A fossil fuel is a fuel formed by natural processes, such as anaerobic decomposition of buried dead organisms, containing energy originating in ancient photosynthesis. The age of the organisms and their resulting fossil fuels is typically millions of years, and sometimes exceeds 650 million years. Fossil fuels contain high percentages of carbon and include petroleum, coal, and natural gas. Other commonly used derivatives include kerosene and propane. Fossil fuels range from volatile materials with low carbon to hydrogen ratios like methane, to liquids like petroleum, to nonvolatile materials composed of almost pure carbon, like anthracite coal. Methane can be found in hydrocarbon fields either alone, associated with oil, or in the form of methane clathrates.
The theory that fossil fuels formed from the fossilized remains of dead plants by exposure to heat and pressure in the Earth's crust over millions of years was first introduced by Andreas Libavius "in his 1597 Alchemia [Alchymia]" and later by Mikhail Lomonosov "as early as 1757 and certainly by 1763". The first use of the term "fossil fuel" was by the German chemist Caspar Neumann, in English translation in 1759.
In 2017 the world's primary energy sources consisted of petroleum (34%), coal (28%), natural gas (23%), amounting to an 85% share for fossil fuels in primary energy consumption in the world. Non-fossil sources in 2006 included nuclear (8.5%), hydroelectric (6.3%), and others (geothermal, solar, tidal, wind, wood, waste) amounting to 0.9%. World energy consumption was growing at about 2.3% per year. In 2015 about 18% of worldwide consumption was from renewable sources.
Although fossil fuels are continually being formed via natural processes, they are generally considered to be non-renewable resources because they take millions of years to form and the known viable reserves are being depleted much faster than new ones are being made.
The use of fossil fuels raises serious environmental concerns. The burning of fossil fuels produces around 21.3 billion tonnes (21.3 gigatonnes) of carbon dioxide (CO2) per year. It is estimated that natural processes can only absorb about half of that amount, so there is a net increase of 10.65 billion tonnes of atmospheric carbon dioxide per year. Carbon dioxide is a greenhouse gas that increases radiative forcing and contributes to global warming. A global movement towards the generation of low-carbon renewable energy is underway to help reduce global greenhouse gas emissions.
Aquatic phytoplankton and zooplankton that died and sedimented in large quantities under anoxic conditions millions of years ago began forming petroleum and natural gas as a result of anaerobic decomposition. Over geological time this organic matter, mixed with mud, became buried under further heavy layers of inorganic sediment. The resulting high levels of heat and pressure caused the organic matter to chemically alter, first into a waxy material known as kerogen which is found in oil shales, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis. Despite these heat driven transformations (which may increase the energy density compared to typical organic matter), the embedded energy is still photosynthetic in origin.
Terrestrial plants, on the other hand, tended to form coal and methane. Many of the coal fields date to the Carboniferous period of Earth's history. Terrestrial plants also form type III kerogen, a source of natural gas.
There is a wide range of organic, or hydrocarbon, compounds in any given fuel mixture. The specific mixture of hydrocarbons gives a fuel its characteristic properties, such as boiling point, melting point, density, viscosity, etc. Some fuels like natural gas, for instance, contain only very low boiling, gaseous components. Others such as gasoline or diesel contain much higher boiling components.
Fossil fuels are of great importance because they can be burned (oxidized to carbon dioxide and water), producing significant amounts of energy per unit mass. The use of coal as a fuel predates recorded history. Coal was used to run furnaces for the melting of metal ore. Semi-solid hydrocarbons from seeps were also burned in ancient times, but these materials were mostly used for waterproofing and embalming.
Heavy crude oil, which is much more viscous than conventional crude oil, and oil sands, where bitumen is found mixed with sand and clay, began to become more important as sources of fossil fuel as of the early 2000s. Oil shale and similar materials are sedimentary rocks containing kerogen, a complex mixture of high-molecular weight organic compounds, which yield synthetic crude oil when heated (pyrolyzed). These materials have yet to be fully exploited commercially. With additional processing, they can be employed in lieu of other already established fossil fuel deposits. More recently, there has been disinvestment from exploitation of such resources due to their high carbon cost, relative to more easily processed reserves.
