Economics 512 research

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timer Asked: Mar 25th, 2017
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Question Description

PLEASE READ CAREFULLY BEFORE ACCEPTING – I am offering a large amount for this work, and as such, I will be expecting high quality work. I have budgeted for 15 hours in my offer to allow for time to research and writing. The need:

12 – 15 page, double spaced, economics (Econ 512) paper on the petroleum industry. The criteria is listed below (Part 1 – Part 5). I have already completed part 1 (3.5 pages) and will provide. I need parts 2 – 5. Each section needs to be clearly defined with level two sub-heads (as demonstrated in part one that I have provided). I will expect high quality work with accurate and up-to-date information/data/graphs, as well as correct APA formatting (to include in text citations). This is for a Master’s level class. I would finish myself, but work has overwhelmed me with a huge project. I need this by MARCH 30th, 2017.

I will only pay for well researched and written work, so please do not accept if you cannot deliver. Please let me know if you have any questions. The sections of the paper are as follows:

Part 1: History of the Petroleum industry – ALREADY COMPLETED AND PROVIDED

a. Describes characteristics of major firms at various points in the history of the industry.

b. Includes relevant and appropriate charts, graphs, and tables of data.

c. Provides information on consumer needs and social or cultural factors affecting the industry.

d. Provides information on technological changes affecting the industry and the directions the industry followed because of those changes.

e. Provides information on government regulations and economic indicators affecting the industry.

Part 2: Analysis of current forces affecting the petroleum industry - this section needs to include:

a. Includes charts, graphs, and tables indicating trends in previously obtained data.

b. Describes industry responses to challenges discovered during the industry’s history.

c. Explains how the identified characteristics and trends act as forces affecting that industry or important subsets of the industry.

d. Discusses the indicators used to determine identified trends and suppositions.

e. Compares similarities and differences between major firms in the industry to indicate an overall industry trend.

Part 3: Competitive structure and resources - this section needs to include:

a. Justifies a competition classification for the industry.

b. Describes the size and strength of current key firms in the industry, as these determine ease of entry and exit for new entrants into the market.

c. Discusses changes in market structure, such as quantity and skill level of labor supply and quantity and quality of raw materials used in the production process.

d. Evaluates industry forecasts for costs of market variables, such as labor and raw materials.

e. Explains evidence of future shortages or higher costs for market variables (that is, what threats exist and how this is known).

Part 4: Petroleum Industry Threats and Opportunities - this section needs to include:

a. Describes threats forecast for the industry (that is, how and why the industry faces these threats).

b. Includes demographic, social, cultural, and political threats.

c. Includes market variables, such as changes in costs, future of resources, and general health of the industry or industries supported by the researched industry.

d. Describes potential for growth in the industry based on economic changes.

e. Describes how the economic changes identified affect demand for products produced.

Part 5: Summary - this section needs to include:

a. Summarizes the results of research completed for this project.

b. Summarizes the trend analysis completed for this project.

c. Summarizes conclusions regarding current industry threats and opportunities.

d. Applies the content of this course to determine the “health” of the industry today, including realistic scenarios for the future of the industry.

