Final Part

User Generated

EI194

Writing

Description

Goerge my man. this is the last part for this class. As always, it relies on the previous work you did which I will upload. This last assignment is divided into two parts. a reflective letter and a mini project. I will upload the instructions. But I can tell you that the project can not be a prezi or a power point.

Unformatted Attachment Preview

UNIT 2 Major Assignment: The Illustration of Research RQ: How do Oil Companies make huge profits? Oil products and Profits Wallace, Ed Freudenrich, Craig Leber, Rebecca This source provides a brief history of oil, especially based on the profitabilit y of the industry. Rather than believing in the hype, people should understand that the true reason behind the high prices of oil is that oil brings high Freudenrich tackles the case of how oil companies make huge profits. Although he does not directly goes into the history of oil profits among the oil companies, he points out the various products that help such companies makie huge profits. He starts by addressing how huge companies are percieved in the movies and TV show. Such TV shows include The source by Leber also talks about the huge profits that large oil companies make. However, the focus of the author is what five major companies have been doing with their daily huge profits from the sale of oil products. Weiss, Daniel, J and Miranda Peterson This article describes how ConocoPhilip s, BP, Shell, Chevron, and Exxon Mobil, the five biggest oil companies, in spite of their “outsized” profits, are lobbying to maintain tax breaks as well as for the government to lift the ban on crude oil export. Smith, Rich Amadeo, Kimberly Froomki n, Dan Williams, James This article explains how Oil companies make huge profits. The author asserts that Americans spend approximat ely$632 billion each year, much of which is used in the huge cost of oil extraction and refining. This article looks at plans to cut the supply of oil by OPEC, a decision reached on November 30, 2016, resulting in the doubling of oil prices compared to January 2016. This article looks at how huge oil companie s are generatin g huge profits while American s have to struggle with the huge oil prices. This article looks at how oil prices have been changing in history. The author puts across that supply and demand of oil have been the main determinant s of oil price changes over history. He examines how geographica l events, stocks, The industry and profitabilit y profits for both the oil companies and to Wall Street. Giant, Oklahoma Crude, Armageddon, and Beverly Hillbillies. The oil prices have, for long time, been considered as too high. In fact, an official has once been quoted considering the oil prices to be dangerousl y high. The source, however, focuses on how oil companies manage to change the less valuable crude oil to much more valuable products. Essentially , the author depicts the largeness of the profits by trying to highlight only five companies have been able to make daily profits amounting to over $375 million. In spite of the huge costs that oil companies claim, they manage to make huge profits. The author feels that something is wrong and oil companies. The industry is that one of the most profitable. The author feels that something is wrong about the profitability of the industry with little regard to the effect of their actions. He feels that oil companies have to act rightly to make fair profit. There is a huge battle of share market with the United States shale oil producers. Shale producers pushed production of oil in the U.S. to 9.4 million mbpd back in 2015, something that knocked the market share for OPEC to 41.8% in the year 2014. Resultantly, supply rose while prices The 5 top oil companie s made $36 billion in the 2nd quarter of the year 2011. A single company, ExxonMo bill made $10.7 billion in three months. Most of these huge amounts, coming from the pockets of supply demand, and NYMEX trading & economy affect oil prices. The author feels that if a business could rely on history to structure their businesses, then oil businesses could operate profitably maintaining a price of $24.58 per barrel. went down. Oil Refining, prices, and profitabilit y The source by Wallace does not directly address the works of oil refining. The source however highlights some of the refining processes that lead to the ever increasing oil prices. For instance, extraction and the refining processes are quite This source by Freudenrich is mostly based on how the refining of how works. The author focuses on explaining how companies manage to refine crude oil to useful products such as jet fuel, pertol, gassoline, diesel, kerosen, and other products. The process is long and detailed, but it is what makes such companies create great value out of crude oil. This source by Leber is based on five companies. It is quite different also it shows how large oil companies have been making huge profits from oil. The Big Five Oil Companies in this case are Shell, BP, Chevron, ConocoPhi The companies have produced financial reports indicating that their profit declined by 7%, which means that they made $177,000 every minute. It is indicated that the companies increased their production in 2013 despite years of declining oil production. American s, is used by these companie s to repurchas e their shares. Oil Gas and oil If these companies prices have a companie are already seasonal s could making swing that is invest supernorma normally such l profits no predictable. money in matter what They hike in product cost they spring and go developm claim to down in ent, hotincur. In autumn. The talent addition, decline in the research, they sell dollar is also a and new both in well-known facilities, America factor that then they and across determines oil could the world, prices. OPEC create hence, their will have to more profits are hike oil prices employm not in order to ent for necessarily maintain their American limited on profit margin s. the amounts as well as spend by keep goods Americans. imported constant. Any geographica l events, especially happening in regions relied upon for oil production has a great impact on oil supply. costly. Sometimes delays in the refining process low production and the quantity supplied of the oil products. This factor leads to high oil prices. Sustainabl e Energy and profitabilit y Some of the profits goes back to boost their strategies and processes while llips, and ExxonMob il. To succeed, the companies make even greater profits by investing some of their daily profits back into their key processes including marketing and improving their supply chain systems. Collectivel y, the five companies earned a profit of $375 million in 2012. They also spend These companies are already making huge profits. Maintaining their tax breaks hurts the economy, Putting these points into consideratio n, tax breaks are not necessary for oil Even though there are many factors that determine oil prices, it appears that supply is a key factor same as Using such profit to repurchas e their shares is an attempt to lock out other This article proves that supply and fluctuation of the dollar are major determinant s of oil prices. others end up to Wall Street. It seems that Wall Street and the profitabilit y of the major oil companies are tied up. Use of the profits and economic impact Wallace explains the profitabilit y of oil companies. He slightly Freudenrich clearly tackles on the topic of what big oil companies do their profits. Just like in any other most of the profits to buy back respective stocks in an effort to enrich their board, largest shareholde rs, and senior manageme nts. This means that all stakeholde rs are encourage to fuel the companies towards making even greater profits. This source is solely attributed to the way large companies working families and the nation’s security. companies. They are just a way of creating supernorma