Accounting Theory – Literature Critique
December 15, 2023
Emerging Technologies and Innovation Sample
December 18, 2023
Introduction:
The continual increase in the prices of oils over the past decades denotes that the global oil markets have led to a period of ever-growing scarcity. Considering the rapid expected growth in the demand for oil in the emerging market economies that are emerging, a downfall in the growth trend of the supply of oil is observed to pave the way back to abundance in the future. The ideology of scarcity infuses the modern environmentalism. The environment has been affected by the extensive extraction of oil and natural products (Baumeister, Guérin & Kilian, 2013).
The anxieties over oil usually derive from the fears regarding running out of oil; however, the true oil curse of the past is a plethora of resources. To maintain the price of oil high to sustain the sector, the authorities of oil have devised methods of manufacturing scarcity (Scmr.com, 2017). The consequences of creating oil scarcity have been politically, economically, and socio-culturally to the society (Baumeister, Guérin & Kilian, 2015).
Figure 1: Share of World Proved Oil and Gas Reserves for Select Regions
Source: (Grant-Muller, et al., 2015)
The forms of alternative energy are in scarcity naturally, it is to be analyzed that the implications of the oil scarcity derive from the scarcity itself or the extensive extraction of the natural oil. The destructive and other experiences that accompany the production of the scarcity of natural oil inform the prospects regarding devising alternative energy for the future, including how these forms of energy can be devised in ways to avoid the negative implications of the scarcity of oil.
The primary challenge of the oil industry
The primary challenge of the oil industry for most of the twentieth century was the prevention of abundance and organization of scarcity. Instances of the perceived scarcity and the present threat of the oil derive from the strategic methods for the production of scarcity and not from the geographical limits. The aspects that determine the scarcity of oil lie above the ground as the availability of resources is determined by how the economies and societies are organized internally (DuBose, 2013).
In the context of natural oil, the scarcity is arising from within the companies of the oil industry itself. Through extensive research, it is revealed that the geologically constrained peak oil is not a real immediate threat, identifiable from the lack of harmony among the oil corporations regarding whether peak oil is a challenge at all. Some corporations consider the theory of peak oil as strategic imaginaries that are used for the manufacturing of the scarcity and controlling of prices (Etienne & Mattos, 2016).
Figure 2: Scarcity of Oil
Source: (Pathakji, 2015)
Implications:
The scarcity of natural oil tends to disrupt the conventional balance of supply and demand along with the merging of the economies associated with natural resources with corporate and political aspects of natural oil. The scarcity of natural oil is mostly due to the altering prices to advance geostrategic and commercial interests. Economics has been provided with a means by which controlling and regulating the available oil resources can be done (Smith, 2016). The global economy is also transforming due to the distortion in the value in the context of the nature of the oil along with the global economics being corrupted by the power that the oil cartels and companies possess (Grant-Muller, et al., 2015).
The companies that deal with natural oil promote the accounts regarding the extraction of oil as costly and onerous, constituting high prices for the consumers despite the natural abundance of oil. Political control regulation over the demand and supply of the power of natural oil has led to the conversion of oil into an economic weapon. The scarcity of natural resources has led to the oil cartels taking advantage of the concept of obscured value. The nature of oil is very much landed by characteristic, the wealth of oil is inextricably and intrinsically associated with the land where it is found creating a challenge to the capital where the forces associated with the socio-political determine the real force of oil (Guérin & Kilian, 2014).
Alternatives:
In contradiction to scarcity, it can be said that natural oil is mostly scarce to be renewed due to the propensity to flow which is a dominating factor that determines the infinite actions in association to finding out alternatives. Most of the alternative resources of natural energy that are on the way to innovation to be used are wind, geothermal, solar, and hydropower which are limited for utilization at the point of collection, as there is no carrier for the energy that is inherent in the technologies which can transform the energy that is harvested from these alternative sources (Pathakji, 2015).
These energy resources are distributed very unevenly, hence, they can provide energy for the constrained geographies only. The most dominant forms of natural energy that can be used by the countries are wind and solar which are also temporarily scarce due to their frequency. On the other hand, oil is densely packed with energy, whereas renewable energy resources are bulky and the content of energy is diffuse, with wind and solar farms that require vast stretches of land (Haans, de Bruijn & IJsselsteijn, 2014).
Though solar energy provides sufficient power technically that is enhanced to meet future energy demands, the limitations of this energy resource lead to natural scarcity which would increase the costs. However, promising innovative technologies would provide a renewable energy form that would be very similar to natural oil in aspects of physical properties (Pedrosa, 2014).
Conclusion:
The global society has been suffering through the mechanism of extraction and production of oil and its scarcity that associates widely with the source itself as natural oil is very much specific, and concentrated at random sites across the globe. This gives rise to vulnerabilities that allow the owners of the land to regulate the distribution. The barons of oil have secretly manipulated the control over the resource which has led to reverberations through the media of the economy and has transformed and disrupted everyday life, stretching right from restricted leisure to civil wars and imperialism.
References
Baumeister, C., Guérin, P. and Kilian, L., 2013. Does high-frequency financial data help forecast oil prices? The MIDAS touch at work.
Baumeister, C., Guérin, P. and Kilian, L., 2015. Does high-frequency financial data help forecast oil prices? The MIDAS touch at work. International Journal of Forecasting, 31(2), pp.238-252.
DuBose, S.E., 2013. The MIDAS touch to save a dwindling community: Microenterprise individual development account services (Doctoral dissertation, Southern New Hampshire University).
Etienne, X.L. and Mattos, F., 2016. The Information Content in the Term Structure of Commodity Prices.
Grant-Muller, S.M., Gal-Tzur, A., Minkov, E., Kuflik, T., Nocera, S. and Shoor, I., 2015. Transport policy: Social media and user-generated content in a changing information paradigm. In Social media for government services (pp. 325-366). Springer International Publishing.
Guérin, C.B.P. and Kilian, L., 2014. Do High-Frequency Financial Data Help Forecast Oil Prices? The MIDAS Touch at Work.
Haans, A., de Bruijn, R. and IJsselsteijn, W.A., 2014. A virtual Midas touch? Touch, compliance, and confederate bias in mediated communication. Journal of Nonverbal Behavior, 38(3), pp.301-311.
Pathakji, N., 2015. A Reflexive Law Approach and Accessibility Rights of Persons with Disabilities to the Virtual World: Seeking the Midas Touch of Corporations. QUT L. Rev., 15, p.140.
Pedrosa, D.D.C., 2014. Data input and content exploration in scenarios with restrictions (Doctoral dissertation, Universidade de São Paulo).
Smith, P., 2016. Google’s MIDAS Touch: Predicting UK Unemployment with Internet Search Data. Journal of Forecasting.
Scmr.com. 2017. Natural Resource Scarcity in the Supply Chain – Article from Supply Chain Management Review. [online] Available at: http://www.scmr.com/article/natural_resource_scarcity_in_the_supply_chain/ [Accessed 2 May 2017].
