Prodigy Oil and Gas
More than a century and a half after its discovery, oil continues to
play an essential role in the global economy, despite fears that
reliance on petroleum is fueling rapid climate change. Over the last
decade, the
price of oil has taken a roller coaster ride, usually in a
cyclical pattern that is in sync with the global economy. A strong
economy tends to increase the demand for oil and drive up the price,
while a weak economy generally has the opposite effect.
As a rule of thumb, economists say a $10 decline in the price of a
barrel of oil increases economic growth 0.2 to 0.3 percentage points,
helping many businesses dependent on oil, like airlines and makers of
plastics and fertilizers. But the opposite is true as well, and the
surge in gas prices in early 2012 raised fears that it might damage the
still-vulnerable economic recovery. But the price leveled out later in
the year — perhaps in a reflection of slowing growth.
Overall, oil consumption has dropped more than 5 percent since 2005, while natural gas use has risen 10 percent.
Overview
While it remains the top source of energy, oil has fallen off its
pedestal since the energy shocks of the 1970s and 1980s, which proved
how reliant the developed world had become on
petroleum products, and
how vulnerable it was to shortfalls in supplies.
In 1973, oil accounted for 46 percent of the world’s total energy
consumption; by 2005, its share had declined to 35 percent. But oil
remains well ahead of other energy sources: coal meets 25 percent of the
world’s energy needs; natural gas is next with a market share of 20
percent; and nuclear power meets 6 percent of the planet’s energy needs.
Besides price volatility, concerns about energy security, as well as
the environment and the threat of global warming, have put oil’s
position under pressure. There are also concerns about the effects of
instability in the Arab world, as well as tensions between the United
States and Iran.
The U.S.: Inching Toward Energy Independence
Across the United States, the
oil and gas industry has been vastly increasing production,
reversing two decades of decline. Using new technology and spurred by
rising oil prices since the mid-2000s, the industry is extracting
millions of barrels more a week, from the deepest waters of the Gulf of
Mexico to the prairies of North Dakota.
In November 2012, a report by the International Energy Agency concluded that the United States would overtake Saudi Arabia as the world’s leading oil producer
by about 2017 and become a net oil exporter by 2030.
Increased oil production, combined with new American policies to
improve energy efficiency, means that the United States will become “all
but self-sufficient” in meeting its energy needs in about two decades —
a “dramatic reversal of the trend” in most developed countries, the report said.
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Source:http://topics.nytimes.com/top/news/business/energy-environment/oil-petroleum-and-gasoline/index.html
