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http://www.papersplanet.comIntroductionNowadays, the question about the future of oil in our environment is becoming moreand more important. What will happen and how will it change our behaviours?Research in the past has shown that the supply of oil is limited, but the demandis rising steadily. Our whole economy depends on oil production and nearlyeverything we use in our daily live comprehends oil as a major ingredient. On theother hand, it has also shown that the prediction about its limits can not be madeone hundred percent correctly. In the 1970´s and the 1980´s, economists predictedthat a barrel of oil would cost a hundred dollars by the year 2000, due to limitedresources. Will the world economy change and switch to alternative resources orwill it totally collapse in our near future? What will the leading oil companiesdo? Focusing on Shell/Royal Dutch as one of the biggest and most profit making oilproducing company in the world, it will be shown how they as a modern businesshave an effect but also changed the world’s oil availabilities. Reviewing the twoopinions about the future of oil, this paper will as well as possible discuss whatwe can expect from our economic future from the pessimistic and optimistic pointof view. Starting with short background information to give a slide overview onhow I got to the point where I am at right now, I will also look at both sides ofthe argumentation for the supply of oil. Furthermore I will analyse the work ofShell/Royal Dutch by focusing on technological restrictions, technicaldevelopments and socio-cultural developments.1. OPEC countries and the oil crisesUntil the 1950´s coal was the leading energy source for private and economicalusages, but this drastically changed in the 60th. As the result of that the mainproducing oil countries decided to form an organization to safeguard theirinterests and to organize their major concerns to have a secure stabilisation ofthe oil price. This was the foundation of the Organisation of the PetroleumExporting Countries (OPEC). In 1965 Algeria, Indonesia, Iran, Iraq, Kuwait, Libya,Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela signed theOPEC contract. Together they are in possession of an estimated two-thirds of alloil reserves and make up to 40% of the world’s oil production (Wikipedia, 2005c).The first oil crises occurred in 1973, when the members of the OPEC (Organizationof Petroleum Exporting Countries) disclosed that they would stop their oil exportto those countries that encouraged Israel during the Yom Kippur War. This war wasfought between Israel and the coalition of Egypt and Syria during October 1973.Egypt and Syria tried to retrieve it lands which had been captured form Israel sixyears before (Wikipedia, 2005e). Additionally, the OPEC decided to use theirmonopolist position to multiple raise the oil price in order to underline itspower in the oil economy. Quickly, the dependence of the western world and itsindustry on the oil from the Middle Eastern countries became clear and the oilprice drastically increased.The second oil crises appeared only 6 years later caused by the IranianRevolution. Oil fields were battered because of the changing regime and power overthe oil sector. This had the lower production and exporting quantities as aresult. The other OPEC members had to increase their production to uphold theinevitable amounts of oil. In addition to this occurrence did the first Golf warin 1981 force Iran to an almost total stop of oil production. Both of those eventshad an economical panic as result which immediately increased the price of abarrel of oil again.2. Oil suppliesToday, our economy and industry depends even more on oil and its appurtenant pricethan ever before. The oil crises of 1973 has shown how powerful oil is and what itcan cause. Already the image of not having any oil reserves left is frightening
 
and the possibility that the world will fall into a worldwide energy crisesinitiates trepidation. The confirmed global oil supplies for the year 2004 were1260 billion barrels, stated by the World Resource Program (Wikipedia, 2005d).Economists also estimated that the oil reserves will only be able to cover the oildemand for another 50 years if we keep on using it like we do today.Since the importance of oil for our economy and industry has become clear from thebeginning of the 20th century, economist and experts were always discussing abouthow long the recourses will last and what we will do when they are all gone.Estimations and statements were made every year. The resources are coming to anend, but since those predictions were made new source and techniques wereestablished to enhance oil. Furthermore, all the estimations are made aboutsources that are economically detected at present. New supplies could be found andused with the help of new technologies.3. Pessimist and optimist modelThe pessimist model for oil supply is based on argumentation that the world’s oilproduction will get to the peak and than constantly decrease with in the next 20years. This curve is called the Hubbert peak named after the American economist M.King Hubbert (Wikipedia, 2005b). For this reason the oil production will backslide and will cause a steady increase of the oil price. Since the world’s oilconsumption will continue to raise, due to a growing world economy, industry andworld population, the demand will prosper to the declining supply. This theorywill include a economic disaster in the long-run if we do not start to look andwork on alternative resources which will be significant to use for the industryand every day life.In contrast to the pessimist model stands the optimistic view of the future ofoil. The optimist argues that the main reason for the unpredictable future of oilis the industrial technology. This is why the forecast for the total oil reservescan not be made within the next century. Developments, new innovations andunexpected incidence have always changed the proposition of oil reserves, so thatthe assumption for a continuous trend, like we have nowadays, has to be treaded aswrong. Underlining this thesis is that the production of oil and its methods haveimproved drastically in comparison to the past or present. Further more did theefficiency increase with tremendous success. Optimists are convinced that theupcoming technology and the corresponding know-how will drastically slow down theinanition of oil reserves.To underline both the pessimistic and optimistic model about the future of oil,experts believe and have estimated that there are about 2,390 billion barrels ofcrude oil on the earth (Wikipedia, 2005d). They also estimated that the remainingcrude oil resources today are about 1000 billion barrels. It has to be clear whatthis number means and in order to better understand simply helps a littlecalculation, 1 barrel equals 42 US gallons which are about 159 litres. From thistremendous amount of oil, close to 50% of the remaining supply are in the MiddleEastern countries. In order to keep our economy and industry like it is todaypeople and companies have to look for new sources and ways to produce oil.Shell/Royal Dutch as one of the world’s largest oil producing companies expectsthat arctic waters have a huge potential to hold massive oil reserves (Wikipedia,2005d)4. Shell and the offshore oil productionStudies of Shell/Royal Dutch give good reasons to support that about 25% of theresidual oil supplies remain within arctic water (Wikipedia, 2005a). The offshoreoil production allows Shell to totally discover a new area of crude oilproduction. Most of those resources are still undiscovered and undeveloped. Thisgives big oil producing companies like Shell/Royal Dutch the chance to fully
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