Oil and OPECOil and OPEC

Another name for oil is Another name for oil is petroleumpetroleum

Oil is a Oil is a non-renewable non-renewable resourceresource = a natural resource = a natural resource that is not replaceable after it that is not replaceable after it is removedis removed

Why is oil such a valuable resource?

Because you can’t Because you can’t make more oil and we make more oil and we

need it for so many need it for so many thingsthings

Energy use is increasing Energy use is increasing because:because:

►More people = More energy usageMore people = More energy usage►More appliances that use more More appliances that use more

energyenergy►Large industrial energy useLarge industrial energy use► ““Bigger is betterBigger is better”” and and ““more is more is

betterbetter”” philosophy philosophy►Leisure activities use more energyLeisure activities use more energy

MonopolyMonopoly = when one = when one person/country/company person/country/company controls a particular item or controls a particular item or product and therefore controls product and therefore controls its price its price

OligopolyOligopoly = when a small group = when a small group of people/companies/countries of people/companies/countries controls a particular item or controls a particular item or product and therefore controls product and therefore controls its price.its price.

World oil use is increasing faster World oil use is increasing faster than the U.S.than the U.S.’’ because they are because they are catching up technologically catching up technologically (becoming more modern)(becoming more modern)

OPECOPEC = = Organization of Organization of Petroleum Exporting Petroleum Exporting

CountriesCountries

►11 countries from around the 11 countries from around the worldworld

Venezuela, Algeria, Nigeria, Libya, Venezuela, Algeria, Nigeria, Libya, Saudi Arabia, Kuwait, Iran, Iraq, Saudi Arabia, Kuwait, Iran, Iraq, Qatar, United Arab Emirates, Qatar, United Arab Emirates, IndonesiaIndonesia

What region of the world What region of the world are most OPEC countries are most OPEC countries

located in?located in?

The Middle EastThe Middle East

Oil Oil exportingexporting countries countries organized to produce an organized to produce an

oligopoly: oligopoly:

Increasing the price of oil Increasing the price of oil when it wants by when it wants by

decreasing the oil supplydecreasing the oil supply

Even though the U.S. has Even though the U.S. has oil, we are not members oil, we are not members

of OPECof OPEC

Why isn’t the U.S. a member of OPEC?

We do not export our We do not export our oiloil

Much of our oil is used Much of our oil is used domestically or is saved as a domestically or is saved as a reserve supply in case OPEC reserve supply in case OPEC lowers the worldlowers the world’’s supply of s supply of oil.oil.

Where does the US get most of its Where does the US get most of its oil? Not the Middle East! oil? Not the Middle East!

1.1.CanadaCanada

2.2.MexicoMexico

3.3.Saudi ArabiaSaudi Arabia

4.4.VenezuelaVenezuela

5.5.NigeriaNigeria

6.6.AngolaAngola

7.7.IraqIraq

8.8.AlgeriaAlgeria

9.9.United KingdomUnited Kingdom

10.10.BrazilBrazil

Source: http://www.consumerenergyreport.com/research/crude-oil/where-the-us-gets-its-oil-from/

►What percentage of our oil is imported from the Middle East?

16%

►What percentage of our oil comes from Canada and Mexico?

49%49%

http://www.youtube.com/watch?v=VCLRlVxOH-Q