Over the last ten days, the United States’ chief energy competitors Russia and Saudi Arabia, launched a two-pronged assault designed to destabilize the thriving US oil and gas industry. Russia is attempting to flood the market with shale oil and natural gas. Saudi Arabia is pumping out cheap crude. And the United States, awash in all of them, is preparing a strategy to stay out in front.
In the international story of energy, these three terms — crude oil, shale, and natural gas — are sometimes used interchangeably. As the future of energy becomes more diverse, however, it’s essential to understand the distinction between them to fully understand the developing story.
In the beginning, there was oil. Over millions of years, plants and animal bones exposed to pressure and heat are compressed until they’re mashed into a gooey organic compound called a hydrocarbon. This is oil, sweet, bubbly crude. Conventional oil is often found at a depth of around 6,000 feet in deposits of varying size.
Crude oil is often drilled through more straightforward methods than shale and natural gas. A hole is drilled straight into the earth. Then, a pump jack is set up, and the oil is essentially sucked from the ground.
With the second-largest deposit of crude oil in the world, Saudi Arabia has a vast network of crude oil pumps to match.
Around the world, below the gravel, rocks, and deposits of crude oil that helped build oil-rich nations like Saudi Arabia, sits the shale layer. Where most modern oil deposits average depth of around 6,000, the shale layer can range as deep as 9,000 feet.
The primary distinction between crude or conventional oil and shale oil is the way it collects. The oil in shale is typically found in smaller batches. As a result, shale oil often needs to be fractured so that the oil trapped within the shale can be recovered.
As technology advanced, so, too, did the means for discovering and recovering oil. Modern methods allow for holes 9,000 feet deep and more than 10,000 feet horizontally. The United States tech-first approach to drilling has been one of the critical factors in the country’s oil and gas ascendancy.
Natural gas can be found intermingled among the deposits of crude oil and shale oil. It can also be found in what is known as tight sand deposits, too. The primary difference between oil (either shale or crude) and natural gas is the degree to which either needs to be refined.
When crude and shale are pumped from the earth, they’re a bit of a mess of different substances that need to be extensively refined before they’re of any use. The word “crude” is applied for a reason. Natural gas, on the other hand, is composed almost entirely of its most valuable component: methane. As a result, less work is required during the refining process. Russia, home to the world’s most abundant supply of natural gas, plans to put that benefit to work in the coming weeks.