Case Study: Petroleum

Origins of the Industry

The American chemical engineer and the American petroleum industry developed side by side over the past century. The petroleum industry began when Edwin L. Drake drilled a successful oil well at Titusville Pennsylvania in 1859. Others quickly followed his lead, and before long oil wells covered the countryside. Just ten years after California's Gold Rush, Pennsylvania had developed its own brand of "gold fever". Some, like John D. Rockefeller, accumulated vast fortunes from this "black gold", while others like Mr. Drake died broke. The difference between success and failure was often a fine line.

"Enough already...go to the end."

Ancient, and Less Ancient, Times

Small amounts of petroleum have been used throughout history. The Egyptians coated mummies and sealed their mighty Pyramids with pitch. The Babylonians, Assyrians, and Persians used it to pave their streets and hold their walls and buildings together. Boats along the Euphrates were constructed with woven reeds and sealed with pitch. The Chinese also came across it while digging holes for brine (salt water) and used the petroleum for heating. The Bible even claims that Noah used it to make his Ark seaworthy.

American Indians used petroleum for paint, fuel, and medicine. Desert nomads used it to treat camels for mange, and the Holy Roman Emperor, Charles V, used petroleum it to treat his gout. Ancient Persians and Sumatrans also believed petroleum had medicinal value. This seemed a popular idea, and up through the 19^th Century jars of petroleum were sold as miracle tonic able to cure whatever ailed you. People who drank this "snake oil" discovered that petroleum doesn't taste very good!

The Search for Oil

Yet despite its usefulness, for thousands of years petroleum was very scarce. People collected it when it bubbled to the surface or seeped into wells. For those digging wells to get drinking water the petroleum was seen as a nuisance. However, some thought the oil might have large scale economic value. George Bissell, a lawyer, thought that petroleum might be converted into kerosene for use in lamps. An analysis by Benjamin Silliman, Jr., a Yale chemistry and geology professor, confirmed his hunch.

In 1854 Bissell and a friend formed the unsuccessful Pennsylvania Rock Oil Company. Not one to be easily dismayed, in 1858 Bissell and a group of business men formed the Seneca Oil Company. They hired an ex-railroad conductor named Edwin Drake to drill for oil along a secluded creek in Titusville Pennsylvania. They soon dubbed him "Colonel" Drake to impress the locals. But the "Colonel" needed help so he hired Uncle Billy Smith and his two sons who had experience with drilling salt wells. In 1859 this motley crew found oil at a depth of 69 � feet.

Pennsylvania's "Black Gold"

Drake's well produced only thirty-five barrels a day, however he could sell it for $20 a barrel. News of the well quickly spread and brought droves of fortune seekers. Soon the hills were covered with prospectors trying to decide where to dig their wells. Some used Y-shaped devining rods to guide them. Others followed Drake's lead and drilled close to water, a technique that was dubbed "creekology". Many found oil, but usually at 4 or 5 hundred feet below the surface. Drake had just been lucky to find oil so high up!

To dig the wells six-inch wide cast iron pipes were sunk down to the bedrock. A screw like drill was then used to scoop out dirt and rock from the middle. Many discovered to their dismay that once they hit oil they had no way to contain all of it. Until caps were added to the wells vast quantities of oil flowed into the appropriately named Oil Creek.

The First Pipeline

Transporting the oil was also a problem. In 1865 Samuel Van Syckel, an oil buyer, began construction on a two-inch wide pipeline designed to span the distance to the railroad depot five miles away. The teamsters, who had previously transported the oil, didn't take to kindly to Syckel's plan, and they used pickaxes to break apart the line. Eventually Van Syckel brought in armed guards, finished the pipeline, and made a ton-o-money. By 1865 wooden derricks were bled 3.5 million barrels a year out of the ground. (Giddens) Such large scale production caused the price of crude oil to plummet to ten cents a barrel.

How Much Oil?

Andrew Carnegie was a large stockholder in the Columbia Oil Company. Carnegie believed that the oil fields would quickly run dry because of all the drilling. He persuaded Columbia Oil to dig a huge hole to store 100,000 barrels of oil so that they could make a killing when the country's wells went dry. Luckily there was more oil than they thought! But don't feel too sorry for Carnegie, he didn't let the setback slow him down very much, and went on to make his millions in the steel industry.

In contrast, "Colonel" Drake was committed to the oil business. He scoured the country looking for customers willing to buy his crude oil. However, the bad smell, muddy black color, and highly volatile component, called naphtha, caused few sales. It became obvious that one would have to refine the oil to find a market.

