Choose one: political geography, energy, oil, or natural resources, environment, economic geography - Essay Example

Impact of Oil on the Global Economy The New York Times and The Washington Times both have reported that Organization of Petroleum Exporting Countries(OPEC) which provides about forty percent of the world`s oil, has increased the production of crude oil in the first quarter of 2012, signifying a greater than before availability of oil in the market. This increase in the supply has come after a long period of two years. Due to this excessive supply, there has occurred a drop in the price of oil, which according to the report has not yet dropped to the expected levels (Reuters).

OPEC, in its monthly report, has stated that most of this oil is being stored due less demand around this time of the year. This creates a further cushion in the availability as demand is already at its minimum and OPEC has increased production. The 12 members of OPEC have upped their output of oil from 31.18 million barrels per day in February to 31.31 million barrels in March, as seven of the member countries have reported higher production levels than expected. Saudi Arabia, the world’s largest oil exporting country is even willing to enhance its production if need arises (Nguyen, 2012).

Humans are social animals. The use of oil has brought humanity from living along riversides to living in huge industrial cities. Oil, being the major source of energy ever since its discovery, is the backbone of the modern industrial life and the most important factor in the development of today’s world. It not only is the benchmark of deciding the economic conditions of the entire globe but is also among the most consumed natural resources available on earth as a source of energy. Oil, typically termed as black gold, has great impact on the performance and growth of entire world’s economy.

According to the studies of Financial Analysts a 10% increase in oil prices can decrease the GDP by 0.5 to 1 percent.The immenseness of its impact on our lives can be estimated from the fact that governments design and formulate their policies on the varying nature of oil prices. It is self- evident by now that inflation is a consequence of increase in oil prices among other factors. Thus an increase in oil prices is depicted in the rise of food prices and other commodities and services.

From an environmental point of view, oil`s excessive use causes pollution and damages earth’s ecosystem. It is our duty to utilize the resources given by the earth in the best possible manner to conserve our planet, ourselves, and also for the generations to come.Prof. Alles has shared in class lecture how oil processing and refining can cause pollution. Air pollution is caused by human activity through burning of fossil fuels and other materials. There are many different causes for air pollution such as industrial emissions, solid waste incineration, and solvent evaporation.

The actual drilling of oil causes pollution as well. Oil companies use a lot of different equipment that operates on fossil fuel. That equipment pollutes the air to find oil that will be processed in a way which will pollute the air as well.Oil companies all over the world highly depend on geologists, geophysicists, chemical engineers, and chemists to examine and study the area before it can be drilled with very large equipment. When specialists want to discover whether an area has oil, they need to move large equipment to the area even though they do not know if they will find oil.

The machinery works specifically to pull oil from the ground and can cost millions of dollars. This must not be wasted on a gamble.As a Saudi student, I have visited Dhahran; Saudi Aramco Oil Company is located in Dhahran, Saudi Arabia. Saudi Aramco is the headquarters of the company where financial transactions are made. It has over 55,000 employees all over Saudi Arabia as of 2009. One day,my friend and I went for a drive in Dhahran city and on one of the highways I noticed very large pipes on both sides.

I asked my friend how he feels living in the most powerful city. He answered, “I hate it!” He continued saying that if you go rural areas before the sun starts to rise, you can actually see with the naked eye a big layer of smoky clouds. He said, “That’s what we have been inhaling since this company was established.” This is sad. Saudi Aramco should engage itself in serious thinking of alternative energy that can be a substitution for oil.Questions:1. Which country has the largest oil refinery of the world? (a) Saudi Arabia(b) India(c) Iran(d) United States2.

The largest oil field of the U.S. is? (a) Oklahoma City Oil Field (b) Permian Basin(c) Prudhoe Bay(d) Kaskida Oil Field3. The OPEC was found in? (a) 1955(b) 1962 (c) 1960 (d) 19584. The highest proved oil reserves including non-conventional oil deposits are in? (a) Saudi Arabia (b) Venezuela (c) Iran (d) Canada5. The International Energy Agency (IEA) was established in? (a) 1984 (b) 1980 (c) 1969 (d) 1974 6. OPEC has: (a) 12 members (b) 15 members (c) 9 members (d) 10 members ReferencesNguyen, Rupert Rowling and Lananh.

"OPEC Oil Output Rises to Three Years High in March on Iraq, Libya." Washington Post 12 April 2012.< http://washpost.bloomberg.com/story?docId=1376-M2D2D80D9L3501-19JUOLHQ1OV5L10P8F150PFSPV> Reuters. "Agency Sees Easing in Oil Market ." New York Times 12 April 2012.