We did a similar exercise with a kids' class this year, totally on the cheap.  The message isn't specifically about oil, it's a broader demonstration of the environmental impact of different transportation modes. 

I got some plastic lids for large tupperwares (about 1'x2'), and laid some dry-ish dirt down.  I propped up one side of the lids so they laid slightly tilted, not flat.  I collected a bunch of leaves and flowers, and gave them to the kids.  I told them to make a forest in their dirt with the plants.  Then we made it rain, using spray bottles.  The dirt and plants absorbed all the water (especially because it was dry to start), very little flowed out into the drainage channel.  I had also made a stack of "roads," "houses," "apartments," and "parking lots" out of duct tape folded over on itself  + sharpie drawings.  So then I told the kids they had to build a village, and had to knock down part of their forest to do it.  Once they had made the village we added "pollution" from cars and other sources - a sprinkling of turmeric over everything.  Then we made it "rain" again - and this time the water ran right off the impervious duct tape (helped that the dirt was now saturated too), and yellow water pooled in the drainage channels.  It demonstrated the impact of development on the natural environment, impact of increased impervious surface on water drainage, and how pollution on land makes it into our waterways.  You could also make skinny little tape strips that were bike paths, and show the difference in the amount of pavement needed for car transport vs. other means.  Could also vary the amount of pollution depending on transport means.   Maybe different kids could be assigned to build bike villages and car villages, then the results could be compared.  Maybe one group of kids could be assigned to build the Nigerian delta or Ecuadorian rainforest village- then when you build the car village, you have to knock down houses and farm fields in the other villages and dump oil all over everything - illustrating the costs of oil extraction.  Lots of things you could do. 

The attached picture illustrates how it's put together.

-Jessica (Free Ride, Pittsburgh)