History of Oil Refinement and the Oil Industry, Part 3

In parts one and two of this three-part blog series, we’ve gone over some of the historical origins of the oil refinement industry, beginning with ancient times and moving forward to the modern day. Oil refining has a long and detailed history, one that showcases technological innovation and human discovery in several major ways.

At Oilfield Equipment & Manufacturing, we’re proud to offer a variety of modern oil drilling equipment and tools that give a nod to our industry’s rich history while also utilizing the best possible technology to help with your needs. In today’s final entry in our series, we’ll go over the modern oil era as it formed over recent decades, plus the impact North American expansion has had on the global oil world.

history oil refinement industry

Modern Unconventional Era

Within the last 15 to 20 years, the North American oil landscape has undergone major changes that have altered its entire outlook. Areas like horizontal drilling, subsea engineering and particularly hydraulic fracking have all changed the costs and viability of certain kinds of oil drilling in massive ways. They have opened up further oil opportunities around the world, throwing the dominance of OPEC into question.

Fracking and North American Oil

Also known as hydraulic fracking, fracking is the process of injecting water, chemicals and sand into wells, fracturing surrounding shale rock and allowing hydrocarbons to escape. This process was only pioneered in the late 1990s, but it quickly proved a viable way of lowering the cost of oil and gas production.

Over the next decade, fracking was combined with advancements in horizontal drilling to bring a major reduction in price for natural gas prices. These prices dipped by roughly 85% between 2008 and 2012, a tectonic shift in the industry.

Impact of Lower Gas Prices

While lowering natural gas prices have been a bit of an issue for producers, they have allowed for low-cost advantages in manufacturing and chemical oil refining. Some of the potential impacts of lower natural gas prices, a few of which we’ve already seen begin to take place, include:

  • A move away from coal and to gas-fired power plants, as a way of lowering emissions
  • Accelerated move to natural gas as a transportation fuel in both commercial and passenger areas
  • Re-consideration of Liquefied Gas (LNG) flows – the US is becoming an exporter, rather than an importer
  • Gas-fired plants operate inexpensively and cleanly, impacting the economics of renewable energy

Now, many are well aware that hydraulic fracking has been at the center of much political controversy in recent years due to the water quantities it requires. For this reason, the technology has been used unevenly within North America, and this is a dynamic still being played out in public policy.

For more on the history of the oil refinement industry, or to learn about any of our oil drilling components or tools, speak to the staff at Oilfield Equipment & Manufacturing today.