Oil in American Shores and Its Accessibility - Research Paper Example

Oil Introduction Open thesis: Oil in American shores and other global reserves like Middle East bears a significant history that comprises unending wrangles due to America’s intention of investing intensively in the market to satiate its state’s high demand for petroleum. It is undeniable that America in comparison to other global states maintains high demand for oil due to its diverse economical facilities that depend on the commodity (Bruce, 2007). These entail transport and industrial besides other domestic purposes that heavily rely on oil or petroleum products. Hence, forming a potential market to the oil-producing states where mostly they tend to have the final say regarding the commodity’s price. However, it is not that America lacks its own reserves, but their yield is inadequate to provide for its large population that normally consumes approximately 6.6 billion barrels annually (Bruce, 2007). This prompted the state to seek other sources of oil that will manage to cater adequately for its demand. America yielded to 21% investing in other states compared to its direct dealing operations. This was in the form of establishing corporations that will specialize in either oil drilling or having other diverse roles in ensuring adequate attainment of oil in the oil rich states, and in turn benefit; hence using diplomacy (Hitchcock, 2010). Currently, America produces 21 billion barrels that normally provide 6.6 billion barrels of oil meant for its population’s demand annually. According to conservationists, this annual consumption is adequate in providing America for 3.5 years, but only through proper application of other substitute saving methods besides effective technology especially in the transport sector. However, studies indicate America’s oil consumption trend continues to augment, where by the year 2020 according to Ghouri’s statistics would read 24,900, 2,596, 2,321 thousand in USA, Canada and Mexico respectively. This was a comparison with the year 1999 oil consumption statistics having 19,519, 1,943, 1,970 thousand in USA, Canada and Mexico accordingly (Ghouri, 2001). The augmenting demand trend has prompted America to depend on imports from other states, since the reserves, that it possesses does not equal its consumption. This is because the demand is outdoing the already diminishing reserves’ production. Studies indicate that American shore reserves are diminishing, which leaves the state with no alternative except offshore drilling, which is expensive. This is due to the capital necessitated and frequent natural calamities that may threaten the oil venture, hence making the state incur massive losses in running the firms (Ghouri, 2001). America’s effort in search of oil to satisfy its population’s demand has prompted it employ diplomacy. This is especially in the Middle East, where its involvement in the oil market and plan to associate with them has prompted mixed reactions (Yetiv & Feld, 2007). Hence, brewing unending wrangles that have not resolved to date, but continues to result to other complicated predicaments in the globe like terrorism. Terrorism besides other problems like piracy usually emanates from oil interests (Hitchcock, 2010). America’s plan to establish association with these states did not receive a light reaction, since many saw it as a rapport intended to control and benefit itself at the expense of the owners’ reserves. Hence, wars that have persisted to the present erupted, for instance, invading of Kuwait by Iraq, which prompted America then under Bush intervene promptly (Ghouri, 2001). America claimed that its intention was to ensure there is peace amid those states and shun any interruptions that would prevent smooth performance oil market. This incidence to America was a success, since it yielded to significant decrease in oil price that has never witnessed before from $32 to $19. Since this, incidence and institution of SPR granted America privilege to be acting as an arbitrator among warring states that seem to threaten global peace. According to numerous states that have fallen victims of this plan, they argue that it is America’s strategic plan to rule and even control the states that possess oil reserves (Bruce, 2007). Other wars that have yielded even to destruction of property besides leaving numerous people dead include Gulf and Suez. These together with other currently concluded wars like that of Libyan all encompass Arab and related states that normally bear quite significant oil reserves. Arguments for and against these wars vary depending on the two sides, where the Arab states who mainly is religious extremists claim to be executing their holy wars commonly known as Jihads. This has even yielded to eruption of dangerous groups like Al-Qaida and Al-Shabaab that are out to accomplish their own interests (Bruce, 2007). Their aim is to avenge themselves and attack the states that seem to be America’s allies or argue against their moves, for instance Kenya which has waged AMISOM to root their headquarters from the war-torn state of Somalia. However, according Yetiv and Feld, America has at disposal unused powerful weapon, which when, applied will silence the boasting Middle East states like Iran (Yetiv & Feld, 2007). Since, America is the leading oil market consumer to numerous states that claim to have significant oil reserves and export their excess yield. Yetiv and Feld’s study argue that in today’s’ global market, both the buyer and seller has equal powers. This implies that the decline of the party one from participating as necessitated in the market, would adversely affect the progress of the other (Yetiv & Feld, 2007). Consequently, America being the chief consumer can effectively use market power through cutting down its daily high demand. This will be via adopting other substitute methods and technology to ensure that it does not rely heavily on imported oil. Hence, influence oil price besides humbling Middle East states and cooperate as necessitated in the market. This tactic would be effective, instead of America applying unsuccessful warfare or diplomacy tactics (Yetiv & Feld, 2007). America’s deployment of market power will have grievous impacts on Middle East states. For instance, states like Saudi Arabia and Venezuela who intensively depend on oil export for their economic survival (Sharp, 1950). The states revenues constitute 70% and 76% respectively, hence indicating a decline in America’s market, which will be a significant blow to their economies. In applying this tactic, America lacks appropriate strategies to implement it, though, at earlier times, it seemed to work but disrupted by numerous political ideologies over the past decades. This is because both the democrat and republican regimes, after assuming power normally bear diverse intentions besides personal that tend to disregard the essential national interests. Additionally, according to Sharp’s (1950) studies, America incur immense expenses in each time it applies either diplomacy or war tactics. For instance, during the warring 1942-1945 years, America’s oil demand augmented by 6.8% (Sharp, 1950). Since, both the land and space facilities required petroleum products, which still led to the increase of the state’s expenditure. Conclusion The accessibility oil in selected global states that possess significant reserves have contributed to a remarkable history amid these states coupled with unending wrangles, which to date have not ceased. America due to its high oil spending that surpasses its reserves’ production prompted it to invest intensively and establish diplomacy with other states. However, this did not go well with some states especially the Arab nations, which interpreted America’s move as a devised weapon to manipulate and benefit self while using their precious commodity. The aftermath of this were unending wrangles that saw the eruption of other numerous and dangerous extremist groups that claimed to wage holy wars against the America. However, America has unutilized and powerful market weapon that will enable it deal with these states effectively by adopting better ways that will lower its oil consumption. This will influence prices in the market especially to the states that rely on oil as their economy chief booster, hence humbling and silencing Middle East states like Iran. References Bruce, A. B. (2007). The Strategic Petroleum Reserve: U.S Energy Security And Oil Politics, 1975-2005. Texas: A & M Press. (Book Review). Ghouri, S. (2001). Oil Demand in North America: 1980-2020. OPEC Review, 25(4), 339-355. Hitchcock, P. (2010). Oil In An American Imaginary. New Formations, (69), 81-97. doi:10.3898/NEWF.69.04.2010. Sharp, R. R. (1950). Americas Stake in World Petroleum. Harvard Business Review, 28(5), 25- 41. Yetiv, S. A., & Feld, L. (2007). Americas Oil Market Power: The Unused Weapon Against Iran. World Policy Journal, 24(3), 53-62. Read More