Prior to the latter half of the 18th century, windmills and watermills provided the energy needed for industry such as milling flour, sawing wood or pumping water, and burning wood or peat provided domestic heat. The widescale use of fossil fuels, coal at first and petroleum later, to fire steam engines enabled the Industrial Revolution. At the same time, gas lights using natural gas or coal gas were coming into wide use. The invention of the internal combustion engine and its use in automobiles and trucks greatly increased the demand for gasoline and diesel oil, both made from fossil fuels. Other forms of transportation, railways and aircraft, also required fossil fuels. The other major use for fossil fuels is in generating electricity and as feedstock for the petrochemical industry. Tar, a leftover of petroleum extraction, is used in construction of roads.
Levels of primary energy sources are the reserves in the ground. Flows are production of fossil fuels from these reserves. The most important part of primary energy sources are the carbon based fossil energy sources. Coal, oil, and natural gas provided 79.6% of primary energy production during 2002 (in million tonnes of oil equivalent (mtoe)) (34.9+23.5+21.2).
Levels (proved reserves) during 2005–2006
Flows (daily production) during 2006
P. E. Hodgson, a senior research fellow emeritus in physics at Corpus Christi College, Oxford, expects the world energy use is doubling every fourteen years and the need is increasing faster still and he insisted in 2008 that the world oil production, a main resource of fossil fuel, was expected to peak in ten years and thereafter fall.
The principle of supply and demand holds that as hydrocarbon supplies diminish, prices will rise. Therefore, higher prices will lead to increased alternative, renewable energy supplies as previously uneconomic sources become sufficiently economical to exploit. Artificial gasolines and other renewable energy sources currently require more expensive production and processing technologies than conventional petroleum reserves, but may become economically viable in the near future. Different alternative sources of energy include nuclear, hydroelectric, solar, wind, and geothermal.
One of the more promising energy alternatives is the use of inedible feed stocks and biomass for carbon dioxide capture as well as biofuel. While these processes are not without problems, they are currently in practice around the world. Biodiesels are being produced by several companies and source of great research at several universities. Some of the most common and promising processes of conversion of renewable lipids into usable fuels is through hydrotreating and decarboxylation.
The United States holds less than 5% of the world's population, but due to large houses and private cars, uses more than 25% of the world's supply of fossil fuels. As the largest source of U.S. greenhouse gas emissions, CO2 from fossil fuel combustion, accounted for 80 percent of [its] weighted emissions in 1998. Combustion of fossil fuels also produces other air pollutants, such as nitrogen oxides, sulfur dioxide, volatile organic compounds and heavy metals.
According to Environment Canada:
"The electricity sector is unique among industrial sectors in its very large contribution to emissions associated with nearly all air issues. Electricity generation produces a large share of Canadian nitrogen oxides and sulphur dioxide emissions, which contribute to smog and acid rain and the formation of fine particulate matter. It is the largest uncontrolled industrial source of mercury emissions in Canada. Fossil fuel-fired electric power plants also emit carbon dioxide, which may contribute to climate change. In addition, the sector has significant impacts on water and habitat and species. In particular, hydropower dams and transmission lines have significant effects on water and biodiversity."
According to U.S. Scientist Jerry Mahlman and USA Today: Mahlman, who crafted the IPCC language used to define levels of scientific certainty, says the new report will lay the blame at the feet of fossil fuels with "virtual certainty," meaning 99% sure. That's a significant jump from "likely," or 66% sure, in the group's last report in 2001, Mahlman says. His role in this year's effort involved spending two months reviewing the more than 1,600 pages of research that went into the new assessment.
Combustion of fossil fuels generates sulfuric, carbonic, and nitric acids, which fall to Earth as acid rain, impacting both natural areas and the built environment. Monuments and sculptures made from marble and limestone are particularly vulnerable, as the acids dissolve calcium carbonate.
Fossil fuels also contain radioactive materials, mainly uranium and thorium, which are released into the atmosphere. In 2000, about 12,000 tonnes of thorium and 5,000 tonnes of uranium were released worldwide from burning coal. It is estimated that during 1982, US coal burning released 155 times as much radioactivity into the atmosphere as the Three Mile Island accident.
Harvesting, processing, and distributing fossil fuels can also create environmental concerns. Coal mining methods, particularly mountaintop removal and strip mining, have negative environmental impacts, and offshore oil drilling poses a hazard to aquatic organisms. Fossil fuel wells can contribute to methane production via fugitive gas emissions. Oil refineries also have negative environmental impacts, including air and water pollution. Transportation of coal requires the use of diesel-powered locomotives, while crude oil is typically transported by tanker ships, each of which requires the combustion of additional fossil fuels.