l profit. These profits do not regard any need for sustainable energy. fluctuation of the dollar. Economic factors contribute to less regard towards sustainable energy. people from the field of creating income. Such a tactic brings the economy down. As such, energy sustainabi lity becomes the least of their concerns. If their profits and other funds were instead put in production of environmenta lly friendly The author asserts that Americans spend approximat ely$632 billion each The battle on market share stability is contributing to increased oil prices. Lower prices The author says that in an economy in which unemploy On the other, limited supply has at times come as a result of political rivalry. The companies inject back most of their revenue to develop tackles the way some of the profits are spent to bring in more profits and therefore further elaborate how such oil companies continue to make huge profits. form of business, oil companies often inject some of their profits back to their capital. In this regard, it seems that some of the profits goes to support the oil refining process. The goes is to make highly quality and useful products out of the crude oil. make use of the huge profits they make from the sale of oil products. The Big Five Oil Companies used by the author to illustrate this are Shell, BP, Chevron, ConocoPhi llips, and ExxonMob il. All these companies are within the list of the Fortune 500 Companies and they make impressive ranking positions around the forms of energy then various harm could be revered. They thus invest a lot on environmenta l safety and sustainability. year, much of which is used in the huge cost of oil extraction and refining. In spite of the huge costs that oil companies claim, they manage to make huge profits, which are used to enrich their stakeholder s. led to reduced U.S shale production iby 2015. High supply resulted in fallen oil prices in December 2014. ment is high and people are struggling with high oil prices, oil companie s are doing very well. This is because they are keen on what makes then perform. Such huge profits are majorly used in repurchasi ng shares. their business including supply chain developmen t and managemen t world. Works Cited Amadeo, Kimberly. "What Makes Oil Prices So High?" The Balance (2016). Froomkin, Dan. "Big Oil Companies Post Huge Profits On High Gas Prices." The Huffington Post (2011) Freudenrich, Craig. How Oil Refining Works. Howstuffworks, 2017. Web. Retrieved Feb. 2 2017. Leber, Rebecca. What Five Oil Companies Did With Their $375 Million In Daily Profits., 2012. Web. Retrieved Feb. 2 2017. Smith, Rich. "Big Oil Isn't as Profitable as Everyone Thinks." Finamnce (2012). Wallace, Ed. A Brief History of Oil (Profits). Bloomberg, 2007. Web Retrieved Feb. 2 2017. Weiss, Daniel, J and Miranda Peterson. "With Only $93 Billion in Profits, the Big Five Oil Companies Demand to Keep Tax Breaks." Energy and Environment (2014). Williams, James, L. "Oil Price History and Analysis." WTRG Economics (2011) ARGUMENT IN TRANSLATION You will post the Translation project on Bb under Discussion Board. You will post the Reflective Letter under Journals. For this final section of our time together, you will be working to present some aspect of the argument that you made in your research papers in a new form—that is, not as a “research paper,” but as an extension of your project that you have been working on since unit II. This assignment is intended to allow you to continue to think about your project after you have completed writing the paper itself. You have spent nearly a full semester working on this topic, and you will do yourself a disservice if you simply consider yourself “done” as soon you turn in your research paper. The aim of this assignment, and this unit, is to encourage you to continue to engage with the scholarly conversation in which you have become involved in a mindful manner. You might even discover that you hope to continue to build upon the work that you have already done, either in your major courses, an independent study, or even as an outside-of-school project. We will discuss your options in class. and finally… REFLECTIVE LETTER • Write a 2-3 reflective letter in which you explain your research process over the course of the semester. Within this letter you should address the following: o Give me some insight into how your research skills, critical thinking, and writing and approach to academic research have changed over the semester, o Discuss how the different units in the course helped you to create a final project with several successful elements to it (or didn’t, if that is the case), o Highlight what your particular (unique) contribution to your research conversation has been this semester, and maybe how you came to that contribution as your work developed, o Highlight the work that you did this semester that you feel was particularly strong, and discuss why you feel that it was very strong and what you might have gained from having done it, o Discuss any moments this semester that you wish you could “do over,” and why, discussing what you would have done differently if you could have that chance, and o Think critically about the conversion of your argument into a new form – why that mode. How Oil Companies make Huge Profits Oil demand across the world keeps growing and it is expected to grow more in the future. The oil industry is extremely huge. In accordance with the department of Energy, fossil fuels, including oil, natural gas, and coal, makes up over 85% of all energy consumed within the U.S. The debate on oil prices has always been an ongoing one as oil prices vary on a minute to minute basis. There are various factors that determine such prices; however, it all comes down to supply & demand. Nevertheless, companies keep on making huge profits year in year out regardless of many claims of oil shortages caused by various factors including political and environmental issues. Are these oil shortages real and or all these political and other forms of crisis people hear in the media impact oil supply unfavorably or are they excuses to help retain high oil prices? How exactly do oil companies manage to make the huge profits? Background In 2011, the 5 biggest oil companies (Chevron, BP, ConocoPhillips, Shell, and ExxonMobil) reported profits of $375 million per day in spite of having reduced their oil production (Leber). This is equivalent to $261,000 of profits every minute, which was more that 96% of what households in America make in a year. In the same year, these organizations received $6.6 million in terms of federal tax breaks each day. The 3 largest American oil companies spent more than 50% ($100 million) of their profits in buying back their own stock in efforts to enrich their largest shareholders, board, and senior managers in the year 2011 (Leber). The whole oil & gas industry used on average $400,000 every day lobbying representatives and senators to weaken public health protections as well as maintain huge oil tax breaks, adding up to approximately $150 million. Each of these 5 huge companies’ CEOs received $60,110 in average as compensation per day during the year. Their pay hiked 55% in the year. The compensation for Rex Tillerson, Exxon’s CEO came close to 55% daily. The companies reported $368 million in profits per day within the first three months of the year 2012. The combined earnings of these companies totaled $1 trillion right from 2001 through 2011 (Leber). Research Question: How do oil companies make huge profits? Rationale This is an important topic to research because oil is always on high demand across the world. According to energy outlook 2013, utilization of energy across the world will hike 56% by 2014 specifically because of the growing economies of India and China. Reports indicate a strong growth in alternative energy; however, they as well explain that fossil fuels are still going to dominate global energy utilization