Petroleum Exporting Countries (Opec). Specifically

SAMPLE EXCERPT:

One way the United States could reduce OPEC's effectiveness is to depend less heavily on foreign oil and create alternative sources of energy for public use and consumption. Education the public on energy conservation may help a bit, but development of alternative sources of energy, such as liquefied natural gas (LNG), hydrogen, and other alternative fuels needs to continue and grow so that America can decrease its' dependence on high-priced foreign oil. Expert George Sterzinger, Executive Director of the Renewable Energy Policy Project, notes, "Study after study has shown that a program of renewable energy development will lower the expected national energy bill, greatly improve the environmental footprint of our energy production, boost domestic investment and job creation, and increase energy security" (Sterzinger 5). It is clear that if the country continues to depend on OPEC for most of its energy needs that oil prices will fluctuate at the whims of the OPEC member nations, which could again wreak havoc with the country's economy.

Besides developing alternative types of fuel, American automakers must do their share and begin developing more hybrids and other type of alternative-fuel vehicles that get better gas mileage and still perform decently. The current craze of large, gas-guzzling vehicles such as SUVs and massive pickup trucks may slow somewhat if energy prices continue to climb, but until the automakers develop viable alternatives; even those Americans who want to conserve fuel have very few choices available to help them save both money and oil. There are hybrid vehicles currently available by Toyota and Honda that use a combination of electrical and gas engines, but they are more expensive than traditional models, and have been in relatively short supply. The Detroit automakers have been working on their own versions of hybrids, but have yet to produce a commercially available vehicle.

However, the OPEC nations also understand the necessity for alternative fuels, and are already developing their own global hold on the LNG market, too. The consortium has positioned themselves to hold a majority of LNG holdings, even before the demand has increased. Writer Sterzinger continues, "According to OPEC models, global natural gas use will rise much faster than oil, doubling by 2020, and OPEC controls roughly 50% of the world's proven natural gas reserves" (Sterzinger 5). Thus, America still needs to develop other alternative fuels to get out from under the monopoly OPEC holds on worldwide oil and natural gas.

In conclusion, OPEC is a strong cartel that controls a majority of the world's most abundant fuel. Because it does not come under the sanctions of countries it does business with, it can raise oil prices at will, or cut back on oil production. OPEC is a monopoly that cannot be controlled by legislation or lawsuits. As such, until the rest of the world cuts its dependence on oil and liquid natural gas, OPEC will continue to hold the upper hand. Perhaps the rest of the world should form its own cartel to unanimously deal with OPEC and their domination. If the rest of the world could reduce its dependency on the fuels OPEC controls, there would be more room for negotiation and compromise, rather than control, dominance, and a worldwide economy dependent on the whims of the oil-producing nations of the Middle East.

References

Claes, Dag Harald. The Politics of Oil-Producer Cooperation. Boulder, CO: Westview Press, 2000.

An informative resource that includes basic information on economies and how a world cartel such as OPEC can drastically affect these economies. Looks into the politics of a multi-national organization, and how it is governed and agreed upon by member and non-member nations. The author defines cartels and maintains that OPEC is not a true cartel because the members do not have a formal agreement regarding certain oil production issues.

Ghosh, Arabinda. OPEC, the Petroleum Industry, and United States Energy Policy. Westport, CT: Quorum Books, 1983.

The oldest resource in this research is this book which gives a good overview of how OPEC began, and how it controls the petroleum industry and the U.S. economy. Some of the references are quite dated, however, and overall, this was the least helpful book used in the research.

Rueda, Andres. "Price-Fixing at the Pump. Is the OPEC Oil Conspiracy beyond the Reach of the Sherman Act?." Houston Journal of International Law 24.1 (2001): 1+.

A very helpful resource that covers both the OPEC organization and how it works, along with a detailed look at the laws and statutes that govern the U.S. anti-trust laws, and why they do not apply to foreign cartels such as OPEC. Contains several different comparisons of energy usage in America and around the world, along with several specific legal cases that have led up to the current policy of not hearing lawsuits about foreign entities in U.S. courts.

Sterzinger, George. "OPEC and U.S. Energy." Harvard International Review 25.4 (2004): 5.

This resource discusses OPEC from a recent point-of-view, especially rising oil prices and world problems sinceā€¦