We are probably all familiar with the debate about oil. On one hand, people argue that it is environmentally destructive and not worth the risk. Other people point to the very real benefits that come with developing a reliable domestic source oil. They argue that we can develop ways to prevent environmental damage that will make the benefits outweigh the risks. To learn more, you can talk to investment experts in the field of oil and gas production like the team at the Southlake Resources Group. In the meantime, here are some of the key benefits of increasing domestic oil production.
A common argument in favor of increasing the domestic production of oil is to reduce dependency on foreign governments and markets. While some of our energy partners are very friendly, the fact is that dependence on other states is never a good idea when it comes to something as fundamental as energy. Anyone who lived through the oil crises of the 1970s will remember first-hand how the economy ground to a standstill as a result of America’s lack of control over its own energy supplies. Other sources of energy, including renewables, must be developed at the same time to further reduce dependency.
Lower Prices and Economic Boost
The laws of supply and demand tell us that the greater the supply of oil is, the lower the prices will be. This is a good thing across the economic board. For consumers and producers alike, there will be immediate benefits in the form of lower fuel costs. But this has spin-offs across the economy as a whole. If the largest cost of production is reduced, then costs all down the line can also be reduced. In practical terms, this means that lower oil costs will also reduce the costs of other goods in the economy. Business runs on transportation whether in the air or on roads, and price of everything that needs to be moved from one place to another will be affected by basic transportation costs. Lower costs therefore have an immediate for consumers. Relatively stable prices have another benefit – if businesses and producers can count on reliable prices over a longer period, they are better able to make investments which can contribute to overall economic growth.
Expansion of oil exploration and recovery activity brings jobs and economic activity to often remote areas. Those people will spend their wages in the local community which helps to spread the benefits of these jobs Job opportunities are available at all levels, from skilled to unskilled, so that the benefits are available to all members of the community. They also provide opportunities for upward mobility as a result of training and on the job experience. Additionally, support or spin-off jobs are created in the wider community as services expand to support increased people and activity.
The oil industry recognizes its obligation to work in responsible ways, and increased activity comes increased potential for scientific and policy advancements to improve the safety and efficiency of the industry as a whole. This includes investments in transport infrastructure to minimize the risks of moving oil across the country and community impact assessment studies to make sure that local communities or wildlife are not negatively affected.
None of this is to say that there are some risks associated with oil development – but it does suggest that these risks can be minimized, and need to be weighed against the very significant benefits of increasing domestic oil production.