for the near future. In addition, people highly depend on oil on their daily-to-daily survival something that means that it is easy for oil companies to take advantage of the situation. As an important element of human’s daily survival, oil should be distributed at fair prices to avoid pressuring those who cannot afford life without it. How Oil companies Work Oil companies drill to extract oil from the ground. Most drilling companies are contractors that have been hired by gas and oil producers. Oil companies then refine the extracted material. The refining sector is dominated by a few large players within the industry mainly because of the huge capital required. Oil companies generate profits by selling at higher prices that the cost they incur in producing it (Freudenrich). In terms of finance, it means that oil companies’ revenues are higher compared to costs required to extract, refine and distribute oil. Particular oil company expenses include exploration costs for each oil reserves, drilling expenses and expense involved in processing oil into usable or salable products. For instance, gasoline (Freudenrich). Most oil companies make extra profits from other sources, for instance, investing in real estate and stocks. The High price of Oil Former Energy Secretary Bill Richardson was quoted referring to oil prices as “dangerously high” in the year 2000 (Bloomberg). He said that the White House was committed towards using all available options to fright rising energy cost. At the same time, Spanish farmers were protesting the high fuel cost in Spain. Iraq President then, Saddam Hussein was frightening Kuwait for stealing Iraqi crude. A barrel would cost $38 while a gas gallon goes for $1.58. Today, a barrel remains stubbornly above $50 with an unending debate on what reasons are behind such prices (Bloomberg). Recently, CNN noted that upon asking three experts about the reasons behind oil price’s instability nature, their response concludes that no one person clearly knows what is happening. Alaron Trading’s Phil Flynn, an analyst was quoted saying that the world is in trouble during the 2007 peak summer driving season. He meant that there was little gasoline left in reserve and shortages had been reported in some parts of the country. Such alarms have always been there since 2001, a time when the oil industry began mentioning to the media about potential rise of gasoline price to $3 (Bloomberg). In summer 2006, similar new were aired every day, only for Americans to find that there had been sufficient gasoline between April and July such that 8.1 million barrels were put into reserve. There was a huge stock of gasoline from 2000 to 2007 despite plenty of refinery issues being reported throughout the 7 years period. The military action threat against Iran was a good excuse for hiking fuel prices. At one point, it was the refusal of Iran to abandon its nuclear programs. On another point, it was Iran’s seizure of fourteen British sailors. All these were said to have potential impact on oil prices, yet both Iran and Iraq, two key oil producing neighbors had been in war earlier in the 1980’s a time hence fuel prices went down (Bloomberg). The major problem with high oil prices does not really rest on its limited supply but how much information about possible threats to supply are fed to the media. Conclusion Oil companies are making super normal profits. It is clear that such profits are because of their revenues, which are higher than running expenses. Even though that is normal in every industry, the revenues here are much higher than they should be. Oil companies have been using methods that help them maintain high revenues. The price of oil keeps on getting extremely high. The key reasons for such high prices are a number of tactics used by oil companies. A few oil companies have made sure that they dominate the industry meaning that they control the prices. They repossessed their companies by repurchasing the shares, something that also means that only a few people control the industry. This will only mean that competition is low and prices will remain high considering that the demand of oil across the world is too high. Another approach these oil companies have been using is that they have influenced politicians into deciding in favor of oil companies, hence, have received incentives they’re not entitled to through tax breaks. This helps them generate huge profits because they are running at very little expenses and selling at very high prices. Again, oil companies have oversold the petroleum crisis to mainly portray low supply. They have misinformed the public that anything happens across the world impacts the supply of oil negatively; however, this is not the case. There is sufficient evidence showing that plenty of supply was there at times of crisis when people had been informed of oil shortages due to crisis across the world. This way, oil companies have managed to maintain high oil prices something that has helped them make super normal profits. It is clear now that these huge profits are not just the normal business where revenue has to be higher than expenses, in addition to other investments like stocks and real estate that oil companies claim to get their money from. Oil companies have been for a long time now playing a dirty game and making large profits. Works Cited Bloomberg. A Brief History of Oil (Profits). 2007. 10 2 2017 . FREUDENRICH, CRAIG. How Oil Refining Works. 2017. 10 2 2017 . Leber, Rebecca. What Five Oil Companies Did With Their $375 Million In Daily Profits. 2012. 10 2 2017 . Surname: 1 1. Weiss, Daniel, J and Miranda Peterson. "With Only $93 Billion in Profits, the Big Five Oil Companies Demand to Keep Tax Breaks." Energy and Environment (2014). This article describes how ConocoPhilips, BP, Shell, Chevron, and Exxon Mobil, the five biggest oil companies, in spite of their “outsized” profits, are lobbying to maintain tax breaks as well as for the government to lift the ban on crude oil export. The companies have produced financial reports indicating that their profit declined by 7%, which means that they made $177,000 every minute. It is indicated that the companies increased their production in 2013 despite years of declining oil profits. The reason for pushing for tax break as well as a lift on crude oil exportation ban is that newer, easier, as well as cheaper oil fields are becoming fewer. By offering oil companies the tax break they need and lifting the ban on crude oil exports, the government will harming the nation’s security, working families a ell a the economy of the nation. The author feels that to avoid all this, the country should be investing in cleaner transportation options. Key questions • The companies have increased their production yet their earnings are low, something that means higher production cost. • Maintaining their tax breaks and a lifting the ban on crude oil export hurts the economy, working families, and security. Evaluation These companies are already making huge profits. Maintaining their tax breaks hurts the economy, working families and the nation’s security. If such funds were instead put in production of environmentally friendly forms of energy then such harm could be reversed. It is quite unfair that these huge oil companies are making use of their 2013 profits decline to put the congress under pressure to retain the tax breaks amounting to $2.4 billion per annum, something that qualifies them for the section 199 limitation, which Surname: 2 will in turn cost taxpayers $14.4 billion within 10 years. The government works towards the interest of the public rather than creating a way for oil companies to continue generating huge profits. By giving in to such requirements, it will be neglecting its duty to its people. If oil production is expensive, then oil companies should turn to generating clean energy. This will ensure a healthy environment. In this case, tax breaks can be considered on the basis that they are advocating for a healthier environment. They should not be let to continue making huge profits at the expense of the public. 