Oil and Gas Prices

Oil and Gas Prices Introduction In the recent past, there has always been news or reports on the rising gas and oil prices. In the recent past, prices have risen from a little over a dollar per gallon to at least $3.47 per gallon. This is according to Forbes (2008), a congressman of the Virginia fourth congressional district.Advertising We will write a custom essay sample on Oil and Gas Prices specifically for you for only $16.05 $11/page Learn More There have been reports that this trend would continue for some time even to a price of 30 more cents per gallon. These increases in prices have been an issue since they have been straining most of the families’ budgets. Forbes says that he has been receiving emails and letters from his constituents regarding the issue seeking to know why the prices are rising at that rate. If this situation continues for a while, it could have much effect on the world’s economy as it would impact strongly on the families and business es as well. The following paper seeks to find out the effects of these fluctuating prices on the environment and the economy and the effects of going green with/without the oil and gas. According to Forbes (2008), the rising gas prices in the past couple of years could have been caused by several factors that have had individual pressure on the energy system. They either influence the price of crude oil or production and marketing of gasoline and the interaction of these in a single market affect the overall gas prices. Some of them include; crude oil prices – their prices are determined by the demand and supply in the world. The OPEC countries are the determining factors since they decide on what to produce and export. This means that the more they produce, the less the prices will be. However, due to the fact that oil is traded in the world market, whatever happens on the ground in these countries could greatly have an effect on the amount of oil produced at a particular ti me of the year. Some example of such events that have affected oil prices in the past include; the OPEC cartel decided to raise production quotas despite the fact that they had previously reduce them in the year 2002. The increasing population in china, India and developing worlds has seen most of the people in these countries have access to automobiles hence increasing the demand for gas and oil in these countries.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More There have been disruptions in countries that produce a lot of oil like Nigeria and Venezuela. Another reason for the increased oil/gas prices is the refinery imbalances – the rising economic growth in the US has created some imbalances in the refining industries since the demand for gasoline is increasing daily and with the declining refining capacity, a lot of constraint has been put on the available oil forcing them to increase prices. Seasonal changes are another factor that has caused the fluctuating gasoline prices. This relates to the time of the year and in this case, gas prices are higher during summer and holiday seasons as many people in America are traveling and hence the demand is high. Forbes (2008) explains that not only crude oil production that impacts on the fluctuating prices rather there are factors such as environmental programs, competition in the local market and proximity of supply. In this case, people living in areas far from the Gulf Coast which is the area where gasoline is produced are likely to pay higher prices since the total price will cover the transportation expenses. Prices also vary according to the competition in a particular area. For instance, the rural areas might experience higher prices since there are not many stations offering such services and on the other hand, those areas with several stations will have fairer prices due to competition. Accordin g to Forbes (2008), the increasing prices have had impact in various sectors in the US. In farming, farmers use energy in processes like fertilization, and due to the increased prices in energy, they have been forced to cut down the amount of produce in a year. This in turn has increased the prices in the amount of food stuff and burden is left on the consumers. Reports by US department of Agriculture said that between 2000 and 2005, the fuel cost on farming rose by 10%. In manufacturing, manufacturers are also not left out as the increased cost on energy used to produce goods forces them to increase the prices of the goods produced and at times they are forced to lower their workers’ salaries. This in turn puts pressure on consumers and workers and strains the economy. The tourism department has also been affected since airlines and bus lines need fuel for them to be fully operational. Some families have been forced to cut short or reduce their travel due to the increased oi l prices and due to this, cities that highly depend on tourism have had heir economy affected. Other than the overall economic effect, individuals have also felt a pinch as they are forced to readjust their budgets to pay for the high prices (Forbes, 2008).Advertising We will write a custom essay sample on Oil and Gas Prices specifically for you for only $16.05 $11/page Learn More There are many man-made machines that rely on oil and gas such as air crafts, motor