Kapitan
03-13-22, 10:37 AM
Oil has been traded for millennia, the ancient Mediterranean civilisations traded olive oil in amphora for goods and service , but it has only been recently that the black gold of today has become the life blood of our society and vital for our transport networks.
Crude oil is non-renewable, like coal it can be highly polluting, it also requires cautious handling and meticulous processing in order to be refined into a substance we can use in our every day lives.
Crude oil comes in many forms and to many in the General public they have a limited understanding of the substance and even what types of products oil is in.
Indeed you will find many people who question why we have to ship millions of tons of the black stuff half way around the world when nations have reserves in their own country.
The general public often uses the General term oil to denote a wide range type of oil, But oil itself is not a single entity, depending on the region it is found will depend on the type and quality of oil.
Oils from different regions have their own unique properties and they do vary dramatically from one to another which means they have to be refined in different ways to produce what we need.
Crude oil comes in different colours, viscosity, volatility and toxicity the definitions are as follows:
Colours: The various colours go from very light brown to extremely dark black
Viscosity: How resistant to flow the oil is usually measured at room temperature
Volatility: How quickly the oil evaporates into the air determines how volatile the product is
Toxicity: Defines how dangerous to life and environment
The four main classes of crude oil
There are many types of Oil out there in fact over 150, many who trade on the stock market will know that there’s the generic term oil is based on the West Texas Index (WTI) which sets the international traded price per barrel.
Then there’s individual types of oil that can be traded, the types of oil depend on the region it was formed, for example the best quality oil can be found in the Persian Gulf region and this oil can be refined into many products Whereas, the Canadian oil sands is a much heavier product and can only be refined into certain heavy fuel oils, tar and bitumen substances.
Class A light and volatile Oils and distillates
Light sweet crude is a type of oil that has a low sulphur content it can be found in many regions predominantly the middle east, Africa, Asia and Arabia but also North America, North Sea and Russia.
It is the most sought-after oil as it is the easiest to refine and produces high quality Kerosene, Petroleum, Diesel products among others.
Light crude such as Brent crude have a higher sulphur content than light sweet crude but it still flows freely at room temperature, and like light sweet crude can be refined into high quality fuels like petroleum, kerosene and diesel.
Class B Light oils and distillates or Non sticky oils
Typically the most common oil found, it does have a higher sulphur content, they have lower volatility than the other types, its slightly harder to refine and has a higher viscosity.
While this type of crude can be refined to make Petroleum products you will mainly find this type in plastics, paraffin and also being used in marine fuel.
Class C Medium and Heavy fuel oils also known as Sticky oils / distillates
Less toxic than class B oils this type of oil is can come from residual oil refinement, but it can also be taken out of the ground.
In Alberta Canada this oil is in abundance in the Oil sands region, but unlike the other types of oil it is mined not pumped.
Class C oils go into making plastics and heavy fuel oils as well as tar and bitumen products, it can also be refined again to create a class D oil.
Class D Non Fluid Oils
These are generally what’s left over after being refined, these are often solids and come from the heavier crude oil refinement process.
A class D oil is dense and often a solid until heated, Paraffin is a good example of a class D oil.
Peak oil production
Back in the 1950s Marion Hubbert described what peak oil was, he showed that the United States would eventually reach peak production in the 1970’s and he was correct in this assumption.
Peak oil is the term used to describe maximum out put then a decline in production, and just as Hubbert predicted in the 1950’s the USA would reach this point in the 1970s and indeed it did.
Production maxed out at 10 million barrels per day and slowly declined, however the hypothesis was proved incorrect as Hubbert had not taken into account several key factors such as offshore oil and new discoveries, in 2017 the USA once again hit 10 million barrels a day and as of 2021 the USA produced 16.5 million barrels per day.
But that’s not to say the hypothesis is wrong just premature, indeed eventually global peak oil production will happen.
With a growing global population and also more demand on energy and resources to create products from raw materials the process will likely speed up, many now predict that peak oil will take place sometime between 2030-2040.
What does this mean for the transport and supply chain industry
All our transport in one form or another runs predominantly off oil products, trucks, trains, ships and planes all use oil products in one form or another.
With almost the entire transport network operating off oil products and peak oil now predicted in 2030-2040 is it not time to start looking at alternatives?
There are many alternative fuels out there yet each have their own problems, some require more energy to produce than they actually give out, some are highly volatile, and other impractical or not sustainable.
Natural gas has been ear marked as a substitute but like the fuel oils used it is a polluter, it is also not renewable and highly volatile, with all that in mind is it worth constructing infrastructure to support the use of this fuel which will likely only be a short-term fix.
Hydrogen is another fuel option, but again can be highly volatile, its use in fuel cells however provide a decent energy source and is not a polluter.
Ethanol is produced from grains it is also used as a fuel for vehicles Brazil is currently one of the world leaders in using this fuel but, to roll out this fuel it would require substantial quantities of crops being diverted from feed and the food chain to create which in turn would put a lot of strain on the agricultural industry as well as the food supply network.
With the prospect of Oil running out in the mid term future these three fuels offer some limited alternative, they also require massive investments in new infrastructure to support the distribution of the fuels.
This leaves us in the Transport and supply chain industry with a big dilemma, with Oil predicted to reach peak production in 2030-40 what viable, sustainable and eco-friendly alternatives are there?
I am sure we all have our opinions and views on this subject and id argue that now is the time we start to formulate an answer to the following question:
With Oil production predicted to peak in 2030-40 what long term sustainable, viable and eco friendly options are there in order to keep the transport and supply chain network functioning beyond 2100?