Early Refining

By 1860 there were 15 refineries in operation. Known as "tea kettle" stills, they consisted of a large iron drum and a long tube which acted as a condenser. Capacity of these stills ranged from 1 to 100 barrels a day. A coal fire heated the drum, and three fractions were obtained during the distillation process. The first component to boil off was the highly volatile naphtha. Next came the kerosene, or "lamp oil", and lastly came the heavy oils and tar which were simply left in the bottom of the drum. These early refineries produced about 75% kerosene, which could be sold for high profits. (Giddens, p.14)

Kerosene was so valuable because of a whale shortage that had began in 1845 due to heavy hunting. Sperm oil had been the main product of the whaling industry and was used in lamps. Candles were made with another whale product called "spermaceti". This shortage of natural sources meant that kerosene was in great demand. Almost all the families across the country started using kerosene to light their homes. However, the naphtha and tar fractions were seen as valueless and were simply dumped into Oil Creek. (I would like to point out that these first refineries were not operated by chemical engineers!)

Later these waste streams were converted into valuable products. In 1869 Robert Chesebrough discovered how to make petroleum jelly and called his new product Vaseline. The heavy components began being used as lubricants, or as waxes in candles and chewing gum. Tar was used as a roofing material. But the more volatile components were still without much value. Limited success came in using gasoline as a local anesthetic and liquid petroleum gas (LPG) in a compression cycle to make ice. The success in refined petroleum products greatly spread the technique. By 1865 there were 194 refineries in operation.

John D. Rockefeller

In 1862 John D. Rockefeller financed his first refinery as a side investment. He soon discovered that he liked the petroleum industry, and devoted himself to it full time. As a young bookkeeper Rockefeller had come to love the order of a well organized ledger. However, he was appalled by the disorder and instability of the oil industry. Anyone could drill a well, and overproduction plagued the early industry. At times this overproduction meant that the crude oil was cheaper than water. Rockefeller saw early on, that refining and transportation, as opposed to production, were the keys to taking control of the industry. And control the industry he did!

In 1870 he established Standard Oil, which then controlled 10% of the refining capacity in the country. Transportation often encompassed 20% of the total production cost and Rockefeller made under-the-table deals with railroads to give him secret shipping rebates. This cheap transportation allowed Standard to undercut its competitors and Rockefeller expanded aggressively, buying out competitors left and right. Soon standard built a network of "iron arteries" which delivered oil across the Eastern U.S. This pipeline system relieved Standard's dependence upon the railroads and reduced its transportation costs even more. By 1880 Standard controlled 90% of the country's refining capacity. Because of its massive size, it brought security and stability to the oil business, guaranteeing continuous profits. With Standard Oil, John D. Rockefeller became the richest person in the World.

So What?

But what came out of all this activity? In short the early petroleum industry:

Brought a revolution in lighting with kerosene.

Helped keep machines in good conditions with lubricants. (it was the "Machine Age" after all)

Provided a new source of national wealth (in 1865 it was the countries 6^th largest export).

Aided the Union in the Civil War by strengthening the economy (also petroleum was used to treat wounded soldiers at the battle of Gettysburg).

A Few Terms

The petroleum industry, like other chemical industries, has a plethora of terms designed to scare off anyone who wants to understand exactly what is going on. Mastering this nomenclature is one of the main tasks facing chemistry and chemical engineering students. Here are a few commonly used terms, but be forewarned; because of the complexity of compounds in the petroleum industry some of these terms are very vague.

Hydrocarbons are chemical compounds made mainly of carbon and hydrogen. Both petroleum and coal contain many different hydrocarbons. Methane, ethanol, and benzene are examples of hydrocarbons, though there are many many others.

Bitumen is a another term for hydrocarbons. Both petroleum and coal are sometimes referred to as Bituminous.

Organic compounds are chemicals made of carbon (although the classification is not totally consistent and some carbon compounds, like carbon dioxide, are not considered organic). Hydrocarbons are commonly referred to as organic compounds, and it is fair to think of the two as equivalent. Carbohydrates, proteins, and urea (found in urine) are examples or organic compounds. It was once thought that organic compounds could only be produced from organic sources. Because of their usefulness, a huge chemical industry developed around organic chemicals during the 19^th Century. Dyes and pharmaceuticals where products of this industry. As chemists increased their skills they found that organic compounds could be synthesized from inorganic sources. However, by this time the classification had been firmly rooted in industry and universities and so it remains today.

Inorganic compounds include everything that is not considered organic (every compound in the world is ether organic or inorganic).

Aromatic compounds are organic compounds which always have a benzene ring in them. Because of this they can be quite reactive and have some interesting properties. The dye and pharmaceutical industries depend heavily on aromatic compounds.

Aliphatic compounds are organic compounds which are not aromatic. They include single bonded (ethane, propane, butane), double bonded (ethene or called ethylene, propene, butene), and triple bonded (ethyne or called acetylene, propyne, butyne) straight chain hydrocarbons as well as cyclic non-benzene structures (cyclopentane, cyclobutane) (every organic compound in the world is either aromatic or aliphatic).

A Barrel (bbl.) of crude contains 42 gallons or 158.8 liters. No one actually ships petroleum in barrels anymore because they are too small, but the term is still used to describe a defined volume.

