Black Gold, White Gold

Petrochemicals and Agribusiness in the 21st century

Oil: Black gold

Post WWII• WWII showed the future needed gasoline

• Machines replaced hand labor in manufacturing

• Transportation now depended on gasoline

Oil now meant power

• Nations with oil reserves that had been undeveloped now found themselves with unlimited wealth

• Competing against each other to sell their oil was destructive

• To protect themselves, many nations in the Middle East created a treaty organization, called....

OPEC

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.

Why use OPEC oil?

Three main reasons

Environmental effects

• Environmental effects of their oil industry are contained in OPEC member countries

Not here

• Environmental accidents occurring in the member nations are their responsibility

Not Ours

Costs

• Expenses for development, safety, training, drilling, transporting and exporting the crude oil are paid by the member nations

Not US

Increased Trade

• Crude Oil is a trade good

• Finished gasoline, often refined in Texas, is also a trade commodity.

• This interdependence helps stimulate and balance USA economy

Problems from OPEC

OPEC was created in the 1970’s to control the supply and price of oil

OPEC Oil Crisis

• OPEC decided to cut of the oil supply to the USA in 1973 because USA supported Israel, which many Arab countries despise.

• An energy crisis resulted, where the prices of oil and gas rose dramatically and gas was rationed

Positive Results?

• Many Texas oil companies started drilling more wells in Texas

• This created jobs in the oil industry where many Texas gained valuable skills used now all over the world

Gulf War

• Both Gulf Wars caused major concerns over the safety of Middle East Oil

• Alternative sources of power-including domestic oil field drilling-became more important

Alternatives to oil?

• Nuclear energy

• Wind power

• Hydroelectric power

agribusiness

How farming has changed

Modern Methods

• Large machines used for both planting and harvesting

• Farm workers rarely own the land, but are employees of a company

• Several farms provide the produce used by a company

Crops

• Cotton-North Texas

• Citrus Fruits and vegetables- Rio Grande Valley

• Fruits, nuts and wine- Hill Country

future

• Texas Business reports:  COLLEGE STATION – Texas agricultural losses due to the 2011 drought reached a record $7.62 billion, making it the most costly drought in history, according to updated totals by Texas AgriLife Extension Service economists.