Case Study: Oil Energy

10/25/06

Case Study #1: Consumption of Oil

The United States is heavily dependent upon the supply of oil for energy. An estimated 60% of total energy is supplied by oil and natural gas. Many problems arise from this high usage of fossil fuels. Several of the problems that arise include the formation of a seller’s market, the environmental complications caused by the emissions of large amounts of fuels, and finally the interdependencies on oil and the great possibility of high-scale economic collapse if oil production is cut.

The first problem that arises from the U.S becoming heavily dependent on oil is that the companies that provide this oil have an insurmountable advantage in setting the prices and profits that they receive from sale. The seller’s market has been created because the supply of oil has been surpassed by the demand for it. Although the government and other political figures say that we are in a buyer’s market, one must remember that politics and the truth cannot be counted on. The truth is that the government says that we are in a buyer’s market to make the American people less open to the fact of corruption in the market. Think of the oil prices today in October 2006. Two months ago I would fill my car up at around $3.40/gallon. The price has since plummeted to $2.20/gallon. There has been no tapping into the emergency reserves; no sudden increase in production; nothing to lead one to believe there was a specific reason for the decrease. With politics and censorship, this sudden drop has not even gotten much media attention. My belief is that the government, specifically the Republican Party has intentionally reduced gas prices to remove any criticism and make the voters happy entering the election, which is oh by the way… in one month.

Another problem that arises from the large consumption of oil is global warming. In the past 20 years the ice caps in the north and south poles have gradually began to melt and with that has come higher water levels which cause a great deal of trouble. One obvious result is flooding. However, there has been a sudden change in the amount of strong hurricanes in the past years. The finger has been pointed to the world’s heavy reliance on fossil fuels, and the ignorance to the fact of how the emissions affect the environment. In a few decades, the beaches that we are all familiar with are going to become an extension of the ocean. Imagine wanting to take your kids to the Outer Banks in 20 years only to find out that due to global warming, the Outer Banks no longer even exist.

While there are environmental conflicts