22 Smith, Rich. "Big Oil Isn't as Profitable as Everyone Thinks." Finamnce (2012). This article explains how Oil companies make huge profits. The author asserts that Americans spend approximately$632 billion each year, much of which is used in the huge cost of oil extraction and refining. In spite of the huge costs that oil companies claim, they manage to make huge profits. The author feels that something is wrong and oil companies. According to the author, there are enormous costs associated with oil generation. Expenses involved include exploration for potential reserves, test ells’ drilling, production wells’ drilling, pumping the oil off the ground, as well as transporting it. There are yet additional costs associated with refining such oil into gasoline as well as getting it to gas stations across the nation. In addition, their market is not limited to America but they do business across the world, hence, their profits are not necessarily limited on the amounts spend by Americans. In spite of such huge costs associated with oil production, the author is surprised that oil companies still report supernormal profits. Oil prices are increasing and oil companies are pressuring the congress for tax breaks. Key Questions • Are tax breaks necessary for Oil companies? • Americans have for long complained about a huge conspiracy to rip off consumers. Evaluation Surname: 3 Oil companies are already making supernormal profits no matter what cost they claim to incur. They claim that huge expenses are involved making high oil prices necessary. This is surprising and confusing: are the high oil costs meant for covering the high expenses or generating the huge profits. I t is agreeable that oil companies are taking America for a ride. Putting these points into consideration, tax breaks are not necessary for oil companies. If the tax breaks are granted then how much profits, will they make? In addition, they have not clarified what benefits to the public will emerge as a result of such tax breaks. Will the prices of oil fall? This is thoughtful given that the demand for oil is still increasing rather than reducing. This is due to increase in the population, improved technology that needs oil to run, and the emerging markets in other developing countries. To be frank, it is thoughtful approving the tax breaks for oil companies will be of any benefit to the nation as a whole. They are just a way of creating supernormal profit. 3. Riddell, Alison, et al. "Towards Sustainable Energy: The current Fossil Fuel problem and the prospects of Geothermal and Nuclear power." (2015). This article talks about utilization of energy in the world today. It asserts that fossil fuels dominate energy consumption and will continue doing so in the foreseeable future possibly doubling fossil fuels utilization. The authors cite various reasons for this including expected growth in population as well as development of the undeveloped nations. Oil is I the most consumed form of fossil fuel, followed by coal and then natural gas. Even though alternative forms of energy exist, people have not given enough attention to them. The population of the world is expected to grow in the future. On the contrary, the limited amounts of such fossil fuels will be diminishing a time goes by. As a result, energy demand will increase while supply decreases. Alternatively, fossil fuels are not the only source of energy that people can use. There are other, even better alternatives. Renewable energy is available and not even completely exploited. Key questions • Why have people not turned to alternative forms of energy? Surname: 4 • Low costs associated with the conversion of resources into oil has caused various countries maintain fossil fuels as their energy source • Estimates indicate that continuous increase in fossil fuels utilization may lead to a sharp increase in oil prices in 20 year to come threatening a potential global economic crisis. Evaluation Oil companies may have a chance to continue generating huge profits if people maintain their tendency to increase utilization of fossil fuels. Alternative forms of energy are a great move; however, people have not given them much of thought. In addition, they are expensive compared to oil production. There is an increasing need for energy considering the increasing population and civilization. This is an important resource for the research, as it will help uncover the future of oil companies. Fossil fuels have a lot of disadvantages, particularly to the environment. It is high time that governments consider funding generation of clean energy. It is true that fossil fuels can be cheap; however, the human race most importantly needs a livable environment. The continued use of fossil fuels has greatly contributed towards global warming. People in the world already feel how this affects them. Cheap source of energy is only for today. Fossil fuels are diminishing and the world will be forced to use alternative energy. People can alternatively turn to alternative energy today and save the environment than wait to be forced to turn to it in the future when the world has already become unlivable. 4. JAM. Who Get's the Business. Indianapolis: Dog Ear Publishing, 2007. This book looks at business complexities from various directions. It connects events to really determine what the cause of business complexities is. Among such businesses are oil companies. The writer writes the book to keep in touch with today’s business news events, which he claims to be happening at a very fast pace. He argues that among the major complexities faced by companies to day including oil companies include difficulties in managing their environment as well as profits. People are complaining about high oil prices. In response, the government renegotiated to recover billions of dollars in the form of government Surname: 5 incentives on gas and oil producers. Again, with regard to business complexities, the authors say that companies purposely keep much of their internal decisions in some mysterious state. These companies calculate the strategies for hat their customers as well as employee to know. Again, they cover the facts with disinformation or misinformation utilizing clever trick on the minds of other people. Key Questions • All people are complaining about the prices of oil and oil companies are making profits • Government renegotiations to recover such incentives will only hurt the small oil companies but small consequences of huge oil companies • Meanwhile, Americans will continue to pay higher prices for oil. • Are oil companies hiding some important information or misinforming the public? Evaluation It does not matter even if the government gets withholds all the incentives directed toward the oil sector. Big oil companies will push for higher prices and while Americans pay such high prices, these companies will continue making supernormal profits. Oil companies are using tricky language and misinforming the public. It is not normal to make very huge profits and demand for tax breaks. Again, it is not logical to make supernormal profit and expect people to understand that high prices for oil are quite necessary to cover the costs of production. This is an important resource to the research it allows for investigations as to why the government still offers incentives towards oil drilling and refining a well a why oil prices remain so high. It is important to understand if oil companies are misinforming the government or the public. 5. Cunningham, Nick. The Economy Needs Higher Oil Prices – Goldman Sachs. 2016. 