Oil and Gas

History of Oil in North America
The mining of petroleum has a long and storied history. The earliest known oil wells were dug in China at 347AD. The wells had depths of 800 ft and the petroleum produced was used to boil brine for salt production. The earliest modern oil well was drilled in 1848 in the Russian controlled city of Baku. The first oil well in North America would be drilled 10 years later in Ontario, Canada. In 1859 the first commercially successful oil well was drilled in Titusville, Pennsylvania for the sole purpose of oil production. The process of refining petroleum into kerosene was developed in 1852 and the demand for petroleum production began to rise. By 1857 a clean burning kerosene lamp was patented and its comparative low price pushed whale lamps off the market. This along with the development of the internal combustion engine created a massive demand for oil by the end of the 19th century. Early North American finds like those in Pennsylvania and Ontario could not meet the rising demand for oil, spurring development of wells in Texas, California and Oklahoma.

Worldwide consumption of petroleum in the past twenty years has grown from 61 million barrels/day in 1986 to 84 million barrels/day in 2006. Crude oil prices have also increased from $27/barrel in 1986 to $60/barrel in 2006 when adjusted for inflation. Worldwide consumption shows no signs of diminishing especially as countries like China and India realize their economic potential. With the current price of oil at around $100/barrel, rapidly growing world consumption, and no cheap alternative, there is no speculation on what the future price of oil will be.