Sustainability in Global Business - Case Study Example

SUSTAINABILITY OF THE GLOBAL BUSINESS Student’s name Code & Course Professor’s name University City Date SUSTAINABILITY OF THE GLOBAL BUSINESS Introduction The main aim of this report is to realize an increased sales of oil and gas products from oil and gas sales in the global market. Tentatively, the kind of oil to be utilized should be of high quality and environmental friendly. In order to maximize their productivity in the global market, this industry should adopt technological advancement strategies. Furthermore, socio-economic and geographical factors should also be put into account for maximum productivity. During extraction oil and gases from their national setting, oil reserves, demand for fuel, climate change, trends in economic development and the alternative sources of energy should be analyzed (Ajayi , et al, 2016). Due to this, I decided to come up with a report postulating a 2040 scenario for oil and gas industry. The plausible sustainability challenge of oil and gas industry The main challenges engulfing the oil and gas industry is competition from the alternative sources of fuel. In the contemporary world, many people are adopting the use of electric cookers and wood fuel in their daily lives. This poses a huge competition from these products hence reducing the demand for oil and gas products. High production of biomass, solar and will energy also reduces the local market for oil and gas industry. In terms of the change in climate, the industry faces a global challenge whereby oil and gas materials emits numerous toxic gases that enhances global warming (Ajayi , et al, 2016). This global gases including Carbon (II) oxide and carbon (IV) oxide corrodes the ozone layer hence increasing global warming. Consequently, people ends up referring the environmental friendly fuel like electricity, renewable solar energy and wild mill. Many states are targeting cars and trains that uses alternative sources of energy like natural solar and electricity. This reduces the demand for locomotives that use oil hence reducing its demand in long run. There is overexploitation of oil and natural gases in Brazil and the global word. This in turn leads to low oil supply to meet the increased global demand. The market becomes destabilized due to the increased oil demand, cultivating an energy crisis in the global market which yields inflation in a given state economy. Geographically, the cases for scramble and partition for oil fields is a tragedy. This merges with political interference in the oil production industry. There is increases wars between the American states and the Asians over oil fields. This also affects the total oil and gas production as the entire mining process will be halted by wars. This in turn reduced the global peace among states decreasing the global oil supply and demand. Market offer for oil and gas industry Demand for the Brazilian oil and gas products is resulted from increased efficiency of energy, socio-demographic factors, rise in the cost of extraction of oil and the emergence of the non-convectional natural gas production Cost of oil extraction There is a reduced cost of production in the Middle East as compared to other places in the world. Other states like Brazil and USA finds it difficulty in oil extraction due to the rugged landscape. This landscape needs sophisticated equipment which are very expensive for oil extraction. They also extract oil from deep seas which attracts additional cost of production. Consequently, this cost spreads across the board upto the selling price of their oil. Demand for cheap Brazilian oil reduces making many states to purchase oil from Middle East. The chart below illustrates the cost of production of oil in different states other than Middle East (Capellan, et al, 2026). Billions of barrels cost of Challenges Produced production (US$) Venezuela 297.5 70-90 Heavy oil tar sang Canada 173.1 50-80 Heavy oil tar sand Russia 80 50-80 Extreme temps. US 26.54 50-70 Shale oil Brazil 15.3 60-80 Ultra-deep waters The increased cost of extraction in the global market deduce that there is no cheap oil though the prices will differ depending on other factors like the quality of oil, political interference, socio-economic factors and environmental factors. Increased demand for Energy Urbanization is a contemporary issue that leads to gradual rise in the oil demand. The United Nations Organization 2011 suggests that population is increasing at the rate of 0.8% annually. This will manifest itself in population increment from 6.6billion in 2010 t0 8.9billion in 2040. This will result in global urbanization mostly in Asia and African states hence increased demand for energy (oil and gas). In 2040, the urban population will be double the rural population. The chart below shows the global trend in the consumption/ demand for oil (Capellan, et al, 2026). 0.8% Projections 1.3% 2000 2010 2020 2030 2040 Increased energy efficiency The increased technological advancement is a tragedy to the oil industry. Automobiles, household equipment and machines are increasingly using electricity for their operations. Furthermore, there is increased demand for less costly machines that utilizes solar energy for their operation. This results to a reduced market for oil products decelerating their market. Upto date, Gross Domestic products have increased with only 33% consumption of energy. This trend will continue for the forthcoming 30 years whereby, by 2040, less fuel will be consumed by the world population (Ren, et al, 2016). Energy efficiency programs are being initiated by industrialized countries like United States and Brazil. These states are producing automobiles with low consumption of fuel from 2017-2025. This will reduce the demand for oil by over 4billion barrels. Non-convectional natural gas production It is evident from the non-conventional programs in Brazil, USA and Canada that in 24 year from now, 2016-2040, natural gas will increase its productivity from 61%-71%. By 2020, these countries will be the major exporters and by 2040, they will they will be producing 84% of these products to the