14 3 2017 . Surname: 6 This article looks at plans to reduce production of oil by OPEC, something that will definitely result in increased oil prices. This is a huge cut on production reaching up to almost a million barrels each day. As a result, oil prices will hike from $50 per barrel to about $60 per barrel. This will provide oil producers across the world with a windfall while the sacrifice made by members of OPEC will be highly paid for through high revenues. An increase of price by a dollar per barrel will ensure increased yearly revenue of $1 billion to Iraq officials. Most consumers are currently used to cheap oil and gas, which has remained so for the last two years. Increased oil prices could put the economy of the U.S as well as other countries at jeopardy. On the other hand, reports say that increased revenue collected by oil producing nations creates excess savings that goes back to the international financial system. This allows banks to lend and interest rate goes down. Key Questions • Consumers may be disappointed with the disappearance of cheap gasoline • Higher oil prices might boost global oil economies through a capital wave flowing to producing companies Evaluation The truth is that oil prices will always remain high as long as oil is an important resource. Production of oil is controlled by a cartel that will twist things anyhow to ensure oil prices remain high. Deciding to reduce oil production, which should mean lower revenues and profits, means higher revenues and higher profits for them. It becomes a strange business environment when businessmen reduce supply to increase prices instead of becoming more competitive. This is rather a dangerous phenomenon. It is high time governments engaged in alternative energy. On top of the disadvantages faced as a result of using fossil fuels, the market is becoming unpredictable a producers can play with the prices however, they want. 6. Amadeo, Kimberly. "What Makes Oil Prices So High?" The Balance (2016). Surname: 7 This article looks at plans to cut the supply of oil by OPEC, a decision reached on November 30, 2016, resulting in the doubling of oil prices compared to January 2016. This is all as a result of a battle of share market with the United States shale oil producers. Shale producers pushed production of oil in the U.S. to 9.4 million mbpd back in 2015, something that knocked the market share for OPEC to 41.8% in the year 2014 from2012’s 44.5 percent. Resultantly, supply rose while prices went down. According to the author, the prices of gas and oil have a seasonal swing that is predictable. Such prices rise during spring and fall during autumn. This is because summer vocation is a driving season. The decline of the U.S Dollar also affects the price of oil. The value of oil producing countries’ currencies is tied to the dollar and this means that devaluation of the dollar causes devaluation their currencies. As a result, OPEC must raise oil prices so that it can maintain its profit margin, Key Questions • Gas and oil prices have a seasonal swing that is normally predictable. They hike in spring and go down in autumn • The decline in the dollar is also a well-known factor that determines oil prices • OPEC will have to hike oil prices in order to maintain their profit margin a well as keep goods imported constant. Evaluation The battle on market share stability is contributing to increased oil prices. Lower prices led to reduced U.S shale production by2015. High supply resulted in fallen oil prices in December 2014. Even though there are many factors that determine oil prices, it appears that supply is a key factor same as fluctuation of the dollar. Oil prices are rising as a result of the battle between OPEC and Shale. It is clear that some rivalry exists between the two parties. Such rivalry appears to be unhealthy because it puts pressure on the consumer. In most cases, rivalry between two business organizations results in increased competition, but Surname: 8 this one creates a very strange business environment. It is clear that OPEC is out to take revenge about what happened back in 2014-2015. On the other hand, they do not realize that it is the consumer, not Shale, who will suffer the high prices of oil. 7. Williams, James, L. "Oil Price History and Analysis." WTRG Economics (2011). This article looks at how oil prices have been changing in history. The author puts across that supply and demand of oil have been the main determinants of oil price changes over history. He examines how geographical events, stocks, supply demand, and NYMEX trading & economy affect oil prices within the United States was heavily regulated by way of price control or production for the major part of the 20 th century. The rapid increase in crude oil prices in the U.S since 1973-1981 could have been prevented if it was not for the U.S energy policy in course of the post embargo period. Such policy imposed price controls on oil domestically produced resulting in consumers paying approximately fifty percent more for imports compared to domestic production.in addition, producers in the U.S received less compared to the world market share. The author feels that if a business could rely on history to structure their businesses, then oil businesses could operate profitably maintaining a price of $24.58 per barrel. Key questions • The3 longest United States recessions matched with extremely high oil prices. • Wars and political instability in oil producing countries have caused a major increase in oil prices as a result of reduced oil supply. Evaluation This article proves that supply and fluctuation of the dollar are major determinants of oil prices. Any geographical events, especially happening in regions relied upon for oil production has a great impact on oil supply. On the other hand, limited supply has at times come as a result of political rivalry. Again, the government has at times had poor policy governing oil production as well a supply. It is important that all parties involved in production and delivery of oil, including the companies, unions, and the government realize that energy is something of great significance to human life. Research should be conducted and solutions reached on how to keep oil prices law and affordable. Efficient policies should be put in place to control how oil prices go up or down and ensure that they remain affordable. 8. Froomkin, Dan. "Big Oil Companies Post Huge Profits On High Gas Prices." The Huffington Post (2011) Surname: 9 This article looks at how huge oil companies are generating huge profits while Americans have to struggle with the huge oil prices. The author says that in an economy in which unemployment is high and people are struggling with high oil prices, oil companies are doing very well. The top five oil companies made $36 billion in the 2nd quarter of the year 2011. A single company, ExxonMobill made $10.7 billion in three months. Most of these huge amounts, coming from the pockets of Americans, are used by these companies to repurchase their shares instead of investing in job creation area such as product development, hot talent/research, new facilities, improving consumer offerings, or even accelerating alternative future energy production. Such companies view their profit as the means to manage their stock price, instead of investing such money the future of the economy or their own companies. According to the executives, stock buyback are a reflection of confidence within the future organizations. On the other hand, they happen to be a selfserving means for organization management to make use of the earnings of the company. Key questions • These profits are made from the pockets of Americans • Such huge profits are majorly used in repurchasing shares. Evaluation If these companies could invest such money in product development, hot-talent research, and new facilities, then they could create more employment for Americans. Using such profit to repurchase their shares is an attempt to lock out other people from the field of creating income. Such a tactic brings the economy down. It only means the oil company executives are self-centered, meaning that they do not care about the general public, but their ability to dominate. Instead of buying back their company shares, they could even invest in alternative energy, which is expected to be the dominant energy sources of the future. It is clear that they do not think of the future of their businesses and assume that their companies could end with the end of fossil fuels. Surname: 10 Other References A&E Networks. Oil Industry. 