Environmental regulation uses a variety of approaches to limit these emissions, such as command-and-control (which mandates the amount of pollution or the technology used), economic incentives, or voluntary programs.
An example of such regulation in the USA is the "EPA is implementing policies to reduce airborne mercury emissions. Under regulations issued in 2005, coal-fired power plants will need to reduce their emissions by 70 percent by 2018.".
In economic terms, pollution from fossil fuels is regarded as a negative externality. Taxation is considered one way to make societal costs explicit, in order to 'internalize' the cost of pollution. This aims to make fossil fuels more expensive, thereby reducing their use and the amount of pollution associated with them, along with raising the funds necessary to counteract these factors.
According to Rodman D. Griffin, "The burning of coal and oil have saved inestimable amounts of time and labor while substantially raising living standards around the world". Although the use of fossil fuels may seem beneficial to our lives, this act is playing a role on global warming and it is said to be dangerous for the future.
Moreover, these environmental pollutions impacts on the human beings because its particles of the fossil fuel on the air cause negative health effects when inhaled by people. These health effects include premature death, acute respiratory illness, aggravated asthma, chronic bronchitis and decreased lung function. So, the poor, undernourished, very young and very old, and people with preexisting respiratory disease and other ill health, are more at risk.
Europe spent €406 billion on importing fossil fuels in 2011 and €545 billion in 2012. This is around three times more than the cost of the Greek bailout up to 2013. In 2012 wind energy in Europe avoided €9.6 billion of fossil fuel costs. The International Energy Agency estimated 2017 global government fossil fuel subsidies to have been $300 billion.
A 2015 report studied 20 fossil fuel companies and found that, while highly profitable, the hidden economic cost to society was also large. The report spans the period 2008–2012 and notes that: "For all companies and all years, the economic cost to society of their CO
2 emissions was greater than their after‐tax profit, with the single exception of ExxonMobil in 2008.":4 Pure coal companies fare even worse: "the economic cost to society exceeds total revenue in all years, with this cost varying between nearly $2 and nearly $9 per $1 of revenue.":5 In this case, total revenue includes "employment, taxes, supply purchases, and indirect employment.":4
The oil and gas industry is usually divided into three major sectors: upstream, midstream, and downstream. The downstream sector is the refining of petroleum crude oil and the processing and purifying of raw natural gas, as well as the marketing and distribution of products derived from crude oil and natural gas. The downstream sector reaches consumers through products such as gasoline or petrol, kerosene, jet fuel, diesel oil, heating oil, fuel oils, lubricants, waxes, asphalt, natural gas, and liquefied petroleum gas (LPG) as well as hundreds of petrochemicals.
Midstream operations are often included in the downstream category and are considered to be a part of the downstream sector.Energy subsidies
Energy subsidies are measures that keep prices for consumers below market levels or for producers above market levels, or reduce costs for consumers and producers. Energy subsidies may be direct cash transfers to producers, consumers, or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls, trade restrictions, and limits on market access. They may also include energy conservation subsidies. The development of today's major modern energy industries have all relied on substantial subsidy support.
The elimination of energy subsidies is widely seen as one of the most effective ways of reducing global carbon emissions.Environmental impact of the energy industry
The environmental impact of the energy industry is diverse. Energy has been harnessed by human beings for millennia. Initially it was with the use of fire for light, heat, cooking and for safety, and its use can be traced back at least 1.9 million years.
In recent years there has been a trend towards the increased commercialization of various renewable energy sources.
Rapidly advancing technologies can potentially achieve a transition of energy generation, water and waste management, and food production towards better environmental and energy usage practices using methods of systems ecology and industrial ecology.Flue-gas emissions from fossil-fuel combustion
Flue-gas emissions from fossil-fuel combustion refers to the combustion-product gas resulting from the burning of fossil fuels. Most fossil fuels are combusted with ambient air (as differentiated from combustion with pure oxygen). Since ambient air contains about 79 volume percent gaseous nitrogen (N2), which is essentially non-combustible, the largest part of the flue gas from most fossil-fuel combustion is uncombusted nitrogen. Carbon dioxide (CO2), the next largest part of flue gas, can be as much as 10−25 volume percent or more of the flue gas. This is closely followed in volume by water vapor (H2O) created by the combustion of the hydrogen in the fuel with atmospheric oxygen. Much of the 'smoke' seen pouring from flue gas stacks is this water vapor forming a cloud as it contacts cool air.
