Historical Context of Sustainability: Gas Resources in Ukraine - Coursework Example

 Gas Resource in Ukraine Executive Summary The main objective of the project is to look at gas as a resource that contributes majorly to the economic growth of Ukraine. Ukraine’s exploitation of gas has resulted in the creation of many alliances through trade with other neighboring nations such as Russia. The tremendous increase in output catapulted by the increased exploitation of the resource forms the basis of the project. It is evident that Ukraine has not reached its full capacity in this sector and, therefore, the government has a lot to do to facilitate the expansion of both the industry and the market. The paper looks at the development of the gas industry over the century and factors that triggered its exploitation. Mechanisms used to exploit and transport the resource will also be highlighted, and the paper will also look at the economic and social benefits and disadvantages conferred upon the people of Ukraine. Moreover, the paper will provide a detailed analysis showing other countries that exploit gas and how some various aspects of the industry differ. Additionally, recommendations on how to improve the sector will be suggested. The recommendations revolve around the provision of better services and improving the sector to be able to handle larger capacities and external demand from foreign markets. For them to be implemented, large private investments must be directed towards the industries that deal in gas. Key words 1. Gas resource- this is a mineral resource that occurs naturally and is obtained from the ground. 2. Economic growth and development- economic growth is characterized by the rapid expansion and increase in the output of a country. The main indicator of growth is size. The larger the size, the more the growth of a given sector in the economy. However, economic development refers to the qualitative aspects of growth. It represents a general improvement in the economy. 3. Foreign markets- markets found outside the borders of a country where goods and services from other countries are freely traded. The foreign markets arise as a result of specialization among various countries. Therefore, countries wish to trade to obtain commodities that they possess a lower comparative advantage compared to other nations with absolute advantage. 4. Importation and exportation- importation is the process whereby individuals, countries or firm buy goods and services from other nations whereas exportation involves selling goods to other nations. 5. Environmental degradation- this is the process through which the environment is distorted and destroyed. The environment loses its beauty as a result of over-exploitation of land through mining. Overview Resources all over the world are not evenly distributed. Some counties are richer than others in terms of resource allocation. Other countries are poor as they are poorly endowed with resources. The resources are economic drivers and have a great impact on the growth and development of the various countries. The inequality in the allocation of resources has led to countries attaining different levels of growth. Moreover, it has influenced trade as countries strive to produce what they have and exchanging them with resources that they lack. Ukraine is a country that is greatly endowed with various minerals. The country is rich in very both raw materials and mineral resources. The most significant and dominant minerals in the country include: iron ore, manganese, coal, uranium ore, oil, natural gas, salt, graphite, sulfur, titanium, kaolin, mercury, magnesium, nickel among many others (Accounting-ukraine.kiev.ua, 2015). The country’s depth has a huge supply of non-metallic minerals such as salt and sulphur. It is also rich in manganese, iron and mercury deposits. Studies have shown that the country’s iron deposit is among the largest in the world (Ukraineatpresent.com, 2015). The availability of all these minerals in abundances is the reason why their gross output is large. Ukraine is a transit country. The geographical location of the country makes it easy for petroleum liquids and natural gas to be transported through pipes from and to Russia. The two countries mainly trade in the above-mentioned commodities. Natural gas is used as a source of energy in the country. Statistics reveals that most of the energy consumed in the country is fuelled by natural gas. This has led to more research to be conducted to provide the means through which energy can be produced more efficiently in large capacities at very low costs. The research bore fruits as it led to the discovery of major natural gas reserves in the country. The shale gas deposits that were discovered are large enough to make Ukraine self-reliant and even large enough to provide a surplus that could be delivered to the foreign markets (Eia.gov, 2015). Natural gas exploitation began very early in the country. In Trans Carpathian region, it began in the late nineteenth century and proceeded towards early twentieth century. As the use of natural gas became popular among the people and the industries, new areas were discovered, and the supply of natural gas increased. It is during the world war two that the extraction of natural gas in Ukraine soared up to early nineteen sixties. The production then drastically dropped in the nineteen seventies causing an increase of net imports of the fuel into the country. The market for the fuel has grown over time, and Ukraine has with time managed to establish a footing in the industry (Encyclopedia Britannica, 2015). The exploitation and use of gas have various advantages and disadvantages. Its exploration impacts directly on individuals, the environment. Gas is easy to transport and store. Increased employment opportunities and trade activities are some of the social benefits derived from the exploration of gas. The nature of gas makes it portable thus