Environmental Hazards of Crude Oil Exploration, Transport & Refining

Introduction: Petroleum's Global Reach and Environmental Stakes

Ever since crude oil was first successfully drilled in the United States at Titusville, Pennsylvania, in 1859, the demand for oil has only increased over the years in countries all over the world (Camden, 1883). Crude oil, from which various petroleum products are obtained, is a naturally occurring hydrocarbon component found trapped in rocks below the earth. The word "petroleum" means "rock oil" or "oil from the earth." Natural gas is another form of hydrocarbon also found in nature. Both crude oil and natural gas have excellent combustibility and are good sources of energy.

Crude oil is not used in its extracted form; it must be refined to obtain products such as gasoline, liquefied petroleum gas (LPG), naphtha, kerosene, gas-oil, and fuel oil. Secondary products obtained during the purification of crude oil include lubricants, asphalt, perfumes, and insecticides. There are approximately more than 4,000 different petrochemical products obtained from the refining of crude oil that have commercial value. Plastics, synthetic fibers, synthetic rubbers, detergents, and chemical fertilizers are some of the consumer products generated from crude oil. The proven crude oil reserves in the world are estimated at approximately 1,074,850 million barrels, and consumption is estimated at approximately 76 million barrels per day. Consumption has continued to increase steadily across the world.

This study investigates the environmental hazards resulting from the exploration, transportation, refining, and storage of crude oil and refined products in countries around the world. It provides a holistic view of the effects of the petroleum industry. It is important to note that the petroleum industry is one in which geographical boundaries are generally inconsequential for the industry as a whole. For example, petroleum exploration might occur in one region while use of the product occurs in another. The United States (19.7 million barrels per day) and Japan (5.5 million barrels per day) are two of the largest users of petroleum products, while the countries of the Middle East and Russia are the major producers. As a result, crude oil or refined products must be shifted from one region to another based on supply and demand (Rodrigue, 2004).

Petroleum products are probably the most commercially and domestically used form of energy source today. As a commodity of great strategic importance, petroleum has tremendous international bargaining leverage. Railroads and pipelines were built and developed to help transport crude oil from areas of production to refineries. From electricity generation to transportation, petroleum products play crucial roles in today's social infrastructure. One of the main issues in this industry is the increased environmental impact resulting from the various processes involved. The potential for extremely hazardous conditions—such as those arising from the transportation of oil by marine vessels and the storage of large quantities of oil—is high.

Environmental issues are becoming increasingly important for the petroleum industry. The three sharp spikes in oil prices (in the early 1970s, late 1970s, and in 1991) observed over the history of this industry have indicated just how dependent the world economy is on petroleum products. These price increases correlate closely with recessions that occurred in the U.S. and many world economies during those periods. Countries therefore, in addition to investing heavily in the search for new petroleum reserves, are also looking for new ways to optimize refinery processes. Increasing storage capacities is a major concern. This implies that countries must build refineries to process crude oil, support tank farms to store crude oil before it is processed, store finished products, and develop shipping and land transportation (rail and roadways) to move oil from supply points to demand points. Issues such as global warming, freshwater pollution, and spills on the high seas are, however, forcing countries to reevaluate their strategies when dealing with the environmental issues related to this industry.

This study provides an overview of the logistics needed for this industry to survive over time. It is beyond the scope of any one study to investigate and study the impact of every variable that can affect the environment with respect to the petroleum industry completely. Major environmental hazards are identified for every stage of this supply chain: from the extraction of oil to the final consumption of products. Concerns over environmental safety and preservation have introduced the ISO 14000 standard for industries to implement. It has been established to provide organizations with guidelines for conducting environmental impact assessments, environmental management, and auditing according to a recognized standard, and to maintain the integrity of the immediate biological and ecological environment as well as the global environment.

Understanding the conditions that create potential problems is the first step in any environmental safety program. This step can help companies better prepare themselves for problems they are likely to face in the future and find ways to reduce their occurrence. For example, tank farms can undertake periodic structural inspections and soil testing to ensure that no leakage occurs. In addition, the management of tank farms can introduce safety measures such as using impregnable oil fabrics in the dikes and designing better catch basins (known as "bunds" or "drip trays" in the U.K.) in case of catastrophic tank failures.

