What if oil is not made from a collection of dead dinosaurs and plants and animals and instead is the landfills from an ancient civilization. Would our landfills end up as oil in millions of years?

I'm questioning a lot of what you wrote, but you did provide a link.

Mark Twain reported in his 1869 travelogue The Innocents Abroad (Hartford, Conn.) that mummies were burned like coal to produce steam on the rail line from Cairo to Alexandria (176–77).

This book is fiction. The episode about "pass me a king, these plebians don't burn worth a damn" was a joke. That has NOT stopped a lot of people from repeating the story.

I'm not sure in what since you mean "some kind of blood" but I'll assume you're just questioning the "dead dinosaur theory". The idea that the earth makes oil is abiotic oil . There's a few different theories about how the oil is made in this way. There is some support for the theory because oil has been found in funny places that didn't seem to have much life. It also fits thematically with an occult theory about how metals grow underground. The basic alchemical theory is that there is some basic element in the earth that can grow into different things -- metals are some of them.

Aren't we burning one "element" needed to harvest life on earth without knowing?

Sure. You can do lots of things with petroleum. I'm not too sure we know what is best to do with it.

These are some interesting questions to consider. I dont think we will know the answer for centuries, it was only like 120 years ago we started draining the earth of its oil, and theirs still so much out there. What gets me is the quantity of it that we consume currently, were kinda shooting ourselves in the foot.

Petroleum is a mix of very many chemicals just as those animals and plants were made up of very many chemicals and rocks are made of very many minerals. For both of those reasons petroleum isn't one element.

It is not needed for any life on earth. If you were to remove all of it, it would have no environmental impact.

For a complete explanation, not claiming anything for or against human accelerated climate change, but just check out Ocean Acidification and you probably need a primer on the Carbon Cycle.

https://en.wikipedia.org/wiki/Ocean_acidification

https://en.wikipedia.org/wiki/Carbon_cycle

By my logic, if we left all that oil deep underground where it is, in geologic time it will eventually be recycled into the Earth's mantle through plate tectonics. So I don't see how it makes any difference on a planetary scale whether or not we leave it in the ground or extract it all to the surface. What we do with it once we get it up? That's a different question entirely. My opinion.

if petroleum is like some kind of blood for the earth

It's not. Unless maybe in esoterics and religion as a symbol.

does it has any real purpose in nature?

Is is part of nature, it doesn't have purpose for itself.

In the past people has burned mummies as a form of fuel. Today we burn petroleum which I was taught is dead animals and plants from the past. Is it?

Technically it's stored energy from the sun. So yes(I guess), as long as it burns it's fuel.

or is it a form of blood that fuels life on earth, like soil fuels plants to grow, or like air fuels in our lungs?

No; no more like the sunlight plants use; no the opposite.

I understand we consider it to be toxic because we can't drink it. But if it harvest some kinds of bacteria,

Toxic is usually meant toxic to humans. What's toxic to humans doesn't have to be toxic to other animals, plants or microorganisms.

Aren't we burning one "element" needed to harvest life on earth without knowing?

No. It's not an element alone, it's combinations of elements. Very simplified it's like this: Plants filter it out from the air with the help of sunlight, it goes back into the air after being burned in fires or a living being.