Oil Research Paper Example | Topics and Well Written Essays - 1250 words - 1

Oil - Research Paper Example Hence, forming a potential market to the oil-producing states where mostly they tend to have the final say regarding the commodity’s price. However, it is not that America lacks its own reserves, but their yield is inadequate to provide for its large population that normally consumes approximately 6.6 billion barrels annually (Bruce, 2007). This prompted the state to seek other sources of oil that will manage to cater adequately for its demand. America yielded to 21% investing in other states compared to its direct dealing operations. This was in the form of establishing corporations that will specialize in either oil drilling or having other diverse roles in ensuring adequate attainment of oil in the oil rich states, and in turn benefit; hence using diplomacy (Hitchcock, 2010). Currently, America produces 21 billion barrels that normally provide 6.6 billion barrels of oil meant for its population’s demand annually. According to conservationists, this annual consumption is adequate in providing America for 3.5 years, but only through proper application of other substitute saving methods besides effective technology especially in the transport sector. However, studies indicate America’s oil consumption trend continues to augment, where by the year 2020 according to Ghouri’s statistics would read 24,900, 2,596, 2,321 thousand in USA, Canada and Mexico respectively. This was a comparison with the year 1999 oil consumption statistics having 19,519, 1,943, 1,970 thousand in USA, Canada and Mexico accordingly (Ghouri, 2001). The augmenting demand trend has prompted America to depend on imports from other states, since the reserves, that it possesses does not equal its consumption. This is because the demand is outdoing the already diminishing reserves’ production. Studies indicate that American shore reserves are diminishing, which leaves the state with no alternative except offshore drilling, which is expensive. This is due to the capital necessitated