts have been signed, Gilliam said companies will then set up oil rigs and drill anywhere between 4,000 to 12,000 feet, depending on the depth the company wants to go. Once the well is drilled, one of two things will happen: the hole comes up dry or the company finds oil.
“If they drill a dry hole, (the oil companies) go back to their geologists, they run logs, they look at the formation … and decided where they want to move and try somewhere else,” Gilliam said.
If oil is found, Gilliam said the oil companies will build a production center that includes a battery, casings, treaters and tanks, harvest the oil and sell it to the refineries. Gilliam said most of the oil from the Permian Basin goes to Cushing, Okla., or Houston.
Formations under the ground are “very tight,” Gilliam said, meaning the ground is not always impenetrable by a drill. In cases like that hydraulic fracturing is used to loosen the ground and help bring more oil and gas to the surface.
First used by Pan American in 1947 in the Hugoton field, Distinguished Engineering Advisor for Apache George King said hydraulic fracturing, or fracing, takes place when oil companies place conductor casings down the well to separate all liquids from any sources of drinkable water. Once the casings are in place, a series of small holes are created to allow the fracturing fluid to flow into the wellbores.
Using a mixture of water, sand and chemicals, King said the mixture is then pumped under high pressure into the well. The pressure fractures the rock and props open fissures that enable natural gas to flow more freely out of the well. Depending on the size of the well and how deep it is, King said the process can use between 100,000 gallons and 1 million gallons of water.
“Basically, what apache is doing, is replacing much of the fresh water with salt water,” King said. “That way we eliminate the fresh water approach.”
With all the concerns and debate with hydraulic fracturing, King said between up to one-and-a-half million wells have been fraced since the techniques conception.
“We think it’s one of the safest processes out there when compared to coal and other factors,” King said.
Once a hole is finished, a pumpjack is put in place to lift the oil out of the well if there is not enough bottom hole pressure. From there, the oil companies will move on to the next area they want to drill to look for more oil.
“Basically, you go from idea, put it together, get your rig, drill, produce it and sell it,” Gilliam said.
Once the oil goes to the refineries, Executive Director of Media Relations with Valero Bill Day said the crude oil goes through several steps inside the refinery to turn it into the different products people use.
“Crude oil by itself is pretty worthless,” Day said. “You can’t run your car on it or heat your home.”
To start off, crude oil is put into a distillation tower, or crude unit, and boiled at a high temperature, Day said. Once the boiling process begins, the first things to be extracted are gases such as propane and butane, Day said.
As the oil gets hotter, the next thing to come off is Naphtha, Kerosene, Light Oil Gas and Heavy Oil Gas, all which are used in the production of gasoline and jet fuel. Toward the end of the process, Day said the oil will then go to a vacuum unit where the product becomes usable in such things such as fuel oils and for asphalt.
“Typically, a refinery can process 150,000 to 200,000 barrels of oil a day,” Day said. “That’s a pretty good average.”
While demand for crude oil and its products are in high demand, Day said the demand in the United States is actually lower than what it is compared to South America, Africa and Asia.
“In 2007, back before the economic down turn, we were using 9.4 million barrels a day,” Day said. “Today, we’re using about 8 million barrels day.”
Though gas prices are still high, Day said the U.S. economy is recovering and would be, just at a slower pace, than the rest of the world.
“Recovery in America and Europe is slower than some other places, but it’s recovering,” he said.
