One can make little argument that the current economic state of the world is largely dependant upon the whole rather than the one. The old days of a country being able to completely sustain itself are coming to a rapid conclusion. Information technology and global shipping and receiving abilities have really created a global link from one country to the next. The United States was at one time one of the world’s most productive producers. We sold products to nearly every part of globe. Fast forward to today and we see that the United States is the world’s leading consumer.
Purchasing became cheaper that producing and the trend held, now production is at an all time low leading to some of the most crucial economic concerns in our history. Global dependence while necessary to some degree is crippling without proper balance. A successful economy can’t thrive solely as a consumer. The money to purchase will only last so long. Economic independence of any kind requires production. The world has to need your products as much as you need theirs in order for global economics to pay off in a balanced fashion. This is the big issue facing leadership today.
The oil and gas industry has long been an area where dependence on foreign oil has been the subject of debate. In the beginning it might have been a good idea to buy foreign oil in an effort to preserve our own. Of course it is hard to avoid the inevitable. Purchasing oil from other countries leaves you vulnerable to the prices they wish to set. This is especially difficult for areas that don’t have their own oil resources. Groups like OPEC (Organization of the Petroleum Exporting Countries) are in control when purchasing is the only option.
OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry. (Organization of the Petroleum Exporting Countries, 2013) Economic stability for those forced to buy their product is not even a passing thought. Yet the trends they set are felt by all. Several national and global organizations exist for the expressed purpose of keeping oil and gas economically available on a global scale.
In an industry so widely needed by all, trade agreements, practices, and policies are an every day effort. Demographics and physical infrastructure are vital in the oil and gas industry. The United States is well suited for doing business on a global level with oil and gas. In order to compete one has to have the ability to import and export products routinely. Unlike some areas of the world America is not landlocked. Year around access to ports on every coast is crucial to the oil and gas industry. Shipping and receiving has to happen on a daily basis.
Agreements with countries like Canada and Mexico make deals and agreements to move product through pipelines in order to stay in business on a daily basis. This goes on other areas of the world as well. Many places in the Middle East where oil deposits are significant have to move products through pipelines in order to get them exported. Like most other things this doesn’t come without cost. Crossing a foreign land with your pipeline is not cheap, usually requiring leasing agreements that extend for hundreds of years at a premium price.
Cultural differences can provide both obstacles and benefits. The cultural focus in one place might be to profit while another culture is looking to do their part for global stability. This is especially important when you have to work together for installing a pipeline or tackling some other multicultural venture. Social responsibility and ethics take on a huge area of discussion when looking at the oil and gas industry. Few would deny the need for the industry to do what they do, but most can agree that some industry practices can not be tolerated.
Probably the most notable oils and gas situation of recent years has to do with the effect to the environment that this industry has. While many organizations are entrusted with creating laws and policies to keep the industry and the environment around it safe, the social responsibility is something different. Nobody wants their beaches covered in oil or their wildlife and waterways destroyed by hydrocarbon infestation. Oil and gas developers are always at work creating innovative ways to be cleaner and more efficient with the products that they handle.
Millions of dollars are invested every year into research and development. The entire goal is to do it better and more efficiently than ever before. Some of these efforts are dictated through legislation, but many others are solely the work of individual companies that embrace their social responsibility and want to make a difference. Raising the bar for new standards and expectations is a serious business in the oil and gas industry. Few people are aware that new standards are also profitable. Proprietary technology and advancements are a big part of the oil and gas business.
The purpose of the FCPA ( Foreign Corrupt Practices Act) is to crackdown on the bribery of foreign officials – official statistics show that 400 American firms have collectively paid $300 million in bribes and other questionable payments to foreign governments, political parties and also directly to the accounts of government officials. (World-Check, 2013) The oil and gas industry is a global dominating industry. Corrupt activities have been a part of the business since the first gallon of motor fuel was created. These days there are rules, laws and regulations to keep these practices at bay.
It keeps the business fair for those in competition with one another. Special gifts and bribes just muddy up the water for everyone involved. Really this takes us back to the ethical and social responsibility of how business should be done. Laws that keep the would be corruption to a minimum help everyone get along better, especially when considering all the different cultural diversities involved on a global level of business. For some cultures bribery is just the way things work. All industries work best when everyone plays by the same rules.
Organization of the Petroleum Exporting Countries. (2013). OPEC Mission. Retrieved from http://www.opec.org/opec_web/en/about_us/23.htm World-Check. (2013). All you need to know about money laundering and criminal use of the financial system. Retrieved from http://fcpa.us