Oil in North America - Annotated Bibliography Example

Oil in North America. [Annotated Bibliography] Cooper, J.C.B. (2003) Price elasti of demand for crude oil: estimates for 23 countries. OPEC Review 27, pp. 1-8. This article examines the implications of the very high crude oil consumption of the United States, estimating this as some 25% of the entire world production of oil, and the biggest consumption of any single nation. The perspective taken for this analysis the period between 1979 and 2000, and a comparison is made over 23 different countries. All countries demonstrate growth in the demand for oil, despite price fluctuations. Price elasticity is estimated as being low in the short run, and somewhat higher in the long run, but for most countries, including Canada and the United States, the value is still within the range -0.18 to -0.45 which is in line with the US Federal Energy Office estimates. Mexico is not measured in this sample of 23 countries. There is nothing particularly new in this article, but it provides useful evidence to corroborate the analysis of other scholars, as for example the work of Ghouris (2001) mentioned below. Van Doren, P. (2008) Review of Bruce A. Beaubouef The Strategic Petroleum Reserve: U.S. Energy Security and Oil Politics, 1975-2005. (College Station, TX: Texas A & M Press), The Energy Journal 29 (4), pp. 167-168. This short article is a review of a much longer book on the subject of the American strategic petroleum reserve which was first created after the first oil crisis of 1973-1974. Van Doren acknowledges the factual account of what happened following the decision to create such a reserve, but his review focuses mainly on the political dimension of oil policies in the United Sates from the mid-1970s until the present day. Successive presidents adopted varying strategies, sometimes using government resources to fill up the reserve, and sometimes halting this process when deficits in the budget squeezed their ability to spend freely. The impact of the Kuwait war is mentioned, and specifically as a brief interlude when the reserve was actually used up partially, and although there was an immediate drop in the price of oil , Van Doren comments that this was probably not connected with the use of the strategic reserve. A key finding in the book is quoted as this: “The SPR had been transformed from an emergency device for use during war, to a politicized price smoother” (Van Dooren, 2008, p. 168). This suggests that the original intention of the SPR has been taken over, and Van Dooren appears critical of the book’s analysis when he comments that “the author is a historian and a journalist and not an economist” (Van Dooren, 2008, p. 168). Van Dooren doubts the main argument, namely that use of public stockpiles is necessary to offset large variations in the price of oil . This review highlights the difficulty that arises when scholars try to work out what the best response is to oil price fluctuations, and how the fluctuations arise in the first place. Politics is always a factor in market analyses, and this review is a good reminder of the need to look at multiple perspectives when reading sources on the subject of oil and its market position. Ghouris, S.S. (2001) Oil demand in North America: 1980-2020. OPEC Review 25 (4), pp. 339-355. This article examines trends in the demand for oil in the United States, Canada and Mexico over the period from 1980 to 1999. It then makes a forecast of predicted oil consumption over the period from 2000-2020 using the insights that were gained from that historical analysis. Three alternative scenarios are plotted, based on low, medium and high estimates of growth. A key finding of the paper is that consumer response to price change is weak over the short term, but it grows stronger over the long term. The major factor influencing the demand for oil in North America is economic growth or decline. In times of growth, demand increases. Some effect of improving technologies has reduced the demand for oil a little, because more efficiency is being gained from oil all the time, but the article still predicts a growth in the overall demand for oil over the next 20 years. In America this growth could amount to as much as 56%., in Canada the growth is higher, at up to 67% and in Mexico only 40%. Population growth is a factor in Mexico, since every 1% of population growth causes 0.49% increase in oil demand, but this correlation is not found in America and Canada, which reflects differing levels of reliance on technology in these states. This is quite a technical article, with complex regression analysis of the trends and it would be interesting to compare its projections with the actual demand for oil in these three countries now that we are more than half way through the twenty year scenario that Ghouris projected in 2001. Margonelli, L. (2007) Oil on the Brain. New York: Broadway Books. This readable and yet scholarly book presents an overview of how the oil industry affects individual countries and also the relationships between countries as boom and bust cycles circulate round the globe. It explains how important oil is to major economies like the United States, and how it affects more marginal economies like Canada and Mexico. It is extremely informative about the effects that North American oil demand has on other oil producing countries like Venezuela and the Middle East. This dimension is often overlooked when looking at things from a purely North American focus, and it shows how decisions and policies in the developed world impact upon major issues elsewhere in the world. Quoting Kissinger, who said that “oil is the blood of the American economy” (Margonelli, 2007, p. 230) the author draws links between the Iraq war and struggles to control the world supplies of oil. The argument of the book seems to draw everything back to the influence of oil, and the dependence that North America has on this commodity, and there may not be enough analysis of political factors, such as the socialist traditions of South American countries or the Islamic culture of the Middle East. Read More