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Economics of Oil and Gas
The oil industry has found and produced expensive and difficult oil from new provinces at a maximum rate possible. This has left abundant, easy and cheap oil in the hands of IOPEC countries in the Middle East. The latter were forced to a swing role hence making up the difference between the world demand and what can be produced by other countries. This was contrary to the normal economic practice hence concealing gradual impact of growing shortages, depletion as well as the rising cost. The depletion of oil refers to a decline in the production of oil of a well, oil fuel or even a geographical area. The predictions of rates of oil production by Hubbert peak theory are made on the basis of prior rates of discovery as well as the anticipated rates of production. Therefore according to this theory once the peak of production is passed the rates of production will enter an exponential decline (Campbell & Laherrere,1998). This is because eventually the world will ruin out of oil.it takes over 10 million years, particular geological processes as well as a mass extinction of dinosaurs and other ancient creatures for crude oil to be created. This therefore makes oil to be classified under nonrenewable resources. However it is difficult to state the exact time when we will run out of oil since we are not able to look into the mantle of the Earth to ascertain how much oil is left there. This means that once the peak of production is reached no matter how many new discoveries are made they would not be able to keep up with the depletion (Jamail, 2011). The truth of the matter is the depletion oil never stops. It begins as soon an oil well starts production and continues for 24 hours a day, and 365 days in a year. Furthermore it is not the news that there are discoveries in oil all…
Reference
Campbell, C. (1998) Peak Oil: A Turning for Mankind. Retrieved April 14, 2014 from http://www.greatchange.org/ov-campbell,peakoil_turning_for_mankind.html
. Campbell J. & Laherrere J., (1998). The end of cheap oil. Retrieved April 14,2014 from http://dieoff.org/page140.htm
Jamail D., (2011).The Scourge of 'peak oil.' Retrieved April 14,2014 from http://www.aljazeera.com/indepth/features/2011/07/201172081613634207.html
Flynn P., (2013). OPEC shudders as shale revolution could spell demise
Retrieved April 14, 2014 from http://www.futuresmag.com/2013/03/14/opec-shudders-as-shale-revolution-could-spell-demi
OPEC The Organization of Petroleum Exporting Countries (OPEC) is a cartel that was formed in 1960 with an initial membership consisting of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The background milieu is that the world was in a state of decolonialisation at the time. The world oil market was dominated by seven major oil companies, all from developed nations, while the OPEC nations were all developing nations. The birth of
So too does the modest recovery of a portion of oil value in the first half of 2009, which saw a more consistent gain in cost due to the shifting impact of the American dollar and the Euro. As a recent report from the Dow Jones Newswires denotes, "Oil gained some ground earlier, propped up by a weaker dollar, after a report showing that consumer confidence was rising in
S. Or European nations. Other Players' Support It must also be made clear that the other oil interests are supportive of the goals of OPEC to increase the price of oil, as they then can demand the same or close to the same prices, based upon market contracts and also make more profit. This is another reason why OPEC has been so successful in its bid to monopolize the market, it is
Petroleum Exporting Countries (OPEC). Specifically it will discuss how the United States deals with OPEC and oil prices, and how the United States has failed to create a viable energy policy that will allow the country not to depend on OPEC's control of the oil market. OPEC is a group of countries that export oil around the world that have banded together to control the supply and price of
That is precisely what has occurred in Iran to date (Ajami, 2008; Larsen, 2007). However, the danger posed by continued Western reliance on OPEC oil in the form of financing that ultimately funds anti-western terrorism may be even more significant. Conclusion Ultimately, the principal question raised is not whether or not nuclear energy is safe and economical and beneficial to the atmosphere; it is whether nuclear energy is comparable to or
While I could lose on this particular investment, if I made this investment several times, I would come out ahead with a 146.5% payoff. It should be noted that a key step in this process is to evaluate the quality of the estimates. The expected value of future cash flows is only as valuable at the information that goes into deriving them. It is a situation of garbage in, garbage