Home > Energy > Distilling Differences between Hydrocarbons

Distilling Differences between Hydrocarbons

Coal, Oil, and Natural Gas are all resources of high energy density and have fueled various revolutions in disparate industries. While they’re often lumped together as hydrocarbons, they have widely different characteristics. Here is a brief overview of  some of those differences:

Formation: All hydrocarbons require vast periods of time for their creation. They begin by dead organic matter being buried and heated until they crack and form a particular hydrocarbon. While they are all chains of Carbon and Hydrogen (hence hydrocarbon) of various lengths, they are not simply the 3 phases of the same substance.  Coal is generated from the slow burial of ancient  forests, wetlands, swamps, and bogs. Oil and Gas are generated in lake or marine environments where plankton and other organisms are buried under water. Over the millions of years or heat and pressure transform this organic material into energy rich hydrocarbons that we extract and burn for energy.

Use: The 3 general physical states each type resides in naturally predisposes them to specific uses. Coal is a heavy, solid combustible rock; a good energy source, but not easily moved. This was the dominate fuel source of the Industrial Revolution As a result, industries developed near coal sources to minimize the transport costs associated with using the fuel. England and Eastern US, both rich in coal, prospered as industry roared to life powered by coal. Coal-fueled, steam-powered trains were the revolutionary mode of transport during the 1800s.  Coal is still the dominant source for electricity generation around the world. Later, oil became the dominant fuel type providing a wider range of transport options as well as many alternative uses such as plastic production, fertilizers, and lubricants. Natural gas is generally used for electricity and heat production.

Distribution: Due to the specific environmental conditions necessary for hydrocarbon formation, their distribution is not even across the Earth. Coal is a entirely viewed as a terrestrial resource as marine mining is excessively difficult and given the abundance of coal, there is no need to exploit marginal reserves. Also, being a terrestrial resource, the countries with large land holdings having the largest reserves (Top 3: US, Russia, China).  Oil and Gas are less abundant and distributed much more unevenly across the globe. While great reserves reside in the Middle East, Venezuela, Russia, and Canada are also among the 10 oil laden countries in the world. Also, given their liquid nature, off shore reserves are capture-able, making distribution even more complex.

Grades: Given the range of environments for formation, the quality of hydrocarbons varies widely between sources. Purest coal, anthracite, contains more energy and burns more cleanly that other, less pure types (bituminous, sub-bituminous, peat). Higher grade coals are mined preferentially over others so as coal use continues, the average coal being burned will become dirtier. Oil can form in various lengths of hydrocarbons  and has a more complex range of types because its liquid nature allows for the incorporation of other impurities. The highest caliber of oil is generally considered light, sweet crude or Brent Crude.  As the level of impurities increase, the value decreases, as is the case with Venezuela’s oil which has considerable sulfur content (referred to as Sour Crude). Additionally, longer chained oils are more difficult to mine and refine, as is the case with the Oil Sands of Alberta Canada. Gas, being light in weight is easily refined into pure forms of methane, ethane, and propane.

Transport: Given its heavy, solid nature, coal is usually transported by rail or ship and is traded on local markets due to the high cost of transport. Natural Gas, on the other end of the spectrum, is light and difficult to contain. It is usually moved via pipelines, though it can be converted to a more transportable state called Liquefied Natural Gas (LNG). Oil is the most useful and transportable hydrocarbon and  is generally moved via ship or pipeline.

Geopolitics: The varying characteristics and uses of hydrocarbons create dynamic geopolitical implications. The concentration of oil in unstable regions of the world has been of concern for decades. Every US president since L.B. Johnson has called for lessening our dependence on foreign oil. This has resulted in increased US production and deeper exploration into marginally located reserves such as in the Arctic. It has also brought alternative sources into production such as the Tar Sands. This brings to light infrastructure needs, and refining capacity. Very few refineries in the world are capable of handling “dirty oil”. The much-debated Keystone XL pipeline would connect the dirty oil of Alberta, CA directly to Houston and one of those few refineries that can handle it. Now with the delays from environmental concerns, China is making investments to increase its refining capacity for dirty oil in hopes to tap into Canadian sources. Similarly, Venezuela’s sour oil has limited markets due to refinery requirements. The US is the primary market due to demand but also current refining capabilities. China is not only increasing its refining capabilities, but also infrastructure investments in Africa in hopes of earning goodwill from oil rich nations. The easy transport of oil makes it a truly global commodity and unilateral maneuvering is unlikely to have great impacts on either supply or demand.

Coal will continue to be the dominant electricity source for decades still. China is increasing its coal consumption daily to meet the growing demands of its population. It’s also looking to neighboring countries for additional reserves to meet its demand. Even environmentally conscience nations are having trouble escaping the need for coal generated electricity with its dirty emissions.

Natural gas differs here too. Due to its reliance on pipelines and long term infrastructure costs, gas is sold in contract blocks between countries over decade long agreements.  The Russia-Europe connection highlights this fact and is exacerbated by soviet-era tensions of sovereignty mixed with needs for energy. LNG trading seems to be following the Contract-Block model thus keeping it from achieving global commodity status equal to that of oil. Japan is likely to become increasingly dependent on foreign natural gas, most likely Russian LNG, as it aims to reduce its reliance on nuclear power with few domestic power options to replace it. Additionally, natural gas booms in North America have depressed the price of natural gas over the last 5 years further altering energy calculations.

The diverse characteristics of hydrocarbons and variations therein create a complex environment for energy policy and decision making.  Understanding the nuance of different energy types will facilitate better utilization of hydrocarbon resources as well as more comprehensive solutions for moving beyond hydrocarbons.

Energy Consumption by Type

Categories: Energy Tags: , , ,
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