American Oil: Its Confound Effects on the Economy and Climate, and What We Have To Do To Maintain Balance

As the United States prospers, the future burns. The United States has recently become the largest producer of oil, resulting in massive booms in the oil industry, but with analysts and environmentalists worried about the future of the planet in return. America now produces nearly 11.7 million barrels of oil (almost 495 million gallons) a day. The usage and production of so much oil (nearly 800 million gallons are used according to the U.S. Energy Information Administration) begs the question: How can the United States move towards a cleaner future without losing out on the economic benefits of fossil fuel?

In order to answer this question, both sides must be understood. First, the economics of the oil industry should be explained. At current rates of production, the International Energy Agency projects that the United States would produce more oil than Saudi Arabia and Russia combined in 2025, in response to the consumer’s demands. As companies and consumers gain from the massive economic benefits the upsurge in extracting new oil brings, it becomes increasingly difficult for us to transition to a cleaner energy.

Upon analysis, the economy of the United States, and many other countries, rides on the oil industry. Because the United States exports more oil than it imports, for the first time in American history, the trade deficit has fallen, resulting in benefits for the American economy. For example, the value of the United States Dollar has increased because of the demand for our second largest product, crude oil. Furthermore, oil, just like shares, are best when both production and price increase.

Large companies such as Exxon and BP have bought large swaths of land in West Texas, hiring many people and towns in Texas seeing a surge in consumerism. Just last year, 43.2 billion dollars were used in land purchasing deals. As more and more oil is extracted, the amount of money flowing into investments and taxes increases, seen in just Texas’ payments of $1 billion in taxes. Oil production companies bear the brunt of taxes, not consumers, incentivizing more purchases of oil from consumers while establishing a link between companies and governments.

Economically, the big oil boom has increased the value of our currency, created thousands of jobs across the West, and puts money into our government and companies. Yet with such economic prosperity comes a severe negative. As more and more pipelines and drills are constructed and used, global emissions escalate, speeding up the change in climate. When more oil is made accessible, consumers burn more and more fuels, expediting climate change.

The drilling of oil has destroyed Texan roads and created gas leaks in Texan communities. The imminent and horrifying threat of climate change burns bright in our nation’s face. While there are numerous benefits to the increased production of oil, there is a threat that comes along with it, a threat that we must work to neutralize.

But how can we balance both oil production and climate change? A remedy to the dangers of releasing carbon dioxide is a technique used by many oil companies already. Occidental is a company leading in the usage of a technique called “carbon capture,” where carbon dioxide is stored underground.

Oil companies, in a sharp contrast to the Trump administration, have formed a coalition with dozens of oil companies in other countries called the Oil and Gas Climate Initiative. This group, consisting of big names like Chevron and Exxon, aims to reduce the release of methane, the second most prevalent greenhouse gas.

In terms of policy, a carbon tax is being passed around that would aim to tax companies for burning fossil fuels, in a way making companies pay for the cost of global warming. The carbon tax would increase prices of gasoline and electricity, forcing consumers to be more energy efficient, and allows the oil industry to have more cost-effective ways of pursuing clean energy, rather than to be subject to government regulation.

The Congressional Budget Office estimates that more than a trillion dollars could be made from the carbon tax, which could all go to fund government agencies that deal with wildlife and disasters, or to researching ways to cut down on fossil fuel consumption. Companies such as Exxon, Shell, and BP have fully backed the carbon tax, showing that the initiative is truly there.

The transition from fossil fuels to clean energy is not going to be instantaneous. The economies of numerous countries depend on the oil business heavily. Thankfully, oil businesses have already started the transition into a cleaner America. The United States as a whole is shifting towards a better mindset regarding clean energy.

A Stanford study conducted in 2018 shows that 74 percent of Americans acknowledge the threat of climate change, and almost 2 percent of car sales are electric. While that may seem low, that percentage grows larger and larger every single year, as electric car sales become more and more popular with big car manufacturers, ranging from Chevrolet to Volkswagen; and become affordable too.

Ultimately, Americans and their industries show the attention and goals that each of us have in a cleaner, safer tomorrow. However, the situation of climate change relies on us. It is up to us to be more responsible and considerate of the oil we consume, and to be aware of the trying times that we are in, while benefiting from the great economy the oil industry has produced. The industry has already started the stages of regressing climate change, the only thing that our future needs is an accelerant in the form of us, the consumers.