I was listening to a “Science Minute” type program on the radio and it said that oil does not, in fact, come from dinos. Instead, it comes from algae. Huh? When did this happen? I’ve always been told that oil comes from dinosaurs! So when did we decide that oil is actually from algae and not from dinos? What caused people to think that oil = dinos to begin with? If this is true, then I guess I’d better switch from burying lizards in my backyard to algae if I ever hope to see my dreams of becoming an oil sheik realized. 
I don’t think anyone thought oil came from Dinosaurs. I was certainly taught in grade school 30 years ago that it was vegetation, not animal life. The vegation acts as a carbon sink, and eventually gives up its carbon as petroleum.
But I think recently there has been some speculation that Oil may in fact be created deep in the Earth, and wells up through porous rock. If that’s the case, we have a LOT of it. But that’s still speculation, I believe driven because some wells that were pumped dry decades ago have recently been found to be filling with oil again. But I’m going on hazy memory, so don’t quote me on that.
I was taught that coal came from plants and that oil came from animals, and the comment on the program was from a listener who wanted to know if oil really did come from dinos so at least one other person out there was told the same thing.
Public Radio’s Talk of the Nation: Science Friday had a show on this subject this past summer. They were saying that the chemical makeup of animals makes it impossible to ever change into oil. If I remember correctly they pretty well discounted plant life also. I didn’t have time to re-listen to it but here is the NPR site to listen to it on Real Audio.
I think we can blame the Sinclair Oil Corporation for the dinosaur-oil association.
From the SOC Homepage:
It seems that many people took the association a bit too literally, thereby creating the myth that dinosaurs essentially became crude oil.
Years ago, Sinclair Oil had a sort of pseudo-brontosaurus as its mascot, which confused a lot of people. Another triumph of marketing, I guess.
Plankton, both animal and plant plankton, growing in warm, shallow seas is the generally-accepted source of petroleum deposits. Although, as Sam Stone says, there is a theory of extremophiles in the deep crust being the origin.
Oceanic plankton, is, however, a huge carbon sink.
Damn hamsters!
And I should have said …was the generally-accepted…
My Dad used to own a Sinclair station.
He brought me home an inflatable apatasaurus, Kelly green.
Memories… 
The igneous petrologist’s summary of how oil forms:
- Things die. (Mostly marine things, since the world is mostly marine.)
- Their little hydrocarbon-based corpses settle to the bottom of the sedimentary basin in which they lived.
- With time, dead critters get buried deeper and deeper–especially if the basin is deepening tectonically (like an extensional graben or a deepening foreland basin).
- Dead hydrocarbons + Temperature + Pressure = Petroleum.
- Petroleum migrates from this “source area” to some geologic trap (“resevoir”), where it awaits exploitation.
I’m sure one of our resident petroleum guys will be along shortly to correct me.
Note that many of our major petroleum areas, like the Permian Basin in West Texas and New Mexico, are pre-Mesozoic, which precludes any involvment from Dinosaurs.
And don’t forget the impact of shrimp sh!t. It can be important. Anyway a nice page can be found here. And not a bad answer from a lump of lava 
Tapioca - who once drilled for oil in granite (and found it :eek: )
[Hijack] Does Sinclair oil have anything to do with the naming of the family in
dinosaurs?
About 3 months ago I asked about the inorganic origin theory of oil production that Sam Stone mentioned:
http://boards.straightdope.com/sdmb/showthread.php?s=&threadid=127639&highlight=theory+inorganic
There’s a couple links there if anyone’s interested.
There is a Sinclair station less than a block from my house, at I-94 and Ruth Street in St. Paul, Minnesota. Still has the green dino logo and other ads.
– Beruang