Unformatted Attachment Preview

Running head: MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM Managerial Economics: Analysis of the Petroleum Industry Keith Shoaf Indiana Wesleyan University 1 MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY 2 Managerial Economics: Analysis of the Petroleum Industry Petroleum. In Latin, the name means “rock oil”. It is classified as a fossil fuel, meaning that the substance is the result of a geological process that converts the remains of plants and animals that died millions of years ago, buried deep beneath the Earth’s surface under great pressure into a black liquid of complex hydrogen and carbon molecules that is often referred to as black gold (Ritter, 2007). History of the Petroleum Industry When most of us think of petroleum we immediately think of gasoline, the heart and soul of modern lifestyles. But human use of petroleum actually goes back centuries. In fact, it has been used throughout history for a number of various purposes. There are numerous records of oil being weaponized and used in war throughout the ages. The Greek historian Herodotus told of its use in the form of asphalt over four thousand years ago in the construction of Babylon. The Chinese burned it to evaporate brine in order to produce salt. Native Americans used it to create magic and medicine (later called Seneca oil and Genesee oil by the Pioneers) as well as using oil to make paint (Wilson, 2010). But it was for a different purpose, artificial light, that oil was catapulted into the major markets of the world and modern oil industry began. Up until the mid-19th century, the world had been almost exclusively reliant on whale oil to produce most of its artificial light. So much so, that the whales had almost been driven to extinction as a result of the extensive harvesting. The scarcity of whale oil began to driving up the price of the resource, and many had to resort back to candles for a source of light. In 1853, an amateur geologist named George Bissell living in Pennsylvania noticed that the locals would soak up oil from puddles in blankets and use them for medicinal purposes. Bissell thought that if he could get enough oil, he could use it as a new, MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY 3 cheaper source of fuel. Bissell acquired capital from investors, purchased land near Titusville, Pennsylvania, and hired Colonel Edwin Drake to locate and drill for oil on the property. In August of 1859, Drake became the first known man to strike oil at its source using a drill. The modern age of petroleum was born. Soon after the American Civil War ends in 1865, American capitalism begins to flourish and a hand full of men become industry titans. One of these men is John. D Rockefeller. Rockefeller bought his first oil refinery in 1864. Post-war America had become more industrialized and demand for kerosene grew in America’s rapidly expanding urban areas, making Rockefeller a very wealthy man. But Rockefeller understood the power of controlling all levels of production. And as additional oil deposits discovered near the Drake well lead to the creation of new firms, Rockefeller quickly begun to buy out or combine with his competitors. By 1870, Rockefeller’s entrepreneurial instincts and his genius for organizing companies resulted in him owning the most dominant oil refining firm in Pennsylvania, the Standard Oil Company. Rockefeller continued to acquire his competitors through intimidation, force, and strong arm tactics and by 1879, the Standard Oil Company controlled 90% of all refinery operations in the United States, creating the first great American monopoly (Parr, 2016). But, as Standard Oil grew in wealth and power, it encountered great hostility not only from its competitors but from a vast segment of the public as well. Rockefeller’s Standard Oil had fought competition with a calculated ruthlessness by securing preferential railroad rates and rebates on its shipments. The company also influenced legislatures and Congress through tactics that, though common in that era, were extremely unethical. And to make things worse, the company’s treatment of its labor wasn’t any better. With growing discontent, Rockefeller looked MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY 4 to protect his empire and in 1882, combined his various companies into the Standard Oil Trust (Parr, 2016). But Rockefeller, and the oil industry at large, failed to notice a new spark on the horizon that would threaten the relevance and very existence of the oil industry. In 1879, Edison created the first incandescent light bulb illuminated by electricity. And by 1882, Edison completed and put into operation the world’s first permanent, commercial power system in lower Manhattan, creating the electrical generation industry. By the turn of the century, over 18 million lightbulbs were in use in the United States alone (Josephson & Conot, 2016). The oil industry was losing its primary market to this new technology, and therefore its influence in legislative arenas. As America entered the 20th century, Standard Oil lost its monopoly on the market when oil was discovered in Texas in 1901. The once invincible Standard Oil continued to lose is dominance in the petroleum industry over the next decade, and was finally dissolved into 34 pieces in 1911 when the United States Supreme Court ruled that the Standard Oil Trust was in violation of the federal Sherman Anti-Trust Act. But the breakup of Standard Oil did not mean the end of the petroleum industry. Coincidently, in the same year Standard Oil was dissolved, a formerly discarded byproduct of the refining process, gasoline, began to have a significant demand in the market due to the popularity of a relatively new technology, the automobile. In fact, the automobile created a new market for several of petroleum’s refined elements as oil was needed not just for gasoline, but for lubrication in the engine, for grease in the bearings, and for making rubber for the tires. In 1908, Henry Ford incorporated the first ever mass-production assembly line to produce the Model T, making the automobile affordable for everyday citizens (Melsoi, n.d.). In addition to the automobile, two brothers, Wilbur and Orville Wright, from Ohio made the first powered flight in MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY 5 North Carolina, giving birth to an entirely new industry that would be also be completely dependent on petroleum (Taylor, 2014). The introduction of new markets, along with technological advancements in medicine, plastics, and other synthetic materials, made petroleum the world’s most depended on resource in the history of mankind. Today, ExxonMobil, ConocoPhillips and Chevron are some of the companies whose roots go back to the breakup of Standard Oil, and they are among the largest publicly traded companies in the world (Ritter, 2007). Analysis of Current Forces Affecting the Petroleum Industry Start section two here…. MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY 6 References Josephson, M., & Conot, R. E. (2016, October 14). Thomas Alva Edison. Retrieved from https://www.britannica.com/biography/Thomas-Edison Melsoi, M. V. (n.d.). The automobile and the environment in American history. Retrieved from http://www.autolife.umd.umich.edu/Environment/E_Overview/E_Overview3.htm Parr, S. (2016, March 9). The epic rise of John D. Rockefeller. Retrieved from http://thehustle.co/the-history-of-john-d-rockefeller-standard-oil Ritter, M. (2007, November 22). Petroleum: A short history of black gold. Retrieved from http://learningenglish.voanews.com/a/a-23-2007-11-22-voa2-83131902/126857.html Taylor, A. (2014, August 20). First flight with the Wright brothers. Retrieved from https://www.theatlantic.com/photo/2014/08/first-flight-with-the-wright-brothers/100796/ Wilson, A. (2010, December 28). Our history of petroleum use [Web log post]. Retrieved from https://www.buildinggreen.com/blog/our-history-petroleum-use ...
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Tutor Answer

Robert__F
School: Cornell University

As I have not heard from you please find the final version

Running head: MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM

Managerial Economics: Analysis of the Petroleum Industry
Name:
Institutional Affiliation:
Date:

1

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY
Abstract
The petroleum industry is one of the biggest industries that are available in the world.
The industry is comprised of various companies as well as firms. The industry has been faced
with a lot of issues in the past and the future of the industry seems to be heading to a dark hole.