Crude oil is non-renewable, like coal it can be highly polluting, it also requires cautious handling and meticulous processing in order to be refined into a substance we can use in our every day lives.
Crude oil comes in many forms and to many in the General public they have a limited understanding of the substance and even what types of products oil is in.
Indeed you will find many people who question why we have to ship millions of tons of the black stuff half way around the world when nations have reserves in their own country.
The general public often uses the General term oil to denote a wide range type of oil, But oil itself is not a single entity, depending on the region it is found will depend on the type and quality of oil.
Oils from different regions have their own unique properties and they do vary dramatically from one to another which means they have to be refined in different ways to produce what we need.
Crude oil comes in different colours, viscosity, volatility and toxicity the definitions are as follows:
Colours: The various colours go from very light brown to extremely dark black
Viscosity: How resistant to flow the oil is usually measured at room temperature
Volatility: How quickly the oil evaporates into the air determines how volatile the product is
Toxicity: Defines how dangerous to life and environment
The four main classes of crude oil
There are many types of Oil out there in fact over 150, many who trade on the stock market will know that there’s the generic term oil is based on the West Texas Index (WTI) which sets the international traded price per barrel.
Then there’s individual types of oil that can be traded, the types of oil depend on the region it was formed, for example the best quality oil can be found in the Persian Gulf region and this oil can be refined into many products Whereas, the Canadian oil sands is a much heavier product and can only be refined into certain heavy fuel oils, tar and bitumen substances.
Class A light and volatile Oils and distillates
Light sweet crude is a type of oil that has a low sulphur content it can be found in many regions predominantly the middle east, Africa, Asia and Arabia but also North America, North Sea and Russia.
It is the most sought-after oil as it is the easiest to refine and produces high quality Kerosene, Petroleum, Diesel products among others.
Light crude such as Brent crude have a higher sulphur content than light sweet crude but it still flows freely at room temperature, and like light sweet crude can be refined into high quality fuels like petroleum, kerosene and diesel.
Class B Light oils and distillates or Non sticky oils
Typically the most common oil found, it does have a higher sulphur content, they have lower volatility than the other types, its slightly harder to refine and has a higher viscosity.
While this type of crude can be refined to make Petroleum products you will mainly find this type in plastics, paraffin and also being used in marine fuel.
Class C Medium and Heavy fuel oils also known as Sticky oils / distillates
Less toxic than class B oils this type of oil is can come from residual oil refinement, but it can also be taken out of the ground.
In Alberta Canada this oil is in abundance in the Oil sands region, but unlike the other types of oil it is mined not pumped.
Class C oils go into making plastics and heavy fuel oils as well as tar and bitumen products, it can also be refined again to create a class D oil.
Class D Non Fluid Oils
These are generally what’s left over after being refined, these are often solids and come from the heavier crude oil refinement process.
A class D oil is dense and often a solid until heated, Paraffin is a good example of a class D oil.
Peak oil production
Back in the 1950s Marion Hubbert described what peak oil was, he showed that the United States would eventually reach peak production in the 1970’s and he was correct in this assumption.
Peak oil is the term used to describe maximum out put then a decline in production, and just as Hubbert predicted in the 1950’s the USA would reach this point in the 1970s and indeed it did.
Production maxed out at 10 million barrels per day and slowly declined, however the hypothesis was proved incorrect as Hubbert had not taken into account several key factors such as offshore oil and new discoveries, in 2017 the USA once again hit 10 million barrels a day and as of 2021 the USA produced 16.5 million barrels per day.
But that’s not to say the hypothesis is wrong just premature, indeed eventually global peak oil production will happen.
With a growing global population and also more demand on energy and resources to create products from raw materials the process will likely speed up, many now predict that peak oil will take place sometime between 2030-2040.
What does this mean for the transport and supply chain industry
All our transport in one form or another runs predominantly off oil products, trucks, trains, ships and planes all use oil products in one form or another.
With almost the entire transport network operating off oil products and peak oil now predicted in 2030-2040 is it not time to start looking at alternatives?
There are many alternative fuels out there yet each have their own problems, some require more energy to produce than they actually give out, some are highly volatile, and other impractical or not sustainable.
Natural gas has been ear marked as a substitute but like the fuel oils used it is a polluter, it is also not renewable and highly volatile, with all that in mind is it worth constructing infrastructure to support the use of this fuel which will likely only be a short-term fix.
Hydrogen is another fuel option, but again can be highly volatile, its use in fuel cells however provide a decent energy source and is not a polluter.
Ethanol is produced from grains it is also used as a fuel for vehicles Brazil is currently one of the world leaders in using this fuel but, to roll out this fuel it would require substantial quantities of crops being diverted from feed and the food chain to create which in turn would put a lot of strain on the agricultural industry as well as the food supply network.
With the prospect of Oil running out in the mid term future these three fuels offer some limited alternative, they also require massive investments in new infrastructure to support the distribution of the fuels.
This leaves us in the Transport and supply chain industry with a big dilemma, with Oil predicted to reach peak production in 2030-40 what viable, sustainable and eco-friendly alternatives are there?
I am sure we all have our opinions and views on this subject and id argue that now is the time we start to formulate an answer to the following question:
With Oil production predicted to peak in 2030-40 what long term sustainable, viable and eco friendly options are there in order to keep the transport and supply chain network functioning beyond 2100?