reducing both transport and storage costs. It also has various uses. It can be used for both residential and industrial purposes for lighting, drying, and heating. However, it should be noted that gas is a very flammable and as such must be handled with care. It also has the adverse effect of contributing to the degradation of the environment through the emission of carbon dioxide, the greenhouse effect. Moreover, it is a non-renewable resource (Conserve-Energy-Future, 2013). Development of the Idea, Recommendations and Justification Transportation system Ukraine has a wide transportation network that is well developed to ensure efficient transportation of the gas from its various sources towards the agreed destination points. The transport system is made up of numerous pipelines, compressors and active storage capacity. The transport system has to be reinforced and developed further to increase the rate at the gas flows. The pipeline connecting Russia and Ukraine facilitate importation and exportation of gas between the two countries. Markets There are a number of countries that are engaged in the exploitation and production of gas, the countries include: United States, Russia, Iran, Qatar, Ukraine, Canada, China, Norway, Algeria. The above mentioned are the major producers. The local market in Ukraine is not profitable as it was initially designed in manner that promoted low prices on the product. Consequently, the market structure has led to huge financial losses in the sector. The major consumers of the product are industrial consumers then closely followed by the residential customers. The District heating utilities rank last in the list of consumers (Anon, 2015). The markets should be established and organized in manner such that it is a win-win situation for both the suppliers and consumers of gas. This will reduce the inefficiencies in the markets that result in huge financial losses. Moreover, it will attract more suppliers as the prices will be favorable covering the operational costs. Comparison with other countries. Natural gas is produced by many countries. Therefore, there exists a great competition between these nations. The competition is usually in terms of pricing, quality, and service delivery. They compete for the consumers and investors. Countries that are more vigorous develop friendly fiscal policies that attract foreign investors. Ukraine ranks highly in the eyes of investors when the parameters under scrutiny are capital and operational costs. The country assures the investors of low operational costs. However, the country fails in its fiscal policies. It offers relatively unattractive fiscal terms to the investors which discourage inflow of foreign investments into the country. Reforming the regulatory structure and the industrial climate must be considered by the country. Low operational costs together with attractive fiscal packages should be designed for foreign investors. Such moves will attract foreign direct investments into the country, and as a result lead to the rapid growth of the sectors and the country as a whole. Conclusion Every individual in a country has a role to play in the preservation of a country’s resource. The main function of the government is to formulate the rules and regulations governing the use of the resources. It is the role of the government to provide an enabling environment that promotes commercial and manufacturing activities of both the citizens and non-citizens. A working democratic system free from corruption and other forms of negative practices motivate individuals to work tirelessly to achieve their objectives which are usually in tandem with the overall goal of the government. It is the duty of firms to provide employment to the people as they need human labor to achieve their set targets. Extraction and manufacturing Firms must ensure that they adhere to the environmental regulations and policies to preserve the beauty of our environment, thus preventing environmental degradation Ukraine ranks higher than most countries in terms of the general level of growth and development. This is attributed to the fact that the country has valuable resources such gas and oil. Ukraine is yet to reach its full capacity because of the poor systems that exist. Therefore, to increase its output, and to ensure that the standards of living of its people improve, the government should take into consideration the recommendation that have been put forward in the project. The implementation of the recommendation will result to an improvement of the gas sector and have a general improvement in the welfare of the citizens. Reference list Accounting-ukraine.kiev.ua, (2015). Economy of Ukraine | Ukrainian economy overview - mineral resources, industry, energy, transportation, agriculture | Economic impact of conflict: Units Consulting Ltd. (Kiev, Ukraine). [online] Available at: http://accounting-ukraine.kiev.ua/economy_ukraine.htm [Accessed 17 Apr. 2015]. Anon, (2015). [online] Available at: http://s05.static-shell.com/content/dam/shell-new/local/country/zaf/downloads/pdf/research-reports/Ukraine-Policy-Dialogue-report.pdf [Accessed 17 Apr. 2015]. Conserve-Energy-Future, (2013). Advantages and Disadvantages of Natural Gas Energy - Conserve Energy Future. [online] Available at: http://www.conserve-energy-future.com/advantages-and-disadvantages-of-natural-gas.php [Accessed 17 Apr. 2015]. Eia.gov, (2015). U.S. Energy Information Administration (EIA). [online] Available at: http://www.eia.gov/countries/country-data.cfm?fips=up [Accessed 17 Apr. 2015]. Encyclopedia Britannica, (2015). Ukraine | history - geography: Resources and power. [online] Available at: http://www.britannica.com/EBchecked/topic/612921/Ukraine/30105/Resources-and-power [Accessed 17 Apr. 2015]. Ukraineatpresent.com, (2015). Mineral Resources - ukraineatpresent.com. [online] Available at: http://ukraineatpresent.com/Mineral_Resources_p_15 [Accessed 17 Apr. 2015]. Read More