Fighting for Survival
For more than 100 years King Oil has reigned over all other sources of energy. Because of the significant impact of oil trades across the world, oil has proven to be the driving force of the U.S. energy sector and an important player in the global economy.
Every kingdom throughout history has had its share of war, and there is no exception for the oil crown. The oil sector continues to play a critical role in America’s fight for stability and prosperity. Oil continues to maintain its sovereignty over the United States and, by extension, the world because of the established infrastructure, American currency, and the necessity for national protection.
1,11 Although, these complex industrial powerhouses are aging and losing their edge, refineries undoubtedly keep our oil sector running by providing fuel, furnishing raw materials for our domestic manufacturers, and employing thousands of well-paid workers.
In conjunction with the expanding pipeline network, many oil refineries will also be upgraded to support the increase in oil production. The soaring profits from the shale boom have already led to a refinery renaissance of sorts. Across the country refineries are being reconditioned, upgraded, and there are also a few newly constructed locations. 1,11,16
With barrels of money already invested in the current system and the intended expenditures for upgrading and adding new pipelines, abandoning these tried-and-true resources in favor of “greener” alternatives would be impractical from a financial standpoint. It would be senseless to switch over at this point, especially considering that a complete overhaul of the current infrastructure would be extremely expensive and damaging to the environment. Despite negative rhetoric from green energy proponents, the reality is that oil will continue to run the show in this nation for a long time to come.
The Dollar: Everyone Uses It!
Speaking of running the show, our currency has been doing just that in the oil industry for a long time. The global economy is inextricably tied to our financial state, because across the globe U.S. currency is recognized as the leading monetary system. This is exactly why the U.S. dollar backs the oil standard worldwide. When a nation –any and all nations, including other superpowers like China and Russia – wants to buy oil, it must first exchange its own currency for dollars in Federal Reserve Notes. To do this, the foreign currency must be backed by something “real” that holds value. Basically, other nations must prove that their currency is equivalent to our dollar before any exchanges are processed. This course of action is not exclusively for purchasing American produced oil, it also applies to transaction for oil discovered and produced anywhere else in the world. On the other hand, the U.S. just needs to turn on the proverbial printing press, and – voilà – oil on the house!5 Dominating this system gives the U.S. tremendous leverage.
Now that U.S. oil production is vital again, other countries are taking heed to our reemergence as a global oil producer. This renewal has helped us maintain our influence over the oil standard, however the supremacy of America’s currency is not guaranteed, as other superpowers are collaborating in an attempt to devalue the dollar. These alliances could lead to hyper-inflation which would likely cause civil unrest across the globe. It seems the plan may be to distract us by procuring our involvement in conflicts around the world, with the intent to gradually weaken our resources, and ultimately replace the dollar as the world’s reserve currency.
An aggressive move...