A typical flue gas from the combustion of fossil fuels contains very small amounts of nitrogen oxides (NOx), sulfur dioxide (SO2) and particulate matter. The nitrogen oxides are derived from the nitrogen in the ambient air as well as from any nitrogen-containing compounds in the fossil fuel. The sulfur dioxide is derived from any sulfur-containing compounds in the fuels. The particulate matter is composed of very small particles of solid materials and very small liquid droplets which give flue gases their smoky appearance.
The steam generators in large power plants and the process furnaces in large refineries, petrochemical and chemical plants, and incinerators burn considerable amounts of fossil fuels and therefore emit large amounts of flue gas to the ambient atmosphere. The table below presents the total amounts of flue gas typically generated by the burning of fossil fuels such as natural gas, fuel oil and coal. The data were obtained by stoichiometric
calculations.It is of interest to note that the total amount of wet flue gas generated by coal combustion is only 10 percent higher than the flue gas generated by natural-gas combustion (the ratio for dry flue gas is higher).
Note: m3 are standard cubic meters at 0 °C and 101.325 kPa, and scf is standard cubic feet at 60 °F and 14.696 psia.Fossil Fuel Levy
The Fossil Fuel Levy (FFL) is a levy paid by suppliers of electricity from non-renewable energy sources in the United Kingdom. The costs are shared by the suppliers and consumers, as a proportion of the cost is passed on to consumers in the cost of the electricity supplied. The Fossil Fuel Levy was imposed to fund the Non-Fossil Fuel Obligation.Fossil fuel divestment
Fossil fuel divestment or fossil fuel divestment and investment in climate solutions is the removal of investment assets including stocks, bonds, and investment funds from companies involved in extracting fossil fuels, in an attempt to reduce climate change by tackling its ultimate causes.
Numerous groups advocate fossil fuel divestment, which in 2015 was reportedly the fastest growing divestment movement in history. Beginning on campuses in The United States in 2010 with students urging their administrations to turn investments in the fossil fuel industry into investments in clean energy and communities most impacted by climate change, the movement soon spread across the globe. By December 2018, a total of 1,000 institutions and over 58,000 individuals representing $8 trillion in assets worldwide had been divested from fossil fuels.Fossil fuel exporters
Petroleum, natural gas, and coal are exported from various source countries to countries reliant on these fossil fuels.Fossil fuel phase-out
Fossil fuel phase out refers to the discontinuation of the use of fossil fuels, through the decommissioning of operating fossil fuel-fired power plants, the prevention of the construction of new ones, and the use of alternative energy to replace the role of fossil fuels.
The purpose of fossil fuel phase-out is to reduce the negative externalities that use of fossil fuels cause. Negative externalities refer to the costs a certain activity has over people who did not choose to incur in them. A direct negative externality from fossil fuels' use is air pollution, and an indirect negative externality are mining accidents, that happen as a consequence of the extraction of fossil fuels. Fossil fuel burning contributes to climate change, as it releases greenhouse gas emissions.Fossil fuel power station
A fossil fuel power station is a thermal power station which burns a fossil fuel such as coal, natural gas, or petroleum to produce electricity. Central station fossil fuel power plants are designed on a large scale for continuous operation. In many countries, such plants provide most of the electrical energy used. Fossil fuel power stations have machinery to convert the heat energy of combustion into mechanical energy, which then operates an electrical generator. The prime mover may be a steam turbine, a gas turbine or, in small plants, a reciprocating internal combustion engine. All plants use the energy extracted from expanding gas, either steam or combustion gases.
Although different energy conversion methods exist, all thermal power station conversion methods have efficiency limited by the Carnot efficiency and therefore produce waste heat.
By-products of fossil fuel power plant operation must be considered in their design and operation. The flue gas from combustion of the fossil fuels is discharged to the air. This gas contains carbon dioxide and water vapor, as well as other substances such as nitrogen oxides (NOx), sulfur oxides (SOx), mercury, traces of other metals, and, for coal-fired plants, fly ash. Solid waste ash from coal-fired boilers must also be removed. Some coal ash can be recycled for building materials.Fossil fueled power stations are major emitters of carbon dioxide (CO2), a greenhouse gas which is a major contributor to global warming.
