United States Oil Dependence

United States Oil Dependence 2007 Introduction

In The Economist edition few moths ago , there was a highlight about the importance of oil price in influencing the macroeconomics of a country The article focuses on the influence of OPEC in determining of the world 's oil price . According to article , last year when oil price reached 80 a barrel , the fact was oil was not in short supply and he stocks was huge . However , the price was high due to oil producing countries did not increase the production and thus leave very few

spare capacity

For instances , few months ago , Saudi Arabia , as the country that holds the largest oil reserves commenced cutting oil production . This cut is officially made in the regular meeting of OPEC (Organization of the Petroleum Exporting Countries . The result of the formalized decision is members of OPEC produces less than 1 million barrel a day . Since the worldwide demand continues rising more than 1 million barrel a day (into 84 millions , the oil price was high

The situation occurs again in these days as oil price skyrockets near to 100 a barrel . Immediately , the condition forces government in several countries to make appropriate correction in their budget in to minimize skyrocketing deficit for 2007 fiscal year Thesis Statement

Despite the threat of skyrocketing oil price that will impact on retail price on most merchandise , still we , consumers , hardly reduce the consumption of gasoline that means we contribute to the increase demands for oil . In large scale , the condition refers that a country has a heavy dependence on oil as energy to run millions of vehicles , run factory machines , light up electricity in rural areas , and many more

Concerning the oil dependence , this will highlight several problem and possible solutions that have been attempted or proposed in to run away from oil dependence in the U .S . In addition , it also explains the reasons why the proposed solutions have failed or why potential solutions will or will not work . Some issues that this will take into account include industrial revolution , OPEC environmentalist , and the continual efforts to develop alternative energy

Problems

In the second half of 2007 , the oil price seemed unstoppable as it is near to 100 a barrel . In an article at HYPERLINK "http /www .oil-price .net " www .oil-price .net , an author presents a reliving expectation that in the future the U .S . consumption will drop significantly as alternative energy starts take places . According to analysts , the most attractive solution to energy crisis is the use of bio fuel to run vehicles and machines at plants . This solution has risen dramatically in use in major European countries like Germany and Netherlands (JeriCan , 2007

However , the use of bio fuel in large number also presents another problem as it cause shortage of vegetable oil quickly . The situation also causes another major issue like global warming as many forests in tropical countries are transformed into palm oil plants

Figure 1 Oil price as...