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Increasing demand for oil and gas is challenging the oil and gas industry for several reasons. First, industry has recovered most easily accessible oil and gas resources. Much of the remaining oil and gas is in deep, remote and complex reservoirs which involve high cost and high risk, or in small reservoirs requiring frequent drilling. Second, the industry must comply with constantly changing regulation. Third, there are not enough skilled oil and gas workers. The number of engineering and geology graduates has steadily declined since 1982. If this trend continues, there will be fewer qualified workers now than there were 20 years ago. The average age of the oil and gas employee, at 49, is the highest of any industry.

Our Environmental Commitment
For the past 30 years, the oil and gas industry's record of environmental performance has improved substantially in all areas. In 2005, the environmental investment by the U.S. oil and gas industry was $10.7 billion. As a result, pollution levels are decreasing even as the demand for oil and gas increases.1

New technology and partnerships with community and environmental groups protect the air, water, soil and wildlife where we operate. As a result:

Since the inception of EPA’s Toxics Release Inventory Program in 1988, total releases of typical refinery chemicals have decreased by 75 percent through 2006.2

The industry’s water recycling efforts not only save millions of gallons each year of this precious resource but also reduce water truck traffic and related noise. 3

Directional and horizontal drilling techniques enable producers to reach oil and gas resources that are not directly beneath the drilling rig. This means wells can be drilled to access reservoirs under environmentally sensitive lands, such as forests, wetlands or aquatic habitats4. Directional drilling also allows for several wells to be drilled from a single location, dramatically decreasing the amount of water or land surface area required to develop a field 5.

The industry has worked with a number of environmental groups such as the Nature Conservancy, the World Wildlife Fund, the National Fish & Wildlife Foundation, and the Wyoming Ranch Agricultural and Wildlife Management Planning Project, not only to promote conservation and wildlife protection programs but to integrate biodiversity conservation into its operational practices.6

The Future: Energy Outlook
The world population is currently around 6 billion people, but is expected to grow to approximately 7.6 billion by 2020. That will mean an increase in the demand for transportation fuels, electricity, and many other consumer products made from oil and natural gas.

U.S. gas production is forecast to rise substantially between now and 2030. This increase comes from unconventional places right here in the Rocky Mountain Region—natural gas trapped in tight sands, coalbed methane (CBM) and other sources. The Rocky Mountain Region, with the majority of the unconventional production, will produce more because of improved technologies and abundant resources. The Rockies will become the country’s highest producing region by 2030, capable of heating 60 million households for more than one year.7 In 30 years, production of shale oil, a type of unconventional oil, could be enough to fuel 35 million cars each year.  This production will provide America with $40 billion in annual economic benefits and could push oil prices downward. The industry plans to drill thousands of new wells, and CBM activity is at an all-time high in the area. Current production cannot keep up with demand. Skilled workers are desperately needed to help industry meet the demand for natural gas today and in the future.

Where Does Oil and Natural Gas Come From?
Oil and gas comes from the remains of plants and animals that lived millions of years ago.  The remnants of these plants and animals settled at the bottom of the oceans. As time passed silt, sand, and rock settled on top of the remains. The pressure from the sediments and the increasing temperature changed the silt, rock, sand and organic matter into petroleum.  All of this process has taken place at the very bottom of the ocean.

The oil and gas that was created at the bottom of the ocean has been able to move upward over the course of millions of years through adjacent rock layers until they finally become trapped in porous rock layers known as reservoirs. These oil reservoirs are located anywhere from 1,000 to greater than 30,000 feet beneath sea level.

Since the reservoirs were created thousands of years ago, scientists have to use the latest technology available to locate them. Once the reservoirs are located, a well is drilled.  Some rocks may allow the oil and gas to move freely, making it easier to recover. Other reservoirs do not part with the oil and gas easily and require special techniques to move the oil or gas from the pore spaces to a producing well.8

Typically, a drilled well uses pressure to help bring the oil and gas that is trapped in the rock to the surface.  Reservoirs are typically at elevated pressure because of underground forces. To equalize the pressure and avoid the "gushers" of the early 1900s, a series of valves and equipment is installed on top of the well. This wellhead, or "Christmas tree," as it is sometimes called, regulates the flow of hydrocarbons out of the well.9 The life of an oil well varies but eventually the oil well is no longer economical and will be filled.


Sources:

1 API, Environmental Expenditures by the U.S. Oil and Natural Gas Industry, 2007.

2U.S. EPA. RY 2006 TRI Explorer.

3EnCana

4 http://www.api.org/ehs/water/directional-drill.cfm

5Society of Petroleum Engineers

6http://www.api.org/ehs/partnerships/environmental/index.cfm and http://ecn.encana.com/static/Bulletins/2006/wyoming.shtml

7AEO2008.

8Society of Petroleum Engineers

9Society of Petroleum Engineers