Explain why oil exploration in the areas shown could lead to high economic and environmental costs. (10) Oil exploration in the areas show brings many environmental and economical challenges with it. The economic cost can be very high due to the extraction techniques used as in the majority of the areas highlighted there are extraction issues due to technical difficulties such as unconventional oil, such as the Canadian Tar Sands and deep water see oil, such as in the Gulf of Mexico which is hard to access. The extraction costs for both these methods is very high and would need high oil prices to see a good return economically. To add to this these methods need vast amounts of energy for extraction, causing the high extraction cost and with this also pollute greatly as the oil is extracted and so raise CO2 and other GHG emissions before the fuel is even burnt.
Another global player are the OPEC nations. These nations have major reserves of oil, therefore can set the price of oil in its member countries. This has led to prices of oil changing, having periods of very high prices and periods of very low prices. For example, Saudi Arabia has 22% of worldwide oil reserves, meaning they can sell their oil globally to countries with smaller oil reserves meaning they can make a large profit. Nationally, different Governments are involved in the global supply of energy.
In the demand side, Methanex’s revenue was exposed to the fluctuation of the demand for methanol, since Methanex only produced methanol. This situation was more serious in the supply side, where the price the “raw material”, natural gas was subject to fluctuating prices, interruptions to supply lines and international policies and regulations governing imports and exports. In last decades, some plants in New Zealand and Egypt had to shut down temporally for fluctuating price of natural gas or political issues. The options for Methanex to solve/relieve these issues include: • Using derivatives on natural gas and methanol to hedge the risk from price fluctuation • Expanding the market in China to explore opportunities in both demand and supply sides • Exploring opportunities in areas where long-term contacts on demand (in methanol) or supply (in natural gas) instead of focusing only on the richness in natural gas reserve • Expanding new products lines to reduce the risk from strongly relying on a single product. It could also make use of the idle resources (plants, machines, etc.)
The cause of these could be over-consumption or prices rising at oil refineries. As a result of this an emergency may arise during cold winters due to increased consumption of energy. Another possible reason for an energy crisis globally could be, as to speak, smaller problems such as pipeline failures and other accidents. Infrastructure damage through severe weather could also cause a crisis. Attacks by terrorists or rebels on important infrastructure and pipelines are a big problem for energy consumers.
The country was also divided on the issue of the increasing dependence on the United States. Many Saudi’s felt that it went against Islamic law, which has led to numerous Islamic terrorist attacks in Saudi Arabia. Saudi Arabia dealt with large numbers of unemployment
The process of hydraulic fracturing is complex and has many effects on the economy, environment, and the workers. As an alternative to conventional drilling, hydrofracking has many advantages and disadvantages to it. Hydrofracking has become highly contested in the current N.Y.S. political scene.
The Suez crisis caused great controversy within Britain and also did a lot to threaten Britain’s world relations, especially with the USA. The Crisis began as a result of Egypt’s Colonel Nasser failing to get funding from the USA for his high dam project which he believed would help Egypt to become a more powerful wealthy nation and bring its industry in line with that of other global powers. Nasser then turned to the Suez Canal for a source of national income. The canal was vital to Britain and France to allow for trade with many eastern countries. Britain had recently removed its troop from the area around the canal, so Nasser decided to nationalise the canal and impose a toll which he could use to fund the dam.
Royal Dutch Shell is the largest gas and oil producer in Nigeria. However, ongoing social and political rife in the delta region continues to affect Royal Dutch Shell’s oil extraction attempts. Another challenge is the militant armed efforts of the Movement for the Emancipation of the Niger Delta, commonly abbreviated as MENDA attacks over the past have in many cases forced the company to suspend production and declare force majeure. Although oil firm royalty along with the sharing of federal oil revenues have provided state governments in the Niger Delta with bigger budgets than many countries in West Africa. Therefore, rampant corruption siphoned off a considerable amount of the revenue, thus, leaving very little for development in the midst of rising social unrest.
The countries include Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. This organisation is very powerful as it controls the amounts of crude oil extracted by countries. It's main aim is to ensure the stabilisation of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers. The grouping currently the organisation has 12 member countries. Any country with a substantial net export of crude petroleum may become a Full Member of the Organization, however the country must be accepted by three quarters of the current member countries.
Petroleum is necassaryfor many industries, and have great significance to the advancement of industrial progress in its current configuration, and that is why many nations have serious concern. Oil importanceof the world’s energy expenditurehave high percentage,