2017. 15 3 2017 . PORRETTO, JOHN. Big Oil's most profitable quarter ever: $51.5 billion. 2017. 15 3 2017 . Robert, L and Jr Bradley. Oil Company Earnings: Reality Over Rhetoric. 2011. 15 3 2017 . Sheppard, David and Neil Hume. Hedge funds’ bets on rising oil prices hit record high. 2017. 15 3 2017 . Weiss, Daniel, J and Weidman Jackie. "Big 5 Oil Companies Going For The Gold." Think Progress (2012). White, Ronald, D. Oil companies are making more money and less fuel. 2011. 15http://articles.latimes.com/2011/apr/28/business/la-fi-oil-refineries-20110429 3 2017. Yager, David. Why Oil Prices Will Rise More And Sooner Than Most Believe. 2016. 15 3 2017 . Surname: 11 Increasing oil Prices Introduction Total oil demand across the world keeps growing and it is expected to grow more in the future. The oil industry is extremely huge. In accordance with the department of Energy, fossil fuels, including oil, natural gas, and coal, makes up over 85% of all energy consumed within the U.S. The debate on oil prices has always been an ongoing one as oil prices vary on a minute-to-minute basis. There are various factors that determine such prices; however, it all comes down to supply & demand. Nevertheless, companies keep on making huge profits year in year out irrespective of many claims of oil shortages caused by various factors including political and environmental issues. Are these oil shortages real and do all these political and other forms of crisis people hear in the media impact oil supply unfavorably or are they excuses to help retain high oil prices? How exactly do oil companies manage to make the huge profits? In 2011, the five biggest oil companies (Chevron, BP, ConocoPhillips, Shell, and ExxonMobil) reported profits of $375 million per day in spite of having reduced their oil production (Leber). This is equivalent to $261,000 of profits every minute, which was more that 96% of what households in America make in a year. In the same year, these organizations received $6.6 million in terms of federal tax breaks each day. The 3 largest American oil companies spent more than 50% ($100 million) of their profits in buying back their own stock in efforts to enrich their largest shareholders, board, and senior managers in the year 2011 (Leber). The whole oil & gas industry used on average $400,000 every day lobbying representatives and senators to weaken public health protections as well as maintain huge oil tax breaks, adding up to approximately $150 million. Each of these five huge companies’ CEOs received $60,110 in average as compensation per day during the year. Their pay hiked 55% in the year. The compensation for Rx Tillerson, Exxon’s CEO came close to 55% daily. The companies reported $368 million in profits per day within the first three months of the year 2012. The combined earnings of these companies totaled $1 trillion right from 2001 through 2011 (Leber). Comparing the claims oil companies are making concerning the problem they are facing, and the huge amounts of profits they are generating, it I clear that something fishy I going on. Oil prices will always increase and claims about short supply of oil, high costs of generating oil, and political and other forms of crisis by oil companies are their strategy of doing business as all these results into increased oil prices. The demand of oil is quite high today, as it has been always. Energy drives the world and people cannot function well without energy. With this in mind, it is important to note that fossil fuels dominate energy consumption and will continue doing so in the foreseeable future possibly doubling fossil fuels utilization. Among the various reasons for this are the expected growth in population as well as development of the undeveloped nations. Oil is the most consumed form of fossil fuel, followed by coal and then natural gas (Riddell, Ronson and Counts, 1). Even though alternative forms of energy exist, people have not given enough attention to them. The population of the world is growing and this is expected to continue in the future. On the contrary, there will be limited oil supply in the future as oil is expected to diminish in the future. Oil companies are quite aware that the demand for oil is always increasing and if they can demonstrate that there is a shortage then their demands will be met, including increasing prices and receiving government grants. Oil production is controlled by cartels that are in war for a huge market share. This is evident in the war between OPEC and the United States shale oil producers. OPEC has plans to reduce production of oil by OPEC, something that will definitely result in increased oil prices, which will mean huge profits for OPEC. This is a huge cut on production reaching up to almost a million barrels each day. As a result, oil prices will hike from $50 per barrel to about $60 per barrel. An increase of price by a dollar per barrel will ensure increased yearly revenue of $1 billion to Iraq officials. Most consumers are currently used to cheap oil and gas, which has remained so for the last two years. Increased oil prices could put the economy of the U.S as well as other countries at jeopardy. The plans to cut the supply of oil by OPEC, was a decision reached on November 30, 2016, resulting in the doubling of oil prices compared to January 2016. This is all as a result of a battle of share market with the United States shale oil producers. Shale producers pushed production of oil in the U.S. to 9.4 million mbpd back in 2015, something that knocked the market share for OPEC to 41.8% in the year 2014 from2012’s 44.5 percent (Amadeo). Resultantly, supply rose while prices went down. According to the author, the prices of gas and oil have a seasonal swing that is predictable. Such prices rise during spring and fall during autumn. This is because summer vocation is a driving season. The decline of the U.S Dollar also affects the price of oil. The value of oil producing countries’ currencies is tied to the dollar and this means that devaluation of the dollar causes devaluation their currencies. As a result, OPEC must raise oil prices so that it can maintain its profit margin. A far as the far for market share in the oil industry continues then prices of oil will at all times go high. The oil industry is an oligopoly. This means that it only a few producers to feed a huge market with its product. OPEC is made up of 12 countries including Iraq, Islamic Republic of Iran, Algeria, Ecuador, Angola, Libya, Kuwait, Qatar, Nigeria, Venezuela, United Arab Emirates, and Saudi Arabia. OPEC is an oligopoly market dominate Arab Oil producers holding the largest amount of refineries something that gives them the chance to dominate others as well as decide prices. The cartel attempts to influence petroleum prices in one agreement and by setting quotas and they become effective through restriction of sales. They anticipate supply and demand of the future through thorough analysis of the current situation to see different price fluctuations within the markets (Moran, 581). After such analysis, the cartel comes up to a decision to either lower or raise the production of oil as agreed by all members so as to maintain stability of price as well as make oil available in the market. OPEC was purposely the manipulation of oil prices as well as controlling the supply of oil (Moran). In America, the five biggest oil companies including ConocoPhilips, BP, Shell, Chevron, and Exxon Mobil control the market (Cunningham). They are so few such that the decision