Roughly 30% of the world's electricity comes from natural gas and petroleum.
Nearly all sources of electricity derive from turbine-driven generators which are run by either wind, water, or the burning of a fossil fuel. The three largest single sources of electricity in the world are: coal, natural gas, and nuclear fission.
We often associate petroleum (oil) with gasoline, but only about 70% of all petroleum is used for gasoline, jet fuel, and heating oil.
All plastics come from petroleum. Think about that for a second. That means your computer, the dashboard in your car, the hangers in your closet (oh, and synthetic clothing fabrics are made from petroleum too), toys, appliances...the list goes on and on. Not only that but things like asphalt, rubber, perfumes, and even aspirin have petroleum in them! There are over 6,000 uses for petroleum other than fuel.
The oil and gas industry is thought to be the biggest industry in the world in terms of capital value.
It is no wonder when you consider that the world not only runs on it, but the world holds it in their hand every single day. From an article on Forbes, here are 3 absolutely insane facts:
1) The total length of natural gas pipelines in the U.S. could reach to the Moon and back 7 times.
2) By weight, there is more oil at any given time being transported on the oceans than there are fish by weight in all the oceans.
3) Oil is BIG. How big? For the sake of this point let's set out some base information: 1 terawatt of power = 1,000 gigawatts. In 2010, oil produced roughly 5.7 terawatts of power worldwide. Wind power in 2010 generated around 34 gigawatts, or about half of one percent of oil. Solar is even worse having produced 3.4 gigawatts which is 5/100 of one percent. To put another way: if solar power production doubled every decade for 100 years, it would still be way behind oil. Keep in mind this is not even including natural gas, which would render these proportions even more ridiculous.
When we talk about the industry itself, it is divided into 3 basic sectors.
The first area is called Upstream. This refers to the exploration and production efforts. Upstream is also sometimes called E&P. As you might imagine, this is all about finding underwater or underground sources of oil and gas and extracting them. Included in this sector are sub-sectors such as well exploration and research, rig operations (onshore and offshore) and machinery rental or acquisition. When you think of "Big Oil", most of those corporations are represented in the Upstream sector (think: ExxonMobil).
Midstream is the area that logically connects Upstream and Downstream. This would mostly be about the transportation and storage of oil and gas. This is accomplished through pipeline infrastructure and of course oil tankers and other transport vehicles. Firms that represent this sector are not as publicly visible or commercially known. One of the largest firms in the world in this sector is Kinder Morgan.
The Downstream sector is all about turning the crude oil (or gas) into a usable product and then marketing it for retail use. A lot of the Downstream companies are very familiar to us: Marathon, Phillips 66, and Sunoco are prime examples.