2

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY

3

Table of Contents
Abstract ........................................................................................................................................... 2
Managerial Economics: Analysis of the Petroleum Industry ........Error! Bookmark not defined.
History of the Petroleum Industry..................................................Error! Bookmark not defined.
Analysis of Current Forces Affecting the Petroleum Industry ......Error! Bookmark not defined.
Current forces affecting the petroleum industry ........................Error! Bookmark not defined.
The previous trends in the petroleum industry. .........................Error! Bookmark not defined.
Competitive structure and resources ..............................................Error! Bookmark not defined.
Threats and opportunities ...............................................................Error! Bookmark not defined.
Slowing production growth........................................................Error! Bookmark not defined.
High costs of development.........................................................Error! Bookmark not defined.
Climate change...........................................................................Error! Bookmark not defined.
Political Risk ..............................................................................Error! Bookmark not defined.
Geological Risk ..........................................................................Error! Bookmark not defined.
Price Risk ...................................................................................Error! Bookmark not defined.
Supply and Demand Risks .........................................................Error! Bookmark not defined.
Cost Risks ..................................................................................Error! Bookmark not defined.
The Bottom Line ........................................................................Error! Bookmark not defined.
Summary ........................................................................................Error! Bookmark not defined.
References ......................................................................................Error! Bookmark not defined.

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY

4


Running head: MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM

Managerial Economics: Analysis of the Petroleum Industry
Name:
Institutional Affiliation:
Date:

1

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY
Abstract
The petroleum industry is one of the biggest industries that are available in the world.
The industry is comprised of various companies as well as firms. The industry has been faced
with a lot of issues in the past and the future of the industry seems to be heading to a dark hole.

2

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY

3

Table of Contents
Abstract ........................................................................................................................................... 2
Managerial Economics: Analysis of the Petroleum Industry ......................................................... 4
History of the Petroleum Industry................................................................................................... 4
Analysis of Current Forces Affecting the Petroleum Industry ....................................................... 7
Current forces affecting the petroleum industry ......................................................................... 7
The previous trends in the petroleum industry. .......................................................................... 7
Competitive structure and resources ............................................................................................. 10
Threats and opportunities .............................................................................................................. 12
Slowing production growth....................................................................................................... 13
High costs of development........................................................................................................ 13
Climate change.......................................................................................................................... 14
Political Risk ............................................................................................................................. 15
Geological Risk ......................................................................................................................... 15
Price Risk .................................................................................................................................. 16
Supply and Demand Risks ........................................................................................................ 16
Cost Risks ................................................................................................................................. 17
The Bottom Line ....................................................................................................................... 17
Summary ....................................................................................................................................... 19
References ..................................................................................................................................... 22

MANAGERIAL ECONOMICS: ANALYSIS OF THE PETROLEUM INDUSTRY

4

Managerial Economics: Analysis of the Petroleum Industry
Petroleum. In Latin, the name means “rock oil”. It is classified as a fossil fuel, meaning
that the substance is the result of a geological process that converts the remains of plants and
animals that died millions of years ago, buried deep beneath the Earth’s surface under great
pressure into a black liquid of complex hydrogen and carbon molecules that is often referred to
as black gold (Ritter, 2007).
History of the Petroleum Industry
When most of us think of petroleum we immediately think of gasoline, the heart, and soul
of modern lifestyles. But the human use of petroleum actually goes back centuries. In fact, it
has been used throughout history for a number of various purposes. There are numerous records
of oil being weaponized and used in war throughout the ages. The Greek historian Herodotus
told of its use in the form of asphalt over four thousand years ago in the construction of Babylon.
The Chinese burned it to evaporate brine in order to produce salt. Native Americans used it to
create magic and medicine (later called Seneca oil and Genesee oil by the Pioneers) as well as
using oil to make paint (Wilson, 2010).
But it was for a different purpose, artificial light, that oil was catapulted into the major
markets of the world and modern oil industry began. Up until the mid-19th century, the world
had been almost exclusively reliant on whale oil to produce most of its artificial light. So much
so, that the whales had almost been driven to extinction as a result of the extensive harvesting.
The scarcity of whale oil began to driving up the price of the resource, and many had to resort
back to candles for a source of light. In 1853, an amateur geologist named George Bissell living
in Pennsylvania ...

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