The Impact Fossil Fuel Has Had On Economics

It is not an exaggeration to state that the oil and gas industry has a major impact on how the world operates. Despite all the talks about the imminent decline of the market, trends still suggest that the industry is still relevant today. Current statistics show that oil accounts for around 33 percent of all the world’s energy. With more people living longer, there is a pressing need for societies to have power. This has driven oil consumption to almost mind-boggling levels. Industry experts suggest that energy can be argued as the primary reason for globalization. Without it, current technologies would not exist. Yet this is a far-reaching statement; one that is perhaps too big a concept to grasp. To better explain the practical and perhaps, direct, impacts fossil fuel and oil have had on society, experts have listed a few examples.

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A booming transportation industry: Considered the keystone to any logistical network, transportation plays a vital role in economics. What drives these trucks, cars, and other vehicles is derivates of gasoline and diesel fuel. With more companies operating on a global scale, more transportation vehicles need to be made. Even with other forms of alternative energy cars, gas and oil will still be needed to operate other parts of the transportation sector.

83 percent of the world has just begun to consume oil: Westerners have a hard time understanding this, but the truth of the matter is, much of the world has only now begun using oil. The growing market in oil consumption means dramatic shifts in not only their local economies but how international policies will play as well.

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Lastly, one cannot talk about economics and fuel consumption without referring to the price inelasticity of demand. There is an assumption that completely removing oil production will improve environmental conditions. People often confuse alternative forms of energy like solar and wind (which is used for electricity) with fuel consumption (which is used for transportation and gas). There is still no significant substitute to the oil market, and improving extraction technologies also imply fewer carbon emissions from existing refineries.

As a successful oil and gas industry entrepreneur, Cody Winters is on a mission to educate fellow investors and operators about the many facets of this lucrative and important industry. Learn more when you follow this Twitter account.

Not a Drill: Iran As a Player In The Oil And Gas Industry

In 2014, the United States became the world’s largest oil producer. This shook the normalized global economic order and stirred some internal cultural shifts in significant oil-producing countries. The fracking boom, responsible for the oil and gas preeminence enjoyed by the U.S., along with simple economic realities, also sent global supply outrunning demand. The oil-exporting countries that are not taking this too well---Russia, Venezuela, and in the spotlight, Saudi Arabia---are now in a pickle apropos cooperation toward curbing global production.

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While the U.S. is also hurt by falling oil prices, it can afford some ascendancy where supply is concerned. It can go as far as being the playground elder, giving Saudi Arabia a sermon about sharing oil markets. President Barack Obama’s landmark leniency toward Iran has also thrown up conspiracy theories about the causes of falling oil prices. Some have accused Saudi Arabia of sabotaging the prices to put competitors like Russia, Iran, and the U.S. in a tight spot. Some see the U.S. using Iran as a pawn against Russia.

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Wherever the undercurrents lie, Iran will again be making its mark in an industry where it has a historical and competitive advantage. Before Western sanctions obstructed the flourishing of its oil and gas industry through the denial of Western technology, Iran exported oil to Europe. The relationship has been given another go this year, with the signing of the nuclear treaty and the lifting of the embargo. Iran will also likely look to the Old World for technologies in refining and developing hydrocarbon fields.

Its four-year absence in the industry might reveal new, oil-hungry export markets such as China, the world’s largest importer, Japan, and India. The country’s oil potential could revert to pre-sanction, historical highs of six million barrels a day, the going rate on the eve of the 1979 Revolution. Iran’s potential in the oil and gas industry could introduce more geopolitical upheavals, not least in the board rooms of OPEC.

The president and founder of Southlake Resources Group, Cody Winters is an experienced and accomplished oil and gas businessman for over 12 years. Visit this blog for more updates about the industry.