The Comeback of Oil as an Investment

The world would stop without oil. Factories would end running as well as all kinds of

transportation. Homes and offices, heated and powered by oil, would freeze in winter. Oil is used in many products that we use every day. But are we aware how much energy does the United States use?

As a whole, USA consumes 100,000 Quadrillion British Thermal units (Quads) of energy each year. Its largest source of energy is oil, and it uses about 35 Quads of petroleum. 71% goes to transportation and 23% for industrial uses such as machines.

Oil is the lifeblood of every industrialized nation such as the United States.

Over the years, debates were exchanged concerning the effects of large extraction of oil and its negative effects on the environment. But still, our politicians approve energy plans because the benefits outweigh the risks.

President Donald Trump has signed the Keystone Pipeline agreement recently to protect the US energy consumption in the next years to come.  

And how will such actions affect USA’s socio-economic position today?

Keystone XL Pipeline

The Keystone XL Pipeline is the brainchild of the TransCanada Corporation, a Canadian energy company based in Alberta, Canada. It proposes to carry oil from Alberta, Canada to the United States.

Canada has the world’s 3rd largest oil reserves, and the US is its largest customer.

The company proposes to manufacture oil from Tar sand. Tar sand can be found all over the world, but it is heavily concentrated in Canada. It is a mixture of clay, sand, and oil.

Mining oil from Tar Sands isn’t like sticking a straw in the ground and to get it, you need to cut down forests. 2 tons of tar sand and an average of 3.25 barrels of water will give you 1 barrel of oil. To squeeze the oil from the sand, you have to boil the ground which takes huge amounts of water and energy.

Aside from the complexities in producing oil in Tar sand, the oil will produce 17% more greenhouse gas emissions than regular oil. It is also projected to produce toxic chemicals which will poison lakes and rivers. Environmentalists worry about leaks and oil spills since it will cross the Ogallala Aquifer. So what will happen to the oil industry of USA now that President Trump had signed the Keystone Pipeline agreement?

The Keystone Pipeline will negatively impact national and local economies. It could destroy the environment and affect lives near the pipelines. The pipeline will not create permanent jobs for the people because it is simple to maintain once built.

On the positive note, it will make the US less dependent on foreign oil suppliers such as the Middle East.

Oil produced in Alberta and North Dakota can enter the global market. The pipeline would send more products to be handled and refined in the Gulf region, increasing investment in oil producing regions in the United States and Canada. State revenues will be enhanced, and there will be the long-term facilitation of economic development in the Gulf region.

In a nutshell, US oil boom isn’t at rest, and it is now planning a comeback; especially with the signing of the Keystone Pipeline construction. Whatever the reason it is, the US administration would only like to safeguard the future of its people who are the key holders of their economy and society.