I was reading ChiefIO about peak oil and saw the most interesting explanation of how hydrocarbons might be produced underground.
We don’t know for sure what process makes oil and there are sound reasons to think that it is still being created in large quantities. For example, the Middle East oil fields have an astounding rate of pumping, yet they have more oil in them now as “reserves” than before the pumping began.He has a lot more to say about why we have a lot of resources even if the conventional theories of oil creation are correct. So you know go read the whole thing.
One very good explanation for “why” is the possibility that iron acts as a catalyst to turn CO2 rich rocks, in the presence of H2 propbably from water, into hydrocarbons in geologic subduction zones (which would explain the oil locations in places like Indonesia and coastal California with active subduction zones).
Much as we do it synthetically (heat, pressure, CO2, H2 or water, and metal catalysts – Fischer Tropsch in a nutshell); nature may be doing the same thing. Take a look at how: Oil may come from subduction of rocks.
And something else to read is a book that says our oil is a product of planet formation with a little different explanation from the above of how long chain hydrocarbons like oil came to be:
The Deep Hot Biosphere : The Myth of Fossil Fuels