International Oil Politics - Essay Example

Politics of Oil Top three countries with the most oil reserves The country with the most oil reserves in the world are Saudi Arabia, Venezuela and Iran respectively. 2 Top three countries in petroleum production The countries that produce the most oil in the world are Saudi Arabia, Russia, and United State. 3 The difference between reserves and production Oil reserves refer to crude oil deposits that are existent but have not been used up. Oil reserves are measured in size and location. Oil production refers involves the process of extracting the oil from the reserves. Evaluation of oil reserves is conducted on a regular basis. Most of the time test conducted on the oil reserves show the size of the deposits is more than first observed. (Campbell, C 67) 4 The three top oil exporting countries The three top oil exporting countries include Canada, Saudi and Mexico 5. Ranking of the United States in petroleum usage The United States has utilized majority of its own reserves. The United States now imports over half of its oil. The United States is currently the biggest consumer of crude oil in the world. Energy costs take 8% of the GDP of the United States. The United States is conducting a geological survey to evaluate its oil reserves. 6. What countries belong to OPEC? OPEC refers to organization of the petroleum producing Exporting countries. This is a cartel of twelve countries namely United Arab Emirates, Saudi Arabia, Ecuador, Venezuela, Iran, Qatar, Libya, Nigeria Kuwait, Angola, Iraq and Algeria. The headquarters of OPEC are in Vienna. They hold regular meeting represented by member countries oil ministers. In 2008 Indonesia withdrew from the group due to its declining reserves. 7 The three top countries with most natural gas reserves As of 2006, the top three countries in order were Russia (1,680 trillion cu ft), Iran (971 trillion cu ft) and Qatar (911 trillion cu ft) respectively 8 The three top countries with most coal reserves The countries with the most coal reserves in the world are the United States, Russia and China respectively. There are about 847 billion tones in the world. These are enough deposits to last the entire world for the next 130 years at the existent level of production. 9. What are tar sands (also known as oil sands)? Tar sands are a naturally occurring bitumen deposits that are composed of a mixture of water, clay or sand and bitumen. They are also known as extra heavy oil or oil sands. 10 Place in North America with a lot tar sand A survey conducted by the United States Geological Survey show areas around Arctic Alaska, Amerasia, East Greenland Rift Basins in North America have large deposits tar sand. It’s estimated that 84% of gas and oil production would take place off shore. 11 Reasons why tar sands are problematic as an energy source Like any non-renewable energy source tar sand affect the environment. When being mined toxic chemical infiltrate rivers and other water bodies. In addition because of the high carbon emission it causes deforestation. Most of time a large section of trees, bushes, top soil are cleared thereby causing environmental degradation. 12 Causes of the 1973 oil crisis The oil crisis in 1973 emanated when the then Organization of Arab Petroleum Exporting placed an oil Embargo on the United States of America. It came about after the United States supplied Israeli with military equipment during the Yom Kippur War. The embargo was placed on October 1973 to march 1974 (Campbell, 89). 13 Prior to the 1973 oil crisis, nominal oil prices per barrel settled at about $3 14 The peak price of oil in 2008 was 145 USD per barrel 15 Today, 8th June 8, 2010, the price of oil per barrel is 72.18 USD. 16 The 1979 oil crisis which is also known as the second oil crisis resulted from the Iranian Revolution. Massive protests that led to the fleeing of Mohammed Pahlavi, Shah of Iran, also disrupted the county’s oil sector which led to the suspension of exports from the country. Widespread panic in the US of looming oil shortage drove higher the price of oil. 17 The Exxon Valdez oil disaster too place in Prince William Sound in Alaska. The tanker hit a Bligh Reef in Prince William Sound and spilt an estimated amount of 250,000 barrels or 10.8 million gallons. 18 What were the effects on the Alaska fishing industry? Microbial populations were destroyed. A lot of herring and salmon eggs were destroyed leading to decline overall fishing population. The fishing industry was devastated. 19 If gasoline cost $3.00 a gallon About what percentage of that goes to the production (exploration/drilling/extraction) sector? a) About 46 % goes to production costs. b) The refining sector takes 6 % c) Government taxes (federal, state, local) 10% percent in cost d) The owner of a gas station makes 2% in profits from oil revenue. 20 Why would china and India want to use population as a yardstick? a) China and India uses population as a yard stick because they have large population. They have large energy requirements as compared to countries with less population. b) Why would the United States want to use the GDP as a yardstick? The US uses the GDP product as a yardstick because its industries rely most on crude oil. They have a moderate population as compared to countries like china and India. 21 Why china is so concerned with upsetting Sudan officials? Because of high energy needs china imports considerable amounts of oil from Sudan. It has decided to overlook Sudan’s human right records in order to get guarantee of crude oil supplies from the African nation. 22 Why china is concerned with upsetting Iranian officials? China does not want to vote on sanctions on Iran because it would mean that it will stop getting crude oil imports from the Middle Eastern country. 23 Obama’s administration has given high priority to energy independence and alternative energy, what benefits will success in this regard has for our country? America will stop relying on imports from other countries because it will be able to meet the domestic market requirement. 24 What is the status and extent of the pipeline through Iran? a) The oil pipeline is still in it development stages. Negotiations are still going on the location of the pipeline should take b) What is the status and explain and extent of the pipeline through Afghanistan? Security questions have been asked concerning the pipeline passing in the Arab country. Negotiations and plans are still going on the pipelines development. 25 In what year did US oil production peak? According to Deffeyes (45) oil production peaked in the United States in the year 1970. 26 The United States now imports over half of its oil. The United States is currently the biggest consumer of crude oil in the world. Energy costs take 8% of the GDP of the United States. The United States is conducting a geological survey to evaluate its oil reserves. 27 What are the four sectors that use the demand oil energy the most? Which sector uses the most oil energy? These sectors are transportations, commercial, industrial and residential. The largest consumer of energy is the industrial sector. It consumes 33% of the energy needs. 28 How much oil is thought to be found in the largest oil fields of Iraq? Ghawar has an estimated amount of 30 billion barrels; West Quran has 21 Billion barrels, Majnoon ahs 13 billion barrels, Rumaila and Khuzesatn has 17 and 100 billion barrels respectively. References Campbell, Colin, the coming Oil crisis, Multi-science publishing, New York, (1997) Deffeyes, Kenneth, Hubbert Peak: the impending world oil shortage, Princeton University press, New York, (2002) Read More