vehicles and many other industrial machines for them to function. Much as they are useful, they also have some consequences that are experienced by both human beings and the environment at large. For instance, coal and oil have molecules that have byproducts of carbon, nitrogen and sulfur when they are burnt. Apart from this, they also produce some form of particles that do not burn and hence released to the environment and cause pollution (NaruralGas.org, 2004). The environmental issue that has be en on discussion currently, the green house effect, is due to the high levels of gases that are being emitted by these green houses. Naturally, there are gases in the environment that regulate the amount of heat that is emitted on the atmosphere. Researches show that increased emission of green house gases could lead to high temperatures on the earth surface and eventually have disastrous effects on the environment. Motor vehicle and aircraft emissions, paints and emissions from industries contribute to smog which is a product of carbon monoxide, nitrogen oxides and heat from the sun. When these products combine, they form a smoggy layer on the environment and can also cause respiratory problems such as lung damages if inhaled by both human beings and animals. Chemicals such as sulfur and nitrogen dioxides react with water vapor to form acid rain which also pollutes the environment, damages crops and causes respiratory illnesses in human beings (NaruralGas.org, 2004). Apart from bei ng environmental pollutants, gas/oils have several benefits. For instance, natural gas is the cleanest fuel since its combustion process produces little byproducts that may pollute the environment. It does not leave any soot or odors and if inhaled in small amounts, it does not affect human beings. Natural gas is also economical since it is piped directly to the consumer and the system is not easily affected by weather changes hence enhancing safety. When using gas and oil, they are easy to transport hence quite efficient. Oil extraction, refining and selling has also created jobs for many people in the producing countries and also improved the economy of the country though exports. Going green is a term that has been in use currently referring to the methods in our daily lives that can be used to help save the environment. According to Save the World (2009), green living entails reduction in the use of oil based energy and using only organic and chemical free products.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More One can also decide to go green at home by applying healthy farming practices through the use of organic and chemical free farm products. It also means people trying to save water by always turning off taps after use and switching off lights when they are not needed. Some people are also trying to save the world by deciding to use bicycle or walk on foot for the short distances instead of using vehicles that use a lot of gas and oils while emitting harmful gases on the environment (Save the World, 2009). All these practices are aimed at saving the environment and creating a healthier earth and in turn reduce diseases and provide healthy individuals who will be involved in developing the world. However, this move does not come without its negative effects as well. McRae (n.d) argues that as much as we are trying to save the world by using organic products, it is quite clear that such products are quite expensive than traditional ones. This also applies to the hybrid vehicles and use of solar panels which seem to be quite expensive. In this world where all are not equal, not every one is in a position to purchases such products and this means that if they can’t afford the big changes; they may not be part of the change at all. Use of fluorescent bulbs is said to save energy as they last longer and use less energy. However, there is evidence that they contain mercury and if no properly disposed, they could contaminate soil or water. Therefore, they must be recycled and this means that one has to store the used bulbs until they are collected by people concerned (McRae, n.d). In conclusion the fluctuating oil and gas prices have had an impact on the economy ranging from tourism, manufacturing and farming. At the same time, use of these products in our daily live helps us a great deal as they speed up our operations in various operations. However, they also have negative impacts as they pollute the environment through emission of gases and particles and thus causing disease. This leads to use of a lot of money for treatment purpose and as such it means that unless we try to devise ways of reducing these effects, the little we get from our businesses will always be used to offset hospital bills. Going green is a strategy being adopted by many in the world to help save the planet by reducing the use of oil based energy and organic products. Much as it is a good way of conserving our environment, it has its own disadvantages which must be looked into such as the expenses which of course are not affordable to all. Reference List McRae, S. (n.d). Negative Effects of Going Green. Web. Save The World. (2009). Going Green: What Does Going Green Mean? Web. Forbes, R. J. (2008). FAQs: Gas Prices. Web. NaturalGas.org. (2004). Natural Gas and the Environment. Web.