Where is the money? Does America truly benefits from pumping more oil?
The United States have joined Saudi Arabia and Russia, as one of the leading oil producer countries. Almost doubling its output since last year to 10 million barrels a day from the previews 5 million barrels. So the question lots of American ask is,” Where are all the benefits associated with this major drilling?”.
Since the massive oil drilling began in 2008, US oil production rose to 10 million barrels a day and analysts confidently predicted that a range of benefits will start flow to the US.
Analysts predicted a line of benefits:
US manufactures will get a major boost
The US will be far less dependent on foreign energy
America could be less active in the Middle east conflict
Yet none of it happen, why?
US economy will boost.
The Major oil drilling should have boosted the economy, make energy abundant and will save money for consumers when buying gas. All of these did happen, but what forecasters didn’t take in advance, is the tide link now Americans have to oil price.
Low oil price is now effecting a lot of people. As oil price dropped, companies in the United States need to cut spending resolving a slowdown in the overall country’s growth.
So, it turned out oil production made some gains but also generate new losses so one offset the other. More importantly, in the past Americans used to worry about high oil price, now they are worried also from low oil price.
By trying to gain independence and having become a leading oil producer, US oil drilling contributes to global oil glut and to low oil price. Every day, global oil production exceeds demand by 1 million barrels causing a new problem: Shortage in room to store these oil barrels.
Oil experts say there are 500 million barrels today worldwide in storage, warning that if the room will run out, oil price can go below $20.
US will withdraw its troops from the Middle East.
Analysts predicted that US oil production will lead American officials to withdraw more and more US troops from the Middle East, as oil was the main reason for the American intervention.
But cheap oil price can destabilize Middle Eastern countries who depend solely on oil revenue.
Moreover, Obama did withdraw troops as he promised when first elected, but America is still engaging in three regional wars: at Iraq, Afgenistan, and Syria, and is dealing with instability throughout the region.
In conclusion, since 2008 there is no clear benefit for the US oil drilling, and it is clear that the major producers worldwide should come to agreement to cut supply, before a big economic and environmental crisis will arrive.