Fossil Fuels
You may be wondering why I decided to write a bit about fossil fuels. Well, it’s quite simple. The entire world is dependent on this vital resource. Just look at the price of oil in the news and you see how it rattles the market. I believe that energy no matter how you play it should be a good percentage of your stock picks and your portfolio. Oil is may have reached its peak and the world will never be the same. Everything revolves around oil and other fuels, I mean everything. There are three forms of fossil fuels, they are: Oil, Coal and Natural Gas. All three were formed hundreds of millions of years ago before the time of the dinosaurs. The age they were formed is called the Carboniferous Period hence the term fossil fuels. It was part of the Paleozoic Era. Carboniferous gets its name from carbon, the basic element in oil, coal and natural gas. The carboniferous period occurred from about 300 million years ago. At the time, the land was covered with swamps filled with huge trees, plants and vegetation as well as tiny sea creatures called diatoms, which are the size of pin heads. The seas and oceans pf the time contained large amounts of algae as well as diatoms. Some scientists believe that diatoms are the source of oil. As the trees, plants and diatoms died they sank to the bottom of the swamps of ocean floors. They formed layers of spongy material called peat. During the course of 300 million years, the peat was covered by sand, clay and other minerals, which turned into a type of rock called sedimentary. As more and more rock piled on top of more rock it began to press down on the peat. The peat was squeezed until the water came out of it and eventually the carbon tuned into oil and natural gas under great pressure from the heat. Who would have thought, huh? Wow, truly amazing!!
Oil As the earth changed and moved and folded pockets where oil and natural gas can be found were formed. Oil dates back more than 5,000-6,000 years ago. The ancient Sumerians, Assyrians and Babylonians used crude oil collected from large seeps. A seep is a place on the ground where the oil leaks up from below ground. The ancient Egyptians used liquid oil as a medicine for wounds as well as in lamps to provide light. In North American, Native Americans used blankets to skim oil off the surface of streams and lakes. They used oil as medicine and to make canoes water-proof. During the Revolutionary War, Native Americans taught George Washington’s troops how to treat frostbite with oil. As our country grew the demand for oil continued to increase. Petroleum oil began to replace whale oil in lamps because the price for whale oil was very high. People all over the world were killing the whales, whale population started to shrink so prices soared. During this time, most petroleum oil came from distilling coal into a liquid or by skimming it off of lakes just like Native Americans did. Then on August 27th 1859, Edwin L. Drake struck liquid oil at his well near Titusville, Pennsylvania. He discovered oil under ground and a way to pump it to the surface. The well pumped the oil into barrels made out of wood. This method of drilling for oil is still being used today all over the world. Oil and natural gas are found under ground between folds of rock and in areas of rock that are porous, which contain oil within the rock itself. The folds of rock were formed as the earth shifts and moves. It’s similar to how a small, throw rug will bunch up in places on the floor. To find oil and natural gas, companies drill through the earth to the deposits deep below the surface. The oil and natural gas are then pumped from below the ground by oil rigs. They then usually travel through pipelines or by ship. More than 60% of the oil we use today comes from outside the US, mainly from the Middle East. Although we continue to make huge leaps in alternative energy, fossils fuels are still used 90% of the time. However, the future looks promising for both the world population and investors who take advantage and learn about these important and vital resources.
Refineries Oil is stored in large tanks, until it is sent to various places to be used. At oil refineries, crude oil is split into various types of products by heating the thick black oil. Oil is made into many different products – fertilizers for farms, feedstock, the clothes you wear, the toothbrush you use, the plastic bottle that holds your water, the plastic Tupperware that stores your food is all made from oil. In addition a barrel of oil is used to make all the above including gasoline, diesel fuel, aviation or jet fuel, home heating oil, kerosene, motor oil among many other things.
Coal Coal, is a hard, black colored rock like substance. It is made up of carbon, hydrogen, oxygen, nitrogen and varying amounts of sulfur. There are three main types of coal – anthracite, bituminous and lignite. Anthracite coal is the hardest and has more carbon, which gives it higher energy content. Lignite is the softest and is low in carbon but high in hydrogen and oxygen content. Bituminous is in between. The earliest known use of coal was in China. Coal from the Fu-Shun mine in northeastern China may have been used to smelt copper as early as 3,000 years ago. The Chinese thought coal was a stone that could burn.
Coal is found throughout the world. Coal is mined out of the ground using various methods. Some coal mines are dug by sinking vertical or horizontal shafts deep under ground, and coal miner’s travel by elevators or trains deep under ground to dig the coal. Other coal is mined in strip mines where huge steam shovels that strip away the top layers above the coal. The layers are then restored after the coal is taken away. The coal is then shipped by train and boats and even in pipelines. In pipelines, the coal is ground up and mixed with water to make what is called slurry. This is then pumped many miles through pipelines. At the other end, the coal is used to fuel power plants for electricity and other factories. Of all the fossil fuels, coal is abundant in the US, but it's not known to be a clean burning fuel.
Natural Gas Natural Gas yet one of the most important fossil fuels dates back a few thousands years to Iran believe it or not. The ancient Persians in Azerbaijan used natural gas to ignite eternal fires worshiping their religion. Natural gas is lighter than air. Natural gas is mostly made up of a gas called Methane. Methane is a simple chemical compound that is made up of carbon and hydrogen atoms. Its chemical formula is CH4 – one atom of carbon along with four atoms of hydrogen. This gas is highly flammable. Natural gas is usually found near petroleum underground. It is pumped from below ground and travels in pipelines to storage areas. Natural gas has no odor and cannot be seen. Before it is sent to the pipelines and storage tanks, it is mixed with a chemical that gives a strong odor. The odor smells almost like rotten eggs. This makes it easy to smell if there is a leak. Natural gas is very dangerous if not properly handled. Safety is paramount and every precaution is taken to assure the public and workers within the industry.. Note: If you smell that rotten egg smell, call 911 immediately and/or the gas company. Do not under any circumstances turn on any lights or electrical devices. A tiny spark from anything can ignite that gas very easy and perhaps create an explosion. Source: www.energyquest.gov. I trimmed it up a bit to make it easier to read and added my own pieces to it. I hope you enjoy it.
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