Oil: To drill or not to drill

_OIL : TO DRILL OR NOT TO DRILL

The United States of America needs to advance in the direction of energy independence (Lake et . al 2008 . This will however require an all-inclusive and well laid out strategic plan that will gradually increase the provision , security and product range on the American energy reserves , encouraging the storing up of oils and allowing the creation of real alternative fuel sources for consumption at consistently controllable and reducing costs (Victor et al 2006 . To further promote this view , drilling next to the Outer Continental Shelf

could be very promising as it could potentially make available tens of billions of oil barrels while it also opens the Arctic National Wildlife Refuge for some drilling activity , thereby potentially leading to about one million barrels of oil per day (Morton , 2002 . The dream of independence is however not without some very important factors like the notable influence of Organization of Petroleum Exporting Countries (Victor et al 2006

At the moment America is yet to attain the independence feat , hence the regular fluctuations in oil prices (Waxman et . al 2005 . These oil prices , most of the time , is a simple reflection of the events of the oil interest group OPEC . During periods that the nations within the OPEC have taken hold on large volumes of extra available production capacity it has approximately regulated the oil price . This keeps prices from plummeting to an extremely low level that reflects it true market competition . This is a result of an imperfect arrangement observed in the midst of the members of OPEC to put some control on their crude oil production . Furthermore , the limits placed on capital invested in the oil production capacity also serve as a regulatory measure

In cases where there exists modest extra production capacity , the OPEC cartel will have minute or no power to stay the prices of oil products from increasing . The possible market behavior determinant influence of the OPEC will however not reduce in the coming years . This is in part due to the market allocation of oil production determined by OPEC . The price of oil products will more likely therefore continue to experience fluctuations

Though there will be continued fluctuations over prolonged stretches of time , the real or eventual price of available oil will most likely experience continued rise . The core rationale behind this is that for one hundred years or more past , the United States and other well developed countries have demanded large volumes of oil products , thereby exhausting most of the available oil resources . Hence with increase in demand at a controlled constant supply , price naturally goes up . The Table 1 shows the world primary oils demand per day . It projects the steady consumption increase for different continents of the world

Table 1 : World Primary Oil Demand (million barrels per day

Oil use or consumption is not only limited to America however , as there is a growing demand for oil products globally with increase in the industrialization levels and sophistication of Countries...