3. Economic Stability
Economic stabilization has tried to take place for years in a market heavily influenced by foreign forces. The US economy has had strong links to oil availability and oil prices, often times leading to energy crisis, when access was low, and economic depression, when prices were high. Development of domestic natural gas well will eliminate extreme economic turbulence.
3.1: Volatility of oil prices
In the early 1970s the US was becoming more dependent on foreign oil as consumption was increasing and domestic oil production was decreasing. By 1973 we experience the first threat of oil dependence, the Organization of Arab Petroleum Exporting Countries (OAPEC) had imposed an oil embargo. Their embargo caused fuel shortages and the price of oil to quadrupled from $3 a barrel to $12. The oil embargo was lifted in 1974, but prices remained fairly high. A few years later the energy crisis of 1979 shook America again, and was again a product of Middle Eastern affairs. Sparked by the Iranian Revolution, and a decrease in their daily production, the world oil market was unable to accommodate the growing global oil demand. Oil prices began to rise again, doubling in about one year. Real efforts started being made to curb US foreign oil dependence by attempting to stimulate domestic oil production, increase energy efficiency, and increasing efforts towards renewable and alternative energy sources, such as wind and solar.
All hope was lost once the price of oil retreated to more moderate levels in the mid- 1980s; domestic oil production, progress toward energy efficiency, and energy alternatives decreased, while foreign imports rose again. This was the start to a viscous cycle that has become apart of the US economy; high oil prices that incite change, and low oil prices that abandon all steps towards fuel independence (table 3.1.1). Table 3.1.2 shows the turmoil in the oil market compared to the natural gas market.
Economic stabilization has tried to take place for years in a market heavily influenced by foreign forces. The US economy has had strong links to oil availability and oil prices, often times leading to energy crisis, when access was low, and economic depression, when prices were high. Development of domestic natural gas well will eliminate extreme economic turbulence.
3.1: Volatility of oil prices
In the early 1970s the US was becoming more dependent on foreign oil as consumption was increasing and domestic oil production was decreasing. By 1973 we experience the first threat of oil dependence, the Organization of Arab Petroleum Exporting Countries (OAPEC) had imposed an oil embargo. Their embargo caused fuel shortages and the price of oil to quadrupled from $3 a barrel to $12. The oil embargo was lifted in 1974, but prices remained fairly high. A few years later the energy crisis of 1979 shook America again, and was again a product of Middle Eastern affairs. Sparked by the Iranian Revolution, and a decrease in their daily production, the world oil market was unable to accommodate the growing global oil demand. Oil prices began to rise again, doubling in about one year. Real efforts started being made to curb US foreign oil dependence by attempting to stimulate domestic oil production, increase energy efficiency, and increasing efforts towards renewable and alternative energy sources, such as wind and solar.
All hope was lost once the price of oil retreated to more moderate levels in the mid- 1980s; domestic oil production, progress toward energy efficiency, and energy alternatives decreased, while foreign imports rose again. This was the start to a viscous cycle that has become apart of the US economy; high oil prices that incite change, and low oil prices that abandon all steps towards fuel independence (table 3.1.1). Table 3.1.2 shows the turmoil in the oil market compared to the natural gas market.
Note: Chart from the years 1861-2011
How volatile the market has been.
Extreme jump in oil prices at 1972
Large decrease in oil prices in years 1984-1987
Source: Quora - http://www.quora.com/Why-have-food-prices-such-as-wheat-corn-have-doubled-in-the-last-5-years
How volatile the market has been.
Extreme jump in oil prices at 1972
Large decrease in oil prices in years 1984-1987
Source: Quora - http://www.quora.com/Why-have-food-prices-such-as-wheat-corn-have-doubled-in-the-last-5-years
Note: Disparities in oil and gas prices in one year, and the changes within themselves.
Time: YearMonth format- 2013m12 is December 2013.
Source: Economic Thinking In Action - http://www.employstats.com/blog/2014/12/19/natural-gas-prices-increased-while-crude-oil-prices-continue-to-fall-in-dec/
Time: YearMonth format- 2013m12 is December 2013.
Source: Economic Thinking In Action - http://www.employstats.com/blog/2014/12/19/natural-gas-prices-increased-while-crude-oil-prices-continue-to-fall-in-dec/
3.2: American job creation
As the new infrastructure develops and the demand for CNG vehicles increases, supporting markets will also increase. Texas jobs ranging from the well to the pump will begin to develop; new fueling facilities, CNG vehicles manufacturing, and maintenance personal will be necessary to sustain a new industry.
As the new infrastructure develops and the demand for CNG vehicles increases, supporting markets will also increase. Texas jobs ranging from the well to the pump will begin to develop; new fueling facilities, CNG vehicles manufacturing, and maintenance personal will be necessary to sustain a new industry.