renewable energy institute colorado
Oil and Gas
Industry GAS OIL
Fady Mansour
Tavis Golden
ECO360
University Phoenix
Instructor: Tom Eustace
August 14, 2007
Oil in one form or another has always been the most useful natural worldwide resources. More than four thousand years, Herodotus, a Greek historian of the 5th century BC and Diodrus of Sicily, a historian of Sicily Agyrim 90 BC-CA CA 30 BC discovered that Babylon were using asphalt black substance found in petroleum during construction walls and towers of Babylon. In 1410 AD, the Indians have been harvesting the oil for medicinal purposes. In 1859, the country of quite strong north-western Pennsylvania that drilling of the first deposit most important and crucial occurred. The well began to be known as well after Drake called "Colonel Drake" Edwin, the man who gave the idea of drilling wells for commercial use. It was the first phase in the history of the oil industry, which has given new lease on life. (The Paleontological Research Institution, history oil)
Today, oil and gas has affected all spheres of our lives. It is the most impoverished and yet the most natural resources used by the world's economies. With the increase in new exploration and technological developments, oil and natural gas production is increasing at a rate of two billion cubic feet per day, and now Devon Energy is one of the largest independent producers oil and gas in the United States. Headquartered in Oklahoma City, it is the provision of three per cent of the gas consumed in North America and the production of 600,000 barrels of oil per day. The company is also drilling more than 2,000 oil wells each year in North America in an area stretching from Gulf of Mexico to the northernmost reaches of Canada. (O & G Oil & Gas Next Generation, 2007)
There are many reasons unpredictable, as in all economic growth, continuous development of technology, changes in energy prices, changing conditions Weather and public policy decisions that led to changes in production levels and demand and supply. According to the Energy Information Administration projections from 2007 to 2030, total production of liquid inside ranging from crude oil, liquid natural gas plant, the Earnings from refining and other refinery inputs, we expect to see a huge increase. The reason for the increase is the growth of refining and other refinery inputs. It is expected that this growth will offset any reduction in output of crude oil after 2017. This increase production has to some extent to the high-tech methods of oil recovery, increased production in the deep waters the Gulf of Mexico, the assumptions of higher resource for training Bakken Shale in the Williston Basin. (Energy Information Administration, 2007)
According to the AEO2007 reference case, total national production of natural gas, including the provision of additional natural gas corresponds to an increase of 18.3 trillion cubic feet in 2005 to 21.1 trillion cubic feet in 2022. (Energy Information Administration, 2007) This clearly shows that despite the factors which led to the increase in energy prices since 2000, the growing influence of developing countries in energy needs worldwide, the promulgation of laws and regulations in the United States, the growing need for alternative sources of energy and the need for technology Energy does not hinder the growth of oil and gas.
United States of America is one of the largest economies in the world per capita gross domestic product to $ 43.500. (The Central Intelligence Agency, 2007). The American economy depends on oil for fuel used for the purpose of transportation. Seeing the current economic conditions and increased demand for fuel, demand for light oil production worldwide is expected to increase to the point where the supply of oil will go to be much below demand. This will result in the imbalance of supply and rising price of oil and fuel in particular for military and strategic. Over 60 percent of fuel needs of United States of America is satisfied by imports and the current state of things, United States of America have to bear the cost at the price of $ 55/Bbl could be increased twice, from 9.9 MM Bbl / d nearly 20 Bbls/dby2025 MM. (Online Edition) As imports will increase, it is very likely that America could cope with shocks prices, supply shortages, and shortages of fuel. According to the EIA / AEO estimates, the average price of oil imports from 2005 to 2020 United State could be reduced gross domestic product of more than 1.1 trillion dollars. (Online Edition) The Department of Energy and the Honourable President of America suggested that the need of the hour is to rely on internal sources of the increase the supply of liquid. (Online Edition) and the best source is the production of oil shale; converted into liquid fuels, provide fuel for the transportation of military and civil purposes. Currently, oil shale resources can be found in Colorado, Wyoming and Utah and hope is on the anvil through the efforts of government, industry and other stakeholders, the oil shale production could reach 2 MM bbl / d by 2020. (Online edition)
The price of crude oil showed an increase since the last two months is expected to reach the height of its monthly average price in August The RAC of crude oil in 2007 is estimated at a rate of 64.86 per barrel, compared to $ 60.23 per barrel in 2006 and 2008 should be 68.75 per barrel. This increase is due to the tight world oil supply and demand.
2007 may attend the increase of total gas consumption by 4 per cent and imports of LNG up to 850 billion cubic feet, which would be a record at the higher level. This is evident from the fact that despite the increased demand for biofuels and other non-hydroelectric renewable energy sources and thereafter the construction of new nuclear power plants, oil and gas industry is expected to provide the same share of 86 per cent of the energy Total primary U.S. in 2030, they gave in 2005
Year after year, there has been much lower growth in retail sales to only 3.2% a year in April when there was an increase in gas stations. Due to the growth of energy prices to roughly 3.4 percent the Producer Price Index (PPI) rose 0.7% in April. Because of rising oil prices and stable demand, there was a trade deficit of 6 billion dollars. (Pod cast Directory, 2007).
According to the Chicago Fed's annual symposium of the automobile Outlook, economic growth in 2007 is considered to be slower than in 2006, inflation and unemployment increased. Energy prices also rose in the months to mid-2006, but after that they decreased by an average of $ 60 a barrel in the fourth quarter. This has led to the increase in inflation of 1.9 percent as measured by the Consumer Price Index (CPI), which is lower 3.7 percent the previous year. (Strauss & Engel, 2007)
This phrase "Oil runs the Nation grows" is obviously true when it comes to oil and gas. The rising price of oil also increases the over all consumer price index, especially September 2005, which was 1.2 percent, the highest in 25 years. The increase unimportance of energy increases the trade deficit, on the average rising oil prices led 10 percent to 150,000 Americans losing their jobs, and over we had to lose between $ 80 billion and 160 billion dollars in economic growth. In September 2005, it was estimated that 40 per cent increase in gas prices reduces consumption Total domestic 0.4 percent and GDP has fallen to about 0.9 percent. In fact, even the consumer spending has been reduced. But there an increase in profits among the major players in oil and Industry. Only in early 2005, the five largest oil companies had made profits of $ 52.2 billion, which was less in 2004, only 39.5 billion U.S. dollars. (Democratic Policy Committee, 2005).
The study on the impact of oil prices by an International Energy Agency in 2004 showed that the impact high prices on the economy will be minimal, which is also high price of oil has become the most important macroeconomic variable. It appears quite clear that new technologies are in sight, oil and gas will hit more. Gains from the industry are invested in new technologies, new production and environmental and product quality improvements to meet the requirements of the next generation. According to the Oil & Gas Journal estimates the industry spends $ 85.7 billion in 2005, while in 2004 it spent only 80.7 billion U.S. dollars in 2004 and 2003 to $ 75.5 billion. (Cavaney, 2006). The threat to the oil industry from alternative energy sources such as biofuels and other renewable energy sources and non-hydro thereafter the construction of new nuclear plants, but industry Oil and gas is expected to provide the same share of 86 per cent of total primary energy in the United States in 2030, where they gave in 2005.
(Energy Information Administration, 2007). As the above study reveals that, although the production of oil and gas is increasing, but she is unable to meet demand and maintain a balance between demand and supply, the government and the Department of Energy takes the initiative to increase in the oil shale to liquid fuels.
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