MGT/426
The United States depends more on foreign oil than domestic oil. Almost 40% of U.S. energy needs are met with the use of petroleum products. But, according to some reports, 40% of oil is produced domestically and the rest is sourced internationally. With this inherent disadvantage, the United States is left to fund their share of the oil to supply the demands of the American consumer. Many of the OPEC countries, where the oil is sourced from have very fragile political environments. The U.S. oil policy is in dire need of change. The necessity is to be able to drill and produce more oil in the United States and be less dependent on foreign producers. By doing this, the reliance on others is minimized, consumer cost is lowered and jobs are made available in America. The change will help meet current and future demand and make America self-reliant – to the extent possible. But, we need to realize the implications of change.
Cycle of Change
Change within the Cycle of Change
The oil industry is a key determinant of, not only U.S. energy policy, but also its foreign policy. Over decades, the U.S. has relied heavily on import of oil from OPEC countries. Although the economic growth of the U.S. has not been overly hampered, this reliance on foreign sources has put a squeeze on finances and increased security risk. There is a lack of control on global oil pricing and one can see massive fluctuations in the economy and commodity markets. For secure economic growth, stability is important and the U.S. is investing and researching in shale energy to implement changes. To begin with, the States of Utah and Colorado, have huge amount of shale deposits, which are currently being researched to source hydrocarbons. This is an example of ‘discontinuous change’ – change that is not expected or experienced before. The deposits are known to hold around 3 trillion barrels of oil. This discontinuous change will rapidly affect the country’s future and global policy. While the process of producing hydrocarbons from shale is still under experimentation, it is widely believed that once the process is implemented, the U.S. will become the largest oil supplier in the world. This kind of discontinuous change will impact world dynamics. OPEC countries will need to compete on prices and can no longer demand exorbitant $100 per barrel rates. Countries in those regions will see a detrimental impact on their economy. Inflation in many of the emerging markets will reduce due to low oil prices. The burden of oil import will reduce globally, but the U.S. will then begin to dictate oil markets and pricing. Once this experimentation is done, the ‘Continuous Change’ cycle will commence – an expected scaling of process operations. More and more licenses will be given by the federal government to lease the land and produce oil on a sustained basis. This kind of change will produce long term beneficial effects to the U.S. jobs, economy and growth. Although the path to implement these changes is tedious, self-dependency will secure the future of jobs and the country. Hostile countries can no longer hold America hostage by controlling the price of oil. The United States Government Accountability Office (GAO) and private industry estimates that the, “amount of oil recoverable to be around 3 trillion barrels.” “In the past 100 years – in all of human history – we have consumed 1 trillion barrels of oil” (Farnham, 2012). This information shows that if America were to seriously begin recovering oil from areas such as the rock of the Green River Formation, it would be “equal to the entire world’s proven oil reserves” (Farnham, 2012). These changes will affect global warming, wild life, greenhouse gas emissions and air and water purity. The technology also requires the use of large quantities of water, which, in the dry areas of Utah and Colorado, is a scarce resource. This cycle of ‘discontinuous and continuous change’ will really disrupt local communities, the global oil economy and world order, in future.
Reference
Farnham, A., (2012). An American Oil Find That Holds More Than All of OPEC. ABC News.
Retrieved from: abcnews.go.com/Business/American-oil-find-holds-oil-opec/
McMahon, M., (2015). Where does the US Oil Supply Come from? WiseGEEK,
Retrieved from: http://www.wisegeek.org/where-does-the-us-oil-supply-come-
