Denis Zukic

Environmental Science- section 86

Oil Prices

The law of supply and demand is the premise of all economics, simply put the higher the

cost of good is the demand for it should be lower. There are however some exceptions to the

rule, we all need necessities to survive and therefore no matter what the price of the good is the

demand for that good should stay high. Excellent example of this is water, we need water and no

matter how high the price goes up we will be ready to pay for it since it is essential for our

survival. Luckily there are few goods that defy the law of supply and demand, unfortunately oil

seems to be one of those goods. Logically, humans do not need oil to survive, we have lived

most of our history without consuming it, our bodies do not need oil, so why is it that this

commodity is defying the law of supply and demand? Why is oil so necessary that we are willing

to overpay for it in order to get it?

Answers to this questions are various, but the underlying reason is that we as a society

and culture have become addicted to it. Unfortunately our everyday lives wouldn’t be the same

without the use of oil. Oil in its various forms is all around us, like pandemics it has overtaken

the whole world. One just needs to open his eyes and will be surrounded by oil in one form or

another, this computer I am using to write this essay contains oil, the plastic keyboard was made

from crude oil, so is every other piece of plastic, just imagine how many plastic bottles,

packages…all made from oil. Furthermore the electric power that runs this computer, my light

bulb, refrigerator , TV….is derived from use of fossil fuels including oil. Well there are of course

other sources of electricity other then fossil fuels, but still most of the electricity we use today is

coming from thermonuclear plants that use fossil fuels. If that weren’t enough the food I am
going to eat might also contain oil, not directly but pesticides, fertilizers used to cultivate and

grow food contain petrochemicals or in other words-OIL! Absurd, nonetheless true. But it

doesn’t stop there, oh no, it goes on even the clothes I am wearing contains oil, clothing ink

contains oil therefore even my clothes has oil in it. Furthermore even most pharmaceutical

products contain oil, yes the medicines we use also contain oil. Refined petroleum is used to get

the organic solvents so the molecular bits of a medicine can be linked together. As well as

medicine products contain the oil so do the cosmetic products- deodorants, lotions, shampoos,

toothpaste…. If all that weren’t enough we use oil to move ourselves and the goods around, yes

again oil is used in order to propel ships, cars, motorcycles, buses, even spaceships….So we use

oil to transport oil-based products, and then we consume those products. Absurd it may sound,

but that is sad reality of our “modern and advanced” civilization. Oil has become like water-all

around us. That is why oil prices now defy the laws of supply and demand.

How have we come to this predicament? We have lost our common sense and have allowed to be

blindly guided into a world of oil-based society. Getting back to economics, the situation is

equally dreadful, oil market is not really a free market, rather it is an oligopoly. Most oil today

comes form few oil producing countries joint together in an organization called OPEC. They are

in control of flow of the world`s crude oil, deciding how much they will produce. Unfortunately

we are left at their mercy, depending on how much oil they will produce they basically control

the supply of oil, and therefore the oil prices. For example in 2008 the price of barrel has jumped

from $60 to $140, more than double, the demand hasn’t doubled in that short time but still the

prices have. Oil prices are prone to change due to speculation, if the OPEC thinks there will be a

higher demand they might automatically increase the price, often this is the case, and we the

consumers are left with higher prices.

Oil craze is the whole world`s ecosystem, which includes us humans as well, which is something

we unfortunately often forget. The extraction and use of oil has brought detrimental effects on

our environment. Oil production, waste dumping and oil spills cause havoc and destruction of

wildlife and habitat. Petroleum processing plants dispose tons and tons of toxic wastes in the

water which contaminates the waters and consequently endangers all marine life. Also indirectly

when we use petroleum derived products (shampoo for example) we also pollute, since water

waste ends in world`s seas and oceans killing coastal marine organisms. As stated earlier, plastic

is also an oil-based product and if not recycled it ends up in landfills or the sea, being very slow

biodegradable product it remains there for centuries. Another major environmental issue with use

of oil is of course the polluting gases produced from burning of oil. The polluting gases like

carbon dioxide, carbon monoxide, methane, nitrogen and sulphate oxides and many others end

up in the atmosphere, oceans, and trough natural cycles get back to soil and underwater aquifer.

Damaging effects of oil are numerous, so the question naturally arises how and can we

change? The issues is that our society depends on large energy inputs, and right now most of that

energy comes from oil and fossil fuels, sustainable energy sources still provide a small fraction

of our total energy consumption, so if we abandoned the oil as our primary source we would

have to decrease our energy consumption, and unfortunately most people are not willing to take

this step. We know that current situation is unsustainable, and that without taking immediate and

drastic changes we will face an environmental and economical catastrophe, nonetheless few are

willing to change despite the facts. As a society we have become overly dependent on

governments and corporations to solve our problems, but ironically we expect from those who

created the problem to solve it. Ultimately governments and corporations are made of people,
and we the people have to change, we have to realize that this oil based society is not

functioning. We must press with all our knowledge, desire and heart to consume less, to seek

alternatives. To have one car instead of three, to demand from government to invest in

alternative sources instead in thermonuclear plants, just recently Croatian government declared

they will invest 13 billion kuna in TE Plomin, this should not be allowed. We must organize and

demand that money goes to better energy investments, the ones that are sustainable. Must we

really buy that much stuff, that many packaging? There are electric cars, why can’t we drive

those, but of course they are not cool and fast enough, the engine is not making that macho

roaring sound when you step on the gas pedal, and so why buying it? It is our attitudes and

beliefs systems that have to change, before we can have alternatives. Because alternatives are

here, there are electric cars, but demand for those is still much smaller than for “regular” cars.

There are organic soaps cosmetics and medicines, but of course they are too expensive, but

would they be if everyone started to buy those? This would increase the demand for it which

would then logically increase the supply and thus lower the price. We must all realize this, that

we can create this different world, but only after we decide to abandon our lofty comfortable

lives, and make some necessary changes for the betterment of our only home-The Earth.

The Native Americans consider oil to be Earth`s blood, so how long can we take her blood,

before she weakens, gets pale, faints or dies?

Greer, Michael John. The coming of a Deindustrial Society: A practical Response.

http://www.oilcrisis.com/whattodo/DeindustrialAge.htm

Hightower, Jim. Big oil song and Dance.

http://library.rit.edu/databases/metasearch/record?group=008880&resultSet=043138&startRecord=12