USA OIL

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Throughout the United States the majority of people are scared wondering when war will be declared. At the same time the citizens of America know, once we are at war with Iraq we will then be at war with oil providers. In order to keep prices from raising the American people must learn the value of conservation. The US, as a business will have many decisions to make within the next few months.

The US is facing its most persistent shortage in oil stocks in over 7 years. With war lurking around the corner, the US has unlikely enough turned to help from Iraq. Although the US plans to launch around 00 cruise missiles a day on Iraq, Iraq has doubled its exports to America, helping US refineries cope with a devastating strike in Venezuela. Iraq, who has the world's second largest proven oil reserves of 11 billion barrels, and at least another 100 billion of unproven reserves, would be a "gold mine" for any oil giant such as Exxon or Shell. Many experts believe that President Bush may be more concerned with the amount of oil held in Iraq rather than their threat towards weapons of mass destruction. If the US were able to whip out Iraqi government and take control of their oil fields it would decrease theirs costs on exports to the US. Although the US military will state that this war is a security issue rather than a grab for oil, many sources indicate that Saddam plans to damage or destroy his oil fields, which would inflict up to 0 billion dollar damage on the US economy and would cause irreparable environmental damage. Large distributors of oil such as Russia fear that if the US were to gain control on a large reserve of cheap oil it could send prices tumbling.

It is a known fact that if there is a shortage in a market the price will rise and on the other hand, if there is a surplus the prices will drop. Since the terrorist attack of -11 the US economy has significantly been hurt. Cheap oil would boost our economy but at the same time promote war on Iraq. If sanctions were lifted and US majors were granted access to Iraq's untapped reserves the hunt for cheap oil could be ended without war. An act of war on Iraq is a win, win situation for the US. If war is confirmed and Saddam eliminates his oil fields the US is still defending against terrorism. On the other hand, if war is declared and the United States takes control of the oil fields as well as Iraq, terrorism and our economy will be protected against.

In an article by Viktor Koen he displays our options to escape the consequences of our thirst for oil. With the constant question of whether or not the US will be at war in the near future the author addresses what Americans have to understand about our oil usage. At the same time the author explains how war could be beneficial to the U.S. economy.

Business week has created guidelines for a rational and feasible energy policy. It consisted of six steps 1-Diversify oil supplies, -Use strategic reserves, -Boost industrial efficiency, 4-Raise car and truck MPG, 5-Nuture renewable energy, and 6-Phase in fuel taxes. To insure oil supplies the U.S. must seek other means of purchasing oil around the world. Along with answering the supply question the U.S. must use strategic reserves such as the 5. million bbl. stored in underground salt caverns in America. They must also boost industrial efficiency across the economy, including solving our oil consumption for transportation. The thought of hydrogen-fueled cars would decrease the oil usage significantly. Innovations towards wind, solar and hydrogen power sources are dropping the price. Finally the thought of raising the energy efficiency in the economy by up to 50% and reducing the U.S. oil consumption by more than billion bbl a day.

The United States will have to make many decisions just as a business would if they're main supplier was to go out of business. The US will either take control of the oil fields in Iraq or have to develop a contract with another oil filled country. Major oil providers such as Exxon and Shell will have to work together to keep their customers pleased. Although the American public know gas prices will be raised, if in fact they are too high people may look to find alternative means of energy. Alternative means of energy will in turn hurt companies like Exxon and Shell, thus hurting our economy.

The United States may be looking at war as a business proposition to better their economy, but at the same time they're protecting their citizens from weapons of mass destruction. Only time will tell what happens and where the US stands as a business among other leading oil providers.

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