of one of them has impact on the other companies. The fact that these companies are few makes it very easy for them to come into an agreement that favors them. It is different from a structure where an unlimited number of companies operate within an industry. Bringing together a huge number of participants can be challenging and the participants may not see things in a similar way. On the contrary, it is clear that the five largest oil companies in the United States are always in agreement and want the same thing for each other. They are always asking for tax break jointly. The same applies when it comes to campaigns for increasing oil prices or trying to make the government and the public understand that a shortage of supply exists. These five companies work hand in hand when expressing the problems facing the industry. They are the industry and the industry is ConocoPhilips, BP, Shell, Chevron, and Exxon Mobil. As long as they remain the industry, they will at all time fight for what favors them, and that is nothing less than increased fuel prices. In addition to that, entry to the oil industry is not easy. This is due to two main reasons: these companies are always making sure that the government makes it hard for other companies to join or maintain their positions in business through a multitude of government and environmental requirements. Secondly, oil production is very expensive. New companies need to invest a lot of money to enter into oil generating business. Expenses involved include exploration for potential reserves, test wells’ drilling, production wells’ drilling, pumping the oil off the ground, as well as transporting it. There are yet additional costs associated with refining such oil into gasoline as well as getting it to gas stations across the nation as well as to other countries (Smith). The personnel working in oil extraction are highly educated and experienced and demand way too much of remuneration. Adding all these expenses to the government requirements then they become overwhelming for new entrants. This ensures and will continue making sure that few huge petroleum companies remain dominating the industry. Again, such huge expenses are a good reason for them to demand for increased oil prices. Recently, the five biggest oil companies, in spite of their “outsized” profits, are lobbying to maintain tax breaks as well as for the government to lift the ban on crude oil export. The companies have produced financial reports indicating that their profit declined by 7%, which means that they made $177,000 every minute (Weiss and Peterson). It is indicated that the companies increased their production in 2013 despite years of declining oil profits. The reason for pushing for tax break as well as a lift on crude oil exportation ban is that newer, easier, as well as cheaper oil fields are becoming fewer. By offering oil companies the tax break they need and lifting the ban on crude oil exports, the government will harming the nation’s security, working families as well as the economy of the nation. This is a good example of how these companies operate jointly in their favor. It does not matter who among them comes up with an idea. They will back it up despite the absence of good grounds to base their arguments. In fact, they come first and the rest of the public can follow as long as the companies have had their way. a long a the companies maintain this attitude and the market structure remains a it is, oil prices will always go higher, just like it has been in history. There is a lot that oil companies can rely upon to demand for oil prices increments. Supply and demand of oil have been the main determinants of oil price changes over history. Any evident events across the world that could possibly interfere with the supply of oil are important and often used to show that supply is at jeopardy even if not. For instance, Former Energy Secretary Bill Richardson was quoted referring to oil prices as “dangerously high” in the year 2000 (Bloomberg). He said that the White House was committed towards using all available options to fright rising energy cost. At the same time, Spanish farmers were protesting the high fuel cost in Spain. Ira President then, Saddam Hussein was frightening Kuwait for stealing Ira crude. A barrel would cost $38 while a gas gallon goes for $1.58. Today, a barrel remains stubbornly above $50 with unending debates on what reasons are behind such prices (Bloomberg). Sometimes back, CNN noted that upon asking 3-experts about the reasons behind oil price’s instability nature, their response concludes that no one person clearly knows what is happening. Alaron Trading’s Phil Flynn, an analyst was quoted saying that the world is in trouble during the 2007 peak summer driving season. He meant that there was little gasoline left in reserve and shortages had been reported in some parts of the country. Such alarms have always been there since 2001, a time when the oil industry began mentioning to the media about potential rise of gasoline price to $3 (Bloomberg). In summer 2006, similar new were aired every day, only for Americans to find that there had been sufficient gasoline between April and July such that 8.1 million barrels were put into reserve. There was a huge stock of gasoline since 2000 to2007 despite plenty of refinery issues being reported throughout the 7 years period. The military action threat against Iraq was a good excuse for hiking fuel prices. At one point, it was the refusal of Iran to abandon its nuclear programs. On another point, it was Iran’s seizure of fourteen British sailors. All these were said to have potential impact on oil prices, yet two Iran and Iraq, two key oil producing neighbors had been in war earlier in the 1980’s a time hence fuel prices went down (Bloomberg). The major problem with high oil prices does not really rest on its limited supply but how much information about possible threats to supply are fed to the media. Catastrophic acts of God as well a political, economic, and social events will always take place and these will always be a good excuse for oil companies to increase petroleum prices. Adopting alternative energy is the only way the world can bring a stop to the high or increasing prices of oil. Alternative energy includes other sources of energy other than fossil fuels. These are cleaner forms of energy that do not pollute the environment like fossil fuels do. These forms of energy include solar energy, wind energy, nuclear energy, hydro energy, geothermal energy, hydrogen, and biofuel and ethanol. Most of these are renewable sources of energy (naturally replenished). There are way too many advantages for using alternative forms of energy as compared to fossil fuels. The process for generating oil, natural gas happens to be quite difficult as ell a demanding one, which needs a wide range of multifaceted equipment chemical as well as physical procedures. Alternatively, alternative energy may be widely produced using basic natural processes as well as equipment. On top of the ever-increasing prices of fossil fuels, they are unfriendly to the environment and expected to diminish at some point. As a result, there are many reasons why people need to turn to fossil alternative energy sources and stop oil prices from increasing due to increased demand. One is that they will save themselves from the problem of running short of energy as fossil fuel come to an end in the future. Secondly, they will be addressing the issue of pollution, which, to a larger extend, has been as a result of fossil fuels, and has led to global warming (Riddell, Ronson and Counts). Coming up with projects to set alternative energy plants, the government as well as private sector will be generating employment for the public and most importantly, freeing the nation from the oppression of the cartels that control production and supply of oil. Now that it is clear that production of clean energy is cheaper