The world needs oil to drive its economy. Until a viable alternative is identified, dependence on oil is only expected to grow. Consequently, the problems that can potentially arise will also increase. For example, until countries in North America and Western Europe decrease the greenhouse gases created by increased oil consumption, or until countries like China and India reduce their pollution levels by better optimizing their coal-fired electricity generators, the issue of environmental damage is a reality the rest of the world will have to face. Environmental pollution is becoming a major concern during the various process stages of the petroleum industry; finding ways to reduce pollution levels is an important part of this industry at all its different stages.

The processing and purification of crude oil is a complex and expensive procedure. The wear and tear on equipment is also great. Continuous maintenance must be performed on the entire system to ensure that failures do not occur. The microenvironment of oil-producing regions needs to be critically analyzed if this industry is to be optimized. Countries like the Netherlands and Sweden are increasingly looking for sustainable development of their energy industries. Simply defined, sustainable development is "a simple idea of ensuring, through new lifestyles, a better quality of life for everyone, now and for generations to come" (UNESCO, 2003). The important resources at the forefront of any sustainable development are forests, water, minerals, gems, wildlife, air, land, oceans, seas, rivers, and lakes. The best alternative is for the world to identify a new source of energy. Until that time, organizations in the petroleum and crude oil industry will have to employ better environmental strategies to ensure that any damage is minimized.

Overview of Environmental Protection Issues

In recent times, the need to protect and preserve the environment is growing. Most scientists and climatologists working with climate and weather data believe that the earth's temperature is rising. This is often attributed to the depletion of the ozone layer and the increase in greenhouse gases. Temperature rises have resulted in rising sea levels. Many islands in the Pacific Ocean are in danger of being submerged. These changes will influence the lives of average citizens. More money will have to be spent on healthcare and preventive medicine. Health services will be burdened by rising pollution levels, depletion of the ozone layer, and contamination of freshwater, the oceans, and the land. There will also be fewer resources and commodities available, and the divide between the wealthy and the poor will widen.

The earth is also evolving and undergoing change. These changes are subtle and not noticeable over typical time spans. The movement of glaciers, for example, occurs at a few centimeters or less per day. Records show that glaciers, which were almost intact for hundreds of years, have been retreating faster since the mid-1800s, and this rate of retreat is accelerating with each passing year (Wright, 2002). Darwinian theory states that plants and animals undergo changes and mutations and that we are constantly evolving. Man's influence has, however, impacted the habitats and living conditions of many plants and animals. The extinction of a species is often attributed to the effects of human encroachment on habitats, the clearing of forests, the contamination of rivers and lakes due to agricultural fertilizer runoff, and uncontrolled hunting for food and sport.

It is often assumed that creating new jobs requires environmental sacrifice. However, a study in Louisiana showed that environmentalists, industrialists, and government can work together to keep the environment safe from harm (DanishEPA, 2001). In many cases, industry also has reason to develop in an area if the right facilities to sustain growth are available. One of the greatest challenges of the present time is the ability to meet human needs without threatening the integrity of ecosystems, which are the basis of human survival. Environmental protection and species conservation are therefore critical issues.

It is predicted that the total oil reserve available today is between 1,800 and 2,200 billion barrels. Approximately 900 billion barrels have already been consumed. Using Hubbert's assumptions, global production will peak within the next few years (Deffeyes, 2001). Most of the oil will be extracted by 2060, and the world will have to look for new options to generate energy. These worldwide assumptions are based on the fact that after 1971, no significant new reserves of crude oil have been found. Drilling potential deposits in Alaska faces political obstacles. The oil mixed with sand on the shores of Canada requires more research for extraction. Newly discovered oil deposits have also proved difficult to drill and commercially exploit without investing in new technology and refining methods. This in turn has forced exploration into regions where the ecology could be seriously affected by the process.

The amount of petroleum resources a person consumes and the damage done in the process of manufacturing and obtaining those resources are key considerations in the analysis of population growth. The U.S., for example, has a lower population than either China or India but uses more petroleum resources due to the higher purchasing capabilities and consumption options available to its residents. Other support systems required to maintain a higher quality of life must also be factored into resource utilization (EIA.DOE.gov, 2002).

This study identifies the following aspects of the petroleum industry for environmental hazard analysis:

— The drilling and production sector for crude oil

— The transporting and piping of products to the refineries

— Refining and processing of crude oil into marketable products

— Warehousing of petroleum products, both finished and semi-finished

— Transportation of finished products to the seller