The results of a recent study show that the net income available to shareholders of large companies could see a significant reduction from the greenhouse gas emissions liability related to only natural disasters in the United States from a single coal-fired power plant.
However, as of 2015, no such cases have awarded damages in the United States.
Per unit of electric energy, brown coal emits nearly two times as much CO2 as natural gas, and black coal emits somewhat less than brown.
Carbon capture and storage of emissions has been proposed to limit the environmental impact of fossil fuel power stations, but it is still at a demonstration stage.Fossil fuels lobby
"Fossil fuels lobby" is the umbrella term used to name the paid representatives of large fossil fuel (oil, gas, coal) and electric utilities corporations who attempt to influence governmental policy. So-called Big Oil companies such as ExxonMobil, Royal Dutch Shell, BP, Total S.A., Chevron Corporation, and ConocoPhillips are amongst the largest corporations associated with the fossil fuels lobby. General Electric, Southern Company, First Energy, and the Edison Electric Institute are also among the most influential electric utilities corporations. However, electric companies and big oil and gas companies are consistently not among the ten highest-spending lobbyists – the United States Chamber of Commerce is currently #1. By sector, "Energy/Nat Resource" comes fifth, behind "Misc Business", "Finance/Insur/RealEst", Health and "Communic/Electronics".Internal combustion engine
An internal combustion engine (ICE) is a heat engine where the combustion of a fuel occurs with an oxidizer (usually air) in a combustion chamber that is an integral part of the working fluid flow circuit. In an internal combustion engine, the expansion of the high-temperature and high-pressure gases produced by combustion applies direct force to some component of the engine. The force is applied typically to pistons, turbine blades, rotor or a nozzle. This force moves the component over a distance, transforming chemical energy into useful mechanical energy.
The first commercially successful internal combustion engine was created by Étienne Lenoir around 1859 and the first modern internal combustion engine was created in 1876 by Nikolaus Otto (see Otto engine).
The term internal combustion engine usually refers to an engine in which combustion is intermittent, such as the more familiar four-stroke and two-stroke piston engines, along with variants, such as the six-stroke piston engine and the Wankel rotary engine. A second class of internal combustion engines use continuous combustion: gas turbines, jet engines and most rocket engines, each of which are internal combustion engines on the same principle as previously described. Firearms are also a form of internal combustion engine.In contrast, in external combustion engines, such as steam or Stirling engines, energy is delivered to a working fluid not consisting of, mixed with, or contaminated by combustion products. Working fluids can be air, hot water, pressurized water or even liquid sodium, heated in a boiler. ICEs are usually powered by energy-dense fuels such as gasoline or diesel fuel, liquids derived from fossil fuels. While there are many stationary applications, most ICEs are used in mobile applications and are the dominant power supply for vehicles such as cars, aircraft, and boats.
Typically an ICE is fed with fossil fuels like natural gas or petroleum products such as gasoline, diesel fuel or fuel oil. There is a growing usage of renewable fuels like biodiesel for CI (compression ignition) engines and bioethanol or methanol for SI (spark ignition) engines. Hydrogen is sometimes used, and can be obtained from either fossil fuels or renewable energy.List of power stations in Italy
The following page lists power stations in Italy.Low-carbon economy
A low-carbon economy (LCE), low-fossil-fuel economy (LFFE), or decarbonised economy is an economy based on low carbon power sources that therefore has a minimal output of greenhouse gas (GHG) emissions into the biosphere, but specifically refers to the greenhouse gas carbon dioxide. GHG emissions due to anthropogenic (human) activity are the dominant cause of observed global warming (climate change) since the mid-20th century. Continued emission of greenhouse gases may cause long-lasting changes around the world, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems.Shifting to low-carbon economy on a global scale could bring substantial benefits both for developed and developing countries. Many countries around the world are designing and implementing low emission development strategies (LEDS). These strategies seek to achieve social, economic and environmental development goals while reducing long-term greenhouse gas emissions and increasing resilience to climate change impacts.Globally implemented low-carbon economies are therefore proposed by those having drawn this conclusion, as a means to avoid catastrophic climate change, and as a precursor to the more advanced, zero-carbon economy.Non-Fossil Fuel Obligation
The Non-Fossil Fuel Obligation (NFFO) refers to a collection of orders requiring the electricity Distribution Network Operators in England and Wales to purchase electricity from the nuclear power and renewable energy sectors. Similar mechanisms operate in Scotland (the Scottish Renewable Orders under the Scottish Renewables Obligation) and Northern Ireland (the Northern Ireland Non-Fossil Fuel Obligation).
