Oil Extraction

Petroleum, commonly referred to as oil, is a natural fuel formed from the decay of plants and animals buried beneath the ground, under tremendous heat and pressure, for millions of years. Formed by a similar process, natural gas often is found in separate deposits and is sometimes mixed with oil. Because oil and gas are difficult to locate, exploration and drilling are key activities in the oil and gas extraction industry. Oil and natural gas furnish about three-fifths of our energy needs, fueling our homes, workplaces, factories, and transportation systems. In addition, they constitute the raw materials for plastics, chemicals, medicines, fertilizers, and synthetic fibers.

After scientific studies indicate the possible presence of oil, an oil company selects a well site and installs a derrickâ—a tower-like steel structureâ—to support the drilling equipment. A hole is drilled deep into the earth until oil or gas is found, or the company abandons the effort.

In rotary drilling, a rotating bit attached to a length of hollow drill pipe bores a hole in the ground by chipping and cutting rock. As the bit cuts deeper, more pipe is added. A stream of drilling “mud”â—a mixture of clay, chemicals, and waterâ—is continuously pumped through the drill pipe and through holes in the drill bit. Its purpose is to cool the drill bit, plaster the walls of the hole to prevent cave-ins, carry crushed rock to the surface, and prevent “blowouts” by equalizing pressure inside the hole.

When oil or gas is found, the drill pipe and bit are pulled from the well, and metal pipe (casing) is lowered into the hole and cemented in place. The casing’s upper end is fastened to a system of pipes and valves called a wellhead, or “Christmas Tree,” through which natural pressure forces the oil or gas into separation and storage tanks. If natural pressure is not great enough to force the oil to the surface, pumps may be used. In some cases, water, steam, or gas may be injected into the oil-producing formation to improve recovery.

Crude oil is then transported to refineries by pipeline, ship, barge, truck, or railroad.

^{Source: U.S. Department of Labor, Bureau of Labor Statistics. http://www.bls.gov/oco/cg/cgs005.htm}