Petroleum literally means "rock oil". It is a very broad word referring to all liquid hydrocarbons which can be collected from the ground. Even natural gas and solid hydrocarbons are sometimes referred to as petroleum. When petroleum first comes from the ground it is called crude oil. Later it is usually just referred to as oil. It can flow like water or be as viscous as peanut butter. It can be yellow, red, green, brown, or black.

Fractions are complex mixtures of chemical compounds that all have a similar boiling point. Light and heavy fractions refer to a compound's boiling point and not their actual density (these are two entirely different things). Light fractions can be very heavy (dense), and heavy fractions can be very light (go figure)!

Isomers are chemicals which have the same number and type of atoms but have them arranged in a different way. Methane (CH4), ethane (C2H6), and propane (C3H8) have no isomers because their is only one way the carbons can hook together. Butane (C4H10) has two isomers (n-butane and isobutane). Decane (C10H22) has seventy five isomers, and a molecule with 20 carbon atoms (C20H42) has over 100,000 isomers. Crude oil contains molecules having 1 to 100+ carbon atoms. Naming these compounds based upon normal chemical rhetoric would be hell on earth! The huge number of possible molecular arrangements is why people talk of fractions instead of using proper chemical nomenclature.

Natural Gas is a mixture of very low boiling hydrocarbons. Natural gas can only be liquefied under extremely high pressures and very low temperatures. It is called "dry" when methane (CH4) is the primary component, and "wet" if it contains higher boiling hydrocarbons. If it smells bad, because of sulfur compounds, it is called "sour". Otherwise, it is called "sweet".

Liquefied Petroleum Gas (LPG) is a very light fraction of petroleum. It is also a fairly simple fraction containing mainly propane and butane. First, it should be noted that under normal pressures LPG is actually a gas, unlike gasoline (often just called "gas") which is really a liquid (ugh). However, under modestly high pressures these compounds can be converted to a liquid (hence their name). Being able to store them as a liquid reduces the container size by a factor of a hundred. This is no doubt why propane stoves are so popular. As cracking methods have evolved more and more LPG has been produced by refineries.

Gasoline is a light fraction of petroleum which is quite volatile and burns rapidly. Straight run gasoline refers to gasoline produced by distillation instead of cracking, although it really doesn't make a difference. Gasoline is often just called "gas", however it is a liquid at typical pressures. This confusing state of affairs developed because the first internal combustion engines ran on town gas (a mixture of carbon monoxide, CO, and hydrogen, H2, both actual gases). These engines were therefore called "gas engines". When gasoline replaced town gas people still called the motors "gas engines" and also started calling gasoline "gas". Today, the average American uses 450 gallons of gasoline a year.

Octane Number rates a fuel's ability to avoid premature ignition called knock. Premature ignition reduces an engine's power and quickly wares it out. The octane scale arbitrarily defines n-heptane a value of 0, and isooctane (2,2,4-trimethyl pentane) an octane number of 100. Isooctane is then added to heptane until the mixture has the same knock characteristics as the fuel being tested, and the percent isooctane is taken as the unknown fuels octane number. Tetraethyl lead used to be a common anti-knock additive which would raise a fuels octane number. High octane fuel can be used in engines with high compression ratios which in turn produce much more power. However, the additive is no longer used because of concerns over lead pollution.

Naphtha is a light fraction of petroleum used to make gasoline. Naphtha also produces solvents and feedstocks for the petrochemical industry.

Kerosene was the first important petroleum fraction, replacing whale oils in lamps over a hundred years ago. Some unscrupulous refiners failed to distill off all the naphtha from the kerosene fraction thereby increasing the volume of their final product. This lead to many lamp explosions and fires.

Diesel fuels find use in the fleet of trucks which transport the nations goods. Diesel engines power these larger engines, and use higher compression ratios (and temperatures) than their gasoline cousins. They are therefore more efficient. It is also interesting to note that diesel engines have no spark plugs, instead the fuel-air mixture is ignited by the rising temperatures and pressures during the compression stroke.

Gas Oil (or fuel oils) are used for domestic heating. In the winter refineries produce more gas oil, whereas during the summer driving months they produce more gasoline.

Heavy Fuel Oil is often blended with gas oils for easier use in industry. Ships burn heavy fuel oils but they call it bunker oil.

Atmospheric Residual is everything that cannot be vaporized under normal pressures. Atmospheric residual is fed into another distillation column, operating at lower pressures, which can separate out some of the lighter compounds. Lubricants and waxes reside in this fraction.

Vacuum Residual is the bottom of the barrel. It includes asphalt and some coke.

Pitch is a thick, black, sticky material. It is left behind when the lighter components of coal tar or petroleum are distilled off. Pitch is a "natural" form of asphalt.

Asphalt is a high boiling component of crude oil. It is therefore found at the "bottom of the barrel" when petroleum is distilled.

Tars are byproducts formed when coke is made from coal or charcoal is made from wood. It is a thick, complex, oily black mixture of heavy organic compounds very similar to pitch or asphalt, though from a different source.