and less complex than the production oil, the government should devote itself to production of renewable energy as the best interest of the public, something they did vow to respect. This is even better than offering oil companies the tax breaks they are asking for considering that they are not meant to bring oil prices down but to cater for the increasing oil generation expenses. The government is supposed to protect the public but not others benefit at the expense of the public. It is the responsibility of every person to address the issue of the environment. However, much responsibility lies with the government as it is supposed to address the general interest of the people rather the need of a single individual. With this regard, the government should address the issue of installing clean energy. Through awareness, it should educate the public of its significance. On the other hand, people in America and other parts of the word are used to using fossil fuels. Americans spend approximately $632 billion each year on oil and gas. People feel that it is easy to buy some gas everyday than buy an expensive car that uses natural energy because it will be expensive in the short-run. Many people prefer using their personal car or a taxi instead of using public means something that increase the demand for oil. People prefer fewer costs and overlook the problems they could course in the future. For instance, avoiding installation of clean energy because it is expensive encourages increased demand for fossil fuels, which means increase in oil prices. It also means pollution resulting into living under adverse environment. The government, on the other hand, is not doing its work. Instead, it is working towards the benefit of the oil companies. If this continues, oil prices will keep on increasing. It is as if the oil companies control the government. The new Trump’s administration behaves a one under the control of the polluter-industrial complex. This is shown in trump’s latest executive order directing his cabinet starts demolishing the various Obama-era global warming policies. Trump has shown a lot of interest in the past in repealing the United States climate regulations set free the fossil fuel industry. The administration asks the federal court to suspend moving forward with the Obama-Era Environmental laws as the Trump administration comes to a decision on how to repeal or modify such regulations (Geiling, 2017). As a result, a long time will be spent by the administration in rewriting such regulations as well as taking care lots of legal challenges from environmentalists. During his campaign, the president vowed to pull out of the Paris Climate deal, which happens to be the major global warming international treaty, however, his recent order does not say anything about it. Reports say that the matter is under discussion; however, Trump has been warned that by taking the move, he would be exposed to a serious diplomatic reaction. Again, Trump’s order has not challenged the fundamental power to regulate greenhouse gasses that rest with the Environmental Protection Agencies. On the other hand, Trump has just begun his business with environmental regulation and it is hard to predict what tomorrow will be like as he continues with his business. The polluterindustrial complex is made of business sectors that are willing to do anything to weaken environmental justice for their own benefit. Such corporate polluters as well as their financial supporters poor money into old as well as current anti-environmental institutions and into the national election campaigns for pro-business candidates running for offices. The actions of President Trump regarding the environment preservation laws put in place by the previous administration are questionable and it is likely that he is a pro-businessman put in place by oil companies to do their dirty work. Among the things the administration is doing in rolling back the regulation include rolling back the clean power plan, reassessing carbon principles for new power plants, and lifting the federal coal-leasing memorandum among other things. It is clear that all this is to be done in favor of American petroleum companies. If the administration is under the control of the oil companies then what will protect the companies from increasing oil prices given that the government is the only body that can stop them. Conclusion The demand for energy in America is high and it is becoming even higher. This because of the growing world population and countries that are becoming more industrialized. As a result, oil companies know that oil must be consumed no matter how high the price goes. Consequently, there has been an increase in oil prices from time to time. Oil shortage is always an easy excuse for increased oil prices and all other factors that determine oil prices result into oil supply and demand. Though prices have been seen to go down at some points, they always shoot after a short while and to a higher level than the previous one. Oil generation involves huge costs and these are as ell good excuses for oil companies to increase oil prices. On the other hand, they end up making super-normal profits in spite of the huge expenses. Again, the companies use any unfavorable events, whether political, social, or acts of God to claim short supply. Another problem is the one of cartels controlling the industry. Such cartels manipulate oil prices through supply and ensure that they get the best out of oil prices. People can control oil prices by turning to alternative sources of energy, however, people are used to using fossil fuels and view alternative energy as costly sources of energy. The government can help through awareness and putting in place projects for alternative energy power plants. On the other hand, it is working towards the wishes of oil companies, something that gets people to suspect that it is being controlled by the polluterindustrial complex. With this form of attitude by both the people and the government, the oil prices will continue increasing in the future. Works Cited Amadeo, Kimberly. "What Makes Oil Prices So High?" The Balance (2016). Bloomberg. A Brief History of Oil (Profits). 2007. 10 2 2017 . Cunningham, Nick. The Economy Needs Higher Oil Prices – Goldman Sachs. 2016. 14 3 2017 . Geiling, N. (2017). The Trump administration isn’t finished rolling back environmental regulations. ThinkProgress, 1. Moran, Theodore, H. "Managing an Oligopoly of Would-Be Sovereigns: The Dynamics of Joint Control and Self-Control in the International Oil Industry Past, Present, and Future." International Organization (1987): 575-607. Riddell, Alison, et al. "Towards Sustainable Energy: The current Fossil Fuel problem and the prospects of Geothermal and Nuclear power." (2015). Smith, Rich. "Big Oil Isn't as Profitable as Everyone Thinks." Finamnce (2012). Weiss, Daniel, J and Miranda Peterson. "With Only $93 Billion in Profits, the Big Five Oil Companies Demand to Keep Tax Breaks." Energy and Environment (2014).
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Here, is the presentation based on the previous papers you uploaded?

Surname 1
Name
Instructor
Course
Date
Reflective Letter
Over the course of the semester, I gained a lot of skills and experience in research skills, critical
thinking, as well as in writing and approach to academic research. With the improvement in these skills
and learning capabilities, my learning process has been becoming easier over the course of the semester.
The advantage with this course is that it gives me the required skills to conduct and formulate
professional academic research in all the other fields of study.
My research skills have improved significantly over the semester. At the beginning of the
semester, I was hardly able to comprehend complex research projects. I was barely ab...


Anonymous
Just what I needed…Fantastic!

Studypool
4.7
Indeed
4.5
Sitejabber
4.4

Related Tags