New sources of oil and gas

The rising cost of oil now has forced governments and oil companies to look at the economics of exploiting previously marginal sources of oil, including those in difficult locations (such as the deep sea) that require intensive and costly processing.

Mining Canada's petroleum and natural gas reserves

Canada has vast quantities of viscous petroleum (bitumen) and natural gas locked up in its tar sands and shale. Its tar sand deposits, when combined with Venezuela are approximately equal to the world's total reserves of conventional crude oil.

Canada is the largest supplier of crude oil and refined products to the United States, supplying about 20% of total U.S. imports, and exports more oil and products to the U.S. than it consumes itself.

Barriers to extraction

The challenge facing engineers is extracting the oil and gas from the tar sands and shale - at present much of it is so difficult to get at that it actually takes more energy to extract it than it gives back in use.

Most of the sands of Canada are located in three major deposits in northern Alberta. In shale formations, natural gas molecules are stuck to the rock, and must be peeled away before they will flow to the surface. Shale gas and the oil sands face the same maddening economic dilemma: Everyone knows the resource is there but separating out the valuable resource is currently uneconomical compared with other options.

Between them they cover over 140,000 square kilometres (54,000 sq mi) - an area larger than England - and hold proven reserves of 1.75 trillion barrels of bitumen. About ten percent of this, or 173 billion barrels, is estimated by the government of Alberta to be recoverable at current prices using current technology.

In the UK - North Sea oil

Since North Sea oil first came on-stream, 36 billion barrels of oil have been pumped out.

1999 marked the peak of oil and gas production in the North Sea, when 2.8 million barrels of oil were pumped every day. Today that figure is 1.5 million. Although reserves are falling, the UK is a bigger oil and gas producer than countries such as Nigeria, Indonesia and Kuwait.

It is estimated that there are still 16 - 25 billion recoverable barrels left, but the rate of decline has been sharper than predicted at around 4 – 5% per year.

The Government recently offered tax incentives to oil companies in a bid to increase output from older North Sea fields. Exploration is being hampered however, as it is worldwide, by shortages of key equipment such as rigs and support vessels.

How new technology made North Sea oil possible

The story of North sea oil centres on the engineers who have made exploration and extraction possible by creating some of the world’s most innovative and impressive structures.

One of these, the tension-leg platform design, has become a template for future rigs having to operate in ever deeper water.

Launched in 1980, the £700m Hutton Platform rig stands 150 metres above the bed of the North Sea. Displacing 68,000 tonnes of water, it is anchored by 16 massive tubular steel cables, fixed to the sea floor. The rig drills for oil and gas, and houses up to 240 staff. 

shutterstock_1038500134   300

Engineering Policy Unit 

Our Engineering Policy Unit works closely with members to raise the profile of engineers and engineering potential, to generate discussion and provide thought leadership.

Read our policy-related Themes and reports