Five orders were made under the NFFO before the UK government replaced it with the Renewables Obligation, the first order or 'tranche' was on October 1, 1990 with an average price of 7.51 pence per kWh being paid to renewable energy generators, the fifth and last was in September 1998 at an average of 2.71 pence per kWh. Although the Renewables Obligation is now the Government’s main mechanism for expanding the renewables sector, the last of the existing orders will continue in effect until it expires in 2018. Contracts resulting from the first two tranches however terminated in 1998, allowing generators from these rounds to now sell electricity under the new mechanism.Proven reserves
Proven reserves, also called measured reserves, 1P, and reserves, are industry specific terms regarding fossil fuel energy sources. They are defined as a "Quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions." A reserve is considered a proven reserve if it is probable that 90% or more of the resource is recoverable while being economically profitable. These terms relate to common fossil fuel reserves such as oil reserves, natural gas reserves, or coal reserves.
Operating conditions are taken into account when determining if a reserve is classified as "proven". Operating conditions include operational break-even price, regulatory and contractual approvals, without which the reserve cannot be classified as proven. Price changes therefore can have a large impact on the classification of proven reserves. Regulatory and contractual conditions may change, and also affect the amount of proven reserves. If a reserve's resources can be recovered using current technology but is not economically profitable it is considered "technically recoverable" but cannot be considered a proven reserve. Reserves less than 90% recoverable but more than 50% are considered "probable reserves" and below 50% are "possible reserves".Steam reforming
Steam reforming or steam methane reforming is a chemical synthesis for producing syngas, hydrogen, carbon monoxide from hydrocarbon fuels such as natural gas. This is achieved in a processing device called a reformer which reacts steam at high temperature and pressure with methane in the presence of a nickel catalyst. The steam methane reformer is widely used in industry to make hydrogen, also called "blue hydrogen", from natural gas. With the use of CCUS technology it is possible to capture the carbon dioxide in the process and thus decarbonised natural gas.
There is also interest in the development of much smaller units based on similar technology to produce hydrogen as a feedstock for fuel cells. Small-scale steam reforming units to supply fuel cells are currently the subject of research and development, typically involving the reforming of methanol, but other fuels are also being considered such as propane, gasoline, autogas, diesel fuel, and ethanol.Subsidy
A subsidy or government incentive is a form of financial aid or support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy. Although commonly extended from government, the term subsidy can relate to any type of support – for example from NGOs or as implicit subsidies. Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates).Furthermore, they can be broad or narrow, legal or illegal, ethical or unethical. The most common forms of subsidies are those to the producer or the consumer. Producer/production subsidies ensure producers are better off by either supplying market price support, direct support, or payments to factors of production. Consumer/consumption subsidies commonly reduce the price of goods and services to the consumer. For example, in the US at one time it was cheaper to buy gasoline than bottled water.Whether subsidies are positive or negative is typically a normative judgment. As a form of economic intervention, subsidies are inherently contrary to the market's demands. However, they can also be used as tools of political and corporate cronyism.Upstream (petroleum industry)
The oil and gas industry is usually divided into three major sectors: upstream (or exploration and production- E&P), midstream and downstream. The upstream sector includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil or raw natural gas to the surface.Upstream Industry has traditionally experienced the highest number of Mergers, Acquisitions and Divestitures. M&A activity for upstream oil and gas deals in 2012 totaled $254 billion in 679 deals. A large chunk of this M&A, 33% in 2012, was driven by the unconventional/shale boom especially in the US followed by the Russian Federation and Canada.
The aggregate value of Upstream E&P assets available for sale (Deals in Play) reached a record-high of $135 billion in Q3-2013. The value of Deals in Play doubled from $46 billion in 2009 to $90 billion in 2010. With ongoing M&A activity the level remained almost the same reaching $85 billion in Dec-2012. However, the first half of 2013 saw approximately $48 billion of net new assets coming on the market. Remarkably, the total value of Deals in Play in Q3-2013 nearly tripled over 2009 at $46 billion, in less than four years.