global market (Ren, et al, 2016). Due to the increased technological advancement, there is need to embrace the element of energy efficiency programs as forwarded by the United States, Canada and Brazil. This will save the environmental tragedies and curb the aspect of global energy crisis. The political systems should be flexible enough to embrace this changes and adopt the new methods of production in the entire production The period between 2040 and today in the oil and gas industry In the contemporary world, there is increased market for oil and gas industries. This is resulted from the increase in technological advancement. He global was over oil fields have reduced crating stability and goodwill in the oil production industries. Increased population and technological advancement has created an increased pool for the demand of oil production. The political systems have changed drastically. This is seen where different governments have come up with new multinational accords to come up with a huge word Organization. This is a project to embrace peace and understanding among the oil producing states (Ren, et al, 2016). The market for oil products has also increased for the continued development of oil products. The periods dominated with numerous wars reduces demand for oil crating low sales. Emerging Asian and Indian states have increased their infrastructural development. Oil production in this states have crafted a pool for capital used for educational and technological advancement. This shows the significance of oil products in this states. The GDP have increased stabilizing the economic conditions of these states (Ren, et al, 2016). The increase in the global production of the energy saving automotive and electric devices hinders the increased sales of oil products. To remedy this, the oil producing states are implementing fuel guzzling vehicles like Prado’s and Mitsubishi. This increases the sales of their oil products. The labor market for this countries is successful as this industry has got qualified pool of labor force working in oil fields. Unlike in the past years where slaves were used in oil fields, expertise are adopted who have enough skills in extraction of oil within a short period possible. Skilled labor is the strength of an effective production industry. Oil is produced within a very short period of time cultivating the ultimate goal of profit maximization. The increased population is a trending increment in the labor force. There is also an element of increased population in regards to unemployment. Many people are unemployed hence increasing the dependency ratio in the working people. This leads to sluggish development mostly in the less developed states with less oil deposits (Ren, et al, 2016). The environment is highly affected by the production of oil and gas products. In the oil fields, there have been discovered numerous fires burning huge forests. Oil mines also collapse burying miners hence numerous deaths. The emotion of Carbon particles and other gases in the atmosphere leads to the formation of acidic rains which corrodes properties. This rain is also unhealthy to human and animals lives. Emission of these gases in the upper atmospheres has yield a greater depletion of ozone layer hence increasing global warming, a resultant effect of climate change (Capellan, et al, 2026). To curb all these, the government responds by coming up with better methods of oil extraction. To eliminate the cases of numerous deaths in the oil fields, the state governments globally have adopted new methods of mining like drilling, shaft and edit methods. These are secure in the oil production sites as they curb oil field associated deaths. States governments are adopting environmental friendly fuels like solar and electricity to curb the increasing rate of air pollution caused by the oil and gas products. Industries on the other hand are recycling oil bi-products hence avoiding releasing them to the atmosphere. They as well treat the oil and gas wastes before releasing them on the atmosphere. These reduces the tendency of environmental pollution (Capellan, et al, 2026). From today to 2040, this industry will go through the following adjustments: Increased demand of its products due to increased population and marketing strategies. Sales of oil will by 80% come 2040 (Capellan, et al, 2026). High productivity resulted from the use of modern sophisticated tools in their production. Diversified oil products ranging from diesel, petrol, paraffin as well as natural gases to meet the diverse demands of customers. Increased fields for oil extraction hence increasing their productivity by 30% come 2040. Trends in oil and gas industries Global networking Many people in different continents communicate via social platforms like Skype, instagram and Facebook. This yields a marketing strategy to reach a wide market globally. Ideas on the effective production methodologies are also shared in such sites hence improving the oil and gas productivity globally (Capellan, et al, 2026). Technological advancement Use of modern methods of production using machines have increased the production of oil and gas products. This has resulted to the increased production of these products to meet the increased market demand. Use of successful transport and communication network like use of electric train has fostered the transportation of these products to their destined places. Emergence of alternative sources of energy. To curb the impact of increased pollution, there is need for alternative sources of energy. This makes many people to adopt electric and solar energy in place of oil nd gas industry. This reduces the global market for this products. Automotive are also being developed with less fuel consuming engines to safeguard the high rate of fuel consumption. Demographic increment Increased population globally have increased the demand for oil products. It has also resulted to the rise in the pool of labor in the oil mines. When new sites are discovered, there is redy labor pool for oil and natural gas extraction. Reference list Ajayi, S.D., 2016. 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