Oil ; gas Essay Example for Free

anele colour b all up EssayThe scrimping is unnatural by many factors that determine if it is strong or weak. These factors know to do with buyers consuming goods and services and at what rate they do this. Do the goods and services that be consumed by hoi polloi created wealth, jobs and a better b embrocateersuit economy for a country. Throughout history some economies feature evolved faster and stronger than an some separate(prenominal)s. Policies that the organisation places on industry, engineering and the environment burn all affect the successfulness of an economy. Of the factors that affect scotch developing the industry of Oil and gun is one that holds a stronghold in the worlds and Americas economy to twenty-four hour period. When evaluating the economic growth factor of economy and specifically vegetable oil and gas on must consider the following questions What coitionship does the factor conduct with the whole economy? How does this factor affect e conomic growth Is the factor a cause or gear up of economic growth? what would the economy be like if there were signifi dissolvet problems with this factor? What relation does a rally bank have to this factor? I bequeath answer each of these questions in respect to how economy is stirred by oil and gas. The economy in the United States today is greatly affected by oil and gas. When there are large reserves and an increase of active drills in respect to oil, the economy seems to receive a boost. This is because prices for such things like gas and oil fall and people are equal to(p) to consume more gas at a lower price. There is more translate and prices fall, therefore people save money on gas and can consume other items in the economy.People working in these industries have more job openings and more jobs filled, therefore creating a lower unemployment rate and a higher national per capita in make love. The need for substitutes are not there so, consumers leave behind co nsume oil and gas at a growing rate. Since, people use oil and gas for so many different things like heating there homes, driving their cars, and a variety of other sources, the overall GNP for the consumer volition rise. Economic growth is affected through significant fluctuations in ostentation of oil and gas. If you look throughout history when there have been fluctuations in gas and oil prices you have vast fluctuations in the economy of our country. The instability of this factor has cause government regulation to come into happen in times of crisis.For example during the mid-seventies we had the oil andgas shortage due to the Middle vitamin E cutting off supply to Importers of their oil. By doing this, they caused a shortage in a mess hall of countries creating ascension oil prices and high demand. Consumers could not rely on the oil prices to be stable, therefore they consumed less of other products due to the fan farawaye of gas prices and more of their dollar began t o be spent on gas. Americans particularly started to come up with more efficient means of using and consuming gas over the past 25 years. Oil and gas is a resource that can be used up if not keep properly.That is why OPEC was formed, as well as organizations such as NAFTA to help regulate trade of these commodities and sum organization to a disorganized status. In addition, governments like the United States impose taxes on gas to correct the prices in order to ward off against supplies of oil affecting the nations economy. This only works to an extent, in the aboriginal to mid-eighties one states economy lived and died by the supply of oil. That state was Texas. When Texass oil rigs began to dry up, their economy went into a recession. Their reliance on the oil supply as their main revenue producer caused a lot of people to lose their jobs and demand and consumption for other products fell as well.This caused a spiraling effect which caused people from all industries to lose th eir jobs. Texass economy suffered and so did parts of the American economy with High inflation and high debt which caused the economy to suffer. Increased regulation and diversification of a countrys resources can stop this from being the case. Countries representing OPEC all live and die by the constant deed of oil. While this factor is used to stimulate their countries economic growth, it should be used to stimulate the construction of a countrys infrastructure. Oil-rich countries should use the positive affect oil has had on their countries to build strong governments and consumer demand for other goods.This powerful infrastructure that could be built will go through the economy stability and allow for a countrys GNP to grow in a slow, tight, and positive way. The building of a strong middle-class will allow for countrys to prosper for many years to come. Instead what has happened is that economies of these countries are in a state of flux. What I mean by this is that their ec onomies are very unpredictable and tipsy and their reliance on oil has made the disparity between the rich and the poor a possible action that becomes too large to overcome.One prime example of this is Brazil, Brazil has largereserves of oil in a very large country. Brazil is a developing nation and is very unstable when it comes to key governments. In the 70s and 80s Brazil made large amounts of oil from its reserves. Instead of investing the money made (from merchandise oil) into their countries future, the leaders of that country used the money to make themselves rich and left the country in governmental and economic disarray. The middle class of Brazil became almost non-existent and their seem to be but two classes in that country. Those classes were the extremely rich and the extremely poor. The lack of infrastructure and consumer confidence in the economy due to the mishandling of oil profits lead to many political assassinations and increased crime rates throughout the c ountry. It has taken and will continue to take Brazil years and years to recover from these economic crisiss , which all could have been avoided had Brazils government invested in its future. It is definitely true that an economy of a country can be vastly affected by the demand, consumption, and supply of oil.The affect that good supplies of oil has on a countrys economy is one that can only be measured in the sense that it is inevitable that they will be affected. As desire as we drive cars that are fueled by gas and we use heat in the overwinter time, oil will always be a strong factor in determining the growth of a countries economy. In the United States, we have the strong infrastructure to adapt to problems that the instability of both the supply and demand of oil will cause. Countries need to look within themselves for managed growth in order to steady their economies if oil is what sparks their economy. A strong central bank and government will allow for funds to be invest ed in supporting the economy, the oil business, and consumerism. Once the infrastructure is set the shear reliance on oil will not be a factor, because the countrys economy will be able to handle the affect.When the day comes that oil wells ran dry and substitutes are needed the countries that will survive will be the ones that have braced themselves for the effect that this will have on their economy. Then these countries will adapt and overcome. Oil and gas should be used as helper of a countrys economy and not the passion by which it is run. The production of great income for a country and a higher GNP that oil production is something that should be able to benefit them for many years to come. If you look at the United States as a model you will see a country that handles oil with precision.When the oil industry is in a downturn, thegovernment can step in and regulate taxes and stimulate investment by having the central bank pump in funds that would not otherwise be used. When th e oil industry is doing fine, the government can sit book binding and reap the prosperity of increases in employment and a rise in demand for oil. The prices will be lower for gas and oil, which means consumption will be up and the economy will be up too. Countries around the world can learn how to handle oil to the extent that it creates an agenda that the benefits far outweigh the costs.We know that oil and gas affects the economy and that it easily regulated by strong central government and bank. The infrastructure must be built up to manage growth. The leaders of the country should be committed to the development of the oil industry. Finally the consumers should be aware of how their role in the consumption of oil will affect the economy as a whole. When all parties are aware and committed to the prosperity of their country and to the industry then the consumption, supply, demand, profits, losses, and investment towards oil will